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Oliver Banks of OB&Co

Retail Transformation Briefing – 31st January

Published 24 days agoΒ β€’Β 7 min read


Hi Reader,

Are we overlooking simple solutions to improve our business?

Retail is an industry that is thousands of years old. However, I believe that we often forget about solutions and ideas that have traditionally been successful. But when we dust them off again, we're surprised at how effective they can be. Home delivery, subscriptions, and omnichannel are just a few examples of ideas that have worked in the past (sometimes centuries or millennia ago), and yet, they're still great now. Sure, they may not have been named in the same way. In fact, back then, we probably didn't even recognise it as a "strategy".

Inspired by a great video from Ian Scott and Jack Stratten, who recognised the opportunity of handwritten chalkboards at Gymshark's store in London. These add elements of authenticity and personality. And if you've ever tried doing one.... it demonstrates a great level of skill, too - especially if you are getting your drawing skills out!

Yet, I find it fascinating how great ideas get forgotten and rediscovered as new innovations. As Ian points out, not all innovations need to be tech-based and innovation can be "in terms of creative uses of existing tools". You may recognise that many small (non-tech enabled) retailers may continue to use some of these great ideas. From handwritten notes, carefully crafted window displays or even expert product knowledge - these can act as surprisers and delighters when revisited.

Sometimes, what we need to move the needle might be sitting right under our nose - so perhaps for the next big idea, we should look behind us at what we've already done and forgotten.


Retail transformation news headlines

😒 John Lewis are set to make 11,000 further redundancies in their business and cited the costs have been a prohibitive force. The changes are not expected as a single reduction, but will be spaced across 5 years. The redundancy announcement followed a move to halve the cash benefits of their redundancy packages available as they mentioned their aspiration to transform and invest in payroll. They're looking to make the changes to better support the remaining colleagues than those that leave the business. Additionally, they've also announced that 2020's transformation plan will now extend past the original 5-year timeframe up to 7 years. However, as Dame Sharon White leaves as Chair next year, it will be interesting to see if there is a major pivot away from their diversification into non-retail business units.

😬 Many retailers, including eBay, THG and H&M, are also announcing job cuts. eBay are looking to make changes in the US, accounting for around 9% of their total workforce, after recent recruitment outpaced business growth. eBay's CEO wrote: "We’re implementing organizational changes that align and consolidate certain teams to improve the end-to-end experience, and better meet the needs of our customers around the world". Meanwhile, THG have been investing in Autostore warehouse automation and are consequentially looking to make changes to their warehouse operations team. In Spain, H&M are looking to close 28 stores, 20% of their local estate, and make relevant redundancies as they look to ensure their stores are in the right locations to be competitive in the market. Other companies like REI and Levi's are also due to reduce roles and cut costs.

🎁 Etsy are majoring on gift giving, with a new AI-powered gift finder and better gift shopping tools. Customers enter details about who they're looking to buy for, including the relationship, occasion and interests. The tool then recommends gifts based on over 200 personas. They are also including better gifting tools for customers, including sending gift teaser messages, sneak peeks and allowing customers to pre-purchase and postpone sending until the right moment. I particularly love the latter - such a simple idea that helps customers shop more easily.

πŸ‘— Chinese mega-retailer JD.com have opened a new fashion warehouse in Paris, France, to make it easier for European brands to access the Chinese market. JD Worldwide offers import and export services and is connected to the main JD.com ecommerce platform. By being locally based in Europe, they're looking to minimise risks for brands and offer faster deliveries and better prices for consumers. The warehouse also includes their new authenticity tool to ensure that no fake products are entering the market. This is a major move that will interest a number of brands, especially those more luxury brands that are in high demand in China. It will be interesting to see if they expand to other categories in time.

πŸ’ͺ Frasers Group have acquired WIT Fitness, including a gym and sports performance training provider. With sports and fitness retailers in their stable, including Sports Direct, Evans Cycles as well as brands like Slazenger and Everlast, they already have a handle on the product side of the market. This move signals a shift into offering services and subscriptions. The group already has an estate of 59 gyms in place across Sports Direct and Everlast branding. However, this acquisition, they'll be in partnership with over 12,000 gyms offering CrossFit training. Having recently acquired former John Lewis and M&S anchor stores, it wouldn't be surprising to start seeing gyms appearing as regular part of their Frasers department stores.

πŸ€– Amazon's acquisition of autonomous vacuum cleaner iRobot has been cancelled after the EU blocked the move. The deal was initially struck back in 2022 but is now not happening as there were concerns that iRobot products could receive preferential listings in the Amazon search results. It was thought that the smart vacuums would support Amazon's smart home ecosystem, with Alexa at the centre. It will be interesting to see whether Amazon Robotics now creates their own in-house product to fulfil that same need, or whether the company move onto other opportunities.

β›½ Morrisons are selling 337 petrol stations to MFG worth Β£2.5billion and will be investing in their grocery business and reducing debt as a result. Both are owned by private equity group CD&R and will see Morrisons take a 20% stake in MFG. It feels like we should expected there to be more synergies and partnerships between the two companies, including convenience store operations, product ranges and future fuel solutions, including EV charging. It also mimics the shared ownership and partnership between Asda and EG Group which developed last year.

🍞 Co-op are the latest retailer to launch a retail media network across their convenience store estate. Convenience missions are different to the major supermarket shopping trips, and ranges often feature a greater reliance on brands relative to in-house products which is perfect for CPGs. Co-op also recently announced a significant leap in membership numbers (15%) and the proportion of the business from those members (21%). They have plans to boost member numbers by an additional 60% over the next 6 years. To support this goal, they've just announced membership pricing, following a number of other retailers and this is likely to further push up the member-related business as well as add more value to the retail media network.

πŸ‘Ά Poundland are making major moves to expand market share across clothing and homeware categories. This week, they've announced a major transformation of their general merchandise ranges and will see 2,000 new products introduced for UK and ROI customers. There will also be more product crossover with Pepco ranges across Europe, delivering improved scalability and profitability. They have also been on a new store opening roll recently and are soon to be opening a new store with an expanded range of kids and baby clothing which they're partially branding as "Motherland", with a distinct nod towards iconic retailer Mothercare, whose brand is now owned by Boots.


New podcast episode: Short term gains, long term pains (part 2) - #275

The best way of avoiding making reactive short-term decisions at the expense of long-term performance is to be more planned in the long term. Easy to say, harder to do. Join Oliver Banks and consider how you can avoid the long-term pains but instead look to build the plans, culture, and leadership attributes and attitudes that can weather the short-term challenges and continue to persevere on towards the company vision.

This is part 2 so be sure to also check out the previous episode below.

Take a listen to episode 275 of the Retail Transformation Show podcast and you'll hear

  • The art of proactive planning to anticipate and adapt to market disruptions.
  • How a clear, purpose-driven vision can guide your company through short-term challenges without losing sight of long-term goals.
  • Finding the right transformation that delivers goals and don’t compromise future growth.
  • Insights into building a business model that is robust, diversified, and resilient to changes in the market landscape.

Also, check out these recent episodes:

​#274: Short term gains, long term pains (part 1)​

​#273: Blending labour savings and service levels​

​#272: Retail trends and themes for 2024​


Driving Retail Transformation: Book spotlight

"Winning hearts and minds" is a phrase that is often used in change and transformation. I've also found it casually used as a phrase without really considering the implications or importance of people for any given initiative.

So, as I was planning out the book's contents, it was inevitable that this topic must be featured. As the structure became clearer, these topics happened to land around the middle of the text. However, knowing the importance of the topic, it felt like a mountain to climb. It felt like a huge challenge to effectively scale to this peak, but also knowing that as you reach the peak, you're only actually halfway through the journey.

To quote from the start of this chapter,

Aiming to earn stakeholders' support, as transformation leaders, we are occasionally open to a crisis of confidence. β€˜Is this a good solution?’ β€˜Will this work out for the company?’ β€˜Should I put my name to this?’ β€˜Will this work out for me and other people involved?’ β€˜Do we have the capability to do this?’ β€˜Are we good enough?’ β€˜Am I good enough?’
​
In this time of mental and emotional anguish, the battle for hearts and minds starts much closer to home. It starts with you.

As it turned out, this section ironically mimicked the challenge I felt as I wrote it.

At times, this middle section was hard to write, trying to find the right words and ideas for such a crucial topic. But perseverance, reflection and research won through and the second half of the book felt so positive on my way towards the ultimate completion point.

However, as I look back on the text now, it's fitting to end that chapter with the idea of inspiring others to step up to the challenge. That's the exact idea behind the overall book. It is possible to change, to respond to the market, to improve... To transform better.

Driving Retail Transformation: How to navigate disruption and change is out on 5th March and available for pre-order now in all good bookstores.


And finally, if you follow me on LinkedIn, you'll notice that from today I'll also be issuing this newsletter on that platform as well as by email like this. This is part of a trial to help share these insights and ideas more widely. Please do subscribe, share and support the Briefing and I'll be hugely appreciative.

In fact, I'd love to hear from you over on LinkedIn - what are your reflections on the stories from this Briefing? In fact, if in a few minutes after this hits your inbox, try clicking this link for the newsletter on LinkedIn.

Keep transforming better,

Oliver

Oliver Banks of OB&Co

Oliver helps retailers to change and transform their operating models. He's the host of the Retail Transformation Show podcast and founder of the RetailTransformation.Live virtual event

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