Success in the current economic climate

This article is brought to you by Retail Technology Review: Success in the current economic climate.

The recent ARC Retail Conference offered the chance for various senior executives of some of the UK's leading retailers to air their views on the impact of the current economic climate.

Companies including Dreams, IKEA and Fortnum & Mason upheld the argument that to survive in turbulent times require a sound business strategy that puts people at the heart of their activities. As surmised by Stephen Robertson, the director general of the British Retail Consortium in his closing words at the conference: "the customer remains king, but so must staff be too." He then went on to say: "Get your retail product offering and service right, and you'll ensure loyalty;" which was another common theme of the day.

Some, like Specsavers, said that it might be able to whether a storm better than others because it had an 'excellent value proposition and sound supply chain management systems' in place. Smaller retailers, including home furnishings retailer Lombok and greetings card retailer Celebrations, were more cautious in their outlooks, but maintained that survival still depended on cutting costs and maintaining an excellent retail proposition.

Loyalty, to Adri Kraa, head of IKEA Shop Online, means answering the needs of its customers and believes that a good online presence should complement a retailer's store-based activities, especially in today's more demanding climate for greater levels of convenience.

"Multi channel retailing has allowed us to improve loyalty by providing more information, choice and convenience," he said. "Increased accessibility has increased frequency of purchase and spend."

Research was presented to show that internet retailing will probably continue to grow and be less sensitive to economic decline on the high street (although never actually become more important than 'bricks and mortar' retailing). Kai Boschman, former group director of corporate affairs at consumer electronics retailer DSGi, showed how online TV can be used as an efficient and cost effective means of viral marketing and internal communications channel for staff.

Technology was an underlying theme to many of the presentations. Most upheld the notion that successful retailing is not just about using the latest technology, but more about people and process. Making sense of the data that technology could provide was regarded as much a challenge as an opportunity, for many.

"Measuring the success of IT initiatives, like managed promotions, can be very difficult," commented supply chain expert Alexandria Rumble at TXT e-solutions. "The more senior level involvement, the better."

Kevin Godding, head of space planning at Carphone Warehouse, wants to make sure that all its 800 stores give the customer exactly what they're looking for and is using technology to allocate stock based on scientific fact, rather than gut feeling. He explained how space planning systems have been adopted to ensure customer satisfaction and improved margins for the business. The importance of where to locate products in a store was backed up by Guy Vaughan, director of POPAI (Point of Purchase Advertising International), who described how the negative perception and non-purchase behaviour of consumers can be linked to gaps on the shelves and out-of-stocks.

Most of the retailers presenting at the conference agreed that as well as treating the customer as king, close relationships with suppliers are also very important. While state of the art technology and the exchange of data was an accepted means of improving supply chain efficiency, a certain amount of change management and training would be required.

Tim Lawson, IT director at Celebrations, emphasised that for a successful supply chain transformation it was critical that the business considered all aspects of change. He said that the process was not just about the introduction of technology. The people in the business had to be proactively involved in the process and given responsibility. And the processes have to be designed to work across the whole business, with suppliers and customers at the heart.

Next year's ARC Retail Conference will take place on 23rd September 2009 at the Cavendish Conference Centre in central London. It's free to attend for retailers. .

2008 CONFERENCE HIGHLITES VIDEO