Will an economic recovery gain pace? Could the weather beeven more unpredictable? And will the high street remain Sale-obsessed? Retailers and experts give their 2014 forecasts.
Derek Lovelock outgoing Executive chairman, Aurora Fashions
We will start to see more retailers fully understand the implications of the inexorable move to omnichannel. Traditional views of retail roles will become increasingly blurred as smart chief executives look even more carefully at the skills they need from employees, and the best will be able to put together optimal teams. This will mean flatter structures and blending skills across functions.
Trying to stay close to the customer will be even more important, as at the moment it feels as if they are one step ahead of retailers with traditional models and organisations.
Andy Street managing director, John Lewis
This year will see no respite in the breakneck pace of retail change we’ve experienced in recent years, with customers continuing to demand more than ever from their shopping experience.
Retailers will need to focus on how they will provide compelling reasons for customers to visit and then stay in shops, emphasising the social interactions the high street can offer.
Online, visits from mobiles and tablets will begin to represent the majority of traffic as shoppers pick and choose the channels - and retailers - which suit their immediate needs. Personalised experiences and products will also be key for customers impatient with retailers that don’t provide tailored content which reflects how they want to shop.
Finally, a seamless customer experience can only be achieved with ongoing investment in the omnichannel systems and infrastructure. We are investing £100m in a second distribution centre in Milton Keynes which will support plans we have for both Johnlewis.com and the new shops we will open in 2014 and beyond.
Gareth Jones group retail and strategy director, Shop Direct
One of the greatest challenges we see for 2014 is continued price deflation, driven by promotional intensity. Despite some very early signs of recovery, customers are still stretched financially. As a result, they need more stimulation than ever to purchase beyond the usual trends and styles, particularly when it comes to full-price items. Retailers that get the blend of quality, service and value for money right will continue to win during 2014.
The weather will continue to present both a challenge and an opportunity. Volatile weather conditions mean the quality and volume of transitional ranges are more crucial than ever to see customers through from season to season. Any fashion retailers that aren’t planning to include transitional products in all of their 2014 ranges are leaving themselves massively exposed.
Of course, the ongoing unpredictability of the weather also brings the sourcing debate back to the fore. Near East sourcing allows greater flexibility but British manufacturing is also experiencing resurgence in response to continued price inflation in the Far East.
In certain categories, there’s now little cost difference between manufacturing in Britain, Turkey or China. In 2014, speed to market may just win out over small cost savings.
Nadine Sharara head of ecommerce, Thomas Pink
I believe there are three key opportunities and challenges facing fashion retail brands in 2014. These are brand presence, digital retailing and customer focus.
It’s becoming increasingly difficult to create and maintain brand presence as the market is already saturated and competition is fierce.
Finding and retaining customers in a fickle trading climate is increasingly difficult and traditional methods are less effective and not sustainable.
Retailers need to react quickly and adapt their traditional retail thinking to fully embrace digital; but the challenge here is in understanding how to do this profitably and how to leverage technology to deliver exceptional customer experiences in store, online and overseas. Linking up channels and communications through a single customer view, listening to customers and understanding the true cost of acquisition within the context of customer life cycle are critical to making the right investment decisions across product, marketing and technology. Retailers and brands need to place more focus than ever on the customer at the heart of the strategy.
Changing the company culture to think outside channel silos from the top down and bottom up will be essential to the speed of success, and requires a strong visionary leadership team.
John Marquis store director, de Gruchy, Jersey
My prediction for the fashion sector in 2014 is that life won’t get any easier and we will continue to face the challenges of the economy, even though we are told it’s starting to turn around.
The opportunities for retailers in the fashion sector will be to look wider than the local market for inspiration and to seek out new and developing brands that will add a point of difference from the core high street offer.
Fashion retailers will take an even more creative approach and will look to be distinctive. The best will know how to instinctively stand out from the crowd.
I predict there will be a sunny outcome for fashion in the spring as the weather could not get any worse than last year.
Andy Rubin Chief executive, Pentland Brands
The good news in 2014 will be how well the UK economy does compared with the rest of Europe. The Chancellor has confounded his critics by showing austerity and growth are possible.
We’ve grown our business in the UK in the last few years by ensuring our products provide great value, quality and attention to detail.
The challenge we all face is how fast everything is changing in a more global, connected world. Coping with change is now an essential skill. Millennials - people born between 1980 and 2000 - are starting to dominate purchases so we need to make sure they are represented in our decision-making and that our product and marketing meets their needs.
Colin Temple chief executive, Schuh
A challenge for retailers in 2014 will be internet giants making the fashion business a commodity business. By this I mean that price becomes so dominant that style and looking good take a back seat to penny-pinching. Ironically this creates an opportunity for style-led bricks-and-clicks retailers who understand fashion to add value by giving great customer service, both on and offline. Their store networks can become mini-warehouses that can swiftly satisfy customer demand, but also offer a great shopping environment for those customers who value service over price.
It would be nice if there were some strong new trends and looks for next year and it also would be great if local councils and landlords could work to make shopping centres and high streets special places to shop.
David Short country managing director, footwear group Macintosh Fashion UK
Although there are clear indications of economic recovery it will take some time for that to filter through to consumer spending. There are signs of improvement but they are erratic and not yet consistent. While like-for-like sales growth and good margin management will continue to be the platform for improved performance, there will continue to be an emphasis on growing revenue by exploiting new channels, both offline and online. The challenge is to ensure that these channels are profitable, that they integrate seamlessly with the core business and, most importantly, that they fully meet our customers’ expectations.
Simon Goodfellow commercial director, footwear brand Oliver Sweeney
International growth through both wholesale and web remains our biggest opportunity, particularly in the US, where we have enjoyed substantial growth and appetite for the brand over the last couple of seasons.
An aggressive store roll-out with existing key accounts, the acquisition and development of new customers and an acquisition-focused marketing plan also present some of our biggest challenges.
Equally interesting is China, where we have some exciting developments in the pipeline, launching early in the year. The selection of the right partners with the right proposition is key to successful entry and growth in this market.
Julian Blades co-owner, eight-store designer retailer Jules B
Over the past six months the market has changed dramatically and we are now entering an era of dog eat dog. The major store groups, some online businesses and larger independent chains have resorted to kamikaze discounting and constant promotions, which have successfully altered the face of the market and educated the consumer never to pay full price for anything. Unfortunately it will be the smaller independents which don’t have an online side to their businesses that will suffer first, as they will find it harder to move their stock and compete with the aforementioned.
Shopping culture is changing rapidly and will continue to adapt as broadband becomes faster and more accessible to all. Unless retailers invest in their business and improve their offer and service, they will not survive.
Martin Schneider owner and head menswear buyer, premium retailer Accent in Leeds
Maintaining footfall within a city centre location is certainly going to be a challenge, especially when parking is so expensive. However, the main challenge will be high street discounting because this is killing independents. Both in store and online, we are constantly being hit with discounts, even from stores you would have never dreamt would be discounting. Everyone seems to be getting dragged in when what we need to do is stand our ground. Harvey Nichols went into Sale on June 11 in 2013 and that was when summer was just starting for us. It is getting earlier each year and that is our biggest worry. The year is without doubt going to be tough.
Justin Burzynski men’s buying & supply chain director, Dune Group
Dune London menswear has grown and performed very well for the last three seasons across all distributions - in standalone stores, House of Fraser and John Lewis. Our challenge is to top this and continue our like-for-like growth. We feel confident we have put together a really well-balanced range for spring 14 to achieve this.
We have also set up a wholesale showroom in New York to break into the US and our biggest opportunity is to take our collection Stateside.
To date our spring 14 range has been well received and we are set to deliver our first orders. We have just shown our first autumn 14 phase at [New York trade show] FFANY.
Carlos Duarte country manager UK & Ireland, H&M
We look forward to the new year and exciting our customers with our new collections. We have a new H&M Sports range launching in January, a new David Beckham collection with a fantastic campaign to support it, and a Conscious sustainable collection for spring, all offering fashion and quality at the best price.
Juls Dawson founder, Just Consultancies
Unfortunately for the retailer, the consumer is finding it easier to buy more product below RRP. This year it seems the whole market followed suit and is now doing flash Sales outside recognised Sale periods. Sale periods seem to be moving earlier and earlier, hampering the opportunities for retailing clothing within full-price selling windows. If we are part of the EU, and have so many unwelcome rules and regulations thrust upon us, why don’t we fall in line with the rest of Europe and have our Sale periods regulated to certain times of the year and for limited durations?
Michael Weedon deputy chief executive, British independent retailers association (BIRA)
I see some reasons for optimism - and others to temper it. There seems to be a stronger pulse in the wider economy and in the housing market in particular, which makes owners happier, although pay growth is still lagging behind inflation, which doesn’t help. Town centre footfall has been more sprightly than out of town, which tends to help indies. Although the growth of digital sales will continue to crank up the challenge to analogue retailing, initiatives such as indie portal MyHigh.St will enable more indies to open for business online. It’s all to play for.
Kate Walton owner, womenswear retailer Havetolove in Newcastle
I think 2014 will be a good year. Our challenge is to always think outside the box, stay one step ahead of the competition and offer the best possible customer service. We have some fantastic collections coming through so I am excited for the new year.
Retail is all about therapy at the moment and a chance to escape the outside world, so we have a colourful palette of animal prints, neon brights and feminine florals arriving for spring 14. I love trends that have longevity and appeal to all ages, so I’m looking forward to the return of feminine elegance, whether it be the perfect dress or a blouse and skirt.
Mei Chung buying director, Browns, London
For autumn 14, I feel we will see key items such as the poncho, oversized outerwear and playful shearling. Metallic shades of copper and old gold in combination with prints will play a key role in pants in autumn 14. We will also see denim trends heat up in fine tailoring and sportswear.
Winter sweatshirts take a further step into technical fabrics with sculpted shapes. As for colours, combinations will be inspired by past generations’ fairy tales. There will be a strong presence of sea green and lush green velvet. I am concerned it will be a real task to introduce this colour to our clients.
Helen Dickinson director general, British Retail Consortium (BRC)
The retail industry continues to undergo transformational change, and 2014 will see this pace of change accelerating. Our most recent sales data shows that within the clothing industry nearly a quarter of spending is online, but the future is channel-agnostic and retailers are continuing to invest in flexibility, convenience, and consistency of branding, whether interaction is at home, in store or on the move. It will be a year of opportunity for exports, with successful UK retailers strengthening their foothold in international markets and capitalising on the sustained appetite for ‘Brand Britain’.
At the BRC, 2014 will see us working hard on our key priorities: shaping regulation affecting the industry - especially continuing to make the case for business rates reform following the welcome, but short term, measures in the Autumn Statement; enhancing trust and further exploring the responsibilities of retailers within supply chains; and developing skills and showcasing the industry as a vibrant and rewarding career choice.
Diane Wehrle marketing and insights director, retail consultancy Springboard
The impact of business rates will continue to be felt on town centres in 2014, despite the aid introduced in the Autumn Statement. To benefit from the £1,000 business rate discount, businesses need to have a rateable value of up to £50,000 and this includes only very small businesses. While it may make a difference to some, those town centres working at the margin aren’t likely to benefit as the majority of smaller businesses in town centres have a rateable value of more than £50,000.
The key issue is that the fundamental problem - the outdated structure of the rating system - has not been addressed. By April 2012, a number of businesses had closed because they couldn’t make it over the Christmas period, with an accompanying rise in the national vacancy rate - the pattern was the same in 2011. So following the first quarter of 2014 we’ll again see an increase in vacancy rates.
Generally, footfall data was no better in 2013 than 2012, and November was worse than in 2012. Over the year from January to November 2013, footfall dropped by 1%, by 3.7% over the same period in 2012, and by 1.6% in 2011. So the situation is still very volatile and it does not bode well as we go into 2014.
Simon Taylor head of international partnerships, New Look
Macroeconomic challenges are always going to be difficult to predict in any international market - there’s nothing new in that. In terms of opportunities, clearly ecommerce continues to be an interesting area of growth, be it through owned or third-party opportunities.
Antony Comyns head of ecommerce, shirt retailer Hawes & Curtis
It appears that consumer confidence is lifting slightly, which is better news for retailers going into 2014. Online is continuing to grow, but customers are becoming a lot more savvy in the way they shop and in many ways are ensuring that we price the product competitively and provide a premium service with multiple payment and delivery options.
Hawes & Curtis works within a competitive space where price is very sensitive. Rather than lower prices we opted to improve the quality of our product. Last year saw us add a silk-touch finish to our men’s formal shirt range. This gives the shirt a soft feel and improves the ease of ironing. This process has an additional cost but we preferred to add value rather than lower the price. We are also working on improving our entire shirt fits, tweaking the collars and adding new products to the range. Shoes have been trialled, as have quality knitwear, coats and gloves. In 2014 we expect to extend the range based on these trials and introduce a comprehensive suit range.
This year will see us add a variety of currencies to the site as we continue to concentrate on the international business. Two country sites [Germany and Russia] are earmarked to be fully translated and we will be employing native speakers to manage certain areas of the online business.
Click-and-collect continues to grow and we will look to improve the speed of delivery, with many stores receiving the parcel on the same day and the balance within 48 hours.
Early 2014 will also see the launch of a Hawes & Curtis app, as well as the main site becoming fully responsive. A combination of kiosks and iPads will be launched in stores to enable our customers to view and purchase the full range of products available online, and have the parcel delivered to their address or collect in store. It’s all about customer convenience.
Donna Ida Thornton Founder of denim retailer Donna Ida
In 2014 I think fashion will be all about the modern wardrobe, anchored by key pieces and finished off with statement tops, coats and accessories.
For spring 14, I’m looking forward to all the new fresh lemon and lilac pastels and the nautical stripes of 1950s Americana in the Ida [Donna Ida’s own brand] On the East Coast collection, worn with my new Rizzo shape, a high-waisted crop skinny jean. For autumn 14 we’re feeling more biker, with cool skinnies with knee details and deep petrol colours setting the pace for the season, and printed coats to finish off the look.
For denim, the slouchy skinny is the shape to go for in blue, with released hems from J Brand, Frame and Mother Denim. White is bigger than ever this year - expect boyfriends, cigarette legs, skinnies and flares. Grey will be the trend that lasts through the whole of 2014. This first appeared in J Brand Photo Ready styles, but will continue to evolve with new washes and shading from soft smokey shades to darker granite colours.
Daniel Morris managing director, accessories brand Paul’s Boutique
This year will continue the trends of 2013. Prices should be steady, retail will increasingly be driven online and we should not assume we know what will happen tomorrow - change is constant. Online will continue to take market share from bricks-and-mortar, with American-style promotional activity the year round. Mega Monday will lead to Transactional Tuesday and Wonderful Wednesday.
Landlords and the Government will continue to say they are trying to help the smaller businesses, but nothing will really change, especially in London and the Southeast.
Vicente Castellano managing director, Hackett
We see 2014 as a really positive year for Hackett, full of opportunities and hopefully meaningful growth. The coming year will see our new Regent Street location having traded for a full 12 months [it opened in November], our presence in China will start to be visible - with eight to 10 stores by the end of the year - and we will keep growing in markets where we are already present in both wholesale and retail. Hopefully all the good predictions about the European economy will become reality and 2014 will be the year that consumption in Europe picks up again - as a really important part of our business this will have a positive impact on our growth.
In terms of product, we really expect the revised accessories range and the Mayfair collection will make Hackett a much stronger proposition for our customers. We will keep investing in quality and design as the main drivers of brand development.
Sean McKee head of ecommerce and customer services, Schuh
2014 will look very much like the year just past, with a recovering economy but customers still conditioned to hunt for value. Most businesses will want to discount less than in 2013 - where promotional activity has been prolific in the second half - and will hope the seasons behave normally this time around. The pure-plays will continue to look for bricks-and-mortar fulfilment opportunities as this is the one piece of the puzzle they still need. We will all still work at improving our data, but added value will come from accessing small data, rather than big data.
Our focus will be on the ‘standing still’ problem - an increasing mobile mix further driving pressure on baskets and conversion, meaning the core challenge is delivering more and better-performing traffic to our sites. By the end of 2014, I would expect smartphone traffic will exceed desktop for at least some retailers, us included. At an acquisition level, the product to watch will be Google’s Product Listing Ads, which are likely to become much more widespread, but the cost will be interesting. In terms of optimising the customer experience, the usual debate will continue, but responsive design will be on most businesses’ radars.
I expect 2014 will be the year that the practical (or at least potential) applications of wearable tech start to become clear.