Looking at how to analyse your company and your competition

I have been looking at different ways to analyse threats to your business, and came across this blog in a similar vein-

http://245daystogo.blogspot.com/2014/10/facing-my-fears.html

There are many ways at deciding what way to take your business forward and the above blog may be one if them. I've worked with many companies and used many ways of deciding which way I'd forward-

SWOT analysis

Competitor analysis

Annual cost reviews

SWOT analysis

This stands for Strengths, Weaknesses, Opportunities and Threats. And the analysis works straight along those lines. Divide a piece if A4 into 4 and in each section you simply write the Strengths, Weaknesses of your business, and the Opportunities and Threats to your business. From these areas you can formulate your plan. Expand on your strengths, work on your weaknesses, explore the opportunities, mitigate against the threats.

Competitor analysis

This is about looking at the key areas of the business and marking yourself and your competitors objectively. This will give the areas that you need to focus your efforts in. If your competitor scores highly in a particular area then you may need to rethink or redesign how you approach this area.

Annual costs review

I worked with a company that used the annual accounts to prompt a review into spending, and this prompted a review of all aspects of the business based on how spending decisions had influenced the year that had just passed.

For example - "we spent £500 on advertising in the Yellow Pages last year. How much business did this get us?" And from there you would check the referral database to see how much business came from the Yellow Pages, whether this was cost effective and whether it was something that should be repeated.

I like this method for the ability to relate the activity to cost and results, but it feels a little bottom-up in terms of how a company should be run.

I hope this gives you some ideas on how to consider where your business is in relation to where you want it to be.

Technology can help, but not for technology's sake

I'm just reading an article in the i newspaper about John Lewis plan for the use of technology in their stores. It involves the use of GPS to locate your position in the store and push notifications in their app to inform you of any offers in that part of the store. You will complete your shop on the app, and it will be picked and packed at the checkout waiting for you to pay. Do they know something that we don't? Do John Lewis and Waitrose customers shop in a different way to the rest of us?

I can't see that walking around the store looking at your phone is in any way a different or better experience than pushing round a trolley and selecting the items physically rather than digitally.

It's a gimmick.

I know a lot if peoe will probably use it when it's first launched and it will gain some publicity, but in the long term it will probably be consigned to the dustbin.

But technology can help retailers, but in the places that make a difference. Apps and mobile versions of retailers websites are a great way to engage your customers in your brand, your stores and your offers (without the reported cost of the John Lewis system above of £100,000.) Poundland sends incentives to customers to Pinterest, Tweet and Facebook their experiences and their purchase and this makes headway into social media networking markets. Friends may not immediately run out to Poundland upon reading about it, but will bear them in mind on their next trip to the High Street. It's this kind of social media networking that is making unseen inroads  into customers spending habits. The retailers with the best apps, best online offering and best social media links will probably win out over those that have great stores, but no more than that.

Click and Collect plays a massive part in this, and retailers of all shapes and sizes have become aware that they can still make the sale, even if the product us not in stock. Pay today and collect tomorrow, whether the buyer is in store, sat at home on a computer or browsing on their mobile phone is a great way to ensure that the business stays within your company - and that people don't shop around and look elsewhere. All retailers need is for the collection process to be smooth and streamlined to ensure that customers feel confident to follow the process again.

I witnessed a customer this morning in an unnamed High Street national chain go to the till to collect her parcel. The cashier asked her to wait while she found the delivery, and came back 2 minutes later to state that it wasn't there. Irate customer asked cashier to have another look and said that they wouldn't be doing this again. Cashier found item, but by this time there was a queue at the till, so the customer had to wait her turn to be served. All of this could and should have been much slicker and customer-friendly. A dedicated collection point, cashiers that are really clued up about their systems and an attitude of ownership of the situation make a great in-store collection experience.

Hope this helps.

Who's next? Why we can alienate our customers before they've even reached us

I hate the phrase "who's next?" in retail. I hate it with a passion. It strikes me as out of control, rude, unfriendly and derivative.

So why do we use it in most retailers when our customers reach the point of sale?

There are so many better things to say-

"Can I help?"

"Hello"

"How can I help?"

Are all better phrases that could be used over the "who's next?" comment. It runs deep, and customers really don't like it. It is at the core of where you and your customers stand with each other. Every time I hear "who's next?" I think "well, the person at the front if the queue - that's who's next."

It shows a lack of control, as the till operator should know exactly who is next. And they always do know who is next.

It isn't very polite, as a smile, eye contact and the phrase "can I help?" say far more positive things about our relationship with our customers and how we wish to treat them.

If this happens where you work, please talk to your team and eradicate it.

Are Tesco set for more pain?

Tesco have issued a second profit warning, the share price has taken a hit and the new chide executive has cancelled his holiday to start a month early.

Are we seeing the fall if the retail giant?

I have made my feelings clear in this blog about Tesco's major failings in respect if their customers. They try to be all things to all men and end up doing none if it well. In the case of the profit warnings, I think that we are seeing stock market tactics and a chief executive that wants to lay a lot if the blame at his predecessors - "look at the mess I inherited" - before a turnaround that looks oh so much better when/if it happens.

We are still seeing it with the banks, where they report trading figures that don't add up to the performance. There are always hundred of millions of pounds put aside for potential future bad debts and misselling claims. For me, this is double accounting, as the bad debts and claims are accounted for in the present but don't happen until the future. At a certan point, the banks won't have these future potential losses to put in their balance sheet and presumably some of the money they have put aside will have to reappear for losses and claims that didn't materialise.

Things aren't always as accounts make then seem

Tesco's next step is to look at their operation and decide where they want to be experts, and where they want to step back from. Offering opticians, pharmacy, tech experts, cafés, mobile phones, etc on top of their wide-ranging food offering is diluting the quality of service and advice they can offer their customers.

Online and 'Click & Collect' can provide answers

Some services Tesco will want to be able to offer in every store, but some have a better foothold online, where the expertise can be pooled and not spread so thinly. Tesco had a functioning website and a reasonably good Click & Collect offering, so these can take the strain of the expertise, whilst try get back to basics in the areas they can lead on in store. Great customer service will never go out if fashion.

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What is the right mix of retailers on the High Street?

I'm sitting on a High Street, looking at the range of shops and wondering if the mix of shops makes the difference in the vibrancy of any High Street or town centre.

Just in my line of vision, I see a food shop, shoe shop, pet shop, pound store, pharmacy, clothes shop and a variety store. Over the street is a coffee shop, an optician, a card shop, 2 fast food shops, a bookmakers and a charity shop. It's a good mix and with ample parking and safe places to cross the road, it's a vibrant area with places to spend, eat and just stop and watch the world go by. Slightly further in the same street are 2 supermarkets, another fast food shop, a car wash, a chain pub and a DIY store.

When High Streets and town centres grow up organically to have a collection of shops that attract a range of customers, then it just works.  It's when the free market doesn't provide this vibrancy that local planners and councils need to get involved.

So how does this happen?

When there is a high demand for commercial property, then planners can look at accepting or rejecting certain uses based on the mix they already have. Landlords can look at choosing a tenant based on the longevity if their tenure as a viable business and a degree of survival of the fittest occurs to ensure the very best retailers are present.

When it doesn't happen

But we haven't been in a situation as competitive as this for several years now, so landlords will be far less choosy in their tenants. At the start of the financial meltdown, commercial landlords would probably have taken anyone who could pay the rent.

So planners have to take the lead and provide planning rules that allow diverse retailers to a High Street without penalising the landlords. This is a fine line, and planning officers have generally been quite lenient in their criteria over the last 6 years or so.

I would strongly suggest that the criteria be clearly laid out and stuck to rigidly for every application. Filling a High Street with charity shops or discounters in a downturn isn't the only way out of the downturn.

People look for bargains, look for value but the days of buying things just because they are cheap has disappeared. Customers are savvier and want something that will do the job they've bought it for.

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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?

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Shop Local is more than just a slogan

Why don't customers in all walks of life choose smaller, independently-owned local businesses to interact with?

Why would you get your coffee fix from a national homogenised chain when there's a local alternative available?

Local companies employ local people, are run by local people who then spend their income locally.  International companies funnel income away from your local area (often in tax avoidance schemes that deprive the UK Treasury of much-needed tax income.). The ethics of major banks, retailers and hospitality companies is regularly brought into question by their mis-selling, corporate governance and tax affairs - so why go global when you can go local?

I would urge all local independent retailers to push this fact in your marketing.

If you are local, live local, send your kids to a local school, spend locally, pay local council tax then you already have an emotional link to the area you are selling your products in and have an empathic link to your local buyers.  You must use this link to forge links with other local businesses and the larger local community.

I would suggest that you source your products from local suppliers wherever possible. If you can supply from your local community then the connection you have with your local community will be much stronger.

Can you survive without promotions or sales?

  As retailers, we work on tight margins for large parts of the year.

The time to refresh and clear out old stock comes in the sales. Traditionally an annual event, this had been pushed into 2,3 or 4 times a year, mainly by fashion retakes that want to cleanse their stockrooms of the last season's unsold items.

An alternative method, pushed by the supermarkets and beauty stores is the promotional period. Thick is where particular lines will be on a particular promotion, often BOGOF or 3 for 2.

The other, less used, method is to create a clearance section or stand in your store to rid yourself of lines that haven't sold, are short of date or you no longer stick.

Can you survive as a retailer without moving to sale, promotion or clearance?

I think that the ideal scenario would be to never have to end up with any of these situations, as your pricing strategy will determine the sales levels of your products.  Say you have a line available in 5 different colours, and 1 colour is being left behind. Well, a price drop would perhaps be a better way of selling that line through than clearance, or editing for the sales.

Some retailers rarely have a sale, some never use promotional periods, so what would be the way forward to become a retailer that stands on your own merits? Would being respected enough to have your products bought at full price all year round be desirable?

I say "yes."

And I point to independent local retailers as both the answer and the solution to this. A strong local retailer that satisfies a local demand by producing or sourcing products that people need at an attainable price should have no need for promotions of sales, but could strike deals with individual customers.

"I'll buy 2 if you knock £10 off the price"

This is a better way for an independent retailer to do business than to sale or promotion their way through stock.

There is another solution that I have mentioned regularly in my blogs - Click & Collect, where you open up your range to internet buyers and have the item ready to collect in your store.  This opens up the potential buyers, and can be used to sell nationally or overseas if the shipping costs are not too burdensome. This increases sales and allows you to clear your range more quickly.