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| Selfridge's Boxing Ring |
Ex Myer CEO,
Bernie Brookes, made a comment this week that could be a good guide for all
retail entities.
“Why not
take the best of the John Lewis online model, together with the best of the
Nordstrom service model, together with the retail entertainment model at
Selfridges and the private label focus at Kohl’s.”
Brookes was
talking about Myer but before you say “What is the relevance for our market?” I
think the relevance covers the whole retail spectrum – online accessibility,
customer service, entertainment, and exclusive offer, are all elements that any
retailer needs to look closely at, including QVM Traders.
Online:
John Lewis,
the UK department store, has long excelled in its online offer. In 2016 it
reported that 33% of its sales were conducted online. While in-store sales have
declined like most other department stores around the globe, their online
growth has been continuous and a useful counter to the impact of changing
consumer habits. QVM Traders who are experiencing a similar sales decline in-stall
may usefully look at online business to fill the gap, just like John Lewis. As
we have pointed out elsewhere, Australia Post are recording record parcel
numbers as consumers embrace online buying.
Customer
Service:
Nordstrom,
The US department store, has become synonymous with best customer service and
it stems from their personal approach with customer service people having
names, and being encouraged to act individually in meeting customer needs.
Finding ways to make your customer service personal (and that includes
electronic communication) is a valuable tool and, as Nordstrom have found,
takes the pressure off price.
Entertainment:
Selfridges
is another UK department store, and they go the extra yard to entertain their
customers with things like their creative pop-up stores and even potato peeling
classes. Don’t laugh, there are many in the new age generations who have never
peeled a potato. Selfridges recently introduced a boxing ring and boxing
classes in one of their stores and have a long history of innovative
entertainment including showcasing one of the first TVs back in 1925. At QVM, entertainment
will probably fall largely in the realm of management responsibility although
individual traders can certainly consider exciting their customers, and
differentiating from their competitors, with innovative in-stall activities.
Exclusive
Offer:
The US
department store, Kohl’s, has steadily grown its private label or exclusive
designs as a core way to differentiate from its competitors. In 2016 nearly 50%
of their offer was in private labels and that has certainly been a focus for
local stores like Myer and David Jones. Myer’s private label content however is
less than 20%. Bernie Brookes, while recently heading South African department
store Edcon, got their private label content up to around 70%. Aldi is a classic local example of maximising private brands. Exclusivity can
be generated in many ways, including simple branding, and QVM Traders may also benefit
from promoting exclusive content.
Large retailers spending millions (probably billions)
on how to best promote to modern consumers. They are our consumers as well, and it would
be wise to closely examine what the big boys are doing.