Look the beast in the eye
With the arrival of department stores came new models of business and redefined shopping habits – vast, sprawling places where you could get everything under one roof. Today, the commercial realities of large space, high costs and rising rents are coming home to roost. Change is here. The challenge now is: how quickly can they alter their course? What can they do today to effect immediate change?
A year ago Visual Thinking launched its Insight Briefing into the department sector, seeking insight into the views, opinions and shopping habits of UK shoppers. Our conclusion was the sector’s future was hanging in the balance. The headlines coming out of House of Fraser, Sears and Hudson’s Bay over the past 12 months, and more recently Debenhams, are sobering and vindicated the reports’ findings.
While there has been much talk of ‘transformation’, retailers are having to look the beast squarely in the eye. That means making brave and bold decisions, albeit not headline-friendly ones. This is no time for simply dipping a toe in the sea of change. What’s needed is true evolution followed by effective implementation of change across as many stores as possible, as quickly as possible.
If that wasn’t enough, onetime-stalwarts of the UK sector are facing competition from new contenders in the market. Next isn’t a department store retailer, but is increasingly acting and thinking like one. The recent opening of its new ‘department store’ on Oxford Street features own-brand products neatly interwoven with concessions such as Clarks Kids, Paperchase and hip Dutch lifestyle brand HEMA. Next has cleverly begun to mix its own range products with third-party brands, underpinning its strategy via its online and catalogue offering. By doing this, the retailer can gently establish familiarity and comfort in shoppers’ minds before slowly extending these products into their physical stores. This isn’t a one-time foray for Next either – its store in Manchester is much more ‘department’ focused, with the innovative addition of the Rockar/Ford car dealership, all giving shoppers more reasons to visit.
While Next is morphing into a department store, M&S seems unsure if it even wants to be one any more. To me, it smacks of singular lack of purpose and confidence in its own skin. Now is the time for leaders at M&S to finally demonstrate courage and decisive action in the face of adversity.
It’s something that nobody could accuse Debenhams of lacking. Like other struggling high street retailers, some department store groups have too many under-performing shops and need to downsize. When I attended the official launch of its Watford store, I asked the question: more store closures? Along with the rest of the invited audience, I was given the assurance there were no plans for further change. Earlier, I said that a lot changes in a year. But in retail, a lot can change in a month. Debenhams has now announced up to 50 store closures and its worst-ever retail performance. Fighting talk from Sergio Boucher, who has declared this is part of a radical overhaul to ensure future success.
I salute Debenhams’ boss and his senior leadership team for their attempts in recent months to transform the business. The Watford store is part of the Debenhams Redesigned strategy, and is cohesive, considered and clearly well planned. Beauty is one of the hero departments here, featuring many examples of innovative thinking, such as new brands, spaces and experiences, plus flexible zoned areas.
Its new Watford store is a huge step forward for the retailer but even so, it isn’t particularly radical. For me, there is still further work to do if it is to turn this promising concept into a genuine game-changer.
On my recent visit to Canada, I discovered that retailer Nordstrom is truly redefining the beauty experience. With such great examples out there, I’m just surprised that even more innovation and inspiration hasn’t yet made its way into UK department stores.
For me, the answer is black and white. Or more to the point, not black and white. As good as some of the new thinking is that’s coming out of the UK sector in response to the current challenges, it all still looks incredibly homogenised. We are now faced with a sea of monochrome brand identities, adopted by House of Fraser, Debenhams and, more recently, with the John Lewis rebrand. It’s a similar story when it comes to the in-store environment too. Compare the use of black powder-coated frame fixturing and oak plinths in the new Debenhams Watford store with the John Lewis store in White City – it’s like playing a game of spot the department-store difference.
The fact that decision-makers are at last responding should be applauded. But for most, change can’t happen fast enough. Failure to invest in initiatives that will deliver improvements in how stores look, function and feel – company-wide and at pace – will see more famous retail names consigned to the history books.
A message there perhaps for House of Fraser. With a raft of senior executive exits at the hands of Mike Ashley, there will undoubtedly be a void in terms of both leadership and capability. I’ll be watching with interest this Christmas to see how the retailer’s fortunes unfold. With so many brands and concessions having already pulled out, how it will fare over the festive period remains to be seen. Already suffering from a host of imported brands from Sports Direct, the visual execution is tragic to say the least. These are not bad brands. But the way they have been implemented in store carries the risk of severely undermining House of Fraser’s traditional values.
With Christmas customarily the make-or-break season for the sector, and attention diverted seeking fixes for the future, this could be the toughest year yet. A lot can happen in a year, a month, a week in retail. Let’s hope, for the sake of the department store sector, that a visible change in the all-important commercial store performance arrives in time to secure a brighter 2019.