The retail sector is still trying to digest the internet. Nobody really knows how long the change is going to go on for. It has certainly not yet reached any mature mix between online and offline sales, but the impact has been profound.
This is something I am particularly interested in, having moved from the department store world, where I was CFO and then CEO at Selfridges, to become non-executive director at a number of retailers, some of them e-retailers and others bricks and mortar businesses. Among them, Rightmove, boohoo.com, ASOS, Blacks and Jaeger.
It's a fascinating time to work in online retail. It's a less forgiving environment
It is certainly a fascinating time to work in online retail – our lives are so time-precious, having a ‘buy now’ button when you’re researching purchases means you don’t have to wait. The crash, recession and slow recovery have adjusted people’s spending habits and given us an even greater incentive to compare prices. That’s why so many retailers are having to stay on their toes – people can check the price on Amazon, for example, so easily, it’s a less forgiving environment.
Yet despite all of that, I don’t think it’s the death of the high street. Not everyone enjoys shopping on the internet and some of the purchases we make – fresh food, for example – require a physical location.
The changes in shopping culture simply mean everyone needs to be a lot more savvy about how they articulate their proposition and what the brand stands for, or the story behind the product. If you engage with that, you will do well. If you’re a bit defensive, you’re going to struggle.
Apple is a great example. It took an IT brand manufacturer to show the consumer electronic shops how to do that job in a positive way. The invitation to play, the architecture of the space, the simple point of sale – people pick up on the detail, and if you have enough of these little nuances, it makes a huge difference.
Some retailers are getting it. John Lewis has always been regarded as a safe business but it has done a lot of clever stuff online. The website is terrific, the breadth of merchandise is huge, it does click-and-collect via Waitrose, it’s very joined up. But generally retail isn’t nailing it.
One of the problems is that the people around boardroom tables tend to be in their fifties or sixties – so they’re not going to get it. They’ll be appreciative of it – I hope I am. But I wouldn’t pretend that I know how the architecture of this comes together. My sense of it isn’t from the gut and wheeling a digital guru into the board meeting once in a while isn’t sufficient.
So we have to get to grips with digital, embrace the change and remember that running a business is a human activity. You can’t do it all remotely. The best teams still get together in a room, have a common cause and a shared outlook.
The other thing that has changed in the 30-plus years I’ve been involved with business is FDs have to be much better communicators than ever. You have to be able to articulate what’s happening – and in a language the people in buying or retail operations understand.
The challenge for the CEO now – and it’s not a terribly new thing – is to make sure the business is keeping on top of new things as they come along. You have to have constant change. I’m not saying everything changes all the time – but some kind of change has to be ever-present. It’s important that when you put the senior team together, the CEO has people who are not scared of change and can help him or her come up with ideas to move the enterprise onwards.
That’s something I look forward to exploring further as I join the panel on managing board conflicts at ICAEW’s FD Conference in May.