If you're passionate about transforming retail
operations and improving performance, plus
you're accountable for key change projects
and programs in your company, then you're
in the right place.
Welcome to the Retail Transformation Show
with me Oliver Banks.
Hey, it's Oliver here and welcome to the Retail
Transformation Show.
This is Episode 23.
I've just come out of Retail Week Live 2019.
Now this is a big event for the UK's retail
leadership.
And it was a great success.
The purpose was to help retail leaders to
network, give new ideas and inspire people
to drive retail forward.
It's a two day event and there were over 160
speakers sharing insights on everything from
consumer trends and marketing to the next
generation through to how to build brand loyalty
through to how to create positive workplace
cultures that are ready for change, and a
whole lot more.
If it's going on in retail, it was there at
Retail Week Live.
And whilst I was there, I was absolutely delighted
to catch up with today's special guest.
So today, we're lucky to be joined by Retail
Week's Executive Editor, George MacDonald.
Together, we dived into all sorts of topics
from some of the golden nuggets shared on
Retail Week Live through to retail trends
over a long period, plus some of the key things
that you need to do to make sure that your
retail business stays relevant and will continue
to thrive in the future.
So just before we get going, do remember to
hit subscribe if you've not already done so.
And that way you won't miss any future episodes.
So on to my catch up with George MacDonald.
And I do have to warn you, this is a two parter.
Today is part one and next time Episode 24
is going to be part two.
So that's one of the reasons why you want
to hit subscribe right now, right?
If you've not already done so hit subscribe,
and don't miss out on part two.
So without further ado, here is my catch up
with George MacDonald.
So today, I'm excited to be joined by the
man known across the retail industry quite
simply as George.
It's like some sort of musical superstar I'm
sitting next to.
He is the Executive Editor of Retail Week.
So welcome George MacDonald to the Retail
Transformation Show.
It's great to have you.
How are you?
Very well thanks for having me.
We're here Retail Week Live.
We're recording.
We've just come out of a great session with
Alex Baldock from Dixons Carphone.
And yesterday, when we kicked off, we heard
the theme was survival of the fittest.
And there've been some great examples of how
retailers are transforming to become fit.
But we're in a state of flux and change across
retail.
Everyone is talking about how they're evolving.
How they are transforming.
What do you think, George, are the biggest
shifts going on in retail right now?
I think there's a couple of really big things
that I would flag.
The first one isn't particularly new, but
it's still causing so much disruption and
that is the impact of new technology and how
that's changing consumer behavior and expectations.
And I think the other thing is what people
are choosing to spend on.
You know, there's much more competition now
for disposable spend from the leisure sector,
whether it's restaurants, or long weekends,
all these sorts of things.
And retailers have to really remind themselves
of their purpose, I think, and really approach
it almost in a simple rather than a simplistic
way.
As Alex Baldock mentioned in the session
you just referred to, you need a really good
answer to the question, "What are you for?"
And I think everything these days starts from
that.
When times were good, you didn't really have
to think too hard about that question.
There was plenty of cake for everybody.
Whereas, now there's much greater competition
for that cake, not just from retailers, but
from other types of business.
And, you know, really powerful new competitors,
things like Spotify, the amount of time that
people spend on their smartphones.
Time is a competitor these days I think.
It sure is.
And it's certainly something that people have
felt pressured time wise for quite a number
of years.
But I just want to touch on that competitive
element.
There are so many competitors now in the marketplace
that are not the classic retailers.
Your Netflix, for example, have eroded what
was that classic DVD market that so many retailers
did use to champion.
And they've suffered and that has declined.
The same as Spotify, for example.
And I think a number of retailers perhaps
have been a bit slow to react to how these
new competition or this new competitive landscape,
I should say, how it's evolved.
What are your reflections?
Why have retailers been a little behind the
curve, do you think?
I think they were originally caught a bit
off guard, because some of these new companies,
let's take Amazon.
They came from nowhere, they grew very fast.
And one of the reasons for that was they turned
out that they knew consumers better than the retailers.
Traditionally, the retailers had things much
more to themselves.
They were the ones who knew about customers.
But expectations have been transformed by
companies like Amazon and Spotify at every
single level from the range that is available
to the prices that are offered right through
to delivery options that would have been inconceivable
really not much more than a decade ago.
What is going to make any retailers stand
out?
And the fact is, despite us talking about
companies like Amazon and Spotify, the lion's
share of retail sales still goes through shop.
Technology, things like search might play
a part, but equally the shop still plays a really
important part.
And so then what is it about a shop which
can be really made the most of to create a
competitive advantage against some of the
new arrivals.
So in some ways, it is the fact that it is there. It can
offer things like click and collect.
But the other thing that I think is sometimes
overlooked, not made enough of, is the role
of the person these days, you know, the staff.
The colleague.
Exactly.
The colleague, the staff member, you know,
they can make a difference, especially when
you're getting into any sort of area of discretionary
spend.
And I think it's been interesting to hear
over the last couple of days, it's come up
a few times, the difference that people can
make.
That is not to downplay the importance of
technology, the rise multi channel at all.
All these digital things, actually, these
days more and more they're just a given.
It is the exceptions, people like Primark
and Aldi that don't play online, which
are proving the rule.
And so, you know, sense of purpose backed
by great colleagues, it's interesting that
Alex Baldock talked about how they're investing
in their people.
He said, you actually can't afford not to,
we hear a lot, understandably, about rising
costs, like a living wage, and but you can
turn that around, okay, you've got this cost.
So it is therefore really worthwhile to make
sure you are getting paid back on that.
And you know, that is all through, or very
much through having really excellent people.
And you know, people like John Lewis and other
retailers, putting more and more emphasis
on experience in store.
You really need good people to be able to
deliver that.
You need good people to be able to explain
complex problems, all these sorts of things.
I think it's really exciting.
For a long time, retail has been saying our
people are our assets or are our greatest
asset, which has been great but perhaps it's
been a little lip service, shall we say, or
a bit of a buzzword.
Yeah.
But now, more and more retailers really do
seem to be getting after how do they excite
their colleagues?
How do they make it a fun place to work?
Give them purpose, something that is really
important for retailers and retail teams?
Yeah.
I think, you know, the whole world is
changing.
Their attitudes about all sorts of things
are completely different from what it would
have been just a few years ago and we see
that in all sorts of areas.
And so one of the effects of that is that
I think the world is much less hierarchical,
and retail sort of has to become so to but
that does not mean there isn't people in charge
of things, or aboard.
But I think, actually, to be in tune with contemporary
customers, it is ever more important that
you're sort of in tune with your colleagues.
Recently, I interviewed Paul Martin, the boss
of Primark.
And he made what I thought was a really interesting
point.
You know, he said that he thinks and tries
to learn as much from the people who work
alongside him or below him as he ever does
from anybody who's been a mentor, his own
boss.
And that really, I thought that was a really
good point, actually.
Because apart from anything else, if you got
close connection and understanding of your
colleagues, you are automatically going to
be closer to your customers, I think because
you know, they're customers of yours and of everybody
else's.
I was thinking, the other day I was in Tesco
Express.
And I saw one of the people who works for
another supermarket nearby that I often go to.
She was in Tesco Express doing a shop.
And I just thought to myself, why is that?
She works in one grocer but she hasn't done
her shopping there.
And she had two full bags.
So that sort of said to me, there's something
a bit disconnected there.
That person clearly doesn't see value in the
store which she works other than it gives
her wage.
I wonder what she would have to say to the
chief executive of that particular grocer
about why she shop in the way she does.
I think there's a lot of powerful lessons
to be learned by going back to the shop floor,
getting closer to that customer touch point,
rather than that sort of classic sitting in
the ivory tower analogy.
Let's take a slightly different perspective,
different direction now, George, if that's
okay.
So you've been with Retail Week since 1998.
Yeah.
A long time.
Which you've seen some phenomenal changes.
So if we were to just rewind the clock back
to 1998, Tesco were keen to promote 24 hour
shopping because customers still back then
didn't have enough time.
So 24 hours shopping was the answer.
There was another small company that just
launched in the UK.
They're called Amazon.co.uk.
I'm not sure what, whatever happened to them.
But they were just starting out.
It seems crazy.
That actually, Amazon's not quite been an
overnight success.
It's been building for a long time.
How do you think the retail market has shifted
in those two decades that you've been at Retail
Week and observing it?
And how do we think it's going to shift going
forward?
Yeah.
I think, you know, we were talking earlier
about time, and you know, I think time is
moving ever faster.
So when I started, yeah, you're right about
the 24 hour opening.
But when I started, you know, that was when
Tesco was opening a lot of extra hypermarket
and a lot of the other retailers, the general
merchandisers, were really worried and up
in arms about it, because people would go
into Tesco and buy a TV as well as their food.
One stop shop and having an enormous share
of that.
Yeah.
Everyone thought that was the future.
Everyone thought that Tesco had seen the future
and it rolls out this fantastic offer.
And it was taking share from every type of
retailer, not just grocers.
And then within 15 years, that format was
being questioned.
Did it have a future?
People were asking because of the rise of
Amazon and others like it.
So you know what Amazon have been great at.
They've been really true throughout to their
original promises, I think.
So things like convenience, value.
They reshaped the landscape in that respect.
So now it's common that multi channel retailers
and their stores, you know, they won't allow
Amazon to beat them on price on comparable
products.
That has become a given.
And I think that actually, it's those sorts
of factors that will continue to change retail
is things like convenience.
You know, at the moment, there's a bit of
a... some retailers and retail property companies
are very much keying into the trend of urbanization,
which is a global trend.
So you've got people like IKEA have developed
stores that work in urban locations and that's
at the heart of their strategy now.
You got retail property companies thinking
of what should we do with that car parking
space, because we might not need so much of
it.
And because people are shopping in different
ways.
Again, urbanization has been explicitly linked
to some of these changes.
So you know, that need for convenience, that
desire for convenience, especially when people
feel whether it's true or not, when they feel
they don't have much time is going to continue
to be valued, I think.
One of the other things that gets a bit overlooked,
but the point was made here over the last
day or two, is actually the importance of
product in the end.
And if you've got something nobody wants to
buy, it doesn't matter whether you're online,
whether you've got the best fulfilment offer
proposition in the world, you actually need
good product, and that can be overlooked.
And again, it gives you that sort of sense
of distinction from others, if you have other
products that is exclusive or have undisputed
quality.
And you know, it's not a new thing, but it
just continues to dominate behavior.
Things like the smartphone.
You look at some of the companies that are
emerging elsewhere.
So for instance, in Africa, there's a company
called Jumia and it's planning a listing in
New York, and the talk is it might be valued
at billion dollars.
It's only, I think, it's less than 10 years old.
But it has built its business around the increasing
adoption of smartphone.
Stuff like the smartphone has, as a product
has become democratized and what it has given
people access to is more than ever before.
And, you know, I think that will continue
to be the case.
And then the other thing, and again it be
maybe it fits in a bit with this sort of sense
of what does time mean to people, how do they
value it?
They do want good experience.
So I think they'll be increasing blurring
of the lines between retailers and other types
of business.
What sort of experience can a retailer offer.
So we were hearing yesterday from Rapha.
They don't call their shop shops.
They call them, I think clubhouses.
And people come there and use the store, even
when it's not open, and they're happy for
that to happen.
The benefit to them of creating that sense
of membership of a club, is that, you know,
they do get the sales as a result, but it's
built around a different way of looking at
the consumer.
And I think you know, that sort of blurring
of the lines of what is a shop, what happens
there, to what extent are you going there
for services and just to meet people or do
something is going to play and ever more important
part, I think.
You always need to make sure that you're not
missing the wood from the trees.
You know, people from Aldi and Primark are
doing well because they're true to fundamental
proposition.
They have a goal.
They have a purpose.
And they're sticking to it with a laser-like
focus.
Exactly.
It has great prices, great product.
And at the moment, shoppers are completely
happy to go to a shop in order to get those
benefits.
So although there is such a time of transformation,
you're exactly right.
And what is the purpose?
What is the point of a retailer's existence?
And, you know, the various models that are all
being either implemented or tried out, show
that there's all sorts of ways of approaching
this and there is lots of opportunities.
But again, you know, to go back and start
from the customer, as opposed to perhaps you
know, what you have traditionally done.
What you've traditionally done might be brilliant.
Don't stop doing it.
But as a lot of retailers are finding, if
the markets moving around you then you need
to change with it and be adaptive.
Don't be left behind.
Now, I just want to pick out.
There's so many different directions we could
have we could go in in what you've just shared
but one of the elements I wanted to pick back
on was Rapha, the exclusive bike store.
I'm not a cyclist myself but I was talking
to Sarah Clark there, who's talking yesterday.
And I love the community that they're building,
I think that's a fantastic way that they have
a purpose of building a community of cyclists,
people that are passionate, the people they
employ, their teams are passionate about bikes
and cycling.
Their customers are passionate.
They want to build and connect everyone together.
That's a great example.
Primark and Aldi, you've given those examples.
They know what they do.
And they do it very well.
Amazon, convenience, they know what they do.
So all of these retailers are laser-like focused.
And I think that's so important for all of
you listening.
If you're a retailer, perhaps you've taken
your eye off the ball, perhaps your focus
is a bit muddled, then that is a great starting
place to go back and say, "What is it we're
doing?
And how do we need to shift and change?"
Yeah, I completely agree.
So that was the first part of my catch up
with George MacDonald.
And make sure that you tune in next week for
Episode 24 when we continue the conversation.
Now, I'm not sure about you
but I found it really interesting when we
looked back at what's happened over the past
20 years and some of the similarities, but
also differences that have occurred.
It makes me think of a couple of things.
Number one, is if you see a change, you've
got to get after it.
You've got to make it happen, because you
could get left behind.
And the second thing is you've got to stay
adaptable, you've got to stay relevant.
And that means having a purpose, knowing who
you're serving, and just doing a great job
at helping those people, those customers to
really solve their problems.
What were your key takeaways?
I'd love to know.
You can reach out to me on LinkedIn, or send
me an email, oliver.banks@obandco.uk.
And incidentally, if you want to get in touch
with George, the best place to find him is
on Twitter @GeorgeMacD.
Now, I'm going to put George's Twitter handle,
as well as some of the other topics that we've
discussed over at the show notes at obandco.uk/23.
That's obandco.uk/23.
So before we wrap up, just a quick reminder,
please do subscribe.
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week.
And I love when you message me as well just
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show even better.
So feel free to get in touch with those bits
of feedback, as well.
So hit subscribe.
Tune in next week for part two of my catch
up with George MacDonald.
And until then, have a great week and I'll
catch you next time.
