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Drapers Retail Market Report roundtable: Knowledge is power

Small- and medium-sized fashion businesses at a Drapers breakfast meeting had one thing in common: their customers are calling the shots.

It is a cliché that successful businesses put the customer at the heart of what they do. But the challenge for retailers now is to find exactly where the customer is, and make sure they are properly targeted.

At Drapers’ breakfast roundtable, held at London’s Covent Garden Hotel on March 27, retailers and brands as varied as Ted Baker, Bonmarché, Reiss, Closet Clothing and Coast all noted that, although confidence was returning, customers were still cautious about parting with their hard-earned cash.

Young fashion brand Duck and Cover’s head of sales Gareth Jones said: “Almost without exception people have said it feels like it’s getting better, but we are not seeing business rushing back.”

Beth Butterwick, chief executive officer of value chain Bonmarché, agreed. “Everyone talks about the economy getting better, but that is not necessarily falling right to the bottom of customers’ purses at the moment,” she said, adding that poor weather at the start of the year also hindered spending.

Jigsaw product director Barbara Horspool noted that consumers were still “very considered now in the way they are spending” and that they were “looking for brands that give them value” - no matter where they sit in the market.

“Consumers have come out the other side [of the recession] behaving quite differently. They want emotional engagement, quality, trust - all these things are really important,” she said. “When there is a lot of the same thing on offer, those that show a bit of entrepreneurialism will win. People want choice on the high street.”

Discounting is still rife. Horspool said the number of sales suggested “some of our competitors aren’t quite as confident as us”.

Reiss’s head of information systems, Hugh Raeburn, echoed this. He observed that some competitors offered promotions so frequently “they are either sitting on a mountain of stock or nervous that things aren’t going to sell”.

But retailers are getting savvier about how they spread the message, as they realise that brand reputation is damaged by being constantly on Sale.

One director spoke of how a sales assistant in a rival store had “whispered” that there was a Sale on, while others talked of the increase in online-only sales, flash promotions and tie-ups with consumer magazines. Hackett ecommerce director Kristine Kirby agreed there was a move to “make it look less panicked”.

Duck and Cover’s Jones noted the rise in the number of Sales right after pay day, saying “the competition to get money out of people in those first two weeks of the month is stronger than ever before, because people are worried about running out of money”.

Retailers and brands agreed there was still tension between those working in ecommerce and those working in stores about who “got the sale” and who was stuck with the returned goods.

One attendee told an anecdote about a previous job in which they discovered a sales assistant had offered personally to post an item for a customer returning it to avoid having “negative sales” that day. Others agreed the two arms remained “siloed”.

Reiss’s Raeburn said: “If we all had the time again, we would build our systems completely differently.”

Hackett’s Kirby said her approach was to insist “we only have a customer channel” - that it is irrelevant where the purchase actually took place because of the way people browse across channels before making a final commitment to buy. “At the end of the day, we all work in the same company the customer bought something from,” she said.

The new dynamics created by the online revolution meant that many in the room felt the customer was driving change.

Antony Comyns, head of ecommerce at shirtmaker Hawes & Curtis, said: “The customer is taking us on the journey - not the other way around. We have to try everything we can to join everything up for them.”

For example, Comyns noted that consumers did not feel comfortable using iPads, so he wanted to introduce kiosks in store instead. “If I put a computer in the middle of the store, no one will touch it. With iPads, people are still unsure. Kiosks look like something from a railway station - it’s something they are used to, so people will walk up to it and start using it.”

Reiss’s Raeburn agreed that consumers are now dictating how they shop: “Twenty or 30 years ago it was us saying to them, ‘This is how you shop with us.’ Now it’s the other way around. We are being led by [the customer]. You feel slightly out of control, but we will get there.”

Butterwick agreed in principle, but felt it could be costly to constantly second guess what they wanted. “There is no point in investing in a really expensive system if the customer is not there yet - you want to be one step ahead, not four,” she said.

She highlighted some of Bonmarché’s upcoming initiatives - such as launching in garden centres or considering developing lines for sale on cruise ships - as a savvy way of “going where the customers are”.

However, in this age of listening to the ever-demanding customer, mistakes are still being made.

Tony Mannix, managing director at Clipper Logistics, noted that several retailers looking to upsell to the click-and-collect customer located the pick-up desk upstairs or deep inside the store, which he argued was a blunder.

“Click-and-collect customers want to be in and out. They want a quick shopping experience, so you should put it by the doors,” he said. “Don’t make it difficult - click-and-collect is what the customer wants to do.”

The question, is what the customer will want next? Ease of access appears to top the list. Fulfilment issues - especially the time taken to refund a customer - were raised by many as potentially damaging.

Choice also was a high priority - the more distinct a retailer or brand’s offer, the more likely it is to succeed. The attendees - most of whom represented firms with a turnover of under £200m - said they felt their size was a help rather than a hindrance.

As Raeburn put it: “The smaller guys are in the stronger position. They are more agile than the ‘oil tanker’ guys and they are the ones that can make that change.”

Retail Market Report

The Drapers roundtable breakfast was sponsored by Clipper Logistics and K3 Retail.

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