Ajaz Ahmed founded the industry-changing Freeserve and is currently running Legal365. He also likes to tell it like it is as you will see over a short series of columns:
Only when the tide goes out do you discover who’s been swimming naked is a quote from Warren Buffet, and it is very relevant today for the retail industry.
My question is, why are so many retailers struggling and going out of business at the moment? It’s because before the recession it was easy to take money, easy credit drove the market and a good time was to be had by all, but as the quote says when the tide goes out, only then do you find out who was swimming naked.
This industry is full of people who simply are not retailers, it’s as simple as that. It’s full of people that have never worked in a shop and could never work in a shop, they simply don’t understand customers and its customers not spreadsheets that drive a retail business.
What’s the difference between a businessperson and an entrepreneur? The two biggest skills that an entrepreneur possesses is the power of observation and empathy. The ability to put yourself in the customers shoes is priceless, that’s how great retailers are able to become such a success without any formal qualifications.
Freeserve was born out observation and empathy. I’d worked in retail (Dixons/PC World) for many years and one of my observations was that when senior management visited my store, they would very rarely talk to the staff. They would never take time to ask the people who spend all their time on the front line, on the shop floor, “what do you think? How can we improve things? What are our customers asking for?” The solutions to many problems often lie with the staff if only someone would ask them.
Comet had been struggling, so how much change was made to the retail part of the business since OpCapita took over? Not a lot. Here’s an interesting fact that the guys sitting behind their desks at head office and the private equity guys might not understand, it’s the retail part that customers see, not the cost cutting or the operations, they see the shops. Customers walk into the shops and spend money.
A number of my friends were working at Comet and I would often ask them “what would you change?” They came up with all sorts of common sense ideas that would make huge difference to Comet’s business. But did anybody ever ask them? No. I asked my friend who is a store manger, when the chairman, John Clare came to visit your store, did he talk to any of the staff or any customers? No was the answer.
That’s partly why Comet has gone into administration, because none of the private equity guys or senior management of Comet were retailers with observation and empathy skills. They simply do not believe that someone on the shop floor might be able to make a suggestion that could make a valuable difference. Because people at head office never went into the stores and asked the staff what they they thought, they look down on the staff that work on the shop floor.
Retail greats like Sam Walton and Ingvar Kamprad walked the shop floor and talked to their staff and customers. You can’t run a shop from just spreadsheets sat behind a desk.
British retail needs more retailers.