John Lewis, Zalando and House of Fraser examine what the future of retailing means to them at #IRC14
15th Oct 2014
Mark Lewis, online director of John Lewis, takes the audience at #IRC14 through the retailer's omni-channel outlook. Photo credit: My-Retail Media
They may be giants in their own respective fields, but John Lewis, House of Fraser and Zalando all agreed on one thing yesterday: no one can be sure what the future of retailing holds, even for the big guns.
Back in 2008, you’d be hard-pushed to find some common ground between House of Fraser and Zalando. The former, a historic British retailer with plenty of hold on the high street, had just launched its website, while the latter was only just being conceived as a business idea in Germany. But it was a sign of how quickly the industry has been forced to evolve to consumer tastes, that both retailers shared a stage for yesterday’s opening keynote speech at the Internet Retailing Conference 2014.
With a focus on ‘re-foundationing’ as its theme, IRC’s key speakers once again opened up to the sector on their goals, achievements, fears and nightmares of operating in such a fast-moving world, and how they’d begun to design their online innovations around the ideas of experimentation and failing fast.
John Lewis has been in the online game a comparatively long time (at least, as House of Fraser’s Andy Harding later pointed out, a lot longer than his own company), investing in e-commerce operations since acquiring buy.com back in 2001. Mark Lewis, online director at the chain, said its growth as an omni-channel retailer had been down to encouraging experimentation, such as its work with JLABs, and its focus on aligning its founding core principles of trust with evolving for the future.
Online is, without a shadow of a doubt, huge for John Lewis. With just 43 stores across the UK, the retailer expects e-commerce to make up a third of its sales by 2014 – 2015, and Click and Collect orders currently account for half of these. Despite this growth, of the stores John Lewis is opening, they’re a considered expansion- now complimenting the overall ‘omni-channel’ outlook the business embraces. As Lewis spoke of the changes his company has been putting into action, a few miles away at St Pancras, John Lewis launched its first station location, equipped with its Click and Collect facilities allowing customers to ‘click and commute’ during journeys in and out of the capital.
What precisely re-foundationing means to the retailer, Lewis remained casually vague about- teasing the audience with the fact that its Christmas advert is now ‘under lock and key’, without giving much away about what the coming 12 months hold for the company. Regardless, it is looking pretty good for 150 years old and it’s clear the retailer is beginning to recognise where its strengths lie in the years to come.
Sandwiched between two high street heavy-weights, it would have been easy for Zalando to look a little out of its depth- but as Europe’s biggest online retailer, these days, that’s becoming a hard task. Jérôme Cochet, senior vice president of sales, explained to the audience that Zalando is now in the process of “cleaning up after the party” after making “a mess” in its first few years of experimenting and growth. Having gone from one market in 2008 to 15 in 2014, Zalando is well versed in what gives its business the edge over its rivals in the highly competitive e-commerce game, and argued that making the local consumer feel “at home” despite being on a multi-national website, was now a main priority for the business. With 13.7 million active customers and EUR 2 billion in revenue after just six years of trading, Zalando is now honing in on the aspects of retail John Lewis and Harvey Nichols are still having to re-define: what its brand stands for, what its positioning is and how it will deal with the future. Zalando may not have a heritage to speak of yet, but being brand new also comes with its own set of positives: it’s far easier to change.
And change is definitely something House of Fraser has had no shortage of in the past decade. While executive director of multi-channel Andy Harding had some semantic bones to pick with Lewis over the use of omni-channel or multi-channel, he was quick to agree that the last few years had been spent bringing their online operations into the fold, in order to create a seamless transition for customers between the House of Fraser they see on the high street, on their iPhones, or on their tablets. Although the going’s been tough for the majority of bricks-and-mortar traders, House of Fraser’s (comparatively) recent expansion and investment in its e-commerce offer has seen it go from strength to award-winning strength in the past few years. Harding explained that this was down to a ‘customer-centric’ focus, with the retailer using its delivery options as a key battleground to differentiate itself from the competition- who have, surprisingly enough- become John Lewis and Zalando.
As the UK’s economy continues to improve and retailers are no-longer fighting for survival, it’s become clear just how much the rise of internet retailing has levelled the playing field. John Lewis and House of Fraser’s hold on the high street stood them in good stead for the twentieth century, but evolving to encapsulate both its stores and online operations brings with it an entirely new set of problems. Remaining true to founding principles whilst evolving at the same rate as its tech-savvy consumers is now the end game. On the other hand, a retailer like Zalando that would traditionally have had to spend years researching and consolidating its growth in order to become a key competitor to a giant like John Lewis or House of Fraser is now able to steam ahead. Without the weight of high street stores, Zalando can change its branding and positioning with one new advertising campaign. Trust, reliability and focus on the consumer experience remain key priorities, but what is also becoming apparent is just how much major players like Zalando and House of Fraser can learn from each other.
House of Fraser tops the e-commerce charts the second year running
13th Oct 2014
“Strategic multichannel consultancy” Practicology have just carried out their third Website Usability Report, which rates 25 UK e-commerce sites on fulfilment choices, site performance and user experience. This year House of Fraser ranked extremely positively, and was the only brand to maintain it's position from last year.
John Galliano at Margiela: why he's the perfect choice
9th Oct 2014
Three years since he was banished from the fashion world after a nasty and highly publicised anti-Semitic rant brought about his spectacular fall from grace, John Galliano is about to make a comeback. The flamboyant pariah has been appointed Creative Director of Maison Martin Margiela- a brand known for its stripped-back, utilitarian image. Galliano, renowned for his dramatic Dior couture creations and his penchant for closing shows dressed as a pirate, strikes one as a surprising choice.
From the weekend: Protests add fuel to fire for Hong Kong’s embattled luxury retailers
6th Oct 2014
‘How do you solve a problem like China’ has been on the mind of foreign luxury retailers for some time. With the shift in consumer behaviour from ostentatious European luxury labels to a focus on more subtle forms of consumption, the slowdown in sales has hit mega brands like Prada and Gucci while they’re down.
Omni-channel or overwhelming?
30th Sep 2014
The future of retail marketing is here, and it’s omni-channel. Namely, a stronger focus put upon the customer experience – their satisfaction and engagement with the brand, through a variety of channels. How successfully this is carried out is down to the marketers.
The creation of new technology has pushed the boundaries of retail and e-commerce far beyond a simple website, now the marketing concepts of Place and Promotion are more evident through personalised banners on devices and micro-location offers. With this new creative capacity, however, comes greater opportunity for error.
Tesco's £250m accounting error and why the worst is yet to come
24th Sep 2014
If the post-crash retail landscape has taught us anything, it's the old Darwinian trope that you must evolve or die. Before the global financial markets came to a screeching halt in 2008 there were far fewer, far larger monopoly-style businesses exacting a well-honed strangehold on the retail industry, and none was larger or more monopolistic than Tesco. From the mid-1990s up to 2006 Tesco went from snapping at Sainsbury's heels to laying claim to a third of the market. When Tesco was taking approximately £1 in every £8 that British consumers were spending, former CEO Sir Terry Leahy quipped that this left another £7 for the supermarket to go for - such was the confidence of a man who saw the business through its golden period. But now the landscape has changed; there is a definite 'squeezed middle' in the supermarket sector, with Waitrose sitting to one end of the spectrum with its affluent customer base, and the increasingly-popular discounters – think Aldi or Lidl – are at the opposite end, happily picking up austerity-hit customers who once did their shopping at Tesco, Sainsbury's or Asda.
From the weekend: Fashion retail's new frontiers
22nd Sep 2014
Whether it’s London catwalk show for a high street staple, a new shopping hub north of the Watford Gap or the fashion industry’s tempestuous relationship with its foreign consumers, the weekend was full of talk of new frontiers for retailers, and their battle to gain ground.
Fresh off the back of London Fashion Week, Marks & Spencer hosted its own AW14 presentation at Vodafone London Fashion Weekend. Filling its runway with highlights from its autumn winter collection this year and its front row with familiar celebrities and stylists, M&S is clearly keen to inch into a more fashionable circle.
IKEA launch budget "Moxy" hotel chain in Milan
19th Sep 2014
IKEA has made the move into the hospitality sector in a big way by opening its first ever budget hotel in Milan. Word is that locations in Antwerp, Brussels and Ghent are also on the cards in the near future though ideal locations have yet to be found.
Why Urban Outfitters' shock marketing has gone too far
17th Sep 2014
Urban Outfitters has pulled a sweatshirt from its website after enraged members of the public noted that the Kent State University-branded garment – which appeared to be stained with blood – was tastelessly alluding to the deadly Vietnam war protests that took place on campus in 1970. Four students were shot and killed by National Guardsmen and nine more were wounded, one of whom suffers from permanent paralysis to this day.
From the weekend: Slick, savvy and social, London Fashion Week goes tech
15th Sep 2014
While Paris has long retained its crown as the haute of couture (even for ready to wear), London is now beginning to define itself as the tech-savvy little sister, intent on bringing a host of ‘social firsts’ to the industry presentations. As the first city to live stream catwalk shows, based in a country with one of the fastest adoption rates of internet shopping and with many shows taking place round the corner from the so-called Silicon Roundabout, it’s no wonder we’re so intent on a technology focus to showcase our cutting edge designs. To most brands in London, it’s a no-brainer.