Articles

The Connected Retail Leader

2015-04-08T15:53:01+01:00

I’ve been talking to a lot of retail leaders recently, and many are facing very similar challenges. Retail is one of the UK’s fastest-moving and most unpredictable sectors. The pace of change and rate of competition continues to intensify. A retailer’s brand is incredibly important in this competitive environment – and of increasing importance is how well employees can bring the uniqueness of a brand to life and engage customers with it. Some retailers struggle with trust issues in a world where customers, employees and other stakeholders are increasingly savvy and demanding. Expectations of openness and transparency are high. Social media and digital communications enable customers to provide instant feedback – and they anticipate an instant response. And of course digital is changing the way we shop – the British do more online shopping than any other nation. All of this is backed up by Kantar Retail’s recent ‘Winning the Retail Battle in 2015’ report, which lists customer insight, technological innovation, multichannel shopping and personalising the shopping experience amongst the key retail priorities for 2015. There is huge pressure on leaders to focus on these priorities and excel in a competitive and often unpredictable marketplace. We’ve seen high-profile heads roll at major retailers including Tesco and Morrisons in recent months. And while the leaders at the top of an organisation continue to play a pivotal role, the most successful retailers are moving away from the old style of command-and-control leadership towards a more connected style of leadership. They are ensuring that employees across the organisation are involved in decision making and building more collaborative cultures. The days of the ‘hero’ leader, where one person at the top of the organisation made most of the decisions, are gone. ‘Connected’ leaders not only devolve decision making and encourage collaboration. They set a very clear direction and purpose which others can buy into, and which provides a framework for that shared decision making so that others can feel confident the decisions they make are helping to achieve strategic goals. They are also values-led and authentic, which helps to build trust. And particularly important in the retail sector, they are agile – they can respond swiftly to change. Sharing decision making across the organisation also helps ensure that decisions are made close to the customer – where they matter most. A great example of a ‘connected’ leader is Asda CEO Andy Clarke. Asda is responding to the challenges in the retail industry by streamlining its management team. Clarke believes that this will enable Asda to prosper in an increasingly competitive market, “by enabling faster decisions through streamlined structures where colleagues are empowered under the leadership of fewer, bigger leadership roles.” Clarke is openly recognising the value of pace and agility. This is a great example of connected leadership, where decision-making responsibility is becoming more devolved across the organisation, and collaboration is encouraged. The big challenge for British retailers is how quickly and effectively they can respond to change and reinvent themselves as necessary. Massive changes such as the shift to multichannel retailing and the rise of the quality discounters are challenging the business models of many retailers. Leaders are being forced to change. Change does of course bring opportunities as well as threats. How best can leaders focus on opportunities? By setting a clear direction, being agile, focusing on core values, involving others in shared decision making, and collaborating widely. These are the factors of connected leadership that can lead to sustainable success. By Andrew Shapiro, Client Partner, Cirrus

Argos launches Birthday Club for party-planning parents

2015-04-08T14:13:46+01:00

Over 40,000 parents have signed up to digital retailer Argos’ new Birthday Club, a scheme to help parents plan for their child’s birthday party, as the high street giant looks to make its customer communications more personal than ever. By sharing their child’s age and date of birth, parents will receive personalised and exclusive party-related information in the lead up to their child’s birthday. Over 70,000 youngsters have been registered with the club so far. Helen McIntyre, Business Development Manager at Argos, said: “This is the first time Argos has requested customer information to send out timely and personalised emails. Now we know when birthdays are coming up and how old children are, we can send relevant product suggestions, offers and useful tips and advice that best match that child at the right time, making the communication far more helpful to parents.” Parents will receive an email focusing on party themes six weeks before their child’s birthday, which includes a 20% off voucher, followed by an email four weeks before on gift ideas. A fortnight before the big day, an email will remind parents of all the last minute party essentials. The Birthday Club was set up to create a one-stop-shop for children’s birthdays, after research found that parents struggle to find everything they need in the same place when shopping for parties. McIntyre continued: “By receiving more relevant information and great deals, this should increase customer loyalty to Argos. Plus it opens up great opportunities to gather insight from our customers, such as by trialling toys with certain age groups.” The Birthday Club was originally soft launched in November 2014. Relevant for children of all ages, the most popular sign ups so far have been for those aged between two and six years old.

Gucci Westman says goodbye to Revlon

2015-04-08T09:13:02+01:00

Gucci Westman, Global Artistic Director for Revlon, has announced that she is leaving her role from 15 April. After joining in 2008, Westman created colour collections or ‘colour stories’ which have been linked to the company’s global success. Martine Williamson, Senior Vice President at Revlon commented on how Westman, “helped elevate the brand within the world of fashion and inspired us to push the envelope in the colour collection category”. Famous for her attention to detail, Westman is recognised for pushing the company’s exuberant image. She leaves the American beauty brand as it aims to encompass a ‘bigger strategy’. Financial results last year were not necessarily ground-breaking for the retailer, due to weak foreign currencies on its international markets. However, Revlon showed unquestionable growth in its Professional Segment as the business integrated TCG into the company and introduced its ‘Love is on Campaign’, pushed by Benjamin Karsch, Revlon CMO. 2014 saw a net sales increase of 4.7%, leaving Revlon President and Chief Executive Officer, Lorenzo Delpani to comment, “2014 was a year of significant change and transformation, resulting in strong growth for Revlon’s business”. Having undoubtedly contributed to the company’s growth, Westman told WWD: "It's been an incredible seven years, and I loved the variety of experiences - this was a great chapter in my career, and I'm excited for all that's ahead." It is not yet known where Westman’s next move will be or who (if anyone) will replace her. With the thumbs up from Martine Williamson, Revlon’s Senior Vice President of Global Marketing and a name made for the beauty industry, Gucci Westman has a clear creative path ahead of her. "Gucci has left a lasting impression on our brand that will not be soon forgotten. We wish her all the best going forward in her exciting and colourful career”, Williamson said.

Fashion e-tailers push the cross sell of other fashion brands

2015-04-08T09:07:09+01:00

Digital department store Very.co.uk is boosting its branded fashion offer with the launch of high street names such as Miss Selfridge, which made its debut on the site this week. The young fashion label is one of a tranche of brands to join Very’s roster, including Warehouse and Coast, which will go live in the next month. This follows the recent introduction of River Island and Wallis to the website. Miss Selfridge launched with a carefully selected collection on Very, which is already proving incredibly popular with shoppers. Very, the flagship website at the UK’s fourth largest etailer Shop Direct, already stocks over 900 labels across its department store range. The retailer is enhancing its fashion offer to put in front of its customers all the brands they would shop on the high street. The recent swathe of clothing brands launching on Very, follows the appointment of former Gap Buying Director Zoe Matthews as Shop Direct fashion director last July. Matthews said: “We want to give our customers more of the brands they want. Our aim is to bring all the labels they’d seek on the high street to our slick, easy-to-navigate website to create a one-stop shop for fashion.” Miss Selfridge is fun, girly and bang on trend – a perfect fit for our younger, fashion-conscious customers. We thought it’d go down a storm, and it might be early days but it looks like our hunch was right.” We’re confident that Warehouse and Coast will also be big hits and will give our customers more reason than ever before to visit Very.co.uk.” The move comes after online fashion pureplay Boohoo revealed last week that it will conduct a pilot to sell 100 items of its clothing on Asos from next month. The fashion etailer, which sells own-brand clothing on its site, is aiming to push brand awareness in both its domestic and international markets through a presence on Asos and this will be the first time Boohoo sells clothes outside its own website. “Boohoo is delighted to announce it will be presenting its brand on the Asos platform, introducing an additional and well-established channel to market,” said a Boohoo spokesperson. “Boohoo has over 12,000 styles online at any one time, but the offering available through Asos will be made up of a capsule collection of around 100 items.” “Boohoo is a single brand, so we wouldn’t deem that as a direct competitor because we have 750 single brands on our website as well as our own brands,” Asos Boss Nick Robertson commented after Asos revealed its financial results on the same day. “Boohoo, because of the price points they sell at, appeal to almost a younger customer than Asos,” he continued. “We’re 20s, they’re almost teenager and very early 20s.” The CEO added that he doesn’t see Amazon as a fashion competitor, but as a “platform for potentially selling lots of clothes”.

Uniqlo to expand in US and Australia

2015-04-08T09:04:39+01:00

Uniqlo, owned by Fast Retailing, is pushing its business globally by targeting areas where it has already witnessed success. The retailer accounted for 52% of its Japanese parent company’s sales in the last year, as Fast Retailing reported that its profits had risen by 64% in the fiscal first quarter. For the 2014 fiscal year which ended August 31, Fast Retailing accumulated roughly $13.6bn, sealing its place as one of the world’s largest apparel retail companies. Uniqlo declared that stores open for a year and over, increased by an average of 10% during the quarter. With over 1500 stores across 16 markets the casualwear retailer is continuing to build its global presence, having recently announced developments in the US, Canada and Australia. US and Canada Uniqlo has revealed that it is coming to Seattle, Denver and Washington to focus on its US expansion. Since openings its first store in Soho, New York almost a decade ago, the retailer now boasts a portfolio of 39 stores across the US, including branches in New York, Boston and Los Angeles. Though the company is not quite on par with like-for-like retailer H&M, which holds 364 stores across the US, the launch of further stores is a move in the right direction. Uniqlo will also open another shop in Boston this summer, one in Chicago and a further one in Toronto, Canada. Australia Leases have been signed at Westfield Miranda and Parramatta for Uniqlo to push its Australian market in Sydney, which is currently marked as the company’s 16th market globally (Australia). The 1,250 sq m Miranda store will be held in the largest shopping centre in Sydney’s south, alongside another 100 retailers. Shoichi Miyasaka, Chief Executive of Uniqlo Australia comments: "We've received a very positive response from the local market since we opened our first store in Sydney and we're incredibly excited to continue to grow our presence within Australia” Japan The company’s base still makes up most of its revenue, with Japan currently holding 810 stores, as of March 2015. Last year Uniqlo Japan shut down 31 of its branches in September, later opening a further 20. It also suffered a dip in sales in March 2015, something put down to fewer public holidays to shop in store. The company’s expansion plans will allow it to disperse its lines over wider areas, where different economies are likely to provide slightly varied outcomes. These areas have been allocated to destinations where the company is already thriving.

Doddle launches click-on-campus at universities across the UK

2015-04-08T08:43:21+01:00

The purple parcel delivery service Doddle, is to change university campuses across the UK with a new click-on-campus solution to bring greater convenience to university students and staff. The new proposition, expected to be rolled out in 10 universities this year, launched its debut store last week at the University of Salford Student Village. Doddle is the only service of its kind that allows customers to have their parcels delivered in-store from any retailer or carrier. Students are able to have their parcels delivered to Doddle for free and use its returns service to send back unsuitable online purchases in a matter of minutes. As an added benefit for students from overseas, Doddle recently introduced an international delivery service, offering competitive pricing on sends abroad, in addition to its range of next day UK delivery options. Thomas Bush, Sales and Marketing Executive, Salford Student Village, said: “It has been a huge relief having Doddle take control of our mail service here at Salford Student Village. They have helped to take strain off the front office team which has allowed them to focus their time on more important aspects of their roles such as customer service. We are happy to see how well the operation is going and could not believe how smooth the transition period was between ourselves and Doddle.” The Salford store is the 32nd Doddle store to open in the last six months, with up to 100 Doddle stores expected to open by the end of 2015. Tim Robinson, CEO of Doddle, commented: “The launch of Doddle in universities is an extension of the convenience offering we have in railway stations. Customer service and convenience is in the Doddle DNA and we will continue to look for new ways to make parcel collection and sending easier for our customers.” Doddle is the UK’s first dedicated and staffed service for collecting, returning and sending parcels which hopes to ensure consumers will never miss a delivery of their online shopping again. The majority of Doddle stores are based in and around major train stations to allow commuters passing through to pick up their online shopping.

US coffee company Star-bucks the price of university for employees

2015-04-07T16:58:45+01:00

The US branch of Starbucks has said that it is committed to supporting its staff by expanding its “Starbucks College Achievement Plan” which gives employees the chance to obtain a college degree, for free. The Seattle-based coffee company launched its “Starbucks College Achievement Plan” with Arizona State University in June 2014 and currently offers its baristas two years of undergraduate tuition at the university, however, this will now be extended to four years, covering the entire cost of an online bachelor's degree which can exceed $10,000 (£6,700). Nearly 2,000 of the company’s workers have enrolled on the programme since June 2014, and Starbucks has said that it’s dedicated to supporting at least 25,000 staff over the next 10 years. "The unfortunate reality is that too many Americans can no longer afford a college degree, particularly disadvantaged young people, and others are saddled with burdensome education debt," said Howard Schultz, Chairman and Chief Executive of Starbucks. "We're stronger as a nation when everyone is afforded a pathway to success." The coffee retailer also offers benefits including healthcare and stock options to its employees. Employees who work at least 20 hours a week will be eligible for the full tuition fees, the equivalent of 80% of the company's 180,000 staff in the US. Starbucks has also said that there is no obligation to stay with the company once students have graduated. The coffee giant’s plans comes at a time in the US job market where major US restaurant chains and retailers, including McDonalds and Wal-Mart are raising their hourly wages and benefits to compete for the best employees. Starbucks said that 70% of its workers currently do not have a bachelor's degree.

Customers compete in budget buying games

2015-04-07T16:37:39+01:00

A string of recent ad campaigns have highlighted the importance of customer engagement and the need for retailers to connect with their customers. Jeff Bezos, CEO of Amazon quoted: "We see our customers as invited guests to a party, and we are the hosts. It's our job every day to make every important aspect of the customer experience a little bit better" Coca Cola has turned nostalgic with its ‘What is Happiness’ and ‘Kissed by’ campaigns, advertising its iconic drink through past legends Marilyn Monroe, Ray Charles and Elvis. Lager brand Budweiser is engaging with its customers by televising a hunt to find the nation’s best goal scorers. The company has collaborated with Sky Sports, pushing the campaign through star names Jamie Redknapp, Gary Neville and Ed Chamberlin. Senior Brand Manager at Budweiser, Andre Finamore Amaral described how the company has combined entertainment and consumer goods to satisfy its demographic: “Capture the magic of Sunday league football, and elevate amateur star players to an almost professional status. Every football fan dreams of seeing their goal on TV, so we are all thrilled to be officially launching our Budweiser Dream Goal ad on consumers’ TV screens to help make this dream a reality”. In comparison, retailers such as Estée Lauder, Clinique, Royal Canin, Latestinbeauty.co.uk, Vente-Exclusive and European electronics giant Media Markt are trying a new approach. Still focusing on customer needs, the retailers have introduced the idea of ‘buy and win’ by joining forces with Lucky Cycle, a customer promotions technology specialist. The company is launching in the UK following a £1m investment, providing shoppers with a ‘fresh way of rewarding’ without discounting. The method gives one in five or one in 10 customers the opportunity to win their basket of goods for free. Simon Calvert, UK Country Manager for Lucky Cycle comments, “We are aiming to shake up the world of retail promotions by offering something new and exciting to consumers when they shop online- the ‘win your basket’ concept taps into the appealing aspect of chance”. Lucky Cycle’s clients are seeing an average 30% increase in conversion rates and sales, with 60% of winners going on to share their victory across social media platforms. The campaigns are also available in store. The promotions can run across individual products or an entire range, with shoppers notified instantly about their win. Calvert continues, “It’s a fun way for retailers to engage with shoppers, increase conversion rates and reward loyal customers with attractive offers. Social media sharing amplifies a campaign and extends its reach”. The step demonstrates the need for retailers to focus on customer satisfaction to keep up with competitors. “The days of whacking up a billboard are waning,” said Greg Duggan, co-founder of WheyHey! Ice-cream. Connecting with customers in order to build a continued relationship is vital, particularly online where options to find an alternative are becoming increasingly competitive.

Cadbury facing £60m Indian tax bill

2015-04-07T09:11:14+01:00

Confectionary giant Cadbury was yesterday faced with Rs5.5bn (a near £60m) tax bill in India, due to allegations that the Dairy Milk chocolate maker claimed excise benefits on a “phantom” factory. India’s tax authorities cite that Cadbury, owned by food and beverage conglomerate Mondelez International, gave inaccurate information when claiming an excise tax exemption connected with a factory in Himachal Pradesh in North India. Cadbury is disputing the bill. Cadbury, the world’s second largest confectionary brand, completed an expansion of the plant in 2009 and now India’s authorities assert the development was suggested as a new facility (and so eligible for a tax exemption), as opposed to an extension of an older factory. This led to allegations from several media outlets in India who accused Cadbury of seeking tax benefits for a factory that did not actually exist. Cadbury denied any misconduct and is prepared to challenge the decision in court. "The issue is one of interpretation, and it will be inappropriate on our part to discuss the details externally at this time since the matter is sub-judice and in the legal domain," said the brand in a statement. The company is examining the order and will challenge the same in appeal, as we firmly believe that we have correctly claimed exemption of excise duty. We also firmly believe that our executives acted in good faith and within the law in the decision to claim excise benefit in respect of our plant." India has been under pressure to reduce its budget deficit of late, attempting to boost fiscal revenue by pursuing billions of dollars in unpaid tax claims against large multinationals such as Vodafone.