Tag Archives: Retailing

Capitalism’s dreadnought

Walking the aisles of a big branch of Toys R Us at Xmas is like being in the engine room of a battleship at speed. It’s not pretty but everything is in its place and the bloody thing works. You can practically hear the purposeful thrum of capitalism in action. The tills ping and the point of sale demos hiss steam. Stokers replenish shelves with practiced grace. I think that’s enough naval analogies for now.

Anyway, the place is a machine. This is what it must have been like for Friederich Engels to walk the mill floors of nineteenth Century Manchester. There’s a mix of dread and awe. These hyper-efficient sheds are probably the apogee of the industrial model of retail commerce that he saw being born. We’ll probably never get any better at wrangling the shiny product of a 10,000 mile supply chain into the boot of a Ford Fiesta by the North Circular.

For box shifters like Toys R Us margins are a vanishing memory and competition from lower-cost channels is corrosive and unremitting (I’m thinking U-Boats). Store closures, mergers and… er… sinkings are speeding up. Everything rests on the December numbers. The prospect of a bad Xmas in a big outlet must be enough to make a store manager weep quietly into her steaming mug of Bovril (as she paces the bridge in the half light of a steely North Atlantic dawn, probably – sorry).

One thing at a time

Seth Godin links to Woot, a clever ecommerce site whose USP is the kind of gonzo experiment you can only really do online – one product per day. That’s it. Come midnight it’s history and they’re on to the next one (or earlier if they run out). Neat, but I guess it might become a kind of straightjacket like lots of high concept business ideas (although that doesn’t stop Pound Shops selling stuff that costs 9.99, I notice). The FAQ is particularly amusing:

“Will I receive customer support like I’m used to? No. Well not really. If you buy something you don?t end up liking or you have what marketing people call ?buyer’s remorse,? sell it on ebay. It’s likely you’ll make money doing this and save everyone a hassle. If the item doesn’t work, find out what you’re doing wrong. Yes, we know you think the item is bad, but it’s probably your fault. Google your problem, or come back to that product’s topic in our community and ask other people if they know. Try to call the manufacturer and ask if they know.”

Convenience? This is war

When the supermarkets abandoned the High Street for their out-of-town barns the damage done to local communities and economies was enormous and permanent. Now they’re coming back, this time in smaller premises. They’re challenging a history of second-rate service and poor quality from the crappy convenience chain franchises and they’re going up against the trusted local independents (green grocers, bakers and butchers) again. This time, though, the effect could actually be positive.

The village (everyone calls it a village but it’s a small town, really) that I live in has become a battlefield in the new supermarket war of convenience. The village, population 8,000, now boasts a branch of Budgen’s (a long time convenience player), a Sainsbury’s Local and a Tesco Metro plus a plucky but surely doomed fight-back from an established off-license called Threshers+Food. In our house, we’re wholesale converts to convenience. We haven’t visited a proper supermarket in months.

If these smart, clean convenience stores can bring consistency and quality back to a sector better known for out-of-date biscuits and a flexible attitude to public health, we might just drive out to the edge-of-town barn a bit less often and the halo effect might bring us back to the older, independent retailers next door and round the corner. Could the multiples actually help to revive the High Street by making it respectable to shop there again? I’d like to think so.