Innovative Retailer - Paper & Cup

Brought to you by Retailinsider.com and PCMS

The Name: Paper & Cup

The Place: Shoreditch, London E2 (and soon also in Mile End, London E3)

The Story: Mixing hospitality and charity is not easy. Well-meaning it may be but stylish it usually ain’t. Until now. Step forward Paper & Cup, recently opened by Diane Abbott MP, who quite rightly said it incorporates three of all of our favourite things: coffee, cake and sitting down for five minutes.

Opening day at Paper & Cup 

And the charity bit? It’s run by the Spitalfields Crypt Trust (SCT) and its main aim is to train people - who have ceased to be addicts - for a new profession – i.e. as a barista. But of course most people will buy coffee and meals from there without ever realising that fact. What they will notice is a quirky shop, which is actually full of charity shop goods but which very cleverly manages to repackage them as desirable vintage items. And it’s a library too.

It sounds very busy: It is a small unit but there is a lot going on. The real win in this is the input of the shop designers – Unkel who worked pro bono for the SCT and ‘curated’ shall we say the items for sale in the shop as well as designing the whole interior, and sourcing the goods - the whole shebang in fact.

You can curate a charity shop? Oh yes. The (wo)men from Unkel trawled through the good, the bad and the ugly in the charity’s shops all over East London and said ‘see those seventies-style melamine tea cups, we’ll have those.’ And what wouldn’t sell for £1.50 in Canning Town gets snapped up in the Shoreditch Triangle for 10 times that.

It’s a funny old world: Its horses for courses. The core clientele are trendsters, web designers, media types, people with asymmetric haircuts. And Brent Clark who wanted it to be as far away from a charity coffee shop as possible so these are the people he needed to attract. And so far so good, the shop is averaging nearly £400 a day which is much better than the planned projections.

And who is Brent Clark? The man who runs special projects for SCT. He has form when it comes to profitable ideas. He set up YourTime – a painting and decorating firm – where all the employees are ex-addicts, and it now has a turnover of £120k per annum. But the women on the programme wanted something else to do so he came up with Paper & Cup.

Paper being the books? Yes, the shop is full of books and you can read them as in a library or buy them. They are also from the charity’s shops, but again curated by Unkel, and Clark also gets brand new slightly damaged books direct from publishers.

He sounds like he is good at getting things? You said it. And his biggest find on this project was to get Vincent Mckevitt on board. The founder of the Tossed restaurant chain has been mentoring the project for a year and at every turn has forced commerciality to the top of the agenda. Again working for nothing he has secured the project favourable rates and may even take on some of the apprentices training there.

How so? After a year he will interview every single one of them and on merit alone will offer a job to the ones who pass his muster. He is opening Tossed outlets at a rate of knots and cannot find any English people who want the work in them so taking on SCT trainees who may not have been paid to work for many years would be a win-win situation. But of course if the chain takes off then some of them will be snapped up internally.

Is that a plan? It’s certainly a desire. The trainees work as volunteers and only the team leader and the manager are paid. But Clark wants to start putting the volunteers into those paid positions as soon as a year is up.

Yes, they do cakes

OK, that’s enough goodwill. Can we talk about cakes now: Certainly. The cakes are local and some are baked by individuals just in their spare time, the bread is local from Flour Station, in fact almost all the food on offer is from that part of London. Love Jam Kitchen from Bow provides the preserves and you can spend a lifetime going through the different teas and coffees. It runs seamlessly through breakfast, lunch and afternoon tea. Someone has properly thought this concept out.

Well, as long as it doesn’t get overrun with dreadful bankers: Hold on there, those ‘dreadful’ bankers financed it. State Street Bank and Barclays Corporate teams to be precise. And very grateful Clark is. As he says ‘addiction struggles to get money’ so hats off to them.

So truly innovative then? Yup. It redefines what ‘charity shop’ means and looks like, and gives you the feeling of doing good whilst indulging yourself. We couldn’t think of another shop doing it. And the outlook is confident as you can see from the fact that Clark has already signed on the dotted line for Paper & Cup number two down Mile End Way, and this time with Lexington Catering in partnership. Scheduled to open on December 1 -  just in time for some Christmas cheer.

Cor blimey. He’s found another outlet one month after opening the first one? Like I say, the idea’s got legs and he is running with it. Now, is there any more of that melamine anywhere about?

PCMS Group is a leading independent supplier of software and services to the retail industry; PCMS Store and Multi-channel solutions have been chosen by over 98 retailers including Arcadia, John Lewis and M&S. 

Kicking the habit of the promotions drug

The retail world is awash with discounting. It wasn’t supposed to be like this. The idea was that the recession would prompt a certain amount of offers and promotional activity and then things would return to normal.

Offers are not special anymore 

But this hasn’t happened and there is a growing realisation that discounting might be here to stay. It is being driven by the fact that the flat growth now being experienced by retailers is not going to return to anything like the pre-recession growth levels.

Evidence of this changing mindset is that even before starting in her role as the new director general of the BRC (British Retail Consortium) Helen Dickinson stated that her period in office will be characterised by the industry’s zero-growth backdrop.

So while the discounting in the early days of the recession was regarded as a short-term hit that could be accepted, the fact that there is now an ongoing need to discount in order to simply stand still is putting the long-term viability of many retailers into doubt.

The next time you eat out at a Pizza Express, just take a look around you and see if anybody in the place is paying full price. Such is the multitude of printed money-off vouchers that the restaurant chain is pumping out every day that if you are the only person in the place paying the menu price for your food then you would feel a little cheated.

The supermarkets have also been caught out by the damage of discounting, having found that the buy-one-get-one-free phenomenon has turned into something customers now insist upon. As a result margins have continued to be hit badly. Such has been the level of discounting that around 40% of supermarket sales are now related to products priced below the full ticket price.

For an idea of how discount-driven the industry has become - type in ‘discount bedrooms’ into Google. You get 84 million responses. For ‘discount kitchens’ you get 13 million, and for ‘discount bathrooms’ you get almost 67 million.

When discounts are combined with increasingly frequent Sales then the situation is exacerbated. For instance, Bathstore has shifted into its Autumn Sale – moving seamlessly from its Summer Sale - and even the upmarket players are being sucked in. Harvey Jones Kitchens has extended its Summer Sale – due to public demand, apparently. It’s not really a great surprise that the punters have voted for cheaper prices.

But as well as reducing margins and profitability, this discounting frenzy has also reduced the levels of loyalty to retailers. With discounting, we find the emergence of the promiscuous shopper and the deal junkie. It’s little wonder therefore that discounting is being tagged as akin to crack - addictive to both retailers and shoppers.

I have attended a couple of conferences of Tesco suppliers held by Dunnhumby, its number crunching division that drives its Clubcard loyalty programme, and the red-hot topic for a number of years has been the need to reduce discounting.

Margin down the plughole

There is a belief that giving reduced prices to all its customers – including their least loyal shoppers, the deal junkies – is a pointless exercise and that it is far better to give the better offers/prices to its genuinely loyal customers – i.e. its frequent and most profitable shoppers – by sending them targeted coupons and promotional offers.

But despite their acknowledgement of the damage discounting has been doing to their business, even the mighty Tesco has found it well nigh impossible to wean itself off the money-off mechanic – partly because all its rivals aggressively partake in such a practice as they are equally addicted.

While the supermarkets continue to fight each other on discount, and mull over the prospect of cold turkey, there have been the odd signs of some merchants kicking the habit. Fashion retailer Fat Face has reduced its sale of discounted goods by two-thirds from the level they were at two years ago.

Its chief executive, Anthony Thompson, recently stated: “We’ve gotten off the discount drug and that drug was a bad one to get on. It makes you feel okay at first but you find you need a higher and higher dosage.”

Whether any players in the kitchens, bedrooms and bathrooms sector will follow suit depends largely on the stomach they have for standing out from the crowd and attempting to appeal to customers with something more than simply the cheapest price.

This column by Glynn Davis was first published in Kbbreview

Movers & Shakers Q&A with Scott Weavers-Wright

Brought to you by Retailinsider.com and K3 Retail

Scott Weavers-Wright, chief executive of Kiddicare

1. What is the greatest opportunity for your business?

Kiddicare is embarking on an exciting new store roll out into former Best Buy units, acquired with Morrisons earlier this year, which presents its own challenges to a previously primarily online focused retailer, but also an incredible opportunity. The new physical retail concept Kiddicare has created is grounded in multi-channel thinking – we believe this is an experience unlike anything in the UK.

Combine this with the reach these stores give Kiddicare across the UK (by the end of 2013, 31% of the UK population will be within an hour’s drive of a Kiddicare superstore), and the opportunity to develop customer loyalty and advocacy is an achievable goal, even in times of austerity.

We’ve developed a new in house team with a wealth of experience and knowledge. We have recruited in order to challenge the existing retail ‘restrictions’ and build an organisation that delivers real, tangible value for our customers.  

To help us achieve the latter, a single view of customer across Morrisons and Kiddicare will provide the platform for our business to offer a personal and relevant experience across any touch point. It is the foundation of our vision moving forward.

Taking a pure play mind-set into the multi-channel world, rather than trying to retro-fit, means our proposition has been developed for the new connected, transparent and value driven market we find our selves in.

2. What is the biggest challenge to your business?

Time is increasingly hard to find! We have so many ideas for the Kiddicare and Morrisons multi-channel businesses and far fewer hours to execute them all. Prioritisation is becoming increasingly difficult. We have to place the right bets. We don’t want to lose our agility, pace or ability to take calculated risks.

Presently, Kiddicare is in unchartered territory – no other dotcom business has attempted a store roll-out programme on this scale. As we grow and more structure and governance is introduced we have to find a way to have the best of both worlds. Do it today; Plan for tomorrow.

We will strive to maintain our unique culture as we grow quickly. We have worked hard to distil the Kiddicare culture into something sharable in order to bring 1,000 new colleagues on the journey with us. It is paramount that we are clear on what we stand for as an organisation and how we want to operate. As CEO of the business, this sits right at the top of my agenda as I believe it will be Kiddicare’s point of difference.

3. With the benefit of hindsight what would you have done differently so far?

I wish we’d started developing technology, rather than waiting for propositions to be finalised. Technology can enable propositions. It is difficult to push the boundaries of your thinking unless you are aware of the technology enablers that exist.

4. What is the future of the physical store?

Mary Portas is fighting for the high street, but there will always be a place for retail parks, particularly for parents looking for ease of parking. These locations also offer the space retailers need to deliver the choice customers desire. 

Mobile is ensuring that physical stores will continue to be an important part of consumers shopping experience. With the continued penetration of smart phones, access to information around price, reviews, video and added value content through you mobile is becoming increasingly commonplace.  However, stores also provide the ability to touch and feel product. It also has immediacy. These are two elements that websites have tried to replicate but have, so far, failed.

If a multi-channel business can ensure they are price competitive, which Kiddicare does by offering a price match promise, then the overarching value and experience a customer gets in a physical environment when combined with digital support is a compelling proposition.

5. What will the high street look like in a decade?

Perhaps retail stores will have become ‘shrooms’, merging physical and digital experiences to showcase products at their best with back-end operations fulfilling the delivery of products in ways that suit customers, such as click and collect, home delivery, and drive through service. 

6. Will mobile devices be the primary sales channel in the future?

The point is choice, especially for Kiddicare’s busy  parent and family market. They’re not ‘loyal’ to one particular channel, but they are brand loyal if that company makes it easy for them. Kiddicare has seen a growth from 11% to 25% with mobile orders in the last year

We are developing a mobile first business but, ultimately, a device and channel agnostic business. A mobile first strategy simply enables us to strip away unnecessary steps, content or processes. It often creates the most streamlined route to complete a task – this thinking can then transfer to another channel with impressive commercial results.

7. What other retail business do you admire?

There are several retailers, both online and in physical retail spaces, which I watch with intrigue. Selfridges offers a superb in-store experience. ASOS has an incredible delivery proposition and cross platform functionality. John Lewis provides exceptional customer service. Zappos and REI have unrivalled online content and imagery which really enhances the user experience.

8. If you hadn’t been a retailer what would you have liked to do?

My two passions in life are technology and football – if I wasn’t where I am today, maybe I would have been a footballer.

9. What marks out of 10 do you give yourself so far for achievement?

I’m very proud of what I have achieved so far, but there’s still more to do. I guess 7/10 for being part way ‘there’.

10. Who would you place in the Top 20 Multi-channel/e-commerce Movers & Shakers?

Kiddicare’s very own Simon Harrow, who now leads our digital trading team.

Guest Slot - Analysis Insider - Sarah Wilson

When Starbucks decided to get a bit more intimate with its customers it took to writing their names on its paper coffee cups. While this might have worked on some levels it quickly began to look a little bit too prescriptive.

Not that nice.

Such initiatives highlight how tough it can be for large companies to suddenly go all touchy feely and get ‘in-tune’ with their customers. What today’s consumers really want from retailers’ employees is for them to be free in the way they act, which ultimately leads to a more natural style of customer service.

For smaller start-ups this will sound perfectly sensible but for large traditional retailers it will potentially conjure up their worst nightmare. Retail models are very rigid and merchants love their rules. If a person works in a store or in a call centre then there will be very specific rules assigned to how they deliver customer service.

In contrast, newer businesses have a very different sense of what’s right for the customer. They allow more customer service decisions to be made on the ground – as long as the employee feels it is the right thing to do.

This agile and personalised approach to customer service mirrors the way that social media has opened up immediate and interactive communication channels between consumers, brands and retailers.

The adoption of mobile devices allied with the utilisation of Twitter and Facebook have presented consumers with many ways to give feedback on the levels of customer service they receive and in a much more direct way.

This is very difficult to manage under old customer service rules and when combined with the development of multi-channel the complexity of dealing with consumers is a growing issue for traditional retailers.

The answer is to make their models much more responsive and to create boundaries where appropriate but allowing gut-feel to operate within those boundaries.  This will lead to retailers being more in-tune with their customers and enable them to convey more of a sense that they are giving their customers what they want and what they need – and in a timely manner.

The implication is that larger retailers need to get more comfortable with having less rules.  The implication of this is that organisations need to recruit people with real customer empathy.
With multi-channel there has to also be an understanding of the specific types of people that retailers need across their various channels and to seek out these relevant individuals.

Retailers must then work on how they communicate with their staff on an ongoing basis and also how they train them in order that they empower them to act instinctively when dealing with customers.

Decision makers don't always have the answer.

What makes any such changes particularly tough is the fact the key decision makers in retail businesses are typically the people with the least amount of customer interface time. Despite this backdrop, things must change.

But it’s not really happening and as such, big organisations are sleep walking into change while newer competitors are growing fast at their expense. The incumbents remain hampered by their old ways of working and out-dated rules.

For many years people have talked about customer service being a key differentiator and it has definitely been the case. But with social media and multi-channel forcing the pace of change in the industry it is essential that retailers now take a fresh look at how they are defining and delivering customer service today.

It needs to be delivered at an exemplary level across all channels and we are defining exemplary as being individual rather than prescriptive and heart-felt rather than machine-like. What’s sure is that the answer is certainly not written on the side of a paper cup.

Sponsored column by Sarah Wilson, retail specialist at consultancy Egremont Group

Evolving life of in-store kiosks

Who remembers the clunky kiosks that Argos was playing around with in its stores years ago? Not that many people probably. Not just because it was years ago but because of the fact that they just weren't any good.

Kiosks: can they stand on their own two feet.

The technology was rather primitive - there was none of today's (supposedly) ubiquitous broadband and seamless wireless connectivity. And all the content was out of date as soon as you loaded it up into the terminal.

But kiosks also suffered from a fatal drawback - people were terrified of using them. Boots had the same problems as Argos and other retailers when it first installed its Advantage card kiosk into stores. Broad swathes of the population simply didn't use keyboards and screens as part of their everyday lives, certainly not outside the confines of their offices.

They couldn't even be dragged kicking and screaming to use these kiosks. Needless to say they pretty much died a death in most stores - with intermittent returns as new iterations came to market. But they never enjoyed much traction.

Things are very different today and many retailers are playing around with introducing interactive technology into stores and as a key part of this movement kiosks are enjoying something of a renaissance.

As an indication of how they are now widely accepted by shoppers just take a look at Marks & Spencer that is in the early days of  rolling out kiosks into the fashion and home sections of some of its stores.

What device does this remind you of?

What is interesting is that today the public's acceptance of using technology outside the office - via iPhones and iPads etcetera - means that kiosks in-store now seek to replicate this personal non-work experience. To the extent that M&S has designed its kiosks to look like large iPhones - placed on plinths - and the user interface mimics many of the interactions and gestures developed for the Apple devices.

The one problem for kiosks is that as they replicate so much of consumers' own mobile devices and the adoption of these technologies becomes increasingly widespread through the population there is an argument that kiosks in-store will simply be replaced by the mini kiosks that we are all now carrying in our hands.

It will be interesting to see how things pan out for the kiosk and maybe some of the answers to where the future lies for the technology might be found at a forthcoming event Kiosk London Expo 2012. One thing is for sure we are in an age where technology is having a massive impact on how retailers' deliver an experience in their stores.

Retail Species - The Changing Man

The Person: Chris Powell
The Company: Stanfords
The Job Title:  Chief Executive

The Story: Say Stanfords to most people and they say ‘Ah yes, the best travel bookshop in the world.’ Which is all well and good unless you say it to Chris Powell when it is definitely not the right answer. The correct answer here is ‘Ah yes, the best internet-led travel information group in the world.’

A man on a mission of change then: Absolutely. This year he went to Vietnam. He bought the guide book at Stanfords and booked the rest of the trip at home on the internet. What he wants to be able to do one day is to do the whole thing at Stanfords but his retail challenge lies in bringing both customers and staff along with him.

Unwilling? You could say that. Powell, who has been in the job around three years, knows bookshops are dying on their feet even venerable ones opened in 1853, but people like what they know. He thinks that Stanfords needs to be a more experiential place – something that women especially value. The whole customer journey needs to be covered in one shop. He wants more pictures, emotion, posters, deals – a ‘feminisation’ you could say. What he also wants is an emporium, but the customers who want serious rows of serious maps still need persuading.

Hmm. What are his retail reference points? Well, the Stanfords vision is to create something that combines what we have now with the National Geographic shop, the Royal Geographic Society, and the London Transport Museum – both its shop and the museum that make it a must-visit place in the Covent Garden area.

What’s wrong with it? Well, there has always been a website but it has just had a revamp. Powell’s vision for this is for Stanfords to be unique in offering the whole range of guides, maps etc which will free people from the plethora of sites offering bits and pieces of the whole. Sales are already 20% up on what they were previously.

It’ll be injections next!  Funny that you should mention it. An innoculation/travel centre is entirely within Powell’s thinking. He is running a big old shop here – three vast floors in the middle of Covent Garden. Space is not an issue. So up-selling and cross-selling accessories like map covers, Stanfords own-brand walking poles, and pen knives are now being sold – so little by little he is pulling everyone his way. His ‘themed area’ in the basement is just about to get into action.

What’s the theme? Constantly changing. He rents it out to travel companies who take it over, run events, pay for the privilege of association and bring in their customers to his shop, and share their database. And it’s already booked out till March. Nice.

So what is the background of this person creating shockwaves through the bookshelves? It’s a private equity story. Powell was a director at Charterhouse where he had a portfolio of SME companies. So he has the finance experience and the strategic thinking to turn the shop about face. He has plenty of different roles at Stanfords, you can add company secretary and finance director to his list of job titles for a start. And of course ‘hand-holder through change manager’.

Is it really that bad? Think Foyles, think very long term staff with two degrees selling books for the love of it. And then tell them they have to rearrange the shop. Put best-selling literature sections on France, Italy and Spain upstairs so that people have to go through the rest of the shop first. It’s not romantic but it sells stuff. Book signings likewise. They used to be held on street level – people walk in and walk straight out again with their book. No, said Powell. Do them downstairs and people will buy on their way down. Eeek said the staff. Where are the impulse buy stands? said Powell. Get some door counters too, install iPads!

Crikey, I begin to see his problem: He is very excited about kiosks. These could be in tiny outlets operating in airports or in a small part of larger stores, with a small range of core stock but offering the ability to buy the whole range online in the kiosk. Minimal costs are involved and it makes overseas expansion possible.

The internet is key then I see: It certainly is. Powell has made enormous changes in the IT systems to allow for a much larger internet business in due course. 20% of sales come from around the world already and this will be bigger. But the stand-out online (and in-store) category is maps where Stanfords has such a uniquely wide range. They have always done B2B business with property developers and housing associations providing them with OS maps, but Powell is now seeking to drag some of that over into B2C. Imagine having your own personalised map done for you in-store while you wait. It can be done and it’s yours starting at £24.

I’ll have one: He is also thinking of an online loyalty card and perhaps even a Travel Club offering discounted deals for members. And if you are still determined for Stanfords to be a bookshop, then check out the entrance display where, shock horror, your light beach reading is now also available.

Whoa there. I’m getting ideas overload: There are plenty of ‘em but very little money to spend on marketing them, which means the chief executive is going to need all his retail nous to generate free publicity. But judging by what he has already persuaded the public and staff to do that shouldn’t be a problem.

Lovehoney - Top 10 tips on running a web business

In the final part of Lovehoney Week on Retailinsider.com we hear from co-founder Neal Slateford, who runs through the top 10 things he has learnt from setting up the business.

1. We don’t know anything, you don’t know anything, but don’t let that stop you.

Before setting up Lovehoney it was a toss-up between creating a cross-stitching online business or selling sex toys over the internet based on them both being under-served categories. After visiting a cross-stitching show and the Erotica event Slateford says “sex toys was chosen as it sounded much more fun”.

2. You don’t need much money, an office, or a warehouse, but a bit of capital helps.

For two years the business was run from a home office and fulfilment was from a Pickfords self-storage building. “There was no electricity and heating in winter but by the time we left we were doing £1 million per year in sales,” says Slateford.

3. What makes you so special?

Competitors come into the market and under-cut you so we went into making our own products. We ran a competition to invent a new toy and Trevor, who lived in a caravan in Ireland, won with Sqweel – an oral sex simulator for women. It has been a runaway hit and Trevor earns a lot of money from it and he now lives in a smart flat in Toronto. Meanwhile, Lovehoney enjoys “fantastic margins”.

No, it's not a Rolodex.

4. Retail is detail.

Lovehoney employs eight people working on content who highlight how to use the company’s products, answer questions about new lines, and create user guides, with the aim of demystifying the industry.

5. Care for your community and they’ll care for you.

Lovehoney has 37,000 members in its community and it asks them questions about new products and they take photos – for things like Model of the Month - that are then uploaded to the site. And the company listens to its customers: “They said they did not like the official photos of models in the product shots as they were too American. Now we have a mix of customer pics and official ones.”

6. If you outsource everything then exactly what is it that you’re good at?

Lovehoney does most things in-house because otherwise there would be a question over what differentiates it from other businesses selling similar products.

7. Always go the extra inch.

“The industry was dodgy so we decided to focus on customer service. We went to visit Zappos in the US and thought we’d do the same for sex toys and go big on customer service,” he says, adding that any item can be returned for any reason up to 365 days after purchase – even if it has been used. Although Slateford says some people will take advantage they represent a “tiny, tiny proportion of customers”.

8. Find good people, it’s hard to be really successful without them.

Not hiring people earlier was a mistake, according to Slateford, who says £1 million turnover had been reached with just the two co-founders working at the company, which with the benefit of hindsight would not be repeated. He cites the company's e-commerce specialist Matty Curry as instrumental in the business' success.

9. It’s easier to change direction when you’re already moving.

Although Slateford says it is tempting to want everything on your website from day one Lovehoney has worked on getting the “bare bones” up and running and to then constantly iterate, which helps to make failures unlikely. “Never go live and then go home. Or go live and go to lunch,” he advises.

10. You don’t need to spend money to get noticed.

Lovehoney found magazine and TV ads did not work but what it finds does work are “stupid ideas” that just need to be brought out from brain storming sessions. Slateford cites one recent stupid idea that got plenty of publicity – a Royal Wedding commemorative cock ring.

For good measure Slateford throws in an extra tip – the most important of all:

11. Have fun and be happy 

“The last 10 years have been fun, we laugh every day. It’s been brilliant,” he says.

Movers & Shakers Q&A with Richard Longhurst of Lovehoney

Brought to you by Retailinsider.com and K3 Retail

Richard Longhurst, co-founder of Lovehoney

1. What is the greatest opportunity for your business? 
Spreading the sexual happiness message into the mainstream. The impact of Fifty Shades of Grey on our sales this year has shown that there is a genuine appetite for adult toys in the mass market.

2. What is the biggest challenge to your business? 
Spreading the sexual happiness message into the mainstream. Retailers are still understandably nervous about expanding their offerings into a previously taboo product area. It's our job to overcome their fears and bring them new product lines that help them capture this new market.

3. With the benefit of hindsight what would you have done differently so far?
Employed more people more quickly, especially ones which are smarter than me and Neal Slateford (Lovehoney co-founder). Which is most people. We love doing things in-house at Lovehoney so recruiting and developing talent is key.

4. What is the future of the physical store?
Functional - Tesco Express is handy for eggs and bacon on a Saturday morning if the fridge is empty. Sometimes the Internet can't deliver fast enough or you haven't planned far enough ahead. The only time I go into an HMV is when I've forgotten someone's birthday. Recreational - some people just enjoy shopping. I'd rather save time online and play golf instead.

5. What will the high street look like in a decade?
It will be a lovely place for a stroll. In Bath where Lovehoney is based I hope they keep it clean and keep the seagull population down. Logic dictates that if a higher proportion of shopping is done online or out-of-town, then we need fewer shops in town centres or shops that do different things. Perhaps there'll be a massive expansion of Laser Quest.

6. Will mobile devices be the primary sales channel in the future?
In the medium term, devices will be used together - people might research here, decide there, and then place orders somewhere else. Further into the future it's possible to imagine a world where you don't need a device to connect to a computer network. Thought-commerce - you heard it here first, though the .com's been registered since 2008 there's nothing doing... yet.

7. What other retail business do you admire?
I just ordered a sofa cover from Bemz - they spotted an opportunity and made a great site. ThinkGeek is a big favourite of mine too - lashings of personality with oodles of unique products. Smashing.

8. If you hadn't been a retailer what would you have liked to do?
I was a tech journalist in the 1990s before getting into retail. I'd have a go at that again, but I don't know if I could do it as well as Rock Paper Shotgun.

9. What marks out of 10 do you give yourself so far for achievement?
1 - there's so much more to do! A pretty good 1 though.

10. Who would you place in the Top 20 Multi-channel/e-commerce Movers & Shakers?
I salute Lovehoney's Matt Curry on a daily basis. He tells me that Simon Harrow at Kiddicare should get in, even though he looks about 12. Which I suppose is appropriate. Oh, and everyone at John Lewis.

Aldi rises and Naked Wines falls in Drinks Retail Websites Table

Brought to you by Retailinsider.com and Cookie Reports

Innovative online wine retailer Naked Wines has fallen 12 places this month in the table of the Top 25 UK’s leading drinks retailing websites for September, which takes it to close to the bottom of the table.

Its score of only 2.14 out of 10 was a quarter of that achieved by table-topping Aldi with its 7.98, which helped it retain its position at the top of the list, according to the monthly table of UK websites for drinks retailers, produced exclusively for Retailinsider.com by website testing specialist Sitemorse.

To produce the rankings Sitemorse runs automated software that page-by-page reads the first 125 pages of each website and analyses on the basis of six key criteria - function, code quality, user experience, accessibility, performance and SEO capability.

Naked Wines managed to beat only Sunday Times Wine Club, which scored 2.05 and is operated by the same company as Laithwaites, which was also a poor performer this month in 21st place just above Naked Wines.

Their performances are in contrast to the top five who all achieved a score above six out of 10 and included this month’s biggest climber EH Booth & Co that moved up 10 places into fifth spot. This represents a sharp recovery on last month when it fell five places.

Another climber is independent retailer Slurp that moved up three places into 16th spot, which coincided with its winning a major award – Direct Merchant of the Year 2012 in the International Wine Challenge. It beat of stiff competition from Tesco, Laithwaites and The Wine Society.

Two retailers were excluded from the Sitemorse testing this month, with Sainsbury’s and Londis not included in the Top 25 table because of their reliance on JavaScript.

Top 25 Drinks Retail Websites – Sep 2012

Company Name +/- Score out of 10

1. Aldi same 7.98
2. Spar (UK) -1 7.08
3. The Whisky Shop same 6.74
4. Fortnum & Mason same 6.50
5. EH Booth & Co +10 6.44
6. Budgens -1 6.22
7. Bargain Booze -1 6.12
8. The Wine Society +3 5.54
9. Lidl -2 5.19
10. Iceland -2 5.10
11. BeerMerchants.com +1 3.96
12. Majestic Wine +1 3.84
13. The Drink Shop +1 3.77
14. Tesco +2 3.64
15. Selfridges +2 3.10
16. Slurp.co.uk +3 3.04
17. Marks & Spencer +3 2.94
18. Asda same 2.90
19. Virgin Wines +2 2.76
20. Waitrose +3 2.38
21. Laithwaites +1 2.30
22. Naked Wines -12 2.14
23. Sun Times Wine Club same 2.05


Cookie Reports offers a unique level of automation and precision to map retailers' ‘cookie landscape’, producing reports that will help secure legal compliance, combat data leakage and improve site performance.

Lovehoney Week - Top 10 best sellers

Lovehoney Week continues with the big announcement that the online adult products company has launched a range of branded 'Fifty Shades of Grey' products.

The success of the book has led to a collaboration between Lovehoney and the book's author E L James to develop a range of merchandise that featured in the publication. The range has been manufactured and will be distributed by Lovehoney throughout Europe via stores and the internet.

Ahead of these products hitting the market Lovehoney has provided Retailinsider.com with its current best selling lines - for the week to September 27 - that includes a mix of own-brand and branded goods.

Top 10 Best sellers

1 Lovehoney Mains Powered Deluxe Magic Wand - £49.99

2 Tracey Cox Supersex Bullet - £9.99

3 Tracey Cox Supersex Love Lube - £5.99

4 Lovehoney Happy Rabbit Natural - £49.99

5 Beginners Basic Silmline Butt Buddy £6.99

6 Tracey Cox Supersex G-Spot Vibrator - £24.99

7 Lovehoney Sexier LIfe Starter Pack - £24.00

8 Beginners Basic Orgasmic Love Egg - £6.99

9 Lovehoney Silencer 2.0 Whisper Quiet vibrator - £19.99

10 Lovehoney Oh! Multispeed Vibrating Love Rings - £4.99

Innovative Retailers - Lovehoney

Brought to you by Retailinsider.com and PCMS

The Name: Lovehoney

The Place: Well, it’s basically an online business but there is a shop in London, WC2 under the Coco de Mer brand, which Lovehoney recently bought.

The Story: Neal Slateford and Richard Longhurst (yes, the most successful online sex toy retailer in the UK is run by men) were colleagues at Future Publishing. There they were down in the West Country watching this whole dotcom malarkey unfolding and Richard was at Dot.Net magazine while Neal was on the business development side of things. E-commerce they thought one day. Hmm, we wonder.

Richard Longhurst: co-founder Lovehoney

So they upped and left? Indeed they did. In 2000, with the very definite idea that e-commerce was the way forward. It’s going to be big, it’s going to be marvellous, but the only trouble was…

They didn’t know quite what to sell? Goodness, it’s like you were there. Longhurst ran a shopping directory with the usual home and garden categories and one bright day he added an adult shop. And as part of that process he had to research the category obviously. What he found provided him with several ‘lightbulb moments’.

Enlighten me too please: The customer service was appalling and the goods were universally presented from either a pornographic viewpoint or at the very least a very masculine one. It felt like a threatening, non-secure retail environment. Then came Sex in the City and it began to be obvious that women wanted to buy these products too. Kerching! The second lightbulb was that these sites sometimes paid 25% on referred sales. That can only mean one thing – sky high margins. So after a visit to the Erotica show in 2001 the decision was made - sex toys it is.

And why ever not. How has the category changed since then? It’s changed enormously. Helped in no small part by one E L James. Every other person in Britain has read 50 Shades of Grey and they all know what kegel exercise balls are. And they want some.

I’m not sure I know… It’s a girl thing: The point is that sex toys have gone mainstream and magazines now write about them. Lovehoney hand-holds, provides reassurance, and guides nervous customers into this new category in a way that didn’t exist before. The message is you’ll be happier and healthier with a good fun sex life. Longhurst is not joking when he says they position it alongside getting your Five A Day.

That sounds energetic. Steady. Five A Day is fruit and veg: But Lovehoney has managed to move away from the ‘seamier’ side of this sphere and the ladies don’t have to stare at massive cleavage shots online all the time as with some competitors. It’s been an evolution rather than a revolution but Lovehoney has survived as the fittest. And the enormous amount of positive customer feedback they get is testament to their game-changing part in that.

And who is their competition? Well, it’s still good old Ann Summers in large part. The difference being that the madame of the sector has 150 shops whereas Lovehoney’s focus and innovation is almost all online so there isn’t too much head-to-head. However, this could be all about to change if the format for Coco de Mer works out.

Ah. Bricks and mortar: Yes, the high street beckons. Anita Roddick’s daughter Sam set up Coco de Mer and Lovehoney has bought it. Neither founder has ever run an actual shop before so they want to get this formula very right first and then unleash it onto high streets everywhere. The fulfilment and online side has been brought in-house and new managers appointed. Currently a new autumn/winter 2013 lingerie range is being designed.

Wait. There are seasons for lingerie! You know nothing. This shop will sell you everything from erotic wallpaper to rather elegant salt and pepper shakers shaped like …

Stop. I need to take a breath. How much more excitement is there? Well Longhurst is very animated about his party business - another newish string to the bow. Called Blue Bella it offers rather more stylish house parties than the ones you are imagining showcasing lingerie or toys. Ladies-only needless to say. And then of course we have the holy grail of erotica – getting into the big retailers.

Is that feasible? There are certainly difficulties. There are things you just cannot put on a shelf without offending people. But as Mr L says, other retailers shy away and yet are strangely fascinated. They know there is a tremendous appetite for it but stores have to be designed to ‘make it comfortable’ for shoppers. Think about it – where are the only products in this category currently sold?

Umm, I’ll tell you: Condoms (and lubricants if you are lucky) are sexily placed in the pharmaceutical aisle somewhere between corn plasters and knee supports. Lovehoney would like to see them somewhere much more romantic – get them on the aisle with scented candles and body lotions for example. Whenever the retail world is up for it, Lovehoney is ready and waiting with its own brand of best-of-breed toys.

Goodness whatever next: I think we’d better get on to some figures. Turnover to the year ending March 2012 was £16 million. That will be significantly up this year. The Channel 4 documentary on Lovehoney broadcast in May raised its profile no end and caused a massive hike in interest in the site, which has never really gone away.

And in five years’ time? Oh, it’s a modest aim - to be the world’s biggest supplier of sexual happiness.

PCMS Group is a leading independent supplier of software and services to the retail industry; PCMS Store and Multi-channel solutions have been chosen by over 98 retailers including Arcadia, John Lewis and M&S. 

It's Lovehoney Week on Retailinsider.com...

Ann Summers has been the acceptable face of the adult market for some time and has largely had the category all to itself. But not any more.

Fuelled by being featured on a Channel 4 documentary this year and the publication of the '50 Shades of  Grey' book, the online business Lovehoney has leapt to prominence. It is arguably single-handedly overhauling an industry that is as overlooked as it is potentially profitable.

The co-founders Richard Longhurst and Neal Slateford also featured in the Retailinsider.com 2012 Multi-channel/e-commerce Movers & Shakers Top 100 report with a coveted joint-top 20 slot. 

This combination of factors has prompted Retailinsider.com to have a Lovehoney week. Over the course of the next few days we will be running various bits of content related to the business. 

And before you ask, no they haven't paid for being featured on the site - neither in money nor any other useful commodities.