Inspiringindies report by Spring & Autumn Fair

INSPIRING INDIES: YOUR GUIDE TO SUCCEEDING IN THE CHANGING RETAIL LANDSCAPE

In Partnership with:

WELCOME Welcome from Louise Young, MD of Retail, i2i Events Group

CONTENTS Why independent retailing matters

The changing retail world

The shop of the new

Small and local the key to success!

Established rules of success 13 Selling to the world

On being a better (independent) retailer

How PR and social media can work for you

Case study Mountain warehouse

Case study Mrs Robinson’s Store

Contacts

i2i Events Group is proud to play such an important role within the retail industry with some of the biggest retail events in the UK. Spring Fair and its sister show, Autumn Fair, are vital to the home and gift sectors of retail; Pure London, the womenswear and accessories markets; the Jewellery and Watch Show for the UK’s jewellery retailers and Glee for all those involved in the £1.7 billion garden centre sector. What we are particularly conscious of is that across all these shows, it is the independent retailer that represents the volume of all visitors. I have been involved with the retail industry across many sectors for some years now and I know just how tough it has been for independents. Not only have they had to defend their businesses from the power of the big multiple retail groups but also the effects of economic downturns. Somehow, the costs of doing business rarely go down accordingly which has had a knockon effect on the ability of many independents to survive. But the UK’s retail sector is incredibly entrepreneurial and it is heartening to

see so many independents that have come through the dark days of the recession and even begin to open new stores as the multiples re-trench and close branches. The challenges do not go away of course and the rise of online competition cannot be underestimated. Which is why at i2i Events Group we feel strongly that we can play a proactive role in helping and supporting successful independents become even stronger. Through our new Inside Retail initiative we want to provide help and support through important publications such as this, but also via our teams of market experts attached to each of our retail shows. We very much hope that you find this report helpful, supportive and inspirational. Please do talk to us if you would like more information or would like to find out more about ways in which we can support you or direct you to association partners like Bira. We look forward to seeing you at one of our shows and finding out how you are successfully building your business.

“ THE UK’S RETAIL SECTOR IS INCREDIBLY ENTREPRENEURIAL AND IT IS HEARTENING TO SEE SO MANY INDEPENDENTS THAT HAVE COME THROUGH THE DARK DAYS OF THE RECESSION” 2

HOW THIS REPORT WILL HELP YOU Total retail sales in the UK in 2014 were an incredible £333 billion. Retailing is an enormous part of the UK economy and its importance goes well beyond just the volume of money being put into tills. It employs more people in the private sector than any other, the value of goods purchased by retailers generates jobs around the world and it generates 5% of our Gross Domestic Product. Retailing is highly competitive and is undergoing enormous change and associated challenges. That much is undeniable. But it is also highly dynamic and responsive to consumer trends and demands. Get it right and you can build a great business. This might explain why retailing accounts for 9% of all VAT registered businesses or 192,595 companies. That translates into 281,930 shops – the majority being run as small, independent businesses. Despite talk about the “death of the high street”, the reality is that there are thousands of thriving independent retailers who have come through the recession of the last few years and have become more resilient and dynamic with strong online businesses. Property analysts also report that independents have also started to expand after spotting the opportunities on high streets being vacated by many larger national chains. This report has been produced to provide invaluable help, support and inspiration for established

“ THIS REPORT HAS BEEN PRODUCED TO PROVIDE INVALUABLE HELP, SUPPORT AND INSPIRATION”

independents who want to learn from others, think about expansion and understand more about the trends that are changing the industry. It would not have been possible without the help and partnership of a number of associations, companies and publications. In particular, the British Independent Retailers Association (Bira) which provides invaluable support for its members and also to anyone seeking help and information on the retail sector. Throughout the report you will be able to hear from experts on: what to consider when expanding your number of stores; how to really serve your customers and ensure you have a clear point of difference; how to embrace the essential online opportunity and how to ensure that your stores stand out from the crowd.

PARTNERS

WHY INDEPENDENT RETAILING MATTERS

“There’s an evolutionary resilience in smaller format retail that suits our appetite for localism and convenience. If these trends are captured and enhanced huge progress is possible. We’ve recently seen a recession driven retreat from the High Street by many of the big names. Yet, what many people wouldn’t have predicted even a few years ago is that they are being replaced by independent retailers. This is great to see; it gives the variety and difference that the people who regularly shop there desire whilst enhancing the sense of community.” Mary Portas, Broadcaster, Retail Consultant and Campaigner for the UK high street. Taken from “Why our high streets still matter” 2014

“Retail Week has been covering and reporting on UK retailing for over a quarter of a century. It was launched in 1988 when the big story was the rise of what became known as the multiples – the major retail groups that were opening stores at a frantic pace. Since Retail Week launched, the number, shape and identity of many of these giant multiple groups has changed dramatically. Many of the big names have disappeared. Others have emerged. Throughout this time, the independent, small retailers have gone unnoticed. However, the focus that has belatedly fallen on our high streets, town and city centres has also meant that commentators, planners and politicians have woken up to the importance of independent retailers. They represent the entrepreneurial spirit which lies at the heart of retailing and as those that have survived begin to move into units vacated by many multiples, we should see them as offering vital lifeblood to UK retail.” Chris Brook-Carter, Editor in Chief, Retail Week

Independent retailers continue to play a vital role within the retail infrastructure across the UK. To understand more about the importance of independent retailers, we asked a selection of experts and retail editors for their views.

“Running a fashion shop remains an attractive option for many budding entrepreneurs despite the obvious challenges in the current economic climate. Remember that the rate of growth for online is plateauing and more than 70% of fashion is still bought offline, that is in a physical store. The most important aspect of a fashion retailing business plan is to have a good financial footing – cash flow management is king. For established retailers too, it is essential to have an honest and transparent relationship with suppliers. It behoves all enterprises to be aware of what’s going on in the world and how a significant proportion of consumers now research the market. I am not convinced that every independent ought to sell online – in fact, many find it too much hard work for too little reward – but every progressive shop owner should have an attractive website for marketing purposes. They also ought to find someone to explain the benefits of an active social media strategy and to implement one. They must make it easy for consumers to find the shop among the competition.” Eric Musgrave, Editor in Chief, Drapers

“Modern retailing is evolving rapidly right around the world. When I travel to many different markets it is incredible to see the vibrancy of retailing in Asia, the Middle East, India or Africa for example. International retailers and luxury brands are a key part of this and you increasingly see familiar names in shopping malls anywhere in the world. What fascinates me though is that what really gives character to any country are the small, independent retailers. And closer to home, here in the UK, this is also true. UK retailing is long established and mature but remains truly dynamic. Despite the pessimistic forecasts about our town centres, new ideas do still spring up. Literally. Landlords, keen to fill empty units, are happy to encourage the phenomenon of pop up shops. Artisan and craft markets are booming as consumers crave something new and different. Retailing will always remain one of the most competitive sectors but it does also mean that it responds fast to change. Independent retailers bring much needed excitement and variety because they know that to survive they have to offer something different.” Ian McGarrigle, Founder and Chairman, World Retail Congress

ONE STEP BACK, TWO STEPS FORWARD What do you do if you think your business isn’t performing or expanding quite as you’d like? Alan Hawkins, CEO of British Independent Retailers Association (BIRA) provides some useful advice and support.

Alan Hawkins, CEO of British Independent Retailers Association

STEP ONE - FIRSTLY STEP BACK One of the hardest things in a business is to step back and bring a pair of fresh eyes to a problem. Are you working in your business or on your business? In my many years with bira I have always envied those who work on, rather than in their business, and in today’s climate many owners have removed a level of management making themselves an integral part of everyday running decisions. This has many plus points but perhaps not of helping you see overall strategy. Yes you can bring in outside consultants but if you allow yourself a little time to think then the answers may not be that costly or difficult to find. THE NUCLEAR OPTION We debate at the bira Oxford Summer School the truisms of retail, from retail is detail, to the customer is always right and so on. Perhaps the fundamental issue for your business is another truism; position, position, position. Maybe the centre of your high street has moved, a major redevelopment some distance away has fundamentally affected your footfall. This is a brave decision but I have seen retailers decide to relocate and make a good job of it, be it out of Town or just to a better retailing area. If this an option don’t leave it too late, you may have a valuable freehold that would be an enabler in releasing capital. This may not be an option in a few years’ time if you build up debt against that security. The fundamentals in your business may not be position, and don’t expect a new location to be a bed of roses, but a least ask yourself this question first. It may be depressing but some owners would be better getting out quickly with something than ploughing on regardless and coming out with nothing.

THE REVIEW Ok, your business needs a refresh not a complete restructure. Start from the customers viewpoint, what do they see in your business why they are not coming in the numbers required or spending enough when they are there. Some time spent on research will pay back handsomely. Do you have a brand in your area, do your customers understand what you are saying about your business, quality, value, service, range, advice, ease of dealing with. Yes if your model is cheap and cheerful it doesn’t mean you can offer good basic service, but if you are up market and pricing some of the costs into the product make sure that the experience is that much better. Mystery shopper, either professionally or even buy some trusted friends can give you and insight into your strengths and weaknesses. Indeed a good old fashioned swot analysis, (strengths weaknesses opportunities threats) can be a good starting point. Do your own, but bring in your staff to do a collective one and you will be surprised how much they can add , indeed in some areas they will know your business better than yourself. Check your rivals in an area and see where you are best and where they are best, what can you do to change the balance. The outcomes will be different for each business but unless you do something the outcomes will be the same. Expensive options include a refit, new signage, new store layout, computerisation updates to understand your stock better. However many changes can be simple with low investment. These changes may make you the money to make the more fundamental ones later. They could include simple staff training, a set time each week for a set period, new uniforms, lighting changes to

“ ONE OF THE HARDEST THINGS IN A BUSINESS IS TO STEP BACK AND BRING A PAIR OF FRESH EYES TO A PROBLEM”

keep them in tune with your business? Can social media work for you, are the kinds of customer you want to attract likely to use Twitter Facebook and the like. If you aren’t reflecting any of these, or at least a well-designed website what does it say about your business?

“ WE DEBATE AT THE BIRA OXFORD SUMMER SCHOOL THE TRUISMS OF RETAIL, FROM RETAIL IS DETAIL, TO THE CUSTOMER IS ALWAYS RIGHT” remove dark areas. Moving departments around just to give customers a sense of change but not just to annoy them! Seasons are obviously a good time to do this. When did you last look at your marketing? Do you have a budget, do you measure outcomes, is what you are doing working. KNOWLEDGE IS POWER Do you really know your business or do you think you do. Do you really understand which items are moving fast and which ones slowly? Do you understand the interaction between margin and stock turn? Do you have the system to do it by product, but at least try to do it by department. I always say margin multiplied by stock turn should give you a multiple of a minimum of 120. Reduce your margin and see how much more difficult this is to achieve. Have you invested enough in systems to provide some of these answers? RETAIL MOVES ON Seismic changes are happening in retail, non-food internet sales are now approaching 20%, but fortunately much of this is from retailers who have physical presence too. Many retailers who have embraced the internet are not sure that it’s adding to their bottom line when other costs are taken into account, but many are. Speak to the ones who are making it work for them. Someone like bira is a marvellous forum to talk to your peers and to find test and cost ideas.

Know your customers is moving on too. Do you have a means of collecting customers email addresses to

YOU AND YOUR STAFF When did you last train and challenge yourself. The bira Oxford Summer School is at one end of the extreme being residential and for a week, but it too is looking at shorter courses. A week away on the Masters with high fliers from other sectors and business sizes will surprise you in what you don’t know but surprisingly what you do know but haven’t allowed yourself time to develop. Training your staff, from in store, day courses and distance learning can all add to the skill set in your business. Good businesses don’t become successful by accident. A motivated staff is the best asset you can have. CONTROL COSTS Really work hard on reviewing costs. This of course starts with buying well. Have you price compared where you are getting stock from, what quantities are needed to take direct shipments , whether a wholesaler works best for you. What special discounts, payment terms are available. In many cases if you don’t ask you won’t get. Overhead control is vital too, and that is where someone like bira can serve you well. This should enable you to cut costs on credit card processing, insurance, banking, utilities and rent and rates, and of course buying too. If gross profit is hard to come by then don’t waste it paying more than you need. Bira will be working to do the things you can’t do, such as influencing rate reform , acting on parking and looking at our planning laws that have not been a friend to the high street for many a year.

CONCLUSION There are only two reasons to go into retailing, making money and having fun. Maybe one because if you aren’t making money the fun will soon evaporate. The answer to any problems your business has aren’t probably too hard to find, implementing change is harder but that’s where the right results will bring back the fun. For further help or advice contact: www.bira.co.uk

THE SECRETS OF PR In today’s fast-moving, digital age, every retailer of whatever size has to embrace PR and the use of social media. We asked one of the UK’s leading PR experts, Kevin Read for his top tips.

Kevin Read, Executive Chairman of Bell Pottinger Corporate, Brand and Digital

Given every business has a unique template the ‘must get around to’ lists are always different. Different pressure points mean there is no single answer to how to ensure, you, your business and your products and services become better known, trialled and trusted. But, there are a number of core PR and social media approaches that can be adopted on a modest basis and pursued with enthusiasm and focus.

TRIAL You need to find ways for influencers, critics and followers of fashion to try your products. Picking-out key individuals, including bloggers, for either free or discounted trails will be important. Securing local or trade media coverage can also provide a perfect platform for encouraging people to discover more about your business, possibly through your website where you might host a time limited offer. Whatever programme you put together it is important to watch carefully reactions. If the media take your story in a certain direction seek to build on it. If one product line out performs another be prepared to adapt. Analyse your web and social media statistics regularly. Look for patterns.

You don’t need to be an award winning writer or an expert social media coder to get started.

Use the data to help plan future products or services.

Before devising your plan of action you must be very clear about your market. You need to understand the profiles of the customers you want to appeal to, and ideally the media they consume and the social media they use.

If all goes well enter an award or two.

Social network theory tells us that some people are more important than others – the so called influencers. Often it is the people with whom we have weak connections that we are most likely to do business with. Talking to the media, bloggers or social media contacts about your business will be vital. But before you pick–up the phone, post an article or send a tweet you need to think very carefully about your story. You might consider working with a specialist to finalise your story and to package it for the media and the social media world.

Carefully planned communications – in classic or digital form - will be a vital ingredient for your business to get noticed and be trusted. But my advice is listen, learn, adapt and be persistent.

TELLING A BUSINESS STORY • Work out what challenge your business addresses • Be clear about the solution your product or service provides (the point of difference) • Highlight the benefits that flow from your offer Identify a face for the business • Prepare content for distribution in print and digital forms • Consider working with a specialist to get your story out

THE CHANGING RETAIL WORLD Retailing is facing unprecedented change. Dr Alan Treadgold has been working with retailers around the world and believes it is possible to identify the key areas that businesses large and small need to focus on to serve tomorrow’s consumers.

The UK retail industry has endured a very difficult time for the last several years. Certainly, we’re not out of the woods yet, but – at the risk of mixing metaphors – it is becoming clear that there is now some bright light at the end of what has for many been a long and dark tunnel. Consumer confidence has strengthened considerably and spending has increased as a consequence. Of course, there are reasons to remain cautious, but there are more reasons to be positive than there have been for far too long. Underlying the economic challenges of recent years have been important structural changes to the UK (and indeed the global) retail industry that will re-shape retailing for generations to come. Most importantly, when we went into recession, retailing was still an almost entirely store-based activity. Now that we are emerging from it, we are in a world of so-called ‘omni-channel’ retailing where shoppers want to shop 24/7 using smartphones and tablets as well as – or even instead of – visiting physical stores. This transformation of retailing

Alan is a retail sector specialist. He works as an independent adviser and consultant to a range of retail and consumer products companies globally on marketing and strategy issues. He is also a member of the Board of the Oxford Institute of Retail Management (OXIRM) at the University of Oxford’s Said Business School and has nonexecutive roles with innovative marketing businesses in the UK and Asia.

“WE ARE IN A WORLD OF SO-CALLED ‘OMNI-CHANNEL’ RETAILING WHERE SHOPPERS WANT TO SHOP 24/7 USING SMARTPHONES AND TABLETS” through shoppers enabled by technology is certain to accelerate as the next generation of shoppers who have never lived in a world without smartphones and high speed internet come into their high spending years. It is timely then to address the question of what it will take to be successful as we begin to emerge from recession and move into a very different type of shopping landscape. Six attributes seem likely to be of central importance for smaller retailers if they are to be successful now and in the future: BE TRULY CUSTOMER CENTRIC Of course, all retailers want to be believe that they have the customer at the centre of their thoughts and their business. But do they really? Are you really stocking what the customer wants and are you really organising your business around how the customer wants to engage with you? If they want to shop online as well as in-store, are you making it easy for them to do so? The mantra has to be: Always do what is right for the customer, not what is easy for the business. UNDERSTAND THE NEW DIGITAL WORLD The world of technology can seem very scary and alien, not least because it moves so quickly. But it is critically important for small retailers just as much as it is for larger ones to have an understanding of the new digital worlds that their shoppers are living in. Do you have a website that’s fit for purpose? Are you able to take orders online if that’s how shoppers want to engage with you? Do you know what shoppers are saying on social media about the experiences they have with you? DEVELOP AND MAINTAIN A STRONG BRAND Branding is very definitely not just for “the big end of town”. All businesses have a brand – usually it’s the name above the door and / or the name of the business owner. Brands need to be built; not with expensive advertising campaigns, but by asking and addressing the right questions: What business are we in? What do we want to be famous for? What experience do we want our shoppers to have? How do we want them to feel about us and to talk about us?

INVEST TIME IN YOUR PERSONAL AND YOUR BUSINESS BRAND Shoppers are far more loyal to strong brands that know exactly what they stand for and that deliver on what they have led the shopper to expect of them. This isn’t about having a big marketing budget. It’s about committing the time and brainpower to be very clear about who you are and what you stand for and then organising the business to deliver on the position you want to occupy. PROMOTE INNOVATION Retailing is changing and the way that shoppers want to shop is also changing. In environments of change, the biggest risk of all for a business is to continue doing the same thing. It’s called the risk paradox: by playing safe, what you in fact are doing is introducing more risk of failure by not recognising and addressing both the new challenges you face and the new opportunities that your business has. So promote innovation. Be prepared to test new ideas – merchandise lines, promotions, opening hours and so on. But importantly, be prepared also to accept that not all innovations will be successful. When they’re not, end the trial, learn the lessons and move on. PRIORITISE EFFECTIVELY In a world where everything can seem urgent, important and immediate, it is more critical than ever for retail business leaders to be able to prioritise effectively. Small independent retailers truly are the lifeblood of the UK retail industry. They bring much-need diversity and interest to high streets and shopping centres. The best retailers will be successful in the new era of retailing – not the largest, the best. And the best retailers might just turn out to be the smaller independents, not the largest corporations.

THE SHOP OF THE NEW

Setting up a shop or expanding to several stores is one of the biggest decisions an independent will ever have to make. Mark Faithfull asks the experts for their advice.

Britain might once have been called a nation of shopkeepers but the post-2008 recession has left far too many high streets up and down the country with little more than betting outlets, charity shops and the odd tatty corner store nestled between boarded up shop-fronts. With online marketplaces and low cost websites providing tough new competition, it is perhaps surprising, but a fact all the same, that independents continue to open and even expand around the country. Yet even among the global powerhouses of the pure online players there is a growing interest in establishing a physical connection between the brand and the consumer and it is something that arguably only a store can provide. So while traditional

retailers and pure players may not be hell bent on huge store roll-outs, most can see that overall sales are helped by having a variety of channels by which to reach the consumer. Tough times have turned many – though by no means all - landlords into more responsive and collaborative partners, while there are also some shopping centre operators and local councils which will dedicate space and resources to entrepreneurial newcomers. Add to that the huge rise in short lease properties – often called pop-ups – and the choice of how to establish a higher retail presence has never been greater, nor more confusing. So what do two experts in their specific retail property fields recommend?

POP-UPS: A SMARTER WAY TO SET UP SHOP?

Abigail Freeman, Director of Projects & Partnerships, We Are Pop Up

WHAT IS POP-UP AND HOW DOES IT DIFFER FROM A STALL IN A MARKET OR STAND IN A MALL? We classify pop-up space as any short-term, empty retail space. This can be anything from an empty shop on a high street, to an entire building, a gallery, a warehouse, or a more quirky space such as a boat or a disused bus depot! It’s also possible to book ‘ShopShare’ space, which is a concession space within an existing store.

WHY A POP-UP AND WHAT TIPS WOULD YOU GIVE ABOUT CHOOSING LOCATION, TENURE ETC? Think about a pop-up as an excellent way to test your business concept, build awareness of your brand and meet customers. We Are Pop Up has worked with hundreds of designers who started out over a weekend or a few days and have grown to established, successful companies. The beauty of a pop-up is that you can test different locations easily – don’t be afraid to experiment, and try something unusual or unexpected. Choose

HOW TO EXPAND FROM YOUR FIRST STORE

Mark Faithfull, Editor, Retail Property Analyst

Tom Stanbury, Director, Central London Retail at CBRE

somewhere that complements your unique brand and your style. When you’re picking a space, look at what’s going on in the surrounding area – who are the neighbouring brands, is passing foot traffic the right demographic for you, does the culture fit your brand? If you’re going for a ShopShare, is there an exciting brand clash you can do that will draw attention to your story? Why not pop-up your floral prints in a florists or your menswear in a barber’s shop? HOW DO YOU MAKE A POP-UP WORK? People pop-up for a number of reasons, so to make a pop-up

SO THE FIRST STORE HAS WORKED, WHAT ARE THE TRIGGERS TO ESTABLISH A SECOND OR MORE? Generally the trigger is the success of the first one, and is it making a profit? It is rare that an independent retailer would open a second store without the first store making money and they will rightly be cautious because it is their money they are investing. Is a retailer seeing consistent growth in sales, do they have good accounts which show profit, do they have the supply lines to expand? ANY TIPS ON HOW AS AN INDIE YOU TIME THE SECOND, THIRD, FOURTH? It is worth investigating where there are more flexible lease terms available, so that you are not tied in to an unsustainable lease length and cost. It is also worth approaching landlords around terms being based on the performance of the store to try and share the risk, and the upside, of the transaction with the landlord. It’s also advisable to instruct a property agent who can advise on market conditions and speak to other retailers who have been there

before and grown successfully. HOW DOES YOUR INTERNAL MANAGEMENT NEED TO CHANGE AS YOU START EXPANDING? It is important to ensure you maximise all opportunities for cost saving so you need to try and keep your overheads to a minimum. When fitting a space out, it is possible to gain relief from business rates payments and much of your expenditure in relation to fitting a store out would be tax deductible if you ensure you apply for the right capital allowances. Another consideration is to recruit staff who have distinct and different roles. You can benefit from specialists, for example the independent retailer is usually a good generalist but as things expand you will benefit from specialists. HOW DO YOU CHOOSE BETWEEN A REGIONAL OR NATIONAL STRATEGY? In my opinion it is easier logistically if you go for a regional strategy but arguably with on-line the next market could be another major city rather than the nearest town.

work, really think about what success looks like. Is it purely sales? Is it purely awareness of your brand? Is it educating customers about your product range? It could be any or all of these, but keep the aim in mind. We like to encourage brands to use the ‘lean start-up methodology’ of measure, test, learn as you go along. We encourage our customers to not be afraid to experiment and take risks. Collaborate with like-minded brands to build your networks and tap into each-others’ customer base, and make use of all the incredible social media tools at your fingertips, to tell your current customers where you are, and to reach out to new ones.

ONCE YOU’VE TRIED IT, HOW DO YOU DECIDE WHAT TO DO NEXT? Again, this depends on what your original objectives were. Do you want to be a global brand? In which case why not plot a city-by-city pop-up tour? Or do you want to be an e-commerce business, in which case plan for a few pop-ups in key locations at key seasonal moments (for example at a design/fashion/ craft week or Christmas). Perhaps you’d like to plot a series of collaborations.

SMALL AND LOCAL THE KEY TO SUCCESS! We asked Author and Lecturer Martin Butler, to share his thoughts on how to be a retail success in an age when consumers are acting and behaving completely differently.

To win the war for the modern customer, businesses must put customers at the heart of everything they think and do. This is not a new insight but with the customer empowered more than ever before, it’s an insight that’s gone hypercritical! Today the world’s most successful businesses are truly ‘customer obsessed’. With the big organisations winning the war for customers by adopting a mind-set of thinking and acting like small, local retailers. Why are the big businesses better at pretending to be local and small, rather than genuinely local and small businesses? Well acknowledging some of the finest business are indeed local and small, the majority stand accused of not listening hard enough to their customers. …oh and if you’re wondering why customers love smaller, local operators just take one minute to think how you feel personally. Do you prefer to do business where they know you, know what you like, know how you like to be served? Or do you prefer to stand in a queue waiting to be served by someone who doesn’t know you from a marshmallow. Or worse still, doesn’t know if you’re a loyal customer or time-waster.…enough said!

Ok, assuming you stock good merchandise or offer competent services, here’s my top 20 checklist for small and local business success! 1

Never forget customers have a choice - so you’re in the ‘business’ of being chosen.

All customers are human beings where emotion plays the dominant role in decision making – so find your emotional edge.

Everyone is hard wired to love ‘easy’…so make it easy for customers to choose you.

Pick the battle you want to win. It might be expertise, or quality, or uniqueness, or outstanding service, or convenience or whatever. But avoid being dragged into price wars - the big boys always win.

The old value equation was simply: price versus quality. But now the ‘new’ value equation is: what I get versus what I pay… and here you can see the role of emotion. So stay clear of price, always go for value.

Nothing is more appealing than being different…so whatever battle you choose to fight, challenge yourself to ‘stand out’ by being as different as possible.

Make sure everyone who is serving knows more about what you’re selling than the customers…this is a non-negotiable prerequisite.

Always remember you can’t get the ‘wrong person to do the right thing’ so be very, very choosy when it comes to hiring your workforce.

Happy customers are more inclined to buy - so make sure you and you’re staff are happy!

There’s no substitute and nothing quite as attractive as genuine ‘passion’ for what you’re doing …presented in a memorable way.

Authenticity in modern business is essential – so is a grand ambition to be regarded as an ‘authority’.

The big no longer eat the small. Nowadays it’s the fast who eat the slow. So live ‘speed’ in everything you do - customers will love you for it.

Embed an imperative to say ‘yes’ to customers. Become a positive ‘solutions’ business - even if it means losing an immediate sale by referring a customer elsewhere. Great local business is all about ‘giving a little of today, for a lot of tomorrow’. Eventually, you will become the trusted first stop for customers looking for the sort of solutions you sell.

Retail and service companies come face to face with customers – so always learn from your customers. But if you ask questions make sure you listen deeply, and when you’ve listened deeply, always, always: ACT.

Elevate customer service to the most important element in winning the war for modern customers but always add emotion - that way you’ll end up with customer ‘care’…it’s a great way to differentiate and be chosen.

Turn a complaint into a fan…when customers complain they’re in an emotionally vulnerable state. Leap on this. Whatever it takes, cure the complaint! Have a strategy for service recovery that’s all about keeping the complainant as a customer. You’ll soon recognise the ‘time-wasters’ but more importantly you’ll be amazed how easy it is to gain fans. Don’t forget to empower staff to do exactly the same.

“ REMEMBER, YOU CAN NEVER BE TOO LOCAL WHEN FIGHTING FOR CUSTOMERS”

Demand ‘killer news’ from your suppliers… news that will help inform and ‘colour’ how you converse to customers. You’ll be surprised what’s out there if you ask customers will love and remember you for it!

Always offer (free) same day delivery. Go on, make it easy for your customers to buy from you. Same day delivery was standard for small, local businesses not long ago – bring it back now!

Use digital and social marketing whenever and wherever is appropriate but be very, very clear, it’s all about building deeper, more emotional relationships not just selling stuff. Best advice comes from teenagers – true!

And finally step 20. The one big thing the big companies find most difficult is to get customers to feel they ‘belong’. In truth the majority don’t even know who anyone is until they pay for something. This is the complete opposite for the smaller, locally run, businesses – so leverage this until the pips squeak! Grab the opportunity, grab hold of your special relationship and make sure your customers feel as if they ‘belong’ …make them feel part of your tribe. Treat your store or website or app’ as if you were welcoming a friend into your home. Greet them, get to know them, and become part of their lives whenever you can. Metaphorically always leave your front door open, never stand behind barriers like counters, never turn your back on customers, chat to them, gossip with them because that’s what human beings like - just like you do! Remember - you can never be too local when fighting for customers!

Martin Butler is an author and lecturer specialising in analysing and interpreting how retail businesses can serve their customers better. His love and understanding of retailing is in his blood having been literally born into the industry. Over a thirty year career in advertising and marketing he worked for many leading international agencies before setting up his own agency which grew to become one of the UK’s largest, privately owned agencies. After selling his business, he has specialised in studying, writing and lecturing about retailing and the changing consumer to audiences around the world.

BOOKS: People don’t buy what you sell, they buy what you stand for…published 2005 The art of being chosen…published 2010 Towards customer obsession (working title)…. in research, publishing late 2015

ESTABLISHED RULES OF SUCCESS If you are an established independent retailer, you will be in no doubt about the impact of the internet on your business and sector. But many are left thinking they can still not compete with the big budgets of the big retailers. Here, retail online expert, Martin Newman, sets out his reasons why you can. Independent retailers, while smaller than large multinational retailers, can potentially have an advantage to their larger counterparts. That is speed and agility. Most large retailers know what they want to do for example, implement click and collect, develop a single view of the customer, run a customer relationship management program (CRM) and so on. Their challenge is that they are often dealing with legacy systems and technology that take

significant time and investment to develop or replace. They also have siloed organisation structures that don’t always lend themselves to the joined up cross channel experience customers expect in this day and age. Small independent retailers can potentially deliver a better customer experience by ensuring they have flexible, future proofed technology in play, while structuring themselves to delight the customer. The web is a great additional channel for small retailers as it can both help to extend the retailers reach while providing a more convenient experience for customers by offering a multichannel experience.

To follow is a checklist of things for you to think about when you add new channels to your business: WHAT’S THE CUSTOMER CONVENIENCE PROPOSITION? From an online perspective, you need a clear convenience proposition. What delivery and returns options will you offer? Will you charge for these or offer them free? Much will depend upon what you sell, what your average order values are and what your competitors do. WILL YOU OFFER CLICK AND COLLECT? There are advantages to doing so. You’ll convert more customers, and you’ll be able to sell them more products when they come into your store to pick up. PRODUCT RANGE & SUPPLY CHAIN You’re only as good as the product you sell. The web provides the opportunity to offer a slightly different product range. You might decide to go

down what we call the long tail route and extend the range by offering more options that you don’t sell instore. Continuity of supply is absolutely crucial. So whatever, you sell, you need to know that you can replenish stock in a timely fashion. TECHNOLOGY For the web, you need a web platform. This is the technology that sits behind the front-end customer experience and drives the functionality of the website. You need something that will interface with, and talk to, your existing technology, which in turn will enable you to do things like click and collect, and manage stock, customer orders and content. SITE DESIGN There is a saying that you may not want to get your creative (Site design) from technology companies (Who build your platform). You will need someone to design the front end of the website and build out your ecommerce proposition. You also need to ensure that your site is fully optimised for mobile devices (That includes smartphones and tablets). HOSTING AND DOMAIN REGISTRATION The website needs to be hosted somewhere. Your web development provider, sometimes known as a web development agency or system integrator, will be able to help with this. When you’re coming up with a name for your retail business, make sure you check the domain name availability for your website at the same time. There’s no point in coming up with a name for your store that isn’t also available for your brand online. You can acquire this from a vast number of domain name registration companies online. CONTENT AND VM You will need to produce content for your website. This is also known as visual and product merchandising. Of course, you already have to produce visual merchandising, also known as point of sale material for your stores. THE WEB CONTENT YOU’LL NEED WILL INCLUDE Product images Lifestyle, or brand related images Product descriptions Static, customer service related content including terms and conditions, frequently asked questions etc.

Martin Newman is Founder and CEO of specialist retail consultancy practicology. He brings years of experience as head of ecommerce for retailers such as Ted Baker. He is also currently a Non Executive Director for White Stuff and Conviviality plc.

You will also need to think about how the content will influence your natural search engine ranking (SERPS/SEO). CUSTOMER ACQUISITION Customers can just walk into your physical store, but the same may not be true for your website. First of all you need to ensure that the website is search engine optimized (SEO). You will need your agency to advice you on this, but in essence the site should be populated with content and meta data that enables the search engine to crawl and index your site. This will also include relevant keywords that related to what you sell, a good site map that can be successfully crawled by search engines, the meta tags that tell the search engine and web users what your site is about and alt tags for images that provide a brief description of the image. You will also need to consider how else to market your website. You can promote it in the windows of your store as well as on all packaging. You will also need to promote it online through search engine marketing (SEM). This is where you pay or bid to acquire traffic when someone keys in a relevant keyword for your business such as black dress, cheap flights, gifts, washing machines etc. The other marketing opportunities include retargeting; this is where the user has been on your site, goes elsewhere but sees an advert for your business.

The other key channel is affiliates. This is where other publishers send traffic to your website and get a commission on any sales made. CUSTOMER RETENTION It’s cheaper to retain customers than acquire new ones, yet most retailers focus on the latter. You should think about how you can build a lasting relationship with your customers so that you enjoy multiple purchases from them over the course of the year. ORDER FULFILLMENT You need to think about how you’ll fulfill customer’s orders. To begin with, you’re likely to fulfill from store stock. But as your web business scales, you may need to think about having stock in a warehouse. You can do this with a third party logistics company. CUSTOMER SERVICE AND CUSTOMER FIRST Some web customers will want to call you before and after making a purchase. So you need to be prepared for the potential of getting a lot more calls into your business that will take time to deal with. You can outsource this to a call centre, but this is not a profitable route to go down in the early stages.

“ THE MOST IMPORTANT THING TO THINK ABOUT IS THE CUSTOMER. WHAT CAN YOU DO TO OPTIMIZE EVERYTHING YOU DO TO MEET CUSTOMER NEEDS?”

CUSTOMER FIRST The most important thing to think about is the customer. What can you do to optimised everything you do to meet customer needs? Finally, you need to think about how you’re going to resource all of the above. You’ll most likely require a different skill set from what you have currently in the business. Therefore, you might want to consider outsourcing elements where you lack the appropriate skills in your business such as acquisition and retention marketing.

SELLING TO THE WORLD The internet has not only revolutionised all our lives, but for small, independent retail businesses, it offers the opportunity to sell to customers, literally, around the world. Peter Fitzgerald, Country Sales Director for Google sets out some of the key building blocks for retailers to make this happen. The internet has rewritten the rules of international business, making it quicker, simpler and more economical than ever to test new markets. By 2020 the ecommerce export market for the UK’s retail, travel, content and leisure sectors is set to be worth £45bn*. Businesses ranging from bedroom startups to traditional companies to established internet players can capitalise on this burgeoning ecommerce opportunity by tackling the common challenges, using the right online tools and applying smart digital marketing techniques. ADOPT DIGITAL-FIRST MODEL To begin, adapt your business to flourish in an international context. Even if you use a multi-channel retail strategy for your operations in the UK, for example, adopt a digital-first model for new markets. With a light ecommerce presence instead of a more intensive physical one, ecommerce players can internationalise much more quickly. Internally, consider setting up an agile team dedicated to international exports. If it can operate quickly and autonomously as a separate entity, more appropriate decisions can be made for new markets so projects can evolve faster and more fluidly. TAILOR YOUR OFFER TO LOCAL CONSUMERS From here, you’ll need to research your target markets. Analyse available data to prioritise the countries where your products or services will appeal most. Several online tools are

available for exploring potential markets. For example, the Google Global Market Finder uses worldwide internet search data to show country keyword searches, estimates for bids and competition for each keyword by market and language. Once you’ve identified markets, drill down to discover your target customers’ expectations and ways to exceed them. Make sure you understand how consumers use the internet in their path to purchase. Research data from free export tools will allow you to better understand different target markets. When it comes to customers abroad, don’t rely on hunches. Instead, employ data analytics tools and analyst research to localise your offer according to market suitability and performance. This will enable you to not only alter to your site, product, marketing and pricing appropriately, but also to keep your finger on the pulse of market changes. Localising your website for different languages and currencies was once seen as a hurdle, but a range of tools now makes this far easier. For example, the UK’s largest independent online beauty retailer Beautybay.com used Google’s free translator tool to translate its website into 80 languages for overseas consumers. USE MARKETPLACES AND MOVE FAST The web empowers brands to sell direct, but many businesses are reaping benefits of using existing marketplaces such as Amazon, eBay or

Alibaba. Services such as these provide access to localised marketing, supply chain and payment options that can significantly improve the uptake of your products. And because they hold information about consumer demand and supply, marketplaces can furnish valuable advice on gaps in the market. As you seek to expand internationally, marketplaces can provide a cost-effective first step into a market, providing the opportunity to test and learn with limited investment. If or when you later develop a website, your marketplace presence will have established valuable exposure among an extensive customer base.

“IN eCOMMERCE THE COST OF ENTRY IS MARGINAL COMPARED TO TRADITIONAL BRICKS-AND-MORTAR BUSINESSES”

In this fluid and lucrative landscape, it’s essential that whatever you do, you act fast. First-mover advantage matters to business success, so don’t be afraid to test your offering in a number of different markets quickly. In ecommerce the cost of entry is marginal compared to traditional bricks-and-mortar businesses. Finally, use different digital marketing channels to target your audience. Don’t assume that if you build it people will come. Digital marketing built across search, display and video – optimised across desktop and mobile – is vital for scaling, testing and expanding globally.

Peter Fitzgerald, Country Sales Director for Google

*OC&C Research “International ecommerce The Future is Now”, 2014

ON BEING A BETTER (INDEPENDENT) RETAILER John Ryan draws on his years of experienceas as a retailer and retail journalist to set out what he believes makes a store the magnet for customers that it needs to be. There’s a reason why the headline to this piece contains a word that is in parentheses – everything that follows could equally apply to a nonindependent retailer found on all high streets everywhere. The point is that some things are inviolable. It’s common in treatises of this kind to come up with ten rules about what needs to be done for success to be achieved. There may not be ten (even if it is a nice round number), but there are a number of relatively straightforward elements that need to be observed if turnover is to be improved, loyalty, of a form, is to be a reality and a retailer is to feel that a difference has been made… THE TASTER Any shopper passing a store has to be given a reason to enter it and there is only one fleeting moment to provide that reason. This is via the window and for many independent retailers this means putting lots and lots of product behind the glass following a ‘more is more’ line of thinking. It doesn’t work. Shoppers need to have the work done for them however and one of any selfrespecting retailer’s jobs is to make things easier. This means doing the editing for the shopper, telling a story via your street-facing display that shows an intelligence at work and which does not overwhelm thanks to volume. Follow this approach and there’s a fighting chance that footfall through the doors will increase.

THE OFFER And once they’re though the doors, the job is to fulfil the promise outlined in the window. Using the window, the retailer has acted as a curator and the manner in which the merchandise in the store is laid out is the next thing that is likely to determine whether an initially favourable impression translates into browsing behaviour. Unless discounting is involved, and there is hardly an independent anywhere that can afford to be one thanks to the volumes required and the cost of doing business, displays need to be pared down. Being prepared not to have everything on show all the time and when necessary to rotate stock so that a perception of difference is maintained, is vital. This will amount to giving the shopper a reason to return and the same approach should be applied to the windows. Colour-blocking, theming, seasonality – any of these might be adopted when making a store appealing, but retailers, independent or otherwise, need to be aware of the requirement to do something. Piling high and selling inexpensively really isn’t an option.

THE DEAL For any demographic, once a shopper is considering something that is in a store, the final piece in the jigsaw is closing the deal, aka putting money in the till and it it matters little how obvious the value on offer may be, an item probably won’t sell itself. The balancing act therefore between offering service and pestering the shopper is a fine one and sales associates need to avoid the obvious trap of being overattentive. That said, stock does not sell itself and the best retailers all negotiate this tricky path.

OTHER THINGS There are, of course, other things to be considered. Any retailer of any size is a multi-channel operation these days and if this is not the case then it probably can’t be considered a player. The point is that whether it’s an online avatar that is involved or a physical shop, the same rules apply and it is vital that there is consistency between the various methods of selling and distribution. A brand is only as powerful as its components and if one of these fails to deliver then an entire enterprise may be tarnished.

THE PAIN The other element that independent retailers are prone to doing is ignoring the obvious. Practically, this means not biting the bullet and cutting the price of a line when it doesn’t work and reinvesting the money. At the beginning of any selling period a retailer will know exactly how many items will be sold. The only unknown is the price at which products will be sold. The easy to say and hard to practice mantra therefore is always that the first cut should be the deepest. Piecemeal markdowns are the road to the receiver – hit things hard and what might seem a tough decision will be made easier.

It is perhaps worth mentioning loyalty at this juncture. Familiarity should breed content and if shoppers are kept happy they may continue to shop. Beware of complacency however. This is the devil incarnate for all retailers and a problem that besets every operation of whatever size. Five, rather than ten, simple rules for retailers seeking a boost then. Follow the principles embodied here and there is a very good chance that things will better. They certainly won’t be worse.

“ ANY SHOPPER PASSING A STORE HAS TO BE GIVEN A REASON TO ENTER IT”

THE FINANCIAL FITNESS TEST Making that decision to expand your business opens up even more tough decisions on how to raise finance and how to present your story. We asked retail investor relations expert, Paul Barker for his advice. For small and medium-sized independent retailers, the idea of openly communicating to the outside world their corporate and financial progress and strategic aspirations is often perceived as daunting. More often, this information is viewed as too commercially sensitive for sharing. The company, after all, isn’t publicly quoted and doesn’t have institutional or retail shareholders. Customer and employee communication is a higher priority and produces greater benefit than engaging with the financial and corporate media, while the interest of City analysts is wedded exclusively to the larger, listed retailers. This isn’t unreasonable logic, and there may be sound business reasons for choosing to remain outside the glare of such audiences. But there are also potential gains that can help to differentiate independent retailers in highly competitive markets – nowhere more so than in the area of raising finance for the purpose of accelerating business growth.

There is today an increasing choice and confidence in non-traditional sources of debt finance, bolstered by the emergence of credit funds, mini-bonds and crowdfunding, reducing the necessity to sell equity. Arguably, numerous of these options call for independent retailers to tell their corporate stories in a more compelling and transparent way and to a wider audience than they might have done in the past. Both mini-bonds and crowdfunding, for example, are typically offered to private investors who are also existing customers. This, in turn, increases interest and awareness in the success of the brand. In effect, the lines that used to be drawn between corporate and customer communication aren’t just becoming blurred; they’re ceasing to exist. Does this mean that independent retailers have to crank-up their machinery for quarterly corporate reporting to emulate their larger listed peers? Well, nothing quite as onerous as this. However, there is a case for building a programme of regular content and media engagement which is both relevant and appropriate for the size and profile of the business. Mountain Warehouse is an example of an independent retailer which reports headline financial performance half-yearly and, by leveraging the media’s fascination with retailing and brands, CEO Mark Neale has created an excellent platform for the business to credibly reinforce its market positioning and expertise in the area of outdoor leisure retailing.

City ‘sell-side’ analysts do not, of course, include non-listed businesses in their coverage, though many are interested in hearing about the strategies of independent retailers as a way of enhancing their knowledge and understanding of the overall market and giving them ‘read-across’ into listed retailers. Opening an informal dialogue with this influential capital markets audience can promote a long-term and mutually beneficial business relationship. Developing a richer corporate narrative also brings the potential to unlock ‘softer’ business benefits, including promoting the business as a great place to work and attracting the best new talent: a successful CEO of an independent business admitted that one of the things that originally attracted him to the role by demonstrating the company’s strengths was its Annual Report & Accounts – a ‘glossy’ that the company was under no obligation to deliver or which provided any more detailed financial disclosure than was contained in its annual statutory filing to Companies House. Of course, the messages, metrics, audiences, timing and strategy must all be carefully thought through, but when executed well communicating corporately has the potential to make all the difference.

TIPS FOR EFFECTIVE CORPORATE COMMUNICATIONS • Develop the About Us section of company’s website. Management profiles, company vision & strategy, case studies and, where possible, bring your ‘investment case’ to life by using visuals and video • Speak to your PR agency, if you have one, to ask for specialist corporate advice to help plan a programme of corporate engagement • Debate with your board and senior management what metrics and level of financial information you are prepared to disclose to and how frequently – headline performance combined with a succinct narrative about strategic and operational highlights during the period under review are your starting point • Consider an online annual report (hard copies are often an unnecessary expense for independent businesses) which reflects your brand and headline financial performance and will be of interest to employees, suppliers, landlords, funders, customers and other stakeholders

Paul Barker is an experienced Corporate Communications and Investor Relations professional whose experience includes HMV Group, Freeserve, Segro, Monarch Group and communications consultancy.

• The media is increasingly interested in trends and commentary on the wider market, rather than just individual financial performance, so before you engage develop some interesting narratives about your business and the markets in which it operates

uk.linkedin.com/in/paulbarkercommunications

CASE STUDY

MOUNTAIN WAREHOUSE Mark Neale, founder of privatelyowned outdoor retailer Mountain Warehouse, believes the secret of success is in seizing opportunities, managing risk and a determination to differentiate your business. Mountain Warehouse now has over 180 shops in the UK and a booming online business. Here he talks about how this was achieved and the tough lessons he had to learn along the way.

“Before I opened my first retail business I worked for a retail consultancy group in London. But I always knew that I wanted to run my own business and it was always retailing that interested me. Mountain Warehouse started in 1997 as a discount, clearance shop for branded outdoor clothing. The shop was in McArthur Glen’s outlet centre in Swindon and it worked really well and opened a second with them at their Cheshire Oaks centre. I think this shows that I was always thinking of a national chain of shops rather than just a one or two shop business. You have to have a clear idea of that early on I believe. However, I am also clear that you have to be very openminded about allowing the

business to evolve and find the successful formula that works. Mountain Warehouse today is night and day compared to what I opened in 1997. By 2002 the business had grown to about 30 shops but unfortunately was struggling badly and I was forced to review everything. One of the areas of the business that was successful at that time was our own brand. So the big idea was to move completely to own brand. It might not have worked but thankfully it did and we’ve never looked back since and have opened between 20 and 30 shops a year ever since. It is also important to seize all the opportunities that present themselves to you. By 2007, the retail property market hit a big downturn and I suddenly found that landlords were very happy to talk to me about taking shops and on very favourable terms. In 2010 we’d opened our 100th shop and we continue to open on the same scale.

MARK’S KEY LESSONS DIFFERENTIATE The UK retail market still offers lots of opportunities to start up and build independent retail businesses. EXPERIMENT You have to keep trying things and be open minded. If something isn’t working, find out how to do it better or change it. KNOW YOUR CUSTOMERS It seems obvious but too many small retailers set up the business they would want to buy from. I would never say I am a hill walker or mountain climber, but all our buyers have a clear idea about our customers who do want to take part in those pursuits. RISK You can’t be afraid of it! Many people don’t pursue their dream of opening a shop because they are worried it might fail and put everything at risk including the family home. But you don’t have to risk everything and shouldn’t. It is vital to manage your risk though and to then be unafraid at seizing the opportunities as they present themselves. Many people wait for the perfect idea but it often never comes along. LOCATION Absolutely critical. We might still be opening up to 30 shops a year but I will still spend time standing in a high street watching shoppers and where they buy from before deciding that it is the right place to open a shop.

CASE STUDY

MRS ROBINSON’S STORE The product range reflects the company’s love of the Sussex countryside and coast, its wildlife and pets. The company features new products on a regular basis and stresses that people can buy with confidence, knowing all products have been” tried and tested by us and our customers in store”.

Sally Robinson recalls that her company faced a huge number of decisions as it established the business and says that wouldbe and start-up retailers should seek out the vast amount of help available to them.

Mrs Robinson’s Store is an independent gift boutique. Inspired by and working with many Illustrators and designer/ makers, to create an individual product mix, the company also works with brands and producers and says that “Finding new products is always the icing on the cake for us.”

Founder Sally Robinson recalls: “We chose our first store, simply from what premises were available at the time. We researched several locations, viewed several premises and talked to suppliers to see what areas they would supply to. There is still quite an issue with exclusivity to a postcode or area.” She says that the big challenges were setting everything up quickly and making “masses of decisions on a daily basis”, for the premises, the stock, the company’s brand identity. “Also establishing a customer base,” she says. “Word of mouth recommendation has been great for us, but that has taken a while to kick in.”

SALLY’S KEY LESSONS PRODUCT MIX Advice I would give others is make sure your product mix is individual and doesn’t replicate anything existing on the high street. Also, think of your ideal customer, where else do they shop? Seek out advice from suppliers as to what sells but don’t over-commit to a particular product. TALK TO OTHERS Talk to other business owners in the area you are considering or have located in. How do they advertise and promote their business? Go to trade fairs, attend seminars and listen to other retailers, brands and trade associations like the Gift Association. NEXT STEPS What’s on my agenda? I think our product offer is good, I always love the buying process and keep up to date with new suppliers and products. Our website is quite new and we need to promote and understand it fully before we think about expansion. ABSOLUTE PRIORITIES Product offer, location, promoting your business to customers.

“ THERE IS STILL QUITE AN ISSUE WITH EXCLUSIVITY TO A POSTCODE OR AREA”

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