Have the High Street banks changed since the meltdown?

Lord Adair Turner tells policymakers to be radical in their thinking, as he analyses the current financial climate and the danger of returning to the dark days of the economic meltdown. Although a little short on detail, his speech hits the right notes in terms of discussing what exactly has happened and where we have ended up with regards the financial crisis that hit at the end of the last decade.  I would ask 2 main questions with regards this-

1. Has anything actually changed?
2. Did anything actually need to change?

I say the answers are -

1. Not really
2. Definitely

So, where do we go from here?

I think that the banking system has come full circle from fear, through self-pity and survival mode to business as usual.  The wider economy doesn't need business as usual, as small business and consumers struggle to get finance for house purchases and find they are further disenfranchised by a system that they didn't help to create, didn't ask for and now feel disengaged from.  This has gone along with repossessions, liquidations and the rapid growth of the payday loan sector.

How can this happen after the major shocks of 2008 and the fact that governments own large stakes in banks?

We are on a course for a similar shockwave of financial crashes if there isn't a change in the structure of the banks, the way they interact with customers and an acknowledgement of the errors of the past.  A whole industry has popped up to make the most out of banks errors - mortgage exit fees, bank charges, PPI miss-selling, etc and this is before the exposure of self-certification mortgages, interest-only mortgages, fasttracking of mortgage clients and others.  Banks have been subsidising high spending on cars, holidays and home improvements by the £10+ billion payouts for PPI misselling alone.

There needs to be a line in the sand drawn by the banks to gain public trust again - or maybe this has gone on too long and can never be repaired.  The public appetitie for payday loans seems to never be satisfied, so why not a Wonga Bank on the High Street?  A series of new entrants to the market that aren't tainted by the scandals of the past may be the only way forward.  Metro Bank is making progress in London, while Virgin Money seems to have escaped the association with Northern Rock.  Nationwide came out of the scandals with an enhanced reputation, as did First Direct.  M&S and Tesco are starting to offer a serious proposition in terms of everyday banking.

Is this the way forward?

The new smartphone from Amazon - fire phone

Tesco sales drop is about more than price

I'm just reading about Tesco's figures and the fact that their sales dropped by 3.1% over the last quarter - the biggest drop since records began in 1984.

My wife and I were in Tesco yesterday and the problems became more obvious to me as we sat in the café overlooking the store.

The problem is that they get nothing right

Now this isn't an anti-Tesco rant. It's true. Look at the facts-

• They don't do quality as well as Waitrose
• They don't advertise as well as M&S
• They don't do cheap as well as Aldi
• They don't do mobiles as well as Carphone Warehouse
• They don't do cafés as well as Costa
• They don't do toys as well as Smyths
• They don't do tech as well as, well anyone really

This adds up to a poor showing overall. The growth of Tesco has come from the "all under one roof" philosophy but this has come at a price to consumers. The reality of the philosophy is "all in one place, but only 60% as good as if you bought it elsewhere."  The idea of training staff up to be as good as their competitors in each field wpuld take a huge investment. The model of the department store, with market leaders delivering each sector, stands up better than Tesco's current plan.

It is my belief that consumers in the UK tolerate standards that would be unacceptable elsewhere in the World.  For example, I conduct mystery shopping programmes for some major restaurant chains and the question regarding food quality is "was the food rancid or spoiled in flavour?"  Now is this a standard we find acceptable?  In most European countries poor restaurants close because people won't pay good money for something below par.

It's the same with Tesco - customers are starting to find them out. Why pay higher prices for less-informed service on technology? Why buy their Finest range when, for a comparable price, you can buy M&S?

There is a bottom ground for discounters and there are already a few in the market. Why are Morrisons rushing for the lowest price ground? Why are analysts urging Tesco to join them?

A company that ploughed some of their vast profits back into a living wage for their staff, more staff available for customers and a higher standard of service would win every time.

Not everything can be bought on the High Street - MP3 version of The Hunting Party by Linkin Park on pre-order

How to increase town centre High Street footfall

Figures released today have shown that retail footfall dropped by 0.1% in April.

However footfall in out of town locations rose by 4% - the 4th month in a row that there had been an increase.

This is more evidence that the government 's town centre first policy is not working.

So what next.  I've looked at certain points in prior blogs relating to how this can be tackled.  Changes to the business rates in vacant shops and incentives from government to help local councils provide free parking are two ways that I think will have a massive impact.

The march of Click & Collect should also see some improvements in town centre footfall and sales figures.

What about YOU as a retailer - what are you doing to keep your High Street vibrant?

Do you have a town centre retail committee?

If so, are you on it?

Are you organising events and incentives to promote your town?

Do you cross-refer to other local retailers?

I think a prime example of the last point is  linked to weddings. A florist should always have a link to a bridal gown shop, a limo hire company, a local wedding cake company - and vice versa.

Local communities of like-minded retailers are stronger together.  Hosting town centre events for Easter, Christmas, Mothers Day, etc will make the whole town sing, encourage people to visit many stores and increase both footfall and sales.

Do this in addition to the moves I have previously outlined and there's a profit to be made!

How to educate your customers

I often wonder how run of the mill, High Street retailers can educate their customers in their ways.  By this I mean how to interact with the company and what "buy in" the company needs from their customers to make a successful relationship/partnership.

Some newer entrants to the market are able to have this relationship/partnership and have complete customer but in, as the retailer and customer have grown together.  For me, a prime example is Ikea.  You select your own products, you get them home yourself, you clear your own tables in the cafe - in return they keep the prices to a minimum.

Another such example is Build A Bear - you pay a bit more for the bear, but you have the experience of choosing the design if your bear and being a large part of the production of the best.  It's not just a purchase - it's an experience.

How do you relate the things you need your customers to know?

In the examples above, Ikea has store notices and both retailers have a great "word of mouth" network of avid fans.  Social media has increased this many times over.

Social media is one way to to this, but you need to educate some valued, regular customers in the first place for word to spread.  So, the best way to initiate this is to get your team to have great conversations with your customers.  The effects of this may not happen overnight, but consistently great interactions with your customers will consistently lead to these values customers being your best advocates.

One message I'd like to see all retailers get over to their customers is that their mistreatment of stock, fixtures and fittings will always come back to them as higher prices.  A packaging that a customer splits and renders unsaleable will mean an extra cost to them and all other customers in future years.

Morrisons slashes prices, but fails to find its niche

Morrisons had an awful year, last year and they've decided to fight the discounter with discounts.  Unless they can undercut retailers like Aldi and Lidl that spend far less on their shop fits and staffing their stores, then they may struggle with this strategy.

It's the 2nd from last sentence that highlights a real need for expenditure-

"A lack of online and convenience store presence has also left the business exposed"

There's plenty of vacant High Street property out there for Morrisons to kill both birds with one stone.  Open convenience stores with online terminals for Click & Collect customers.  It will get them back on a par with the big boys, rather than trying to fend off the discounters snapping at their heels.

Not everything can be bought on the High Street - 100 Kindle books to read in a lifetime

Asda gets in on the Click & Collect boom

I have long been an advocate of the Click & Collect services offered by High Street stores to access a full range of products in perhaps a smaller outlet.  Boots and Next in particular have seen these offerings as successful.  Now Asda have announced plans to increase their "Click and Collect points" by 1,000.

http://www.bbc.co.uk/news/business-26918527

This is a huge growth area and will continue to grow both your offering, and the High Street.

I have seen research by an unnamed High Street retailer that the average customer spends approximately a further £8 when they come into store to collect their goods.  That's extra income on both counts that can't be sniffed at!




Not everything can be bought on the High Street - Audible by Amazon

A clear purpose of what your retail business delivers is key

You must be able to communicate what your retail business stands for and what your customers are to expect in order to be successful.  The more successful retailers of the present times are clear in what they do best, tell their customers "what they are famous for" and their customers respond with loyalty and passion.

Some examples-

Value
Poundland and Home Bargains stand out here for me, as they consistently offer good products at a great price and their customers love it.  You can expect average customer service, often long queues and no shop floor staff to ask questions, but this is the price you pay to pay the price you pay!


Quality
This is the success story of John Lewis and Waitrose over the long-term and especially over the last few years.  The long-standing guarantee of "Never Knowingly Undersold" is their tagline but it is the absolute quality of their products (and staff) that sets them apart.


Getting the fashion trends "just right"
Now this is more difficult to put your finger on, but Next and Zara have hit the nail on the head, year after year.  They produce what their customers want to wear and their growth and sales have followed.


Loyalty
I have marked this as what a retailer can stand for as Tesco with their Clubcard and Boots with their Advantage Card have built loyal customers through their store card schemes, even though they lack in certain other areas (in my view, Tesco with service and Boots with price.)


Expertise
Their are certain retailers that are just accepted or known as the experts or leaders in a certain area.  If you want to buy sports gear then you will more than likely end up in Sports Direct.

All of these companies named have posted great results over the years and they, their staff and their customers are very clear in what they get from their shopping experience.

Ensure that you and your team have a strong, solid idea of what you want to be famous for and  communicate this clearly and consistently to your customers with your everyday conversations with your customers, your marketing and your social media presence.

Recycling empty shops is key to the future vibrancy of the High Street

The below article on the Management Today website seems to bemoan the fact that the High Street has spawned Charity Shops and Betting Chains, but the picture is much more complicated than that-

http://www.managementtoday.co.uk/news/1286363/high-street-shop-closures-dropped-80-last-year/

There needs to be a progression away from shops that sell products or services that we can find cheaper and easier online towards places that offer an experience. product or service that we would rather see or circumstances dictate that we can't do online.  On the "Risers" side of the chart are great examples of this-

Hotels
Although we mainly book these online (see the decline in travel agents on the "Fallers" side of the chart) we can't stay in a virtual hotel.  Good quality basic accommodation at competitive prices will always attract visitors to the correct locations.  The success of Travelodge and Premier Inn are testament to this.  Having a budget hotel in or near your High Street will provide you with extra trade.

Convenience Stores
We buy this at our convenience, as the name states, so it's not a pre-planned online purchase.  As the supermarkets develop their Click & Collect offerings via convenience stores then this area will get bigger and bigger.

Cheque Cashing
This has similar background to convenience stores, as there is a shorter run-up to this decision and the nature of the business and clients lead this to being a face-to-face transaction.  As technology develops, this may be an area that could go online, as was reported last year, with banks allowing customers using technology to pay in cheques.

http://www.independent.co.uk/news/uk/politics/treasury-unveils-smart-way-to-cash-a-cheque-take-a-photo-on-your-phone-and-mail-to-the-bank-9025350.html

Sports Goods Shops
I feel this one area is on the list due to the expansion of Sports Direct over the last year.

Bookmakers
This is the growth area that I find most startling on this list. And with the advent of virtual gaming machines on your smartphone and online betting accounts that you can access from anywhere, is the one area that I don't see being a long-term upward trend.

The areas that have seen falls are areas that have seen a large growth online, such as travel agents, recruitment agents, video libraries and photographic stores.  This will only continue, but regeneration of our High Street into something that is fit for purpose in the modern World is essential.  I have mentioned Click & Collect before, and this is a great way of combining online and High Street parts of a business.  It combines the best parts of the online experience (convenience and price) and removes the worst part (paying for and waiting for the delivery.)  If you are not offering this service now, then you must seriously consider it.

Online-only retailers, such as Amazon are rumoured to be setting up demonstration stores where you can try the latest games console, for example, then order it there and then for home delivery or Click & Collect.  On a recent visit to a shopping centre on a weekday, the only 2 shops that were busy were Build A Bear and the Lego store.  Both were offering an experience, like the demonstration store.  Offering your customer an experience, whether that's building your own soft toy or building your own Lego characters, gives them something m ore than a transaction - it's an event.

Another stores that I have seen similar experiences are Sainsbury's, where I was offered a croissant with jam and then told which croissant and which jam, to enhance my experience (and make me buy some!)

Then there are the beauty stores (Boots are good at this) where they offer you a makeover, show you online videos with make-up tips and then sell you the relevant products.

None of these things can be experienced online!

Not everything can be bought on the High Street - Kindle edition of The Book Thief

The Budget 2014 - how does it affect the High Street? and Next's increase in profits

The Budget

The Chancellor George Osborne outlined The Budget for the upcoming tax year yesterday.  What parts of it affect retail and in particular the High Street?

Well, in my view, it's a budget of small measures to inch us further along the road to recovery.  The 1p cut in beer duty, the halving of tax on bingo and the revamp of the savings and pension rules will bring some people back to the High Street, which can only be good news.  As they have a beer, play bingo and sort out their finances, they will spend time in cafes and spend money in shops.  This knock-on effect will be marginal but will help.

There is also the slight boost for some retailers themselves in the incentives offered for expoirting and investment-

http://www.bbc.co.uk/news/business-26642445

Next reports rise in annual profits

http://www.bbc.co.uk/news/business-26660925

The biggest rise was in the Next Directory part of it's business and I believe that many High Street retailers can learn from their Click & Collect and in-store ordering systems particularly.  These two areas a great offering, where you can offer your entire catalogue to customers of even your smallest stores and have them there waiting for your customer to collect.  It works well with many retailers (I particularly like the offerings of Boots and the big supermarkets with this) and can boost your trading platform.

You can offer an online or in-store experience for a customer, for items that you may have to source from a supplier, may have in another of your outlets or may have stored away from your shop front.  You can have the great conversation with your customer, sell them the required items, and then have the item or items ready for that customer to collect at a later date.

Your returns policy needs to be a little more flexible with this approach but the benefits to both parties and the customer loyalty it generates is more than enough compensation for this.

This can be linked to a recent report that family financial optimism was rising-

http://www.bbc.co.uk/news/business-26255705

My first ebook is on an Amazon Countdown deal. I'm so excited!

Do payday lenders have a place on our High Street?

As I looked through the BBC news pages, this article caught my eye.

http://m.bbc.co.uk/news/business-26382481

There are payday lenders on most High Streets, so is greater regulation a good thing for other High Street retailers or not?

For

Well, on a selfish level, there more disposable income our potential customers have in their hand, the more they have to spend in our shop.  Providers of essential items of grocery or personal hygiene products will welcome our loyal customers being able to continue spending.  In the UK we have little manufacturing industry, so a large part of our economy is driven by consumer spending.   The local plus it may provide is jobs for a couple of local people and rent for what may be a local landlord.

Against

In terms of the greater good of our community, money leaving local people as high interest payments and arriving in the profits of international corporations does us little good at all.

It may be our staff that are borrowing in this way, which if used irresponsibly then can lead to longer-term financial woes.  This could eventually lead to absenteeism or, inextreme cases, employee theft.

I am against the "Nanny state" and I think that people should be free to make their own decisions.  There is obviously a market for payday lenders, as they have become hugely successful.  This needs to be balanced with financial education (preferably in school.)

Not everything can be bought on the High Street - James Hunt: The Biography

It's payday weekend again

I suspect many of you have seen an upturn in sales towards the end if this week. Thursday and Friday are reporting good sales from local retailers here.

Make sure you're ready for this weekend.  Extra selling staff will make a big difference, as will staff ready to serve at the tills.

Your operations team should be prepared for extra replenishment and for it to take a little longer than usual, due to the extra customers.

Good luck out there!

Have a great weekend!

Your enthusiasm infects your team - and your customers

The best managers have boundless enthusiasm (mixed in with some focus.). When you are enthusiastic about your job, your company and have a clear direction for this enthusiasm then your team will feed on this.  They will work better for you, share your goals and share their ideas.  Nourish these and you have a winning team and a great place to work.

I worked with a manager with great energy, enthusiasm for the job and a clear view of where they wanted their store to be - with a sense of what order things had to happen to achieve this.  It was a job that I jumped out of bed to work in.

And your customers feel it too!

Some things you can't buy on the High Street - Amazon Prime

Article on retail gazette website By Wayne Usie, Senior vice presidentof Retail, JDA Software

Just reading through retail gazette website when I came across this article-

http://www.retailgazette.co.uk/articles/41412-building-the-nextgeneration-retail-operating-model-five-things-every-retail-ceo-needs-to-know

This brought up 2 key areas for me-

1-You must know your customer

Through all your customers interactions with your brand, you need to know what your customer is doing. Your High Street presence is the face of your brand but your customers will interact with you via your website, mobile website, apps and social media amongst others.  The more of these you can track, then the more you can tailor the experience to your customer.  Having log-ins for your website, tracking in your apps and loyalty cards will enable your systems to follow your customers browsing history as well as purchase history.  Allowing reviews of products via your website sees how your customers use and recommend your products.  Interacting with your customers on social media allows you access to their profile and their friends.  This information can prove invaluable.  Use it wisely.

2-You must know your own proposition

These two areas go hand-in-hand.  You must know in exact detail what you offer your customers.  From this detail you must ensure that all your team know your proposition and can talk about it with confidence to every customer that walks through your door.  Some of the UK retailers that have disappeared over the last few years tried to be too many things all at once - Woolworths, Comet, JJB Sports to name some high-profile examples.

Your customers must know why they are walking through your door. Your team must know how to interact with them.

Not everything can be bought on the High Street - Amazon Prime with TV and film streaming

Comparisons of UK High Street to that of Italy

On a recent visit to Italy, I decided to look at the similarities and differences between the High Streets in Italy and those in the UK.  The High Streets I encountered in Italy were generally more vibrant, with a higher occupancy rate than those I have encountered recently in the UK.

There is more of a focus on the trades in Italy and no High Street is complete without a butcher, greengrocer, fishmonger, cobbler or baker.

Some or all of these have been rolled into one supermarket in many UK High Streets.

This isn't to say that supermarkets are necessarily a bad thing in a High Street shopping area, but that a competitor that provides some expert knowledge and a high level of customer service would be beneficial.

We have seen more of a café culture like our European cousins over recent years, but the difference is marked.  UK High Streets have mimicked the US with large chains tending to dominate, whereas in Europe the trend is for local, independent cafés.

Planning offices need to prioritise the types of business they want to occupy their town centres. When economic times are tough, it is easy to accept whatever business that comes along.

Perhaps a forward-thinking council would get together with local landlords and advertisers to request certain tenants or sectors that they would like to enhance their town centre. That would be a proactive move.

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Speed of service is key for most High Street shoppers

Although quality of service and spending as much time as possible with each and every customer, the dynamic can change for many of your customers on the High Street. There are time constraints, mostly in the week, from the ticking clock on their parking space, childcare, returning to work from a lunch break and generally trying to fit necessary shopping into an already busy lifestyle.

High Street customers have less time than those in edge if town stores.

As quality, successful retailers we react to the reduced amount of time our shoppers have.  We need to man the tills, with a back up available nearby, especially at lunch time. Staff lunch breaks need to be worked around this. Putting a positive spin on this with your team will help with morale.

Stock replenishment needs to be complete before and after the busy hours over lunch time.  This ensures availability for lunch time shoppers (especially important if you sell lunch food items) and keeps your replenishment staff ready to assist customers on the shop floor and tills.

Management need to be visible on the shop floor and available to motivate their team at this vital time of the day.

Let's gear our teams up for this important time of the day and ensure we make the best if our High Street location.

Some things you can't buy on the High Street - Kindle version of The Husband's Secret

BBC article on Justin King's time at Sainsburys

http://m.bbc.co.uk/news/magazine-25960491

Highlights 5 key areas of success in Justin King's time at Sainsburys.

I found the quality/value and the focus points the most interesting and the most relevant.

Quality/Value

This is interesting because the days of low price being mistaken for value seem to have all but disappeared.  Value means being appreciated as a customer, receiving truly excellent customer service and buying goods that exceed expectations.  Even value retailers can't get away with selling things that don't last.

Focus

This seems so basic, such a given, but it is still overlooked.  It determines staffing profile, marketing, social media presence, expansion plans. It must be at the forefront of your mind with every decision. It must be clearly defined and clearly communicated to your team.

Some things you can't buy on the High Street - MP3 download of Crying for No Reason

Payday weekend

Very short note today - this is the first payday weekend since Christmas for many people.  Make the most of it.  Ensure your promotions are spot on and full, ensure your team are well-prepared and motivated.

Although there may be some left-over credit card debt, many people will have some money to spend so make sure that if they come into your store, you are ready with a smile and spend some quality time with them!

Some things you can't buy on the High Street - MP3 of Happy (from Despicable Me 2)

Introduction

Hello

This is a short introduction to an ongoing series of short blogs on retail.  I have worked in retail for over 20 years and in this blog I'll share my experiences and show how these can be fitted to a plan for a retailer to move forward.  I also mention in the blog name about saving the High Street in the UK.  There is much debate about whether it can be saved or should be saved.  It has been the centre of life for many towns for over a hundred years.  It has to change and adapt to survive, but yes - it is worth saving.

I won't reveal my name at any stage my name, the name of any of my colleagues or any of my employers, past or present, as I don't think that this is fair for anyone or any company involved.  I still work in retail, so I value my anonymity.

I will take specific examples from my working life and apply them to a strategy to ensure that retailers have a better time of things (this is specifically vague, as I don't necessarily mean more profit, as this may mean less money in the pocket of you or I) and the High Street is returned to a vibrant place to work, shop and spend time.

Hope this makes a little sense ans starts to get your interest.  All of my blogs will be fairly short and on a single topic, so would make good weekly reading for any retailer, shopper or entrepreneur out there.

Thanks for reading!