Retailers must embrace digital

IMG_4440

Far too many retailers are unskilled in the area of digital and this puts them in a sufficiently precarious position as to threaten their very existences.

The mindsets of executives at the top of a whole raft of retailers must be changed if their companies are to fully grasp the challenges and opportunities of digital before it is too late.

This was the message delivered by respected retailer Sir Ian Cheshire, former CEO of Kingfisher, at the recent BRC Annual Lecture, to a room packed full of industry leaders.

Among the senior executives in the sector he is among the minority to have recognised that digital is changing the fundamental way of the retail world – helped by his time running e-Kingfisher during the dotcom revolution in the late 1990s and early 2000s.

And he does not believe it is an age issue but is more to do with attitude. The leadership teams have to adopt the right mindset in order to embrace digital and accept that it will wreak disruption throughout their businesses. But the alternative is much worse.

Even for those that accept the challenge he warns of the hardship ahead: “The next five years will be difficult. The inflexibility of property compares unfavourably to the rest of Europe. The question is, ‘how quickly retailers can get out from under this boulder?’”

He knows from his time at Kingfisher that despite the desire to exit leases the reality is that landlords are unwilling to lose strong covenants from the likes of B&Q.

But it is not just about property as Cheshire suggests the most difficult task facing retailers is changing existing cultures – to one that is digital-first and involves investing in some real data capabilities.

IMG_4442

He points out that the retail industry sits on a “shedload” (and he knows a lot about sheds) of data but it is not being analysed. This is a serious mistake because the likes of Google are all about interpreting data.

“Data is being generated by customers and there are two million search queries on Google per minute. It’s consumer data that retailers should be interested in. We’re not that good at using big data,” suggests Cheshire.

Although the challenges are clearly great he also points out that the UK has a global opportunity in e-commerce and that the industry needs to be made aware of this and take advantage of the skill base sitting in the country.

“Merchants, developers, and middlemen here understand this area and this represents a massive opportunity for the UK,” he says. It is clearly time to grasp the mettle (or nettle, whichever you prefer).

Glynn Davis, editor of Retail Insider

Follow

Subscribe to our e-mail newsletter to receive updates.