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Executive Predictions: The retail outlook for 2016

Fashion retail’s leading figures get out their crystal balls to predict what this year could have in store for the UK industry.

nick jones george asda

nick jones george asda

Nick Jones, managing director at Asda’s George

 

“From the market’s point of view 2016 will continue to be as competitive as it has been in 2015. However, it feels like there is some growth coming back into the market – there is a bit more disposable income about. It will be interesting to see who holds out at full price and who discounts. Discounting is an easy drug to get on, but it’s our job to make sure we have unbelievable prices everyday, so our customers don’t have to adapt their shopping patterns around our Sales.

“Online growth will continue and there will be more merging of the physical and the digital. You will be able to select a pick up location to save you waiting in for a delivery, for example.

“For George events will continue to be very important. Our shoppers are going bigger on Halloween, birthdays and the Olympics. They are looking for something to celebrate and we are there for them in an affordable way. It won’t be easy for clothing and the third quarter of 2015 was tough for Asda but we are confident.”

 

Paula nickolds john lewis

Paula Nickolds

Paula Nickolds, commercial director at John Lewis

“There are several trends we can confidently predict that we will see come to light in the coming year. More than ever before, consumers are looking for ‘guilt-free’ products, meaning that today’s brands must act responsibly and maintain integrity to be commercially viable. Customers are actively seeking premium materials, beautiful design, good-quality manufacturing and authenticity.

“Personalisation is another key factor for 2016. Luxury by today’s definition is not always about blowing the budget, but about adding little luxurious touches to elevate everyday life by seeking out personalisation across all kinds of products, an increased level of comfort and fast-tracked services to turn the ordinary into the extraordinary.”

 

Daniel Rubin

Daniel Rubin

Daniel Rubin, founder and executive chairman of Dune Group

“The retail market, both in the UK and internationally, has been challenging. In the UK the combination of adverse weather conditions, fewer tourists and cautious consumers, who are spending more on leisure than clothing and footwear, has made for a difficult trading environment. This, combined with general price deflation, has led to a heavily promotional retail market.

“More than ever you need the right product offer and service proposition to trade well. I’m cautiously optimistic for 2016. The economy appears stable and with the next interest rate rise not forecast until the end of 2016 consumers will feel positive. However given the competitive environment retailers will need to be on top of their game to be successful.”

 

Sergio Bucher

Sergio Bucher

Sergio Bucher, vice-president of Amazon Fashion Europe

 “In our fast-paced world it’s increasingly difficult to make predictions about the future. In 2016 I think the market will continue to further polarise around strong brands and affordable fashion – consumers are wise and want the best value for money. The most successful brands will be those that can meet customers’ quickly changing moods and tastes by being nimble. Mobile sales will continue to rise as customers become increasingly comfortable buying fashion on the move.”

 

Beth Butterwick

Beth Butterwick

Beth Butterwick, outgoing chief executive of Bonmarché and CEO elect of Karen Millen

 “At a macro level, customers are increasingly spending on leisure, entertainment and technology. At the micro level, this will mean retailers must work hard to earn their spend, with particular attention to a real understanding of ‘my customer’ and ‘what my brand means to them’.

“We look to this year with measured optimism and opportunity, but it will not be without its challenges. The living wage will be one of the headwinds of 2016 and, we are fully committed to delivering this for our colleagues. We will continue to modernise our product, our customers are telling us we can be ‘bolder and braver’. We will be targeting new customers, with a concentrated drive on brand personality and marketing, and in continuing to evolve our end-to-end customer experience, we will look to further develop the efficiency of our systems and processes.

“This streamlining of the customer journey is expected to be a major part of retail in the years ahead and I’m convinced that in time, consumers will no longer remember where they began and ended their shopping journey. As such, businesses that make their purpose clear and their propositions accessible, are likely to succeed.”

Stacey_Cartwright

Stacey_Cartwright

Stacey Cartwright, CEO of Harvey Nichols

 

“Growth in the luxury sector has slowed in the last few years, and we expect 2016 to be another challenging year. In this difficult trading environment, retailers need to work ever harder to stand out and deliver a strong, differentiated and compelling customer proposition. Through major investment in people, our retail infrastructure , marketing and technology.

”Harvey Nichols is in a strong position for the year ahead. We’ve just launched our first ever loyalty programme, Rewards by Harvey Nichols, which has had a fantastic reception and will allow us to get to know our customers better and most importantly reward them for their loyalty. We are creating beautiful shopping experiences in our stores. We have just opened a new differentiated retail experience in Birmingham and we have a radical and fast-tracked refurbishment plan for our Knightsbridge flagship store.

”The first stage of Knightsbridge is the launch of our new menswear destination in spring 2016, to be followed quickly by a revamp of our beauty and accessories offer. We continue to invest in our front line people to provide our customers with an exceptional level of service. We also continue to drive digital engagement, as we roll out harveynichols.com internationally, as well as expanding our online offer.”

 

Anthony Thompson Fat Face

Anthony Thompson

Anthony Thompson, chief executive of Fat Face

“With the UK clothing market growing very slowly, structural costs growing reasonably quickly, and no price inflation on the horizon, most profit growth will have to come via market share gains. Those with a differentiated offer, a trusted multichannel brand and international routes to market should still do well.

“What the market needs most is quality, newness and innovation. What it needs least is a continued ‘race to the bottom’ supported by cynical discounting and lazy retailers.”

 

Allan Nielsen

Allan Nielsen

Allan Nielsen, chief executive of Bestseller

“2016 will be no different to 2015 in terms of challenges and ever-changing competition. We want to make sure we are more prepared than ever before, working smarter to ensure stronger relationships and growth across our account portfolio. The local knowledge base we have working in the UK is key for us to keep ahead and deliver the top trends at the prices we know our customers want to see.

“Digital is set for continued rapid growth for 2016, which opens further opportunities for us to get more connected with key players and partners. We will work harder and closer with our accounts to maximise our offering and presence from a digital point of view, social media and strategic online approach.”

 

Colin Temple

Colin Temple, managing director of Schuh

 “2016 will continue to challenge. The change in trading patterns caused by Black Friday – which also affects the trading pattern for Christmas – will force retailers to become more sophisticated in their discounting and staffing if they wish to maintain some level of profitability.

“Jones the Bootmaker, Kurt Geiger and Office have new owners. If the new owners are looking for growth, it will be at the expense of other footwear retailers. This means that we will all have to buy better, be more efficient and offer the customer a better experience.

“Customers will continue to expect better service. The explosion of same-day delivery means that next-day delivery will become the norm rather than being a premium service. The advent of mobile payment will mean that all retailers will need to invest more in technology. Mobile payment allows us to open stores without cash desks, so we can have more display space in store. The shift from desktop and tablet to mobile is making internet retailing much more challenging. The smaller the device, the more expensive it is to appear on the first page of the search engines.

“The great thing about fashion is that trends always come and go. Retailers who can spot the trends, offer great customer service and operate efficiently will be the ones who survive and prosper in 2016.”

 

Federico Marchetti  CEO  Yoox Net a Porter Group

Federico Marchetti

Federico Marchetti, chief executive of Yoox Net-a-Porter Group

“For Yoox Net-a-Porter Group, this year’s biggest opportunity will be moving our integration forward, and sharing and combining our strengths across the business, from world-class technology, to exceptional service and content. With this strategy, I am confident we will retain and build on our 2 million-plus loyal customers. We continue to see a lot more opportunities than challenges ahead for us in online luxury fashion, although, as ever, we will need to be innovative and fleet of foot, responding quickly to any changes in our markets.

“I expect to see another year of rapid change in the market, as customers increasingly interact and shop with online luxury fashion retailers through their mobile devices. Only companies that put the customer at the heart of everything they do will reap the rewards.”

 

Nigel Oddy, House of Fraser

Nigel Oddy, House of Fraser

Nigel Oddy, chief executive of House of Fraser

“2015 has been an exciting year for us in many ways and next year looks to be equally as exciting, but with new challenges to overcome and mitigate against. The clear and growing interaction between online and bricks-and-mortar retailing, and the changing demands and habits of shoppers is putting pressure on retailers to reconsider how their businesses are best structured.

”We responded to this challenge in 2015 and have changed our business to ensure our customers are now even more at the heart of everything we do, complementing our truly multichannel business. We are confident this will put us in a strong position as we enter 2016.

“There are other challenges, however, that we as an industry face, including cost pressures from rising business rates, the adoption of increases in the national living wage as well as costs attached to the growth in online retailing. We are carefully assessing how these developments impact our business and the sector. To react and adapt in the best interest of our customers will be our priority.”

 

Angela spindler

Angela spindler

Angela Spindler, chief executive of N Brown Group

“I think we’ll see the pace of change really step up again for the 50-plus fashion market – the heartland for our biggest brand, JD Williams. For all retailers, the challenge and opportunity is how to adjust their model to ensure they can continue to respond to consumers’ increasingly diverse multichannel demands.

”At N Brown we will continue with our transformation, including the implementation of systems that will further underpin our ability to grow and thrive in this new retail environment.”

 

Jane Shepherdson, Whistles

Jane Shepherdson

Jane Shepherdson, chief executive of Whistles

“There is a new energy and excitement coming through for 2016 that is hard to avoid. The shift towards multichannel shopping continues apace, and consumers’ expectations of service levels are rising continually.

“In terms of trend, new silhouettes abound, colour is back, and fashion has become a must-have purchase again. Our product offer is strong and confident, and there are huge opportunities to engage with and delight our customer through authentic and genuine editorial, personalisation and flexibility of service.”

 

Meg Lustman  CEO  Hobbs

Meg Lustman

Meg Lustman, chief executive of Hobbs

“This year is gearing up to be an exciting one for the industry. Innovation will remain at the forefront of progress, as retailers contine to develop ways to attract and inspire their customers with an ever-more personalised experience. Businesses will need to be agile with their technologies and their locations, to capitalise on opportunities for expansion at home and abroad.

”While online – and mobile in particular – will continue to flourish, physical bricks-and-mortar stores remain a crucial element of the retail proposition. Businesses are all hoping for a positive outcome of the rates review in the spring.”

 

17. Ben Lewis  CEO  River Island

Ben Lewis

Ben Lewis, chief executive of River Island

“While the consumer outlook is improving slightly, we are planning cautiously and making sure that we are in a strong position in terms of having a great product range and offering a first-class experience in-store and online. Technology will continue to play an important role, so we will invest and innovate to best serve our customers, whether they are shopping in store, online or using our increasingly popular mobile apps.”

 

Neil Hendy

Neil Hendy

Neil Hendy, creative director of Coast

“I think 2016 will bring a real re-emergence of individuality and garments which look bespoke. For years now there’s been a lot of similar product on the high street, and a lot of people chasing the same trends and colours. I think retailers are going to become more individual in terms of brand handwriting, because the customer is demanding it.

”The customer is very savvy and wants constant newness. They’re also appreciating good quality more than ever and craving product with a one-off, unique feel. At Coast we’re known for product you can wear for occasions, but we’re also quite famous for beautiful prints and jacquards, so while we’ll obviously reference trends in terms of shapes and silhouettes, we’ll always maintain our brand individuality.”

 

Wendy hallett

Wendy Hallett

Wendy Hallett, managing director of Hallett Retail

Despite the overall economy improving, it will be difficult to change consumer behaviour away from buying during promotional periods. This, along with the introduction of the living wage, is highly likely to result in higher prices in order to protect margin, with a move away from the ‘first price, right price’ approach.

“Productivity will become even more key as staffing costs rise and employers seek to deliver more from fewer people. However, the living wage may give retailing an opportunity to attract more talent into the industry if we see the differentiation between retail and other sectors reduced.”

 

Moss Boss boss Brian Brick

Brian Brick  

Brian Brick, chief executive of Moss Bros

“This year will see the completion of our store refurbishment programme and transition to a full omnichannel customer offer. This will stand us in good stead with the Rio Olympics and the European Football Championships influencing patterns of trade in 2016. It will be interesting to see the development of the phenomenon that is Black Friday, both from a customer and a retailer perspective. Like it or not, it’s here to stay.”

 

Tom Joule, Joules

Tom Joule

Tom Joule, founder of Joules

“For 2016 we’re predicting pastels and pretty looks will be big, with a slight hippy style interpreted in a posh way. For retail trends, it’s all about the mobile, make it slick, easy to shop and quick to transact, we’ve seen good growth in this area.

”The living wage is factored in to our growth plans and has little effect.

“We’ve had a strong reaction on our forward-order ranges, and I believe this will reflect well for 2016. Mild winters continue to play a part in our thoughts of product selection for future seasons.”

 

scott tepper

scott tepper

Scott Tepper, fashion buying and merchandising director at Liberty

 

“We feel 2016 will be a year of femininity outselling androgyny, as Liberty’s customers are responding very well already to new season spring trends of embroidery, embellishment, sparkle and shine. The hints of classical English variations on the poetic sleeve, the ruffled neck and lace detailing are surefire bets to draw in a young generation of customers who were not here for the last go round on them. These trends always lead to a strong and personal jewellery moment, and we expect growth here to offset customer fatigue with statement handbags and shoes”.

 

Peter Ruis

Peter Ruis

Peter Ruis, chief executive of Jigsaw

“We are cautiously optimistic for 2016, and will continue to add extra space, at home, internationally and ‘digitally’. This is not a ‘freewheeling’ economy but if we innovate and differentiate we can continue to succeed.”

 

William Kim, CEO of AllSaints

William Kim, CEO of AllSaints

William Kim, chief executive of AllSaints

“We are very excited by the opportunities for brand growth that continue to be afforded by the global marketplace – specifically by leveraging new geographical markets, new product categories and new channels. We will continue to reach our global customer base by investing in new stores in the Americas, Asia and the Middle East. Following the launch of our handbag collection, we are adding categories, such as an expanded shoe collection with our new production partner, Vince Camuto.

“We will continue to capitalise on the global opportunities presented by our in-house digital team, further enhancing the customer journey with new platforms and process improvements.”

 

Steve Buck

Steve Buck

Steve Buck, managing director of Barbour 

“We expect trading conditions in 2016 to remain challenging for retailers, so offering excellence in garment quality and customer service will be even more important. The digital landscape will continue to develop and having a clear and coherent digital vision will be essential for success. In 2016, by listening to our customers and working hard with our retail partners, I am confident Barbour will carry on making good progress.”

 

russell jones

russell jones

Russell Jones, director of Robinsons of Bawtry, Doncaster

 

“For an independent retailer, social media and the internet are the future. But there is still a need for personalised marketing. At Robinsons we run events throughout the year to engage with our customers. We start the year with the Bawtry Fashion Week on March 10-17 in aid of the British Heart Foundation. Then there is the annual Visit Bawtry Race Day on 14 May and the Robinsons Charity Polo day on 3 July.

“In 2016 I would like to see brands take a longer-term view and stamp out ridiculous mid-season promotions such as Black Friday. They constantly erode margins and are confusing to customers.”

 

sally heath new pic

Sally Heath

Sally Heath, ecommerce director of New Look

“Our priorities are still to grow the UK business, but international is really where we’re focusing our energy. It’s well documented that we’re moving into China. We have 60 stores there now, so it’s a big focus. In ecommerce international is really on the agenda. We’re re-platforming our French and German websites, we’re also going to migrate our UK website. We’re focusing on building our presence through ecommerce.”

 

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