Research Briefing Winter 2018

Transforming the

New. Updated.

/ Back Next visualthinking.co.uk / 1 About

The very definition of the department store is in flux. Since we published our first report on mainstream department stores, the sector has seen acquisitions, restructuring and hundreds of store closures.

Visual Thinking knows a thing or two about the department store What department stores will look like in the next five years is one sector. With 25 years of experience, we’ve enabled some of its question; but what about the here and now? The hard truth is that biggest names to see real and immediate breakthroughs in store retailers must balance the need for long-term strategy with the more performance. Our team of transformation specialists are immediate reality of poor store performance. Many do not have the dedicated to helping retailers take stores from the everyday to the luxury of time to get it right; with individual stores and even the very exceptional. Whether your focus is on game-changing methods existence of the retailer themselves under continued threat. or continuous improvement, we turn big strategy into meaningful In this report, Visual Thinking has set out to explore the current action – informing policy, embedding change, empowering teams challenges and opportunities facing our mainstream department stores and engaging shoppers. No one delivers visible change instore if they are to turnaround their commercial fortunes. Not at some point better and faster. in time, but today. For more information visit: We hope this report, supported by exclusive research conducted by www.visualthinking.co.uk Roamler and expert opinion and analysis, goes some way to answering the key questions facing the sector. Which brands face the biggest challenges? Where should senior leadership teams be focusing investment to deliver tangible improvements in retail performance? How can retailers deliver new strategies and innovations at the scale and pace required?

Put simply, there is much work to do. Many in the sector are still missing out on quick wins. Whether that’s better-defined visual policy – making stores easier to navigate and fulfilling shopper desire for environments with a greater sense of discovery and inspiration – or improving store team’s ability to deliver first-rate retail standards. The support and tools exist. They just need to be adopted and applied effectively

Many in the sector are still missing out on quick wins.

Image | David Jones Flagship, Sydney, Australia

Karl McKeever Visual Thinking

Back Next 2 Rising Demands

Many mainstream department stores are falling short when it comes to making a good impression. Most are simply fighting for survival. Others have already fallen off the cliff.

Image | © Shutterstock

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The strain on the UK department store market has been highlighted by the high-profile struggles of leading chains. Changing shopper behaviour, declining sales, falling profits and poor leadership have all added to the pressure. While iconic names likes , and continue to thrive, it’s important to draw distinctions. These are high-end names with small estates – completely different beasts to the likes of , and John Lewis.

In 2017, sales in UK department stores amounted to £34.5 billion. Although sales figures have remained relatively stagnant in the last few years, forecasts reported by Statista predict that department stores will see a decline in sales as high as 17% between now and 2022.

We have already seen the demise of , and House of Fraser fall into administration before the Mike Ashley buyout. Debenhams and Marks & Spencer have seen a decrease in their market share and are closing stores. Marks & Spencer went from being the leading retailer with 29.1% of the market in 2012 to falling below Image | John Lewis, White City, John Lewis in 2017. Between 2012-2017, both Marks & Spencer and Debenhams experienced declines in their market share of around 6% and 1.5%, respectively.

In the US, the story of Sears is a sobering one, with the former bastion of These are certainly ‘interesting times’ for department stores. the department store now struggling for survival and closing hundreds of Innovation has predominantly centred on creating a compelling instore stores in a bid to tackle some of its vast debt. Proof if needed that size environment and whilst this is important, research suggests that and reputation are no guarantee of survival. Canadian retailer Hudson’s department store retailers should be doing more to ensure both their Bay also has experienced significant losses, leading to a number of store products and instore merchandising resonate with customers, if they closures, including 10 of its Lord & Taylor stores in the US. In Australia, are to reinvigorate sales and deliver sustainable profitability, once the Big W, Target, Myer and David Jones have all seen a difficult year. Target short-term benefits of cost cutting measures have been exhausted. has announced plans to close up to 20% of its stores. David Jones has placed all its focus on its Sydney flagship store as part of a $200million Download a copy of our original 2017 Research Briefing, Click Here. refurbishment. Reporting massive losses, Myer has brought in new Chief Executive John King in a bid to turn fortunes around. Meanwhile in Germany, and Galeria Kaufhof are to merge, making it one of Europe’s largest department stores, with 243 stores.

Which? Customer Satisfaction Ratings The annual high street retailer survey compiled by Which? is the UK’s biggest. Here’s how customers ranked the UK’s big four mainstream department stores.

1

50 50 36 14 10 100

House of Fraser Debenhams Marks & Spencer John Lewis

Customer score is based on overall satisfaction with the shop and how likely people are to recommend it to a friend. For the full list of Britain’s best and worst high street shops, visit www.which.co.uk

Survey of 10,356 members of the UK general public in January 2018.

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As we highlighted last year, Marks & Spencer announced In our 2017 edition of ‘Transforming the a ‘transformation strategy’. Still, chairman Archie Norman Department Store’ we explored the challenges recently declared the retailer was ‘on a burning platform’ with its future resting on its ability to change and develop. ahead for mainstream retailers in the UK sector. The company has reported a small increase in profits, but So how do things look 12 months on? declining sales in clothing and food, therefore it has begun its programme of closing 100 stores by 2022. Chief executive Steve Rowe is now leading a radical retail transformation plan, which includes opening newly remodelled stores in 2019, fixing the online channel and putting It’s been a turbulent year for the retailer. This time last every aspect of the supply change, ranges and marketing policy under year, the talk was of its planned transformation strategy, close scrutiny. encompassing product, customer and infrastructure. But since the £90m buyout in August, Mr Ashley has sacked the former directors and senior management team, including CEO Alex Williamson. Key concessions and Our reference last year to John Lewis’s ‘reinvention for the suppliers such as Woollen Mill have pulled out, with brands 21st century’ has now been strengthened by the retailer’s seemingly nervous about now supplying product. More imported brands announcement of a rebrand, becoming John Lewis & from Sports Direct have arrived, but run the risk of undermining the Partners. This is accompanied by a new monochrome retailer’s traditional values if implemented poorly instore. House of Fraser visual identity and is mirrored by its supermarket arm, has also alienated customers with ambiguity over gift cards bought before rebranded as Waitrose & Partners. For the first time ever, the buyout. The retailer now looks set to be hit by further store closures the two operated dual marketing campaigns. The ambitious campaign was after landlords have rejected rent proposals. supported by a big launch to communicate the rebrand, with a group of schoolchildren staging a theatrical reimagining of Bohemian Rhapsody. Meanwhile, its new ‘experiential’ concept is evident in its White City and Debenhams’ reputation for relying on Blue Cross discount Oxford stores, with demonstrations, services, sensory VM and exploratory days boosted sales but encouraged customers to wait shop fits designed to actively engage shoppers. for promotions before buying, further squeezing the bottom line. Last year, we touched upon the Debenhams Redesigned strategy. CEO Sergio Boucher describes it as ‘...not trying to be more premium, but to have a more premium presentation.’ Its new-look Watford store is the Something of a new entrant into the department store realisation of this strategy, designed to make shopping easy, sociable world, Next has taken the bold step of dipping its toe in and fun. With hero departments, including beauty and home, it places the department store ‘these waters’ with its new store on a strong focus on innovative thinking, with flexible zoned areas and . The store features own-brand products interactive spaces. However, the retailer has now announced up to 50 store along with an array of concessions, such as Lipsy, closures, almost a third of its estate, along with huge profit slumps. Are Paperchase, Clarks Kids and Dutch lifestyle brand HEMA. we likely to see the sale of the company’s Danish stores, which operate Next introduced new ranges to customers via its online and catalogue under the Magasin du Nord banner, to fund further investment in its UK channels before introducing them into the store. It has also partnered with transformation plans? Rockar/Ford to deliver a car dealership in its store.

Year-on-year growth rates for UK department stores (%) Leading mainstream UK department stores by share of the market

35 35

30 30

25 25

20 20

15 15

10 10

5 5

0 0 2016 2017 2018 John Lewis M&S Debenhams House of Fraser Department stores — Online sales only 2012 Department stores — Total sales 2017

Source: Retail sales in UK March 2018, Office for National Statistics Source: Statista © 2018

Back Next 5 Shopper View

Fewer shoppers are choosing to seek out department stores in A total of 203 department stores across Debenhams, House of Fraser, their current form. Who are they shopping with? What do they John Lewis, Marks & Spencer, Fenwick and Beales were visited in look for instore? And can they find it? We talked to shoppers locations across England, Scotland and Wales. themselves to discover the answers. Roamler shoppers were asked to answer a series of questions. Before This study of the major multiple UK-based department stores they entered the store, we got to know them better with questions was commissioned by Visual Thinking and produced by research about their shopping habits in department store retailers. During the agency Roamler. visit, we asked them to record their immediate observations and take visual evidence to back up their answers. Finally, after the visit, we followed up with a few questions about their time instore.

How often do you visit department stores? Which do you purchase most often from department stores?

26% 13% Homeware Childrenswear

28% Periodically 19% Fragrance

14% 27% Weekly Once a month

6% 25% Few times Fortnightly 2% a month None of the above 22% 18% Womenswear Menswear

How easy was it to find products promoted on displays instore? Why do you typically visit a department store?

26% Next to Easy Cannot find the display to find the product 27% 0%

10%

20% 24% 30%

40%

50% Gifts for friends and family 60% Inspiration / ideas Special / one-off purchases Social – shop with / meet friends 13% (coffee / restaurant) 10% Homeware Childrenswear Womenswear Menswear Regular purchases frequent visits

Source: Originally published in ‘Transforming the Department Store’ 2017 by Visual Thinking and Roamler Download a copy of our original 2017 Research Briefing, Click Here. Back Next 6 Make Merry

It’s the time of year when shoppers want department stores most. But is it time some retailers were paid a visit from the ghost of Christmas past?

Image | , New York, USA

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Why do many mid-market department stores give so little attention, energy or investment over to making Christmas the most wonderful time of the year that it should be instore?

Think back. How many children used to visit the ‘big store’ to see Santa Claus at the start of the festive season and as a family? Forget Black Friday. In every big city, this was a huge ‘Red Friday’ moment for retailers. Not only ‘pester power’ at its most potent, retailers knew how to put on a show for you, with store windows drawing huge crowds of excited people. In turn, they rewarded the retailer for their efforts with a visit and likely purchase instore. Those children in turn grew up with memories that influenced their own shopping behaviour.

Christmas just wouldn’t be Christmas in Newcastle without the unveiling of Fenwick’s Christmas window. Highly anticipated, as ever, this year large queues gathered from 3pm as people hoped to secure a prime spot. As darkness descended on the city and snow started to fall from the retailer’s rooftop, the retailer officially launched its 2018 Christmas window.

Creating new experiences Top | Harrods, London, UK It’s a formula mirrored by the likes of Liberty, Harrods and Selfridges, Right | John Lewis, London, UK with amazing examples of originality and creativity providing a free spectacle that draws huge crowds. Throughout the festive period, these stores become a destination in their own right. They truly get Christmas; creating experiences that tap into public affection – guaranteed to In the UK, surely a retailer like John Lewis – often the ‘only store in town’ entertain, enthral and be remembered. – has an opportunity to capitalise on its retail estate, pulling power and clout to work with local councils and bring Christmas to the public on Nowadays, in the big chain department stores, store windows typically a national scale, anchoring the launch of festivities around its stores. offer little more than a street side hoarding of the retailer’s above-the- Coca-Cola can do it with its festive Truck Tour, why not them? Forget line Christmas campaign or, worse still, their website homepage. Black Friday and the associated impact on the bottom line. The lead up Meanwhile in the US, the holiday window launch at Saks Fifth Avenue to Christmas should not be about online discounts. John Lewis is better in New York is quite simply legendary, requiring police attendance to than that. provide traffic and crowd control. The point is, that the simple stuff also works. Retailers should look to As retailers look to engineer costs out of the business and turn increasingly the past in moving forwards. For all the talk in the sector of creating to technology in search of answers, it feels like many senior leadership social shopping and retail experiences, the answer is right under teams have mislaid the memories, imagination and desire to go back to retailers’ noses when it comes to Christmas. For those that get it right, it basics in order to make Christmas a special time in retail once more. is guaranteed to be the gift that keeps on giving

Make Christmas a special time in retail once more

Image | Saks Fifth Avenue, New York, USA

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Karl McKeever Founder & Managing Director Visual Thinking

Mainstream department stores have had their way for too long. Now is the time for them to look adversity in the eye and take brave bold decisions.

The stakes have never been higher as once trusted ‘too big to fail’ middle-market department stores have toppled with increasing speed and alarm. This is no time for complacency.

Being ‘in the middle’ is a challenge in itself. How do you serve and satisfy ‘everyone’ well? The sheer mass of this market, however, makes the commercial opportunity worth the time and effort to get it right.

There is no denying that Harrods, Selfridges and Harvey Nichols have always been premium, but John Lewis & Partners continue to head further upmarket, thanks to their recent focus, investment and attempts to ‘own experiential’. At the other end of the spectrum, retailers such as TK Maxx continue to apply pressure, striking the Aldi-like balance of shifting perception, enabling shoppers to access quality at low prices.

Even when middle-market department store groups downsize and close under-performing stores, their sales will still be threatened, with regional department stores reaping the benefits of loyal local customers and limited, if any, competition from the larger national chains after they have moved out.

If that wasn’t enough, one-time-stalwarts of the UK sector are facing competition from new contenders in the market. Next isn’t a department store retailer, but is increasingly acting and thinking like one. It already has the size, breadth and scale. Now it has begun to bolt-on extensions to its own-label products with third-party brands, slowly extending these categories and brands into their own physical stores.

So where does this leave the likes of Debenhams, House of Fraser and M&S? Put simply, squeezed from all sides and increasingly vulnerable. The issues facing the sector are not exclusive to any particular retailer but with common, recurring themes among all once mighty mid-market department stores, both in the UK and overseas. And these problems have few easy fixes.

Decades of strategic sleep walking and corporate inaction needs to be Top | Debenhams, Watford, UK unpicked and updated at pace. Internationally, there are now several Bottom | John Lewis, , UK large retailers in the sector that appear to be treading water and with senior management teams feverishly trying to effect change - before it’s too late.

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As a case in point, House of Fraser was too slow to invest in updating What is desperately needed, but currently lacking within many middle- its stores and then only selectively. The result was a lacklustre market department stores, is a more distinctive and differentiating shopping experience with increasing inconsistency in ‘quality’ offered approach to the product mix and store presentation. Add to that offering to shoppers city to city. More than ever and with the opportunity enhanced levels of customer service and with instore events and presented by a new owner and promised investment, experiences that really excite and engage. the business is ripe for disruptive and bold change. The point is, that the simple stuff also works. Surely, retailers can also look to the past in moving forwards? Perhaps reminding that ‘tech’ should not take precedent over more modest investment in making department stores great again.

All too often when brands are trying to get back on track, all of the energy and money goes into a new concept store or technology. While this may be useful to set the tone for future development, it does nothing for the existing estate on a wider scale. And that’s what middle-market retailers We’ve had enough of average need – easy, cost effective solutions, in the here and now, delivered everywhere. mid-market stores Shoppers want something different, relevant and engaging that motivates them to buy. As well as the ‘smart stuff’, it’s about doing simple things well. Or as it used to be known: Shopkeeping.

We have enough average mid-market stores. Any struggling retailer seeking to transform its business must take the initiative and get on the front foot in order to stem the rot. It’s never been more vital for those occupying the middle ground in the sector to demonstrate bravery and Karl McKeever conviction in the face of current adversities. Shoppers, staff and investors Visual Thinking need to see a visible difference, and quickly

Read: ‘Fitting Experience’, John Lewis White City Store Review Click Here.

Risers & C&A De Bijenkorf Fallers El Corte Ingles Fenwick Isetan John Lewis Kardstadt/Kaufhof We rate some of the world’s biggest Big W Kohl’s mainstream department stores. There is life David Jones La Rinascente Debenhams in the format yet, as proven by this list. Liberty Dunnes Stores For others, there are still challenges Matahari Fábricas de Francia (and opportunities) ahead. Nordstrom House of Fraser Parkson J C Penny SKP This list is based on more than current financial performance, taking La Maison Simons into account both a retailers’ proven or potential ability to realise brand Stockmann potential. Long-term approaches to redefining purpose and retail Lord & Taylor experience are one thing. Success, however, isn’t solely about being forward-looking. Those on the rise all share common attributes – they Macy’s are innovative, agile and proactive. They are taking decisive action, and Myer making focused investment, ensuring they are best placed to maximise appeal, relevance and store performance in the here and now. For the Neiman Marcus purposes of this review, we have not included those retailers defined as Sears luxury department stores. Suburbia

Back Next 10 The Performance Issue 10 On Trend

What are the key trends shaping the future of department stores? Here we look at ten of the most influential...

Experiential Retailers must look, increasingly, to the experiential side of #1 shopping. An area in which John Lewis & Partners seem determined to lead, announcing intended investments up to £500 million a year in the area. Shoppers can now use its concierge service at their new experience desk to book beauty appointments or time with a sales assistant. The retailer is also thinking imaginatively, allowing customers to gift a ‘store to yourself’ personal retail experience – promoting discovery, social shopping and memories, for a price: £10,000, to be exact.

Agility Agility is the watchword of the moment for department stores. #2 Courageous leaders must acknowledge that becoming more nimble will likely mean closing more stores and shedding jobs. Top | John Lewis, Oxford, UK Critically, they must ‘be’ agile and not just ‘do’ agile, shifting the entire Bottom | Nordstrom Local, LA, USA © Kris-Cherie culture to embed change from within. Australian discounter Kmart has adopted a ‘customer-centric’ strategy that has seen them undergo a masterful transformation.

Brand vs. own-brand Personal Stylists Traditionally, UK department store formats have relied on a Most department stores now offer personal shoppers, #3 concession model. These come with the added bonus of #7 with John Lewis & Partners harnessing this as a clear form flexibility, as each concession can sing to the tune of local tastes. Selfridges of differentiation. Its unique ‘style studio’, styling sessions, cookery delivers this with consistent success, as demonstrated by its ‘Designer masterclasses and beauty treatments are a world away from the previous Street Room’ in its Oxford Street store, breathing life into every square inch stigma of TV stylists, offering instead an upmarket, bespoke experience. of space. Others continue to invest in developing their own-brand ranges in a bid to extract greater profitability from trading space. Discount Department Stores In the US, Nordstrom already operates two Nordstrom Rack Food #8 stores – a line of discount stores that has flourished among Other than a few notable exceptions, UK department store retailers bargain hunters in Manhattan. Here, there are already discount retailers #4 are surprisingly lacklustre in terms of their food offerings, with the encroaching on the traditional ‘department’ format, with the likes of TK obligatory, but uninspiring, instore café – however you dress it up. Maxx and The Original Factory Shop enjoying success. Will B&M be next? It’s a different story abroad, where dazzling food halls draw in shoppers in They have the categories and products to become the new department their droves. stores if they define themselves for the future and think out of their current, big format, ugly box. Retail Format Smaller format stores may be nothing new, but last year Sustainability #5 Nordstrom opened its first ‘Local’ hub in the US. It seems this More than a decade after M&S launched its Plan A initiative, is a strong platform for department stores. Aldi and Lidl in the grocery #9 House of Fraser arguably set a high watermark for the sector are proving that small format is more appropriate to evolving sector in the UK with its new store in Rushden Lakes. While its current shopper behaviour than the race for the biggest space. Department store challenges have no doubt seen sustainability slip down this particular shoppers want more edited, curated collections that are tailored locally to retailer’s corporate agenda, the issue itself is not going away. The focus geographic locations. is increasingly also shifting to wider ethical topics such as transparency, with Kmart in Australia lobbying for improved worker conditions in Consolidation foreign factories. It would seem that together we are stronger, with consolidation #6 and mergers fast taking hold in the sector. The most recently Social Shopping announced is that of Karstadt and Kaufhof in Germany, the country’s This is very much the cornerstone of Debenhams new two biggest department stores. House of Fraser’s Mike Ashley also has #10 transformation strategy ‘Debenhams Redesigned’. financial interests in Debenhams although a possible merger here has, so The launch of its Beauty Club Community is a major part of this strategy far, been denied. – enabling users to enjoy a cohesive and seamless cross-platform experience. Its Beauty Club is already 1.3 million strong, offering benefits and loyalty points which can be redeemed instore and online. The retailer is looking at how to take further commercial advantage of the initiative, such as push notifications and connecting shoppers to stores

Back Next 11 Declining States

At their zenith in 1985, US department stores However, across almost every category, most of the spend department stores lost was not diverted to online - it went to other physical shops. took 14.5% of all retail spend; last year that figure was 4.3% and it’s still falling. In fashion, for example, 69% of spend lost from department stores was diverted to other bricks-and-mortar fashion shops, most of them specialist brand stores and off-price outlets. A similar trend reveals itself Despite the rash of recent headlines, the decline of American department in homewares, where 72% of lost spend has been diverted to other stores is not a new phenomenon. The decay has set in over a long physical stores. period of time. Once jewels in the crown of retail – iconic cathedrals of consumption to which shoppers would flock – that gilded age is now If this demonstrates that the impact of online is more muted than is often little more than a faded memory in the US, with several retailers in the believed, it also suggests that the question as to why department stores sector seemingly in terminal decline. Storied firms like Sears are in are losing trade is not fully answered by simply pointing to online sales. financial difficulty, while even the once-pioneering Macy’s is struggling. Four Amendments On the ground, death takes the tangible form of vacant shops in malls Shoppers interviewed in the survey help reveal the underlying answer. and cities. Once bustling landmarks teeming with shoppers have been The top four reasons for spending less at American department stores replaced by empty, dispiriting voids. And that trend will continue in the are uninspiring shops, a lack of interesting products and services, poor US and beyond as more retailers shed unprofitable stores. Sears alone customer service and an unpleasant shopping experience. These are has earmarked 142 shops for closure, with more to follow. all factors fully within the control of department stores and are also the exact things that those businesses have neglected over many years. Fatalistic Thinking The popular diagnosis for this decline is the rise of online. This mantra of Sears is probably the best example of this. Once the go-to retail ‘shifting shopping habits’ has now become a catch-all excuse for poor destination for middle America, it has been starved of investment performance. For some, it has also resulted in fatalistic thinking: viewing over the past ten years. Shopping there is now a dingy and dispiriting the rise of online as an unstoppable, destructive tide that cannot be experience that most consumers actively avoid. tamed nor harnessed for good. Nordstrom Success There is no denying that online has been disruptive – but it is not the sole By comparison, Nordstrom is at the other end of the spectrum. It cause of the demise of American department stores. It is not even the has invested in its stores, sourced innovative brands, developed its primary reason. Each year we speak to over 25,000 American shoppers own labels, and added new services like click & collect and curbside to understand their habits and behaviours. A large proportion of these collection – which is offered 24/7 at its Manhattan menswear flagship. It have reduced the amount they spend in department stores. has also flexed its formats to tap into new pockets of consumer demand.

The results say it all. While Nordstrom has had difficult periods, it has maintained sales growth and retained customers more effectively than most of its more traditional and cautious rivals.

And that’s the true lesson for all department stores, in America and beyond. The Internet is not the killer. Choosing to stop evolving and adapting is the real cause of death

Neil Saunders Managing Director GlobalData Retail

Back Next 12 Boom Town

As store closure programs bite, many towns and cities are set to lose their big chain favourite. Despite this, there are countless independent department stores that remain the hub of local communities. So what can these smaller retailers do to protect their legacies and adapt to the changing retail landscape?

A few generations of refinement can work wonders for local retailers. Rutherford’s of Morpeth has traded since 1846, while Browns of York was founded in 1890. Not forgetting Bakers & Larners, situated in the town of Holt, Norfolk. The 341-year-old department store pre-dates Debenhams by almost 150 years.

There is new blood too. Opened two years ago in Sheffield, Sandersons is a rare example of a brand-new independent department store business, drawing from the lessons of the past, but very much looking forward at what the modern shopper wants and expects. Then there’s Days. Created by Edinburgh Woollen Mill entrepreneur Philip Day, its first store launched last year in a former BHS outlet in Wales – another new department store seeking to defy the trend of closures. A total of 50 stores are planned, as part of a nationwide rollout.

Many independent department store retailers benefit from freehold ownership and greater agility, enabling them to stay in step with the needs of their local customer base. With 30 stores, Beales may not be considered small, but as the biggest department store in Dorset, it does have a distinctly local focus.

However, when it comes to department store retailing even small independent retailers cannot afford to stick to doing it the old-school way. Though independent department stores are a long, proud and innovative part of Britain’s retail heritage, many have failed to move with the times. For context as to the fragile nature of the sector, the latest Plimsoll analysis states that 51 of these are making a loss, 59 are in danger and 26 are ripe for takeover. The much-loved Bodgers of Ilford has now closed its doors after 125 years trading, with online competition and a proximity to Westfield proving too much for the retailer.

So what do independent and smaller family-run department stores need to do to navigate and succeed in modern retail?

Retailers cannot afford to stick to... the old school way

Top | Jarrold, , UK Bottom | Sandersons, Sheffield, UK

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Environment, brands and people Distinctive and bold Independents can’t always match the big multiples on price, but they It’s worth saying, that the assumption that delivering transformation can nearly always compete in terms of the instore experience and always requires major financial investment doesn’t hold true. distinctiveness of the offer, if focus and investment is placed in the Implementing visual policy guidelines is a relatively quick, cost-effective right areas. The Morleys Stores Group is currently investing £3m in way to boost productivity and accelerate the pace of transformation. the redevelopment of its 90,000 sq ft Elys flagship in Wimbledon, transforming both Ground and First floors – recognising the importance With familiar names like Ted Baker, Phase Eight, White Stuff and of, and supporting a commitment to environment, brands and people, Barbour sitting alongside local products in independent department with real success. stores, the focus is often on offering a mix of quality brands. This requires the retailer and store teams to deliver levels of product Many independent department store retailers are also following the handling that customers would expect, and the brands themselves footsteps of their bigger counterparts by offering customers more than demand. Think less volume and more consistent retail standards. It’s just a functional experience – partnering with local specialists to provide important that the approach to instore execution, visual merchandising instore ambassadors for services such as beauty consultations, as well and retail standards helps to define the brand as independent, as teaming up with local florists and providing a stronger catering offer. distinctive and bold. Visual Thinking has worked with both Jarrolds and Roys of Wroxham in recent times, to support the delivery of just that.

Adapt to change For many, remaining relevant also means finding ways to adapt to change. This may mean dropping traditional measures of success and changing the mindset and culture of both senior leadership and store teams alike – often a difficult challenge for retailers entrenched in methods that may be outdated. Securing the buy-in of store teams – the people who will actually create and sell the vision to shoppers – is vital. Retailers have a responsibility to ensure that store teams are inspired, motivated and, most importantly, capable of delivering the required transformation.

In short, there are plenty of examples around the country of retailers that continue to thrive. With the right people, the right knowledge and the right skills, the future for independent department stores remains a bright one

Top left | Fenwick, Brampton, UK Top right | Roys of Wroxham, Norfolk, UK Bottom left | Ely’s of Wimbledon, London, UK Bottom right | Fenwick, Brampton, UK

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We’ve all experienced poor customer service – indifference to our needs or a lack of product knowledge. It’s a far cry from the idea that modern physical retail is ‘experiential’. It’s easy to blame store teams or Sales individuals. But is that fair? In short: no. Too often, those frontline professionals who deliver the brand experience are not sufficiently engaged in wider retail transformation initiatives, or supported with the investment to develop the knowledge and skills Force required to deliver the improvement in performance demanded of them. Consistent Standards In truth, attentive and knowledgeable staff is rarely seen as an exciting topic for shareholders or internal teams. Only when performance begins to haemorrhage in the public eye do beleaguered senior retail leaders Creating inspirational spaces isn’t, as quickly turn their attention to such ‘lowly’ issues of staff and store- level operations. Often, the taps of good old-fashioned service and the many believe, the silver bullet to solving fundamentals of effective are all too quickly turned off. Why? Because the problem for department stores. A these are easy ways to save money and shore up profits. This is folly, and simply serves to mark the start of a new decline-and-improve cycle. fundamental shift is also needed to change the way retailers value store To ensure success is delivered in every store, every day, retailers must invest in developing their people, arming them with specialist, practical colleagues and develop their capability. skills to keep stores running smoothly. And they must produce robust, clear communication around retail policy, so staff are operating within consistent guidelines, imbuing them with the confidence that they are making the right decisions. It’s ‘freedom within a framework’ – store managers and teams making on-the-ground judgement calls that are right for shoppers and bang on brand. Good people and great service strengthen the bond and engagement with customers. And right now, that’s what so many department store retailers need.

What Good Looks Like We may work in retail, but we’re all shoppers too. Encouraging store teams to take a step back and see their store through a shopper’s eyes is vital. Would what they see encourage them to buy? What would have a negative impact on store experience? They’ll quickly understand how those seemingly small visual tasks really can make a big difference.

But don’t assume everyone knows what should be done. Retailers must provide clear guidance on expectations of ‘what good looks like’ and the policies and practices teams should be adopting. To filter strategy down to store teams, retailers also need to be realistic. Real, tangible retail transformation will need time, investment and an unwavering commitment.

Improving Capability It’s a sad fact that department store retailers are facing pressure to reduce their head count, both at head office and store level. That means everyone’s contribution is more important than ever. Store teams need to know their role and work towards shared objectives.

For teams to perform better, they need the right (and often new) skills. Plenty of retailers readily invest in headline-grabbing store concepts, but fail to provide the necessary learning and development needed to deliver real change. By investing in your store teams, you’ll move one step closer to embedding long-term changes in behaviour and accelerating Everyone’s contribution is change instore. For many, the challenge is to find smart tools and resources to help unlock stores’ true potential and work more efficiently more important than ever than ever before. It’s a challenge, not an insurmountable problem.

And when policy has been set and clearly communicated, there are better ways to monitor how well teams are complying with instore visual standards day-to-day. Invest wisely in the right kind of store insight and it is possible to improve productivity and financial efficiency — focusing attention, time and resources on the stores that need help the most

Click Here. Image | Debenhams, Watford, UK Read: ‘Look the Beast in the Eye’ Retail Focus column,

Back Next 15 Man-made Beauty

In the UK and US, two big department stores have given their beauty halls a makeover, hoping to grow and groom sales among male shoppers along the way.

Beauty is one of the unmistakeable hero departments within Debenhams’ new Watford store. Part of the ‘Debenhams Redesigned’ strategy, the interactive space occupies 15% of the store and features 24 new skincare, make-up, haircare and men’s brands. According to Debenhams, elements of the new-look beauty offer will be rolled out to around 40 stores in time for Christmas 2018.

The halls are designed to create a modern, welcoming and easy to navigate, interactive environment where you can learn, discover and experiment with products from established beauty houses and breakthrough brands.

Traditionally, many beauty spaces within department stores rely on brand supported investment and innovation. Here, one fifth of the beauty hall is serviced by Debenhams and not by individual brands themselves. The true difference-maker, however, is the cohesive, considered and clearly well planned and flexible zoned areas, with spaces such as the Perfumery, Skincare Lab, Hair Lab and a Men’s Lab. It is perhaps the latter, however, that is the most interesting. Top | Beast, , UK Bottom | Nordstrom, New York, USA Male Grooming Growth More and more men may be embracing the bearded look, but male skincare is also seeing really strong growth, with sales up 16.5%. According to the latest TGI data from Kantar Media, a third (33%) of UK men say they use face creams and lotions on their skin.

Beast is a relatively new Covent Garden store catering to men’s beauty, In the US, Nordstrom is also seeking to redefine the beauty experience, until now typically overlooked by department stores. It’s a curated with its new men’s store in New York. Like Beast, its democratic beauty collection of over 80 premium brands. But it has an understated hall concept approach, used in its refurbished and new stores is, in approach to its layout with beauty categories instead of brands clearly many ways, the polar opposite of what brands themselves and store signposted making it super easy for the male customer to find what designers typically want to see. This still upscale, low level, intimate they want with minimal interaction. With its new ‘Beauty Hall of the space eschews the familiar phoney brand war competition, with the Future’ concept, Debenhams is clearly keen to capitalise on this great (and exclusive) product choice presented with an equality and growing category, too. parity that suits all, while still delivering feature brand space and voice. This revolutionary approach works at many levels, creating small but Distribution of Debenhams sales by category beautifully formed retail spaces within one authoritative area, where personal service and advice can be expertly dispensed.

Admittedly, the wants and needs of male shoppers in Watford are likely Beauty 25% to be somewhat different to their Manhattan counterparts. But the Nordstrom store is proof that Debenhams is at least looking in the right places for inspiration. Yes, there is still much more that it could, and Womenswear 16% should, do: the Watford store is arguably innovative only because it’s Debenhams. That said, the inroads it is starting to make could quickly Menswear 14% leave other mainstream retailers in the UK sector looking tired and out- dated by comparison. Time for more makeovers?

Home & Furniture 12% Read: Debenhams, Watford Store Review, Click Here.

Childrenswear 9%

Source: Debenhams - © Statista 2018 Back Next 16 Going Up?

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