Did an asteroid just end the age of the dinosaurs?

A few weeks ago, it came out that Boris Johnson may have spent £200,000 on the refurbishment of the Prime Ministers 4-bedroom apartment in Downing Street.

That created a bit of a stir for a number of reasons. In the UK, Prime Ministers have an annual allowance of up to £30,000 of taxpayer’s money to contribute to costs of maintaining and furnishing their residence.

The relevance of this story to our industry is that Boris Johnson’s partner referred to the existing furnishings of his predecessor as a “John Lewis furniture nightmare”. (For Non-UK readers – John Lewis is an upmarket department store with 35 locations across the UK)

Bad PR

Retail is struggling to bounce back from more than 12 months under the pandemic, and many small and large stores are continuing to tighten their belts.

In March, John Lewis announced the closure of 8 stores. So, in this context, it is especially hard to see them being tripped up.

As a result of this snub by Downing Street, John Lewis’ quality score and their value for money score went down more than 5 points. However temporary, it suggests this story will have a significant impact on the brand’s public perception. The overall brand health, which averages a range of markers, had fallen by 4.8 points.

In 2020 John Lewis was the best brand in the UK. It will be interesting to see how well the brand bounces back from this story.

Final blow

It’s not just John Lewis that’s finding themselves in trouble. Many department stores are floundering.

This month Debenhams will close all its stores, a sad conclusion to a journey of a store that was initially founded in 1778 in London and grown into 178 locations across the British Isles and Denmark.

In France, Galeries Lafayette faced losses of up to €1 billion, in the U.S. JC Penney was facing bankruptcy, and other department stores worldwide are facing similar challenges.

Some will blame COVID, but it is more likely acceleration of a trend started years before the pandemic hit. COVID is just the last asteroid to hit these retail giants of old.

Perhaps the UK government will impose an online sales tax or some other measure to level the playing field, but it does not change consumer preferences and buying behaviour. The convenience of online is paramount, especially since technical innovation is reducing barriers and providing convenience with an increasing range of product groups, e.g., use of AR in trying spectacles, furniture and fashion.

If retail cannot compete with convenience, they need to make it up in relevance and social engagement. The use of technology can facilitate both these factors.

Relevance is about adding value to the buying experience, such as try-and-buy, getting a demonstration and some help setting it up. It is about making a connection and providing something extra. The best brands connect the physical and the digital experience, e.g. John Lewis will happily advise you in-store and won’t push the sale. Online sales near a physical store are associated with that presence. Another good example is Apple, where you can complement online purchases with training and support in-store.

The biggest shortcoming of digital is the lack of engagement.

Social engagement is about building on that, providing community space that is associated with your retail operation. Some department stores have organized book readings, food tastings, cooking demos and fashion shows. However, more can be done to draw traffic.

Imagine providing discounted space for learning and playing, maybe involving the local council to create more engagement and purpose around the physical retail environment.

Managing the workforce in a conventional store has always been challenging. Lately, even more so with fluctuating capacity limits and changing opening hours due to COVID. Add to that the complexity of a cross-functional workforce to take into account social engagement as well as ensuring you have the right people in the right place at the right time. Of course, that can all easily be automated so that you can focus on managing your people and improving the in-store experience.

If you’re a shopper, what’s most important to you when shopping? If you’re a retailer, we’d love to hear from you and share our insights and experience.

Contact us at Simms & Associates to know more on how your company can use technology to adapt and evolve.



By: Michiel Lely

Director Professional Services