With much written in the press recently about the demise of Toys R Us and Maplin, experts are now considering what could have been done to save the businesses and turn their profits around.
Trading conditions on the UK’s high streets are tough. Whether it’s Brexit to blame, high business rates, a spike in inflation, the national living wage, or the apprenticeship levy, the fact is that more and more retail businesses are failing. And with this in mind, retailers need to look beyond existing offerings and tactics and re-address their operating models.
In the age of Amazon, constant and quick change is needed. Customers are changing the way they want to shop. Ecommerce, and mobile commerce in particular, is playing a rising role in retail sales and businesses in the industry need to adjust their models by looking to a more digital future if they want to survive and thrive.
The millennials, whose buying power will soon surpass that of generations before them, are spending more money on experiences, rather than material things. They want in-store and online social interaction, with digital platforms enabling real time posting of photos showing friends their whereabouts and purchases. They want a personalised marketing approach, where online platforms know their preferences and make recommendations accordingly. Convenience and flexibility is now key, with the demand for both online and in-store purchases, quick delivery as well as instore collection of pre-ordered goods, and more innovative ways to pay for merchandise.
“Digital transformation is no longer a choice for businesses, but a must,” says Pat Lynes (City AM – 2 March 2018), adding that the collapse of Toys R Us and Maplin simultaneously was “inevitable”.
“Some of these big businesses were set up over a century ago, and their structure has barely adapted. These firms aren’t able to move quickly enough to make the changes that will save their business in the future.”
Businesses need to take a leaf out of the tech startups’ books, Pat says: “The arrival of agile, tech-based companies has caused change to become a constant, iterative process, rather than one making changes in big three-to-five year chunks.
“Fast, intense, and incredibly purpose-driven: that’s what a startup looks like – not a cumbersome behemoth.”
With this in mind, he says businesses should take a “SWAT team approach” to transformation by bringing in a smaller, external team who will work alongside management to help them make bold, brave decisions which may well go against the grain of how things have always been done in the past. One that will challenge existing ideas and capitalise on the raft of new opportunities presented by changing consumer patterns.
At Beavis Morgan, our business specialists are committed to providing entrepreneurial retailers with an understanding of the key issues driving the retail sector.
Being centrally located within walking distance of London’s ‘silicon roundabout’, and working in partnership with our technology business experts, we are well positioned to provide retailers with the most appropriate solutions to improve operational efficiency.
In the age of digital, those businesses who do not invest, reinvent and remain current run the risk of failure. Don’t let that happen to your retail business.
Find out more about how we can assist. Contact Steve Govey or your usual Beavis Morgan Partner.