We all know that the retail sector is having a hard time
– you cannot open a newspaper without reading about yet another merchant
bringing the shutters down for the final time or at best reducing the size of
its portfolio of stores.
Little good news for retail in the newspapers.
But just think how bad things would be if retailers were
as far behind the times as businesses in the leisure industry – where there has
been only a minor understanding of the environments in which they trade. This has
in turn led to many operational deficiencies including the limited adoption of
digital technologies.
Retailers are arguably light years ahead of their leisure
and hospitality counterparts. They are adapting their business models to the
inevitable multi-channel future and have for many years recognised the value of
employing people in a trading function whose role encompasses the management of
both margins and sales.
In contrast, the hospitality industry does not have a widely
recognised role that ties these two crucial elements together. Typically the
operations people look after sales and service while the margins end of things is
handled by marketing.
It’s a rather perverse situation because retailers have
long since recognised the need for having trading directors, and also
increasingly in this multi-channel world, e-commerce directors who are
specially focused on making money on the assets within the business.
They are tasked with continuously looking at ways in
which they can be smarter with how they squeeze more sales and profitability
from their businesses. Nobody has really thought about implementing this
trading-mentality approach in hospitality.
The industry tends to still operate within silos whereby
you let hoteliers do their job and let publicans do their job – and within large
multi-discipline groups it is fair to say that the rule is that ‘never the
twain shall meet’.
But finally the industry is beginning to look at the retail
sector and admit that they do a much better job and that there is therefore something
there that the hospitality industry can learn from.
Whitbread: Has smelt the coffee.
Take Whitbread and its Restaurants division. It is taking
a progressive approach by identifying the need to have a specialist trader on
its board and allowing this individual to operate beyond a single
brand/service/environment within the business.
The company’s managing director spotted the potential to
add real value by having a specialist trader focused on pulling operations, HR,
marketing, and finance together and driving meaningful money-making strategies.
For example, this could be about stocking regional beers
in different clusters of Whitbread’s pubs. This would impact on various parts
of the business and it would be up to the trader to bring together these
unconnected disciplines and deliver the initiative as a profitable ongoing activity.
Whitbread is also adapting other parts of its business to
take into account the fundamental changes taking place around it in the wider
world. Like the retail industry it is coming to terms with the impact that
digital technologies are having on businesses in all sectors.
It has seen the likes of Jessops react to these changes
by skilling-up through its recent recruitment of a trading director to its
board who brings significant digital skills from his previous role at The
Carphone Warehouse.
Whitbread’s Premier Inn division is taking similar steps
by boosting its digital capabilities by appointing a new marketing director
from Lastminute.com who brings broad-based marketing expertise including brand,
consumer and digital skills.
The company has recognised that a greater percentage of
its sales are accruing through its website and that this is only likely to grow
over time – and it has chosen to do something pro-active about it.
Let’s see if other operators in the leisure and
hospitality industry final wise up to the big-time threats and challenges out
there and follow suit in changing their models to operate in today’s and
tomorrow’s worlds rather than that of
yesteryear.
Sponsored column
by Nigel Sapsed, director of executive search specialist Sapsed Stevens
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