Leader: Retailers must make 2020 the year of self-help

It looks as if 2020 could be another punishing round in the ring for the retail industry, judging by some of the January trading statements.

One of the Christmas winners, Next chief executive Lord Wolfson, sees no reason to expect any sudden change in consumer behaviour.

He told Retail Week headlines about Brexit-related uncertainty last year made little difference to spending patterns and he does not anticipate much change now the clouds are clearing.

Assuming so, retailers will again need to up their game. Marks & Spencer is a case in point. M&S chief executive Steve Rowe last week reported the retailer’s first rise in like for likes in three years, although at the core clothing division, comparable sales were still down. The turnaround has a long way to go, but Rowe argued M&S was a “self-help story”.

Destiny and discipline

Some may dispute that in a week when pureplay fashion specialist Boohoo’s market capitalisation overtook that of M&S. It is evidence of the rapid pace of change in retail that a business founded in 2006 is now worth more than one which has reigned triumphant for much of its 136-year existence.

But Rowe’s point was well made at a wider level.

Retailers can expect little government help on cost burdens such as business rates. And little help from consumers who have embraced new retail names and sought value as never before, enabled by the price transparency devices ubiquitously carried in people’s pockets.

When there is so little help at hand, retailers need now more than ever to take charge of their own destinies.

“Next has not stood Canute-like and tried to reverse the tides of change but has recognised them and adapted”

That means being absolutely focused on business relevance and purpose. Retailers with stores need to ensure they really fulfil their purpose, particularly if they are seeking discretionary spend, rather than offering the utility of convenience and everyday essentials. Product had better be good, service standards high, the environment enticing, availability strong, services such as click and collect slick.

These are retail basics, but retailers can fall down on them more often than they should – evidenced by factors such as availability issues or poor clothing fit that have featured in some of the Christmas updates.

The shop has to be somewhere worth visiting in its own right, or as a well-oiled link in the multichannel chain, if it is to play a starring role rather than collapse under the burden of costs.

It’s not as if that’s an unachievable goal. Primark is an obvious example of great in-store and retail standards. If Primark can do it, so surely can others with a big bricks-and-mortar presence, if they brought similar discipline to the task.

Agility and ability

In the same way that there are lessons to learn from Primark’s store prowess, retailers should seek to replicate what they can from the online stars.

Boohoo’s sales rise of 44% over Christmas was a meteoric outperformance. That’s down in no small part to its online-only model, but there’s more to it than that. Plenty of etail start-ups never make it through their first few years and online growth among some of retail’s most established names was lacklustre at Christmas, so Boohoo is clearly doing some things right that others aren’t. Other retailers need to consider how they can replicate the agility and ability to back bestsellers that Boohoo has.

One business is navigating the perilously choppy retail waters consummately and consistently while operating right in the heart of the ‘squeezed middle market’ of fashion. It’s Next, which has balanced bricks and clicks well, even though sales in-store have fallen, to deliver overall business success.

Next has not stood Canute-like and tried to reverse the tides of change but has recognised them and adapted. It’s a powerful example of self-help and there are more when you start looking. The time to look, learn and act is now.