What's next for retail?
The Office for National Statistics say that retail sales grew by 0.9% in January 2012 when compared with December. That was a surprise to most economists and a welcome one for the government. Is it a boom for the retail sector? Are we all going shopping to beat the winter blues? No. Sir Philip Green, the Top Man at Top Shop says post-Christmas discounting was brutal. Recent retail growth is thanks to extreme slash-and-burn tactics that only the largest retailers can temporarily afford.
The litany of major brands which have disappeared from out high street is shocking: Woolies, Habitat, Thorntons, Jane Norman - and that's just for starters. One recent report said that, on average, Britain's multiple retailers closed 14 outlets per day last year, with charity shops, pound shops, credit unions and convenience stores taking up the slack and massaging the otherwise awful statistics.
One can only say that the ONS has approached the new stats from a constructive perspective. One of their spokespeople said: "All sectors are experiencing some growth when you look year-on-year. In particular the household goods sector has risen from where it was previously, it's ended a long run of contraction." Hmmm…
The comments from Capital Economics (run by Roger Bootle, one of the few economic soothsayers who regularly gets it right) may be more pertinent. They say "January's strong growth goes against the much more pessimistic picture painted by anecdotal evidence and all of the retail surveys".
By the way, these figures don't take account for the difference between online sales and bricks-and-mortar shop sales. Any increase in overall retail performance hides a dramatic and continuing shift year-on-year from offline to online. The convenience of online sales (from easy comparison of prices to not having to park in a high streets riddled with yellow lines) means more of us than ever are taking our business to virtual stores.
So, are there any solutions to help address the retailers' pains? Here are some thoughts and recommendations:
• Recognise that the world has changed. Be realistic and don't operate in a mirage of optimism. All businesses are different, so evolve your model to balance bricks and clicks in the most efficient way for yours.
• Don't give up on marketing, ever. Stop marketing and you'll cut off your lifeblood of customers. But recognise that marketing is now a professional game, so get the best advice and take time to discover what works. Remember Lord Leverhulme, the founder of Unilever, who famously said "Half of the money I spend on advertising is wasted and the problem is, I don't know which half".
• Train your staff and expect them to go the extra mile with customer service. There are enough people who are hungry for work that you can expect the best from your staff on the front line. Just make sure you spend time at the coal face, too.
• Exploit technology to maximise online, shop, mail order, phone sales etc. Take every opportunity to reach people in the way they want to be reached, with offers that meet their needs, and remove every possible barrier to sales.
• Use social media and look out for new and emerging platforms like shopa.com to proliferate awareness and generate sales through friend recommendations and the emergence of 'social commerce'.
• Last but not least, adopt hawk-like financial management. Set and monitor your KPIs and exploit every possible economy. Look at your supply chain from top to bottom and don't forget the overheads too. You'll need to conserve your cash.
For more information on business best practice, get a copy of my book, From Vision to Exit, The Entrepreneur's Guide to Building and Selling a Business available on Amazon and in all good bookshops now.