Ali’s

retail homilies

itim.com Unified Retailing

There is "gold in them hills"

Amazon reported it made £1bn profit through price optimisation.

The good news is it works. The bad news is not many retailers are looking at their own pricing methods and strategies and optimising them. Something we do very well.

Ali’s

retail homilies

itim.com Unified Retailing

Choking

I heard this phrase recently – “If you are not careful, the “tail of stock”
will “choke” your open-to-buy”

Apparently, that is how most retailers go bust. The last 20 years of low interest rates might have made us lazy when it comes to stock management.

As the cost of capital has gone up 10- fold this year, optimising stock is essential. We need to be careful!

Ali’s

retail homilies

itim.com Unified Retailing

Too much product
in the world

Between 1995-2010 world manufacturing capacity tripled. Capital (Foreign Direct Investment) poured into the emerging markets (the third world). It has helped keep inflation low.

If you search on Amazon for ‘dresses’ you get 19,000. There is too much product out there.

Retailers cannot compete on product alone.

Ali’s

retail homilies

itim.com Unified Retailing

Its only going to get
more expensive

We went from European manufacturing to Eastern Europe, to Turkey, to north Africa to Sri Lanka, to China, to India, to Vietnam, to Cambodia, and finally we have ended up in Bangladesh. That appears to be the end of the line.

It cannot get any cheaper. With living standards increasing everywhere, it can only get more expensive.

Ali’s

retail homilies

itim.com Unified Retailing

The lost art of merchandising

The UK used to be a leader in
merchandising, like many things in Britain
we celebrate the things we have lost.

In a digital age encompassing the concept of ‘fast retailing’, it appears that people think planning has no value. We are losing merchandising skills.

In the military they always reminded people of the 7 P’s. “Proper Planning and Preparation Prevents Piss Poor Performance”

So true in retail.

Ali’s

retail homilies

itim.com Unified Retailing

Merchandise well and your customers will come.

Sir Ralph Halpern once told me - that
was the philosophy of Burton Group
which he founded in the 1970s.

It’s still true, but not if “when they come” they
get bad service and a poor customer experience.

In a customer centric world, a great product assortment needs to be accompanied by great customer service and experience.

Ali’s

retail homilies

itim.com Unified Retailing

Customer engagement.

It’s hard to retain the loyalty of customers
without really engaging with them.

Observations from retailers are - if your customers don’t shop 4-12 times a year it is hard to engage with them.

Retailers need to have an assortment or product range that allows customers to shop 4-12 times a year, so digital or face to face engagement can really happen.

Not many do.

Ali’s

retail homilies

itim.com Unified Retailing

Unified retailing.

Retailers are playing two roles today.
They have always been product distributors, and
more and more they are having to be ‘curators’ on behalf of their customers.

That is why we are all talking about Unified retailing – being customer centric and product centric concurrently, which is hard to do.

What’s more, as you gather more customer data, it should allow you to shape/improve your product assortment. But is it?

Ali’s

retail homilies

itim.com Unified Retailing

Secret of a retailer’s success

Charles Wilson once said: ‘Most retailers have something unique in their DNA. It’s what makes
them special. ‘

My Advice is - “if you have a best kept secret – keep it that way.” Don’t lose sight of your DNA.

Charles also said, in his experience, retailers who stop performing are those that try and veer away from their original DNA.

Remember your competitive advantages is your competitive advantage, keep building on it.

Ali’s

retail homilies

itim.com Unified Retailing

Structure vs Strategy – what
is more important in retailing

Business schools go on and on about
strategy. But real competitive advantage
often comes from “Structure”. 

Look at natural species. They are different
because their DNA (structure) is different. 

Anybody can copy your strategy, but few people can
re-create your unique DNA.

Structure is processes, systems, capabilities and
know-how.

Ali’s

retail homilies

itim.com Unified Retailing

Retailers are still
organised functionally!

There is a head of stores, head of
e-commerce, head of marketing,
head of B2B, head of supply chain,
head of buying, head of merchandising,
head of finance etc. 

A focus on functional excellence is a paradise for those selling best of breed solutions.

I asked a CEO recently, “Who in your organisation is in charge of end-to-end processes?” He said, “no one!”

Unified Retailing is ‘joined up’ retailing, from the consumer to the supplier & ‘optimised’. To be a high performing retailer you need excellent end-to-end processes

Ali’s

retail homilies

itim.com Unified Retailing

Retailers are run
by people.

There is a lot of focus on AI, superior intelligence.  But intelligence has to be acted on. People are part of the value chain.

There is no point putting in sophisticated intelligent systems if you have “poorly trained people”, that cannot act on it.

For every £1 you spend on systems, how much should you spend on the training and development of people, 25p-50p-£1?

Ali’s

retail homilies

itim.com Unified Retailing

Return of the Jedi!

If you equate the ‘Empire’ as – Amazon,
Online Sites, Facebook and Google.

The ‘Jedi’ as local/national store-based retailers. 

Recently, financial results show a “Return of The Jedi”
– Will it last?

Unified business models that promote real omni-channel excellence are winning the war.

Ali’s

retail homilies

itim.com Unified Retailing

Like for Like Sales

A retailer said to me that the only thing that matters is sales. “I am measured on like-for-like sales growth”. 

It’s easy to drive sales growth if you are not interested in making profits.

Just look at so many “online” retailers!

Like-for-like profits growth is much harder to achieve.

Unified retailers are the most profitable retailers.

Ali’s

retail homilies

itim.com Unified Retailing

What’s the right
profitability level?

Many good retailers operate in the range of 5-10%
net profit. 

Yet some break the 10% barrier- How do they do that?!

Could your business do that? 

We believe it’s possible to double profits if you UNIFY
your business.

Ali’s

retail homilies

itim.com Unified Retailing

GMROI

I am told that GMROI is the only KPI, private
equity firms who own retailers focus on.

If you don’t know “why”. There are probably huge opportunities to create value in your business.

Stock Management is completely changing. You no
longer have to own the stock you sell.

It is possible to optimise inventory and space in an
omni-channel world, dramatically improving GMROI.

Ali’s

retail homilies

itim.com Unified Retailing

Show me the money

A retail CEO who I was trying to sell a technology
solution to, said to me,

“If I add up all the benefit cases I was sold by
consultants and IT vendors like you. My profits would
be double my revenue.”

It’s easy to imagine “value”. Much more difficult to
create it.

Of course we believe Unifying your business will create value.

Ali’s

retail homilies

itim.com Unified Retailing

What’s the point
of a retailer

Amazon has shown you can digitally
connect a consumer to a supplier
seamlessly, without any human
contact. It’s fast and convenient.

So what’s the point of a retailer that is only a product distributor – something to really think about?

There are all sorts of possibilities like, being a global brand, being a customer curator, making human
contact count, being part of a community, service and
convenience… there needs to be a clear sense of
purpose, a differentiator. Unified retailing is all about
establishing a ‘purpose’.

Ali’s

retail homilies

itim.com Unified Retailing

Why bother having
“stores”

In a national retailer, 85% of customers
live within 15 minutes of a store.
Your store is a point of community
engagement.

If you close a store, you lose out on a community and
your online sales from that community will also
decline. The reverse is also true. 

The store is a focus and a point of community
engagement and not just a point of sale, but a point of
service. We believe CRM should be store driven.

You can make human contact count, by providing
services that make you more convenient than Amazon.

Ali’s

retail homilies

itim.com Unified Retailing

15 Minute City

During covid we realised that being
close to services made a difference. 

As we move to an eco-friendly world, having your store within 15 minutes of your customers will become a key competitive advantage. 

Delivering from your shop will be cheaper, eco-friendly and more convenient than delivering from a national warehouse.

Ali’s

retail homilies

itim.com Unified Retailing

Retailers want
to be national
and
international but… isn’t
it
all about the customer?

In the desire for growth, retailers
want to expand, naturally!  

Ironically the fastest way to
grow is to grow “locally”.
It is easier to grow your
customer base by better engaging with your local community, around your store.

The fastest and most profitable growth comes from being more local. 

Its not intuitive!

Unified retailing is customer centric retailing. What matters, is not market share, but the share of your community you have.

Ali’s

retail homilies

itim.com Unified Retailing

Making human
contact count

Some people think CRM is about
email marketing from head office.

They forget that the “R” in CRM
stands for Relationships.
A relationship is really person
to person.

In the Godfather the famous line was, ‘it’s business, it’s
not personal’. Relationships unfortunately are personal.

You have staff in stores. Go make human contact count.