I was working on a piece of work recently with a colleague about the retail industry. Our thinking was moving into fast fashion, or more like “fast retail” – a made up term describing the sales of low-cost goods increasingly quickly, probably through subscription channels.
We started to consider the counter this trend, but the following piece was dropped. I recently picked it up again when I saw an article about UK retail sales.
Countering fast retail
The Guardian article “Charity shop and antique purchases drive up UK retail sales” is interesting because it’s such a counter balance to the constant product advertising and marketing culture we live in: “Buy more”, “buy it cheaper”, “buy the latest version”, etc. etc.
There’s usually a counterculture that either stops, or prolongs, a trend. With retail sales it might be a combination of Minimalism, the book and Netflix documentary; and Marie Kondo or KonMari – her process of tidying up to create joy. (If that sentence looks peculiar, then watch one of the programmes to get the picture).
Minimalism and Marie Kondo both recommend buying fewer high-quality goods rather than lots of poor-quality goods.
Maybe this explains the increase in charity shop purchases. In the Guardian article, Paul Dales, chief UK economist at Capital Economics, said “…households still have the ability to spend and remain the strongest part of the economy.” In other words, people are choosing to go into charity shops over buying brand new goods.
The same is applying to media companies too:
Netflix now spends more on content than Amazon ($4-6B), Hulu ($3B), HBO ($2B), Apple ($1B), Showtime ($1.5B), Starz ($1B), CBS All Access ($500MM) and YouTube combined.*
In other words, we’re willing to pay a Netflix subscription for high quality video content.
What do customer want?
Returning to retail, a UK survey of 2,000 adults suggested the shops people want on the high street are:
- Greengrocers
- Independent clothes shops
- Baker
- Butchers
- Handyman/ DIY (I’m not sure we need a handyman shop on the high street)
- Record shop
- Shoe shop
- Chain clothes shops
- Post Office (I think this is a romantic ideal… we still have lots of Post Offices, and we’re just not using them)
- Luxury clothes shops
Customers want a genuine, sustainable, high quality product and service. Only if it’s a pure commodity do they want it as cheap as possible. Maybe this helps explain the demise of many High Street chains: Poundworld, BHS, Maplin, Phones4U, Blockbuster, New Look among many others. These were companies trapped in the middle-ground between low-cost, super-efficient companies such as Lidl and high-value retailers.
This middle-ground is exactly where Amazon fills the gap, and is able to win against the high street. We don’t want an experience with the middle ground, we want to quickly order a product to arrive the next day. For a high value item, we want a buying experience that a high street shop can provide.
Maybe this is why Watches of Switzerland, which begun life as a listed firm in the City less than two months ago, has reported a 22.5 per cent rise in group revenue to £773.5m during the year to 28 April 2019. And at the other end of the spectrum is the supermarket Lidl, growing in the UK at an impressive 16% per year.
*Source: https://redef.com/original/the-streaming-wars-its-models-surprises-and-remaining-opportunities