Innovative Retailers Part 1 - Twitter to the rescue

The Shop: The Big Green Bookshop

The Place: the gritty streets of Wood Green in North London

The Owners: Tim West and Simon Key

The Story: Opened in March 2008. Having taken a pay-cut to get out of the Oxford Street branch of Waterstone’s (“where  you sell units not books and manage spreadsheets”) Key came to Wood Green Waterstone’s to get some of that local touch. But not long later and with only nine days notice the Waterstone’s closed. And its two managers decided to do something drastic. Like open their own bookshop. So they did.

The man himself: Simon Key 

Bitter about that? Nope. Key is saddened at the direction Waterstone’s took but he thinks that if they keep shutting as many stores as they are then the pendulum might swing back to allow it to be an excellent book chain again. He believes power handed back to the shop managers is a good thing.

So just the one shop in the empire? For now yes. But Simon would like to open many more if they can find the right communities.  Their philosophy only works where community spirit is strong and the staff love the community they work within.

As opposed to? Well, funnily enough Waterstone’s for example, where Simon feels their local champion idea just ends up being a sales gimmick. You can’t move at the Big Green Bookshop for comedy nights/children’s storytelling/local market events and that is the way they want it to continue.

Venture going well? Pretty much. But their ‘big bank loan’ presented some problems earlier in the year and led to some very innovative retailing. The shop drafted a letter which was tweeted out to everyone asking them to buy a book to tide them over and help with cashflow.

Did it work? Just a bit. It became one of the most read tweets in London that day. The day before they’d made £200 and the day after £2,500. People came in with large donations. Money was sent from as far as the US. And this continued for a month.

The Big Green Bookshop: Not big or green

 

Blimey, they’ll be doing it again. They’d rather not. But there are plenty of other innovative ideas they have. During the Booker prize they turn into a lending library and for a one off payment you can read all of the short list instead of buying them all and then keep your favourite one at the end. Thirty people took part the first year they ran it.

Loyal customers then? Unbelievably so. Last month a load of them turned up to the shop one fine morning and cleared all the rubbish on the scrap land next to the unit so that it can be planted with flowers and set with tables for an impromptu coffee shop. And when Key and West reluctantly gave over part of the shop recently to a second hand section the troops rallied round again and donated  lots of good quality second hand books.
 

What’s next for the dynamic duo? Skype events with American authors. And twinning with bookshops outside London for video-conferencing events.

Kindle-phobes? Not a bit of it. But it’s a watching brief on this one. They are waiting until it is no longer a luxury gadget and till a universal provider emerges. And then you can be very sure the Big Green Bookshop will have some good ideas on how to use it to their advantage.

If you’re thinking of doing the same thing: Read The Rebel Bookseller and The Art of Bookselling. 

If you want some free cake: Get down there when the bank loan is paid off in the New Year. They ‘ll be having a party. 

   

Private label is for everybody

The reason for the success of Ikea is not down to the price and size of its meatballs. It is down to its range of unique, exclusive products that have given it the ability to massively differentiate itself from the rest of the market.

At the World Retail Congress in Berlin this week, Anders Dahlvig, former chief executive of Ikea, suggested the game was becoming increasingly tough for retailers who relied entirely on the branded goods of the FMCG companies.

The disconnect between the branded goods and the retail channel is making it increasingly hard for merchants to eek out a decent margin when they are simply selling the same goods as everybody else.

This is why Dahlvig reckons there will be a trend towards more private label goods. This view was echoed by Sir Martin Sorrell, chief executive of WPP Group, who suggests such products will play an "even more significant" role in the future than they have done in the past.

The major supermarkets have long recognised that private label has a massive role to play. Only last week on a visit to Sainsbury's HQ in Holborn Retailinsider.com visited the group's beer buyer who revealed its 'Taste the Difference' range of ales was expanding from three to seven varieties.

The decision he had to make was which branded beers would have to be removed in order to make way for these private label brews.

This is just a very small example of the growth of private label but it is representative of an industry-wide trend that looks set to accelerate as differentiation moves up the agenda of all retailers as they fight for relevance in a tough global market.

Plastic shouldn't be the only way to pay online

Internet connectivity in Russia is at a lower level than many other European nations and this clearly has an adverse effect on the amount of online commerce undertaken in the country.

But with only a piddling 5% of consumers purchasing goods online this is staggering low even with the unsurprisingly modest internet penetration among the Russian population. This is especially so when you consider that 58% of people in the UK buy online, 69% in Sweden and 66% in Germany, according to figures from CBRE released at the World Retail Congress 2011 in Berlin this week.

So what, you might ask. Well, the interesting bit came in a presentation at the Congress by Javier Perez, president of MasterCard in Europe, who stated that only 5% of sales made in Russia are with plastic payment cards compared with a country like the US where the level is 60%.

Now to my mind that suggests there is some obvious connection between the low level of online sales in Russia and the equally paltry credit card penetration in that country. It was rather strange therefore that in the CBRE research it was also found that only 12% of consumers surveyed stated that not having a credit card was a reason for not shopping online.

While this might not be the case in some countries it clearly is in the likes of Russia. The fact that very few people have plastic cards in that country is having a massive effect on online spending. Many people simply do not have the tools to buy online. And this is repeated in many countries.

While we are analysing the stats, we should also point out that it is something of a misnomer to suggest that 12% is a small number of people who do not have a credit card. In these increasingly straightened times retailers should recognise that it is criminal to be effectively locking out 12% of their potential customers.

Guest Slot – Recruitment Insider-Nigel Sapsed

Many of you will no doubt have eaten in Pizza Express and been served up decent quality pizzas and maybe some dough balls to keep your kids quiet. Well the group recently served up something of world class quality – the announcement that the business had appointed the president of McDonald’s Europe to run the pizza chain.

It's not fine dining, but it's mighty fine at recruiting.

What a coup. At McDonald’s, Steve Easterbrook had been overseeing 7,000 outlets in 40 countries, having worked his way up over a period of 18 years, and now he chose to jump ship to run a UK business with a mere 400 restaurants.

It is an incredibly exciting piece of recruitment and highlights that what you see on the surface with many such high level placements is only a small part of the whole picture. Each will comprise three key components – cultural fit, opportunity and of course remuneration.

In the case of Easterbrook the latter will undoubtedly involve a deal of sorts. As part of the private equity-owned business Gondola Group, the Pizza Express chain could be split out and Easterbrook will be in the box seat to lead that one and own a stake in the enterprise.

Or there could be plans to list the whole Gondola Group – that also owns Zizzi, ASK and Byron – with Easterbrook then in situ to head up the UK’s largest quoted restaurant business. Whichever route is taken there will be plenty of financial upside for the new man if things work out.

The second component is opportunity. Easterbrook will have worked out that there is plenty to get his teeth into at Pizza Express and make a genuine difference. The reality is that the chain is getting hammered on its margins from vouchers and discounts, whereas rivals Nando’s and Wagamama are flying.

Please, no more Big Macs and fries.

Pizza Express sits somewhere in all our hearts but we probably only go once a year while the aforementioned pair have a model that achieves high frequency rates. This brings us on to the final component – cultural fit. There is no doubt that Easterbrook can harness his McDonald’s experience to help bump up the frequency rates at Pizza Express. 

Consider how McDonald’s has gone from Formica tables and plastic uninviting interiors five years ago to now a place where there are vibrant colours, comfortable chairs and quality coffee that rivals that of Starbucks and Costa.

So successful has Easterbrook been at making a difference at the burger chain that he arguably realised his job was done and the opportunity afforded at Pizza Express was therefore much greater. The lack of opportunity at McDonald’s in the UK has certainly prompted one senior executive of a major food company to turn down the role of head of McDonald’s UK.

With many retail businesses on the ropes we are seeing a growing number of opportunity plays that present experienced individuals with great prospects of making a difference and in the process earning a name and a decent bit of financial gain for themselves.

Jessops is one such business where chief executive Trevor Moore came from a senior role at Esporta. He bought a stake in the business from its private equity owners and has transformed it from an emporium for beards and geeks looking for the latest tripod into something akin to an Apple store.

Yes, times are tough but adversity also brings opportunities for those with the appetite to make the difference.

Nigel Sapsed is director of executive search specialist Sapsed Stevens

Footfaller: The Shopper`s View Part 1

Hands up everyone who enjoys a secret rummage through the reduced label pile in the supermarket? Almost everyone likes getting something cheaper than it otherwise would be and there are few who have not snaffled a bargain at some point. But hands up again who has bothered to check their receipt to find out if their bargain was scanned properly by the checkout person.

After a recent near-disaster involving cake (only an eagle eyed person behind me saved me from paying the full price) I conducted an impromptu survey on the whole issue. The customer behind me said that she would absolutely return to the shop over even a 50p discrepancy if she noticed the reduction had not scanned.

And even the checkout person in Sainsbury’s said that it had happened to him, as a consumer, so many times that he always looks at the monitor himself to make sure that it has gone through on the cheaper price. He was however at pains to point out that it is not always the cashier's fault.

Reduced labels are supposed to be placed on the front of the product in a very obvious way. When this is not done and they are hidden round the back somewhere the inevitable happens.

Reduced now: but what about at the till?

Another person chipped in that some people are slightly embarrassed to buy reduced labels and even if they saw immediately that the original price had been scanned in error, they would rather just pay than draw any attention to themselves as a serial ‘reduced’ buyer.

This obviously came as a shock to Footfaller whose normal MO is to pile the reduced items up together and say in a very loud voice ‘These are all yellow labels’. 

This sounds rather good for the supermarkets, which appear to be making plenty of money out of people’s embarrassment. And wouldn’t it be interesting to know how much extra money they make from labels being ‘incorrectly’ positioned on items.

But the consumer is fighting back as a quick trawl of the internet revealed that there another set of tricksters entirely, who are busy removing the reduced labels in order to re-attach them to perfectly in-date goods that they fancy buying. If noticed and challenged they merely say that it was lying in the reduced aisle guv, I know no more than you.

This fascinating revelation coincided with the first time I have ever seen a discounted label on an item in a Marks & Spencer shop which caused me to wonder if anyone has tried that in its stores. Considering that it was M & S who invented the whole concept of sell by dates to sell more food, it might be seen as their just desserts.

Multi-channel/e-commerce Movers & Shakers Top 100 Report

Multi-channel and e-commerce is one of the few bright, shiny spots within retail so it is no surprise that there is great demand for people with expertise in this field.

Find out who is in this year's Top 100 Movers & Shakers.

This was one of the reasons why last year Retailinsider.com launched  the first Multi-channel/e-commerce Movers & Shakers report. We wanted to find out who were the most influential people in this part of the industry as well as the potential future stars.

K3 Retail has again sponsored the report, which for 2011 has grown into a Top 100 - from a Top 70 last year. This recognises both that the practitioners in this part of the market are becoming a bigger part of the retail sector as a whole and that the report has gained a more established presence (I hope).

In contrast to last year an Advisory Panel of industry figures was appointed to place the top 30 names in the list in order of influence and power. The remaining 70 are in alphabetical order.

We are grateful to John Bovill of Jacques Vert, Simon Russell of John Lewis, David Smith of IMRG, Christina Starkey of Odgers Berndtson and Jonathan Wall of Shop Direct Group for generously giving up some of their time and sharing their vast knowledge.

This has helped make this year's report a much better guide to who exactly are retail's real movers and shakers in 2011. If you don't believe me then please download the report.

TO VIEW THE REPORT CLICK HERE

And if you require a hardcopy version then please contact Retailinsider.com on glynn@busicomm.co.uk and we'll get one sent out to you.

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The store, just what is it good for?

We've banged on before on Retailinsider.com about the role that stores will play in a multi-channel future and we've looked into the crystal ball for clues about how bricks and mortar will stack up in a digital world.

Will bricks and mortar stack-up in the future.

The guessing might now be over because although the future is still not exactly becoming crystal clear we are at least getting a little more clarity. What's prompted this is a flurry of activity by retailers. In the space of a month we've seen impressive announcements and launches of new store formats.

House of Fraser was quick off the mark with its announcement of a Click and Collect store - that will be a fraction of the size of its regular outlets and will partly be used as a collection point for goods ordered online.

We also had the announcement of the opening of the first Simply Be store from N. Brown that looks set to be a pioneering outlet that mixes physical goods with the latest digital technologies.

On top of this, Ocado recently opened a store in the One New Change development in the City of London that enables shoppers to scan barcodes alongside images of a small range of products and then have them delivered to their homes in the evening.

Ocado virtual store: a stretch to make work?

Close on its heels was an announcement from Amazon that it is to open a number of 'collection points' in prominent shopping centres - including One New Change. These will consist of a row of lockers that will house products thst have been ordered online and are awaiting collection by their owners.

And finally, we've had Morrison's announce it is to introduce internet kiosks into 28 stores that will sell goods from Kiddicare, which it bought earlier this year. This is the first step in its non-food plans.

The common factor among these various initiatives is that the lines between the internet and physical space is blurring.

While this is very exciting for consumers, who are being increasingly accommodated in their desire to shop across channels, it represents a headache for many retailers because it highlights just how many thousands of traditional stores are now a potentially redundant commodity.