UK retail: a comparison of information needs and supply across three sectors of the industry
by
Maria Kiely, B.A.(Hons)
A Masters's Dissertation, submitted in partial fulfilment of the requirements of the award of the Master of Arts degree of the Loughborough University of Technology
September 1994
Supervisor: Mr. Derek Stephens, MSc, M.I.lnf.Sc Department of Information and Library Studies
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v888/L!-~3 ABSTRACT
This research examines whether information needs and supply differ across sectors of the retail industry. Three sectors are selected for examination; grocery retail multiples; mixed retailers; and booksellers, stationers and newsagents.
The study addresses three key areas; information provision; information needs; and information supply. It identifies the nature of business information provision in large retailing organisations; ascertains if, why and how information needs are changing; assesses the impact on company information needs, of three key trends; retai I internationalisation and the opening of the Single European Market; green consumerism; and the recent recession; identifies the nature of information supply; examines the use of external information providers; and identifies gaps in business information products available.
A multiple methodology was adopted using case studies and a questionnaire. 9 companies participated in the study; 4 mixed retailers; 2 bookseller, stationer and newsagents; 2 grocery retail multiples; and 1 company providing a retail information service.
The study.reveals the heterogeneous nature of i~formation provision within large UK retailing organisations, even when divided into sectors. . The survey results illustrate significant changes in information needs across all sectors of the retail industry, in the las t five years. Information needs are shown to reflect sector-specific retail trends and issues, industry wide retail trends, as well as individual company operating practices. ACKNOWLEDGEMENTS
I should like to thank:
Derek Stephens for his invaluable guidance and help in supervising this project.
The John Lewis Partnership PLC, W H Smith PLC and Management Horizons for their time and assistance.
Mum and Dad for their support and encouragement. CONTENTS PAGE
ACKNOWLEDGEMENTS ABSTRACT INTRODUCTION ...... 1 0.1 Definition of terms 2 0.2 Aim of study 3 0.3 Objectives of study 4 0.3.1 Information provision 4 0.3.2 Information needs 4 0.3.3 Information supply 4 0.3.4 Sector comparison 5 0.4 Study outline 5
CHAPTER ONE: RETAILING IN THE 1990'S: CURRENT TRENDS .... 8 AND FUTURE DEVELOPMENTS 1.1 Retail internationalisation 8 1.2 Niche opportunities 1 1 1.3 The economic situation 1 1 1.4 Green consumerism 1 2 1.5 Employment and the work force 1 4 1.6 Demographic and consumer trends 1 4
CHAPTER TWO: CHOSEN SECTORS. DEFINITION AND ANALYSIS .... 18 2.1 Classification of retail sectors 18 2.2 Booksellers, stationers and newsagents 19 2.2.1 Sector definition 1 9 2 . 2 . 2 Trade structure and major players 19 2.2.3 Sector trends and issues 19 2.2.4 Sector performance 21 2.2.5 Comparative performance 21 2.2.6' Future prospects 21 2.3 Large mixed retailers 22 2.3.1 Sector definition 22 2 . 3 . 2 Trade structure and major players 22 2 . 3 . 3 Sector trends and issues 23 2.3.4 Sector performance 24 2.3.5 Comparative performance 24 2.3.6 Future prospects 25 2.4 Grocery retail multiples 25 2.4.1 sector definition 25 2.4.2 Trade structure and major players 25 2.4.3 Sector trends and issues 26 2.4.4 Sector performance 27 2.4.5 Comparative performance 28 2.4.6 Future prospects 28
CHAPTER THREE: METHODOLOGY ...... 32 3.1 Large companies definition 33 3.2 Chosen sectors 33 3.3 Chosen survey methodology 33 3.4 Case studies 34 3.5 Questionnaire 36 3.5.1 Piloting 37 3.5.2 Distribution 38 3.5.3 Response rate 38
CHAPTER FOUR: CASE STUDY. MANAGEMENT HORIZONS ...... 42 RETAIL INFORMATION SERVICE 4. 1 The company 42 4.2 The retail information service 42 4.3 Case study results 43 4.3.1 Retail information service users 44 4.3.2 Impact of key trends and developments in retailing, on information needs 46 4.3.2.1 Retail internationalisation and the opening of the Single European Market 46 4.3.2.2 Green consumerism 47 4.3.2.3 The economic situation 48 4.3.3 Changing information needs 49 4.4 Summary of case study findings 50 CHAPTER FIVE: CASE STUDY, LARGE MIXED RETAILER, ...... 54 JOHN LEWIS PARTNERSHIP PLC, BUSINESS INFORMATION SERVICE 5.1 The company 54 5.2 Case study results 55 5.2.1 Information provision 55 5.2.2 Changing information needs 58 , 5.2.3 Impact of key trends and developments in retailing, on company information needs 60 5.2.3.1 Retail internationalisation and the opening of the Single European Market 60 5.2.3.2 Green consumerism 62 5.2.3.3 The economic situation 63 5.2.4 Information supply 64 5.2.4.1 In-house information supply 64 5.2.4.2 Use of external information providers 65 5.2.4.3 Nature of information supply in-house 67 5.2.4.4 Gaps in business information products 69 5.2.5 Additional comments 69 5.3 Summary of mixed retailer survey 70
CHAPTER SIX: CASE STUDY, BOOKSELLER, STATIONER AND ..... 75 NEWSAGENT, W H SMITH PLC, LIBRARY AND INFORMATION SERVICE 6.1 The company 75 6.2 Case study results 76 6.2.1 Information provision 76 6.2.2 Changing information needs 78 6.2.3 Impact of key trends and developments in retailing, on company information needs 80 6.2.3.1 Retail internationalisation and the opening of the Single European Market 80 6.2.3.2 Green consumerism 82 6.2.3.3 The economic situation 82 6.2.4 Information supply 83 6.2.4.1 In-house information supply 84 6.2.4.2 Use of external information providers 84 6.2.4.3 Nature of information supply in-house 85 6.2.4.4 Gaps in business information products 86 6.2.5 Additional comments 87 6.3 Summary of bookseller, stationer and newsagent survey 87
CONCLUSION ...... 92
BIBLIOGRAPHY ...... 97
APPENDIX ONE: GLOSSARY APPENDIX TWO: QUESTIONNAIRE INTRODUCTION
Retailing in the UK is undergoing a period of structural, organisational and technical change. Indeed, for any newcomer to retailing research, the most striking testimony to this phenomenon is illustrated in each and every documented source relating to the industry. Regardless of author or ·document format, statements such as: In the last twenty or thirty years, British retailing has undergone major changes in both its commercial and economic organisation and its geographic character(l) and The industry has undergone the kind of transformation that only major growth or major decline brings to a whole sector of the economy,(2) bear witness to the dramatic changes which have, and are still, taking place. Retail analysts not only look to·the recent past as a source of change, stating: The growth and restructuring of the retail industry in the 1980's has been a significant economic event, (3) but, they also look to the future to confirm that the retail revolution is far from reaching an end, "retailers in the 1990's face a minefield of change"(4).
For the last twenty-five years, UK retailers have relied heavily on sustained growth for survival and expansion, but, issues such as market saturation, the erosion of national borders and radically changing consumer expectations have put an end to this success factor. It is clear from the literature, that in order to maintain market share and survive into the next century, retailers need to adapt to their changing environment and adopt a flexible approach to the service that they provide. Competi tion is no longer based
1 solely in the home market but has become global. Also, demand is increasing more and more for new concepts and new technology to help companies gain an edge over competitors.
Business information has a crucial role to play in this period of rapid change. This is not to say that business information was not important in the past, but as O'Brien and Harris write, more than ever before success in retailing depends on up-to-date information. CS) Ford confirms this prognosis, stating The business of retailing in the 1990's will increasingly be one of information and licensing.(6)
Information required by retailers can range from land availability for new store development, consumer attitudes and behaviour to general economic data and the monitoring of competitor strategy. It is clear that an adequate supply of information may give a company an operating advantage over competitors who do not place a high value on information, as Kennington writes, A company that is aware of and able to use information is more likely to be profitable and expanding rather than the reverse.(7)
0.1 DEFINITION OF TERMS
For the purposes of this study, retailing is defined as: An economic system for distributing the products and services of industries to meet consumer wants, needs and desires in a context of scarcity. CB)
2 An information need is defined as: A phenomenon occurring when a company realises that a gap exists in existing knowledge.
Information supply is defined as: A method of information provision which satisfies a gap in existing knowledge.
Business information is defined by Kennington as: That information required by a commercial firm which assists it to carry out its business.(9)
A more comprehensive definition of business information is given by Haythornthwaite as: ... the published data, facts and statistics needed for decision-making in business organisations, private or public, as well as government. It includes market information, financial, bank and company information, laws and tax regulations, economic, commercial and trade information as well as factual information about the environment in which business and other organisations operate.(10) Further definitions are provided throughout the text where considered pertinent and where considered necessary to help define the scope of the study. However, every industry and indeed every individual sector of an industry has its own specialist terms and jargon and all readers who are not familiar wi th retailing research, are directed to the glossary in Appendix One, for explanations of the multitude of retail terms contained in italics throughout the text.
0.2 AIM OF STUDY
* To examine whether the information needs and supply of large UK retailing organisations differ across three sectors of the industry.
3 0.3 OBJECTIVES OF STUDY
* The study will address three key areas; information provision; information needs; and information supply.
0.3.1 INFORMATION PROVISION
* To identify the nature of business information provision in-house, in large retailing organisations.
0.3.2 INFORMATION NEEDS
* To ascertain if information needs are changing
* To ascertain how information needs are changing
* To ascertain why information needs are changing and more specifically,
* What impact has the trend towards internationalisation and the opening of the Single European Market had on information needs?
* How has the trend towards green consumerism affected information needs?
* How are information needs affected during periods of recession and economic downturn?
0.3.3 INFORMATION SUPPLY
* To identify the nature of information supply
* To examine the use of external information providers
4 * To identify gaps in business information provision for the retail industry
0.3.4 SECTOR COMPARISON
The conclusion will: * Draw together the analysis.
* Ascertain if the information needs and supply of large UK retailing organisations differ across sectors of the industry
0.4 STUDY OUTLINE
In order to conduct an effective study of organisations or particular groups of users, it is most important to consider the information needs and supply of those users in the context of both the industry and the sector in which they operate. For this reason, chapter one discusses the main contemporary issues and trends of retailing in the 1990's which are pertinent to all sectors of the retail industry. It draws out issues related ·,to information needs and supply which are addressed during the course of this study.
To complement this discussion, chapter two focuses on the three sectors of the retail industry chosen for in-depth study. It provides a definition of each sector and draws out sector specific trends to assist with sector comparison in the latter stages of the study.
Chapter three provides a methodology for the study and will describe the data gathering process.
Chapter four, five and six act as discussion chapters and contain the results of the data gathering process.
5 Finally, the conclusion draws together the analysis and relates the survey results to the aim and objectives of the study.
6 REFERENCES
1. O'Brien, Larry and Frank Harris. Retailing: shopping, society, space, 1991, p. 4. 2. Howard, Elizabeth B. and Ross L. Davies. Change in the retail environment, 1988, p. 7. 3. BDP Planning and the Oxford Institute of Retail Management. The effects of major out of town retail development: a literature review for· the Department of the Environment, 1992, p. 6. 4. Stansfield, Paul. Risks and opportunities. In: David Ricketts ed. Risks and opportunities in retailing in the 1990's, 1992, p. 2. 5. 0' Brien, ref. 1, p. 134. 6. Ford, Richard. Some perspectives on retailing in the 1990's. In: David Ricketts ed. Risks and opportunities in retailing in the 1990's, 1992, p. 160. 7. Kennington, Don. Business information into the 90's. Refer. 1990, 6 (3), 1. 8. O'Brien, ref. 1, p. 6. 9. Kennington, ref. 7, p. 1. 10. Haythornthwaite, J. Working with business information today. In: J. Haythornthwaite ed. The business information maze, 1990, p. 2.
7 CHAPTER ONE: RETAILING IN THE 1990' S: CURRENT TRENDS AND FUTURE DEVELOPMENTS
The aim of this chapter is to discuss the main contemporary issues and trends .of retailing in the 1990's, which are common across all sectors of the retail industry and to draw out issues related to information needs and supply which will be addressed during the course of this study. The chapter will discuss retail internationalisation, niche opportunities, the economic situation and social issues such as green consumerism, employment and the work force and demographic and consumer trends.
1.1 RETAIL INTERNATIONALISATION
The retail industry, both in the UK and abroad, is gradually experiencing an increase in cross-border activity. Bromley and Thomas define international retail operations as: ... the operation by a single firm, of shops, or other forms of retail distribution, in more than one country. (1 ) However, according to a report by Coopers and Lybrand in conjunction with the Oxford Institute of Retail Management (OXIRM) (2), the trend towards retail internationalisation means much more than this and includes not only the 'visible' presence of retailers trading outside their home markets but, also, the globalisation of retailing techniques, franchising, merger and acquisition activity, non equi ty cross-border alliances such. as buying groups, and minority share holdings in overseas companies. Euromonitor states that this trend is set to continue for two inter- related reasons, growing saturation in home markets and opportunities offered in under-developed markets(3).
8 UK retailers, such as The Body Shop, Boots and Dixons, have ventured abroad with varying degrees of success, investing heavily overseas during the early 1980' sand although the recession forced retailers to focus on home markets to defend market share, Nielson believes that the tide has started to turn and internationalisation is once again a key feature within the industry(4).
Focusing on sectors of the retail industry, Bromley and Thomas believe that internationalisation is more common among non food retailers than food retailers, stating that of the 1,321 activities recorded within the EC, 869(66%) were in non-foods, 286(22%) in foods and 166(12%) were mixed retailers(5). Food retailing has been considered largely national and sometimes regional industry(6), and companies have been focusing attention on new methods and technological developments associated with supermarkets, rather than venturing overseas. However, it is now believed that market saturation will bring a rapid decline in expansion opportunities in the UK and will release substantial amounts of capital for investment in other areas. According to Davis, It is amongst the food retailers of Europe, in particular, that quite dramatic developments have occurred in recent years in cross-border trading and overseas expansion. (7)
In any discussion concerning the internationalisation of retailing, the opening of the Single European Market should also be considered. 1992 did not bring wi th ita marked change in retail operations, continuing the fundamental restructuring process already underway, but it did stimulate cross-border activity through simplifying frontier controls, deregulating transport services and generally making operating across borders easier and more attractive(8).
9 How does this effecf the information needs of retailers? For UK retailers to succeed abroad, there are numerous critical success factors -which need to be adhered to. According to Rogers, Gamans and Grassi, Global retailing will require business persons to carefully adapt to the cultural climate in the area in which they intend to do business. (9)
Knowledge of new operating environments will have to extend far beyond company profiles and competitor strategy and include detailed consumer analysis, accurate information concerning the legislative environment, distribution and supply channels and much more. According to Coopers and Lybrand and OXIRM, The most successful operators have developed market-led strategies and have constantly monitored changing consumer requirements. (10)
Even for those companies who claim to have no interest in Europe or overseas because their operations are based solely in the UK, there is a need to operate defensive positioning. Currently, the UK market is far more attractive to continental retailers than the continental market is for UK retailers(11) and although, as yet, penetration of the UK market has been limited, threats of massive opening programmes by food retailers such as Aldi of West Germany and Netto of Denmark are increasing.
Retail analysts believe that retail internationalisation will continue and accelerate as a result of the liberalising effect of the opening of the Single European Market. According to OXIRM, Future success for UK retailers in the Single European Market, will depend on an awareness of the activities of their continental European competitors, detailed knowledge of the opportunities
10 ,;
in Europe, an understanding of the success factors for developing an international presence and a clear comprehension of the legislative changes taking place in the community. (12)
Clearly, the impact of internationalisation and the Single European Market on the information needs of companies will be different for all sectors of the industry and this study aims to assess this impact.
1.2 NICHE OPPORTUNITIES
Niche retailers are not a new feature of the retail industry, but a combination of issues such as the recent recession, market saturation and the desire to maintain market share, have forced retailers to adopt new strategies to maintain margins and promote growth. One such manifestation of these new strategies is the trend by large retailing organisations towards operating in different formats. Gateway, for example, has almost completed a move towards multi-format operations, using its Somerfield fascia to promote a more upmarket image, while continuing to use the smaller Gateway fascia in a high street environment. A similar example is illustrated by Next, who operate store formats such as Next For Men, Next Too Nothing, Next Classics etc. In order to target particular consumer groups, retailers need to not only monitor consumer trends but also to identify gaps in the market place and to moni tor competitor acti vi ties far more closely than ever before, This study aims to assess the extent to which retailer information needs have been affected by these new gaps in the market place.
1.3 THE ECONOMIC SITUATION
Chapter two will demonstrate that all sectors of the retail
1 1 industry were affected to some degree by the recent period of economic recession. According to a study by MCLachlan(13), into the attitudes of senior UK management towards business information, although it might be assumed that during periods of economic boom, investment in information provision and research would expand and that during a recession there would be a move towards information cost-cutting, this model is too simplistic. McLachlan suggests three reasons for an increased demand for business information during recession. Firstly, when companies first realise that recession is beginning to hi t, demand for business information will increase in an attempt to correct the situation. Secondly, companies will cease to use external information providers, thus placing greater emphasis and increased demand on in-house business informa tion provision. Finally, in order to reap the benefi ts that economic upturn will bring, it is vital to protect market share during the recessionary period. However, a business information resources survey of business libraries and information centres in the UK in 1993(14), demonstrated that library and information department budgets had suffered severe cuts during the recessionary period. Chapters four, five and six will assess the impact of recession on information needs and supply within the retail industry. The study will examine the value that retail organisations place on information during recession and the extent to which periods of economic downturn effect demand for particular types of information.
SOCIAL ISSUES
1.4 GREEN CONSUMERISM
Concern for the environment has escalated quite dramatically in recent years and nowhere has it been more apparent than in the retail industry(15). The term 'green' describes a plethora of ideals and philosophies and 'green consumers' have
12 been categorised into varying types (16) and shades (17) of green. However, regardless of how ' green consumers' are categorized, the message from pressure groups such as Friends Of The Earth is that If consumers commit themselves to consuming in environment friendly ways, the international capitalist market for goods and services will be forced to provide them.(18)
In the light of this considerable commercial power, what effect is 'green consumerism' having on the attitudes and actions of retailers? The desire to appear 'green' has been adopted by many retailers, whether as a public relations exercise, to create more product lines, to save money through lower energy al ternati ves or simply to jump on the green bandwagon, retailers have realised that going 'green' can pay rich dividends.
Unfortunately, the ambiguous and vague connotations of what constitutes 'green' behaviour has given retailers licence to selectively interpret it to suit their own business strategy. In some instances, retailers have merely re-labelled products as Dobson writes, Products in green packets sell significantly better than similar products packaged in any other colour.(19)
At a time when retail saturation in the UK is considered to be fast approaching and the Single European Market has broken down trade barriers making it easier for European competitors to break into the UK market, retailers cannot afford to be labelled environment unfriendly.
All retailing organisations need to be aware of the environmental factors surrounding the products they sell and according to Harris they will need to monitor their
13 competitors' environmental strategies(20). Although 'green consumerism' increased quite rapidly in the late 1980's in a period of economic optimism, 'green retailing' in the 1990's is less certain and has been described as a 'green fatigue'(21) caused by recession and financial instability. This study will assess the impact of green consumerism on the information needs of retailers. It will examine the extent to which large retailing organisations monitor competitor environmental strategy and establish what effect the recent recession has had on demand for environmental information.
1.5 EMPLOYMENT AND THE WORKFORCE
According to Kirby(22), employment seems likely to emerge as a most important issue in contemporary retailing. Companies are operating longer business hours while employee working hours are falling. Characteristics of the retail industry are the employment of almost 50% of staff on a part-time basis, a figure which is steadily rising(23) and a greater proportion of women in the workforce. Associated with these trends are increases in the complexity and diversity of conditions of employment and a deskilling of the workforce(24). Moves towards a seven day operating week will call for diverse employment packages including premiums for working unsociable hours and care allowances for the elderly and children. This study will address whether these trends have, or are likely to, place greater emphasis on information concerning employment legislation and personnel management theories and techniques.
1.6 DEMOGRAPHIC AND CONSUMER TRENDS
UK population growth is declining slowly, while a significant redistribution of the population age is taking place. According to Euromonitor, between 1992 and the year 2000, 14 .:q
population shifts will be away from 16-39 year olds and towards the under 16's and the 40-65 year age groups(25). These shifts will bring opportunities for sectors marketing themselves towards the children's market and the over 45's. However a decline in the 16-39 age group will have implications for the housing market and sectors such as mixed retailers and non-food retailers who depend to a large extent on a home furnishings product range.
A further trend identified by OXIRM is towards a decline in the average household size(26) which would yield higher margins for sectors involved in the fast moving consumer goods(FMCG) market for smaller households. Shopping is also emerging as a leisure activity. However, according to Newby, The great majority of developers and retailers have, through their act ions, shown either a total failure to appreciate the implications of these new types of shopping behaviour ... or they have often misunderstood and have responded inappropriately. (27)
Clearly, there is a demand for accurate and relevant information concerning the constantly changing retail environment. This study will address how retailers are responding to these emerging trends.
15 J
REFERENCES
1. Dawson, John A. The internationalization of retailing. In: Rosemary D. F. Bromley and Colin J. Thomas. Retail change: contemporary issues, 1993, p. 26. 2. Oxford Institute of Retail Management. Responding to 1992: key factors for retailers, 1989, p. 9. 3. Euromonitor. Retail trade UK, vol. 1, 1993, p. 30. 4. The retail pocket book 1994, 1993, p. 128. 5. Dawson, ref. 1, p. 34. 6. Retail brief, no. 4, summer 1993, p. 2. 7. Davies, Ross. The internationalisation of retailing. In: David Ricketts, ed. Risks and opportunities in retailing in the 1990's, 1992, p. 68. 8. Oxford Institute of Retail Management, ref. 2, p. 22. 9. Rogers, Dorothy S., Lynda R. Gamans and Mercia M. T. Grassi. Retailing: new perspectives, 2nd ed., 1992, p. 159. 10. Oxford Institute of Retail Management, ref. 2, p. 23. 11. Ibid., p. 53. 12. Ibid., p. 59. 13. McLachlan, John. Business information in the marketplace. Business Information Review, 1992, 8(3), 35-36. 14. Business information resources 1993 survey. Business Information Review, 1993, 10(2),. 11-12. 15. Vallely, Bernadette. Green consumerism. In: David Ricketts, ed. Risks and opportunities in retailing in the 1990's, 1992, p. 96. 16. Harris, Frank W. & Larry G. O'Brien. The greening of shopping. In: Rosemary D. F. Bromley and Colin J. Thomas. Retail change: contemporary issues, 1993, p. 241 . 17. Vallely, ref. 15, p. 15. 18. Harris, ref. 16, p. 229.
1 6 ;
·19. Ibid., p. 238. 20. Ibid., p. 245. 21. Ibid., p. 230. 22. Kirby, David A. Working conditions and the trading week. In: Rosemary D. F. Bromley and Colin J. Thomas. Retail change: contemporary issues, 1993, p. 26. 23. Robinson, O. Employment policies in the service sector: training in retail distribution. Service Industries Journal, 10, 284. 24: Kirby, ref. 22, p. 196. 25. Euromomitor, ref. 3, p. 22. 26. Howard, Elizabeth B. and Ross L. Davies. Change in the retail environment, 1988, p. 17. 27. Newby, Peter. Shopping as leisure. In: Rosemary D. F. Bromley and Colin J. Thomas. Retail change: contemporary issues, 1993, p. 215.
17 CHAPTER TWO: CHOSEN SECTORS. DEFINITION AND ANALYSIS
Chapter one provided an analysis of current trends and developments within the retailing industry as a whole. The study will now focus specifically on the three sectors of the industry chosen for detailed study: booksellers, stationers and newsagents; large mixed retailers; and grocery retail multiples. This chapter provides an overview of sector specific issues which could influence information needs and the way in which information needs are satisfied. The chapter will provide a definition of each sector, trade structure and major players, trends and issues within the sector, recent sector performance and forecasts for the future.
2.1 CLASSIFICATION OF RETAIL SECTORS
One of the limitations of retailing research is the varied classification of retail sectors attributed by market researchers, publishers and the government. The classification used in the government's biennial inquiry, 'Retailing', provides a base for any broad quanti tati ve research, but increasing retailer diversification has led market researchers and publishers to expand upon and re-define sectors of the retail industry ( 1 ) . Euromoni tor's justification for its re-definitions is that in the 'Retailing' enquiry, neither the country's best-known bookseller and newsagent, WH Smith, nor the biggest chemist, Boots the Chemist, is classified under those headings, but as 'large mixed businesses' .(2)
Given the limitations that the government's definitions pose for detailed sector analysis, it was decided for the purpose of this study, to utilise the definitions provided by Euromonitor.
18 2.2 BOOKSELLERS, STATIONERS AND NEWSAGENTS
2.2.1 SECTOR DEFINITION
Euromonitor's definition of the booksellers, stationers and newsagents sector is: Businesses selling mainly new or second hand: stationery, artists materials, greetings cards and postcards, books and maps, printed stationery. The sector includes newsagents who do not have significant sales of confectionery and tobacco, but excludes office equipment and stationery dealers. (3)
2.2.2 TRADE STRUCTURE AND MAJOR PLAYERS
According to the 1991 Retail Inquiry, there were 3,280 booksellers outlets, controlled by 2,016 businesses, and 5,708 newsagents controlled by 3,142 businesses(4). WH Smith and John Menzies are the leading retailers of both stationery and books, operating 800 outlets between them(S). Pentos has a total of 149 outlets, trading as Dillons, Claude Gill, Hatchards, Athena Bookshops and others, and 177 UK outlets trading as Athena Galleries. Clinton cards is the leading specialist greetings card chain with 177 outlets(6).
2.2.3 SECTOR TRENDS AND ISSUES
Pricing and the Net Book Agreement (NBA) continue to be major issues within the sector (7) . Under the NBA retailers are forced to charge publisher fixed prices, and although it is a voluntary agreement, it does have legislative force. The major players have been involved in small-scale discounting, although Dillons was restrained by a Publishers Association injunction in 1991(8).
1 9 Waters tones is experimenting with firm selling and if successful, other retailers may adopt this method(9). usually, booksellers purchase from publishers at discount prices on a sale or return basis. Firm selling increases this discount, under the condition that books purchased in this way remain at full NBA price for at least one year. After a year, books can be reduced and sold off in twice yearly sales.
Compared to other sectors, booksellers, stationers and newsagents spend quite small amounts of money on main media advertising. However, advertising is becoming a key issue in the sector and advertising investment is rapidly increasing. WH Smith is the heaviest advertiser in the sector and spent £10.3m in 1993(10).
Most large outlets within the sector have installed Electronic Point of Sale (EPoS)/computer systems, enabling computerisation of stock and sales information (11). According to Retail Intelligence, the potential of Electronic Data Interchange (EDI) is still largely untapped but could revolutionise ordering and payment for books(12). Technological developments such as CD-ROM are already installed in many outlets and further developments are in store.
Companies are placing greater emphasis on training and customer service. EPoS installation necessitates highly trained staff to handle systems, while increasing competition in the marketplace requires high standards of customer service to help maintain market share.
There has been quite a strong trend towards concentration in book retailing. Small multiples have been losing market share and the sector is becoming dominated by large multiples(13).
20 2.2.4 SECTOR PERFORMANCE
Prior to 1991, the sector performed well with turnover growth averaging 18% per annum during 1987-90(14). The sector held out well against recession because although many goods are classed as non-essential, they are reasonably low priced. In 1991, however, the sector experienced only a 1% increase in sales, a dramatic slowdown. 1993 saw turnover growth climbing to 4% and projected to grow by 5% in 1994(15). In summary, the sector resisted recessionary forces until 1991, when it was hit with a substantial decline in turnover growth and is yet to show signs of a complete recovery.
2.2.5 COMPARATIVE PERFORMANCE
The 4% sales growth in 1993 was 1% higher than the rest of the non-food sector of which they are a component, but 2% lower than the retail industry overall(16). Comparative performance within the sector has been erratic, outperforming all retailers between 1987-1990, underperforming in 1991 and performing marginally better than all sectors in 1992(17).
2.2.6 FUTURE PROSPECTS
In book retailing, competition is growing from audio, video, computer and CO-i technology products but Mintels research in 1991 (18) indicated potential for market growth. The NBA will probably remain but be manipulated by firm selling agreements. Although recession hit booksellers late, there is yet little evidence that recovery is helping the sector(19). Saturation is a serious concern and increasing competition from supermarkets, convenience stores and bargain bookshops may manifest themselves as push factors for booksellers to look beyond the home market to Europe, for growth.
21 stationery and greetings cards are still a growth sector. They will continue to benefit from environmental awareness as products made from re-cycled paper continue to gain ground(20). The customer is seeking convenience and value for money from a one-stop shopping format and specialist card and stationery retailers will witness increased competition from non-specialists in the future.
2.3 LARGE MIXED RETAILERS
2.3.1 SECTOR DEFINITION
Euromonitor's definition of large mixed retailers is: Businesses with less than 80% of turnover in anyone of the broad kinds of business categories used to describe specialists. In the case of food retailers and hire shops, the proportion is taken at 50%. The sector includes the mixed retail businesses of department and variety stores (21) .
2.3.2 TRADE STRUCTURE AND MAJOR PLAYERS
According to the 1990 Retail Inquiry, the sector comprised 2,834 businesses operating 10,953 outlets(22). Compared to booksellers, stationers and newsagents, this sector contains over 2,000 less businesses but 2,000 more outlets. A characteristic of this sector, with 50 large businesses controlling 5,866 outlets, is that large mixed retail multiples dominate the sector and accounted for 94% of turnover in 1992(23). Marks & Spencer is the UK's largest mixed retail business(24). Three other variety stores, Woolworths, BHS and Littlewoods are also key players in the market. In the catalogue showroom segment, Argas is the largest business while the Burton Group, trading predominantly as Debenhams leads in the department store segment.
22 2.3.3 SECTOR TRENDS AND ISSUES
Store location is a key issue within the sector. Traditionally, variety stores have sustained growth by operating as 'anchors' to high street shopping areas. Stores such as Marks & Spencer, wi th a core textile offer, have required larger towns and department stores have demanded major town and city centre sites to support profit margins. Now, there is a trend towards out of town sites(26), although not on the food retailing scale.
The trend towards automation reflects the retail industry as a whole. Department stores, in particular, require information technology to help relieve the problems of large multi-level units. Again, the development and use of EPoS is a key factor in this sector providing links between head office, trading units and suppliers.
Many department stores now belong to international buying groups which provide information concerning the international sourcing of products. This negates the need to provide this information 'in-house'.
A current feature within the sector is intense price competition in major merchandise areas, such as clothing. Even before recession hit, clothing retailers were unable to raise prices in line with general price increases(27). Competition between mixed retailers and clothing specialists has introduced an element of discounting into the sector, even by Marks & Spencert(28).
Most mixed retailers continue to increase product range through concessions. John Lewis is an exception to this. Stores opposed to concessions believe that floor space is better used for product investment rather than rent. 23 Customer service and staffing levels remain a key issue(29). Department stores, in particular, are renowned for their emphasis on high service levels.
Customer loyalty schemes are still important. The use of direct marketing to develop credit customer loyalty has been developed further in recent years ( 30 ), al though cus tomer information obtained by this method could be better utilized.
Compared to booksellers, stationers and newsagents, mixed retailers place greater emphasis on advertising. Woolworths is the leading advertiser and amongst the biggest in retailing as a whole. Image advertising in both women's and lifestyle magazines is now used by most retailers in the sector(31).
2.3.4 SECTOR PERFORMANCE
Mixed Retail businesses achieved a 3% increase in turnover in 1992, 1 % higher than non-food specialists but 1% lower than for the retail industry as a whole (32) . However, sales increases were 1% down on 1991 figures and only half the rate of growth achieved in the two previous years, partly due to low price constraints (33) . Given that the sector relies heavily on merchandise areas hit by recession such as furniture and clothing, the damage was not as pronounced as it could have been, due to the strength of some of the major retailers (34) .
2.3.5 COMPARATIVE PERFORMANCE
Compared to all other sectors selected for the purposes of this study, mixed retailers were hit hardest during the recession. However, between 1987 and 1992, turnover growth was only marginally smaller(5%) than total retail sales(35).
24 2.3.6 FUTURE PROSPECTS
With recession over, mixed goods retailers can expect retail sales to increase (36) . In the longer term, however, price competition will continue to be a feature and mixed retailers will need to reverse the trend towards specialist retailers. Critical success factors will be attracting customers to city centres and keeping abreast of changes in retail practice.
2.4 GROCERY RETAIL MULTIPLES
2.4.1 SECTOR DEFINITION
Grocery retail multiples are a component of the food retailing sector. Euromonitor's definition of grocery retail multiples is: "mul tiple retailers selling mainly packaged groceries"(37). Grocery retail multiples operate in the fast moving consumer goods (FMCG) market, primarily selling food. Traditionally, supermarkets have stocked a limited range of non-food items but now multiples are gradually moving towards a 'total shopping environment' ethos and expanding their range to include petrol, clothing, plants, flowers and stationery.
2.4.2 TRADE STRUCTURE AND MAJOR PLAYERS
According to the 1991 Retail Inquiry, there were 82,572 food retailing outlets overall, controlled by 62,009 businesses, with 8,309 large grocery multiple outlets, controlled by only 74 businesses(38). Food retailing is, by far, the largest of all retail sectors. By 1993, the multiples accounted for over 80% of sales(39), with the top five multiples Sainsbury, Tesco, Asda and Gateway owning 41.7% of the market between them (40) .
25 2.4.3 SECTOR TRENDS AND ISSUES
A key feature within food retailing is long-term structural change, producing a shift in sales from small businesses to large, with a resulting decline in the number of outlets per 1,000 inhabitants(41). According to the 1991 Retail Inquiry(42), the number of food retail outlets fell by 36,515 between 1980 and 1990.
Own label products are of greater strategic significance now than when they were first developed as a foil to counter the rising prices of branded products, allowing retailers to control selling prices and trading margins(43).
Market saturation is of considerable concern to retailers, who are being forced to admit that it does exist and will take hold before the turn of the century (44) . The building of stores is not likely to stop, but instead the multiples are expected to replace old sites and build progressively smaller stores(45).
For over a decade, grocery retail multiples have been pursuing market share using the same strategy, by shifting stores from the high street to the edge of towns(46). However, store location is set to become a key issue wi th ci ty analysts predicting a return to the high street.
Perhaps the greatest concern to UK grocery multiples is the threat posed by discounters. Research by Barclays de Zoete Webb suggests that by 1997, the number of outlets operated by discounters will number approximately 1,900 and that discounters will have an impact out of all proportion to their share (47) .
26 Automation and use of new technology are key features in the sector. EPoS generated sales data at product line level is sent through EOI links between central distribution and suppliers, ensuring fewer lost sales through poor availability and better stock turn performance on lower investment in stock (48). Further developments include electronic shelf-edge labelling, in-store video advertising and the use of smart card technology in consumer marketing(49).
Food retailers have concentrated on raising standards of food safety, although it is likely that this will become compulsory under legislation from the proposed EC food hygiene regulations(50).
In-store services and facilities continue to develop in an attempt to improve quality and customer care(51).
Since several multiples broke ranks and opened on sundays in December 1991, the practice of Sunday trading has continued and will remain. According to Mintel, having opened on Sundays on a regular basis for so long, it is impossible that any reform of the law could successfully enforce six day trading (52) .
Spending on advertising continues to increase with grocery retail multiples spending more on advertising than any other sector (53) .
2.4.4 SECTOR PERFORMANCE
Grocery retailers achieved a 7% sales increase in 1992, compared to increases of 9-10% in each year between 1987- 1991 (54) . Regardless of this slight decline, sector sales growth was almost double the 4% average achieved by the industry as a whole. Although the recession forced consumer
27 spending cuts, durable goods were hit first, followed by consumer goods and although not entirely immune, grocery multiples virtually escaped the recession.
2.4.5 COMPARATIVE PERFORMANCE
Going into, during and coming out of recession, food retailers compare extremely well to all other retail sectors. During 1987-1992 grocers sales volume grew by 19% compared to 8% achieved by the industry as a whole(55).
2.4.6 FUTURE PROSPECTS
The grocery retail sector is currently undergoing a process of considerable change. Price wars are set to continue, but even more aggressively than before due to the continued growth of the discount sector. Grocery retail multiples are still relying too heavily on geographical expansion to keep growing, but there may be a parallel upsurge in high street developments as companies detect new opportunities there as an insurance against market saturation. Similarly, it is likely that they will begin to exploit opportunities abroad more readily. The market will continue to adapt to consumer trends such as green issues and customer care initiatives. Overall, there is a need for multiples to differentiate themselves from other retailers and this success factor will become ever more critical.
28 REFERENCES
1. Euromonitor. A-Z of UK retailing, 2nd ed., 1989, p. 11. 2. Ibid. 3 . Ib id ., p. 1 6 . 4. Business monitor, SDA 25, retail sales, 1991, p. 66. 5. Economist Intelligence Unit. Retail trade review, no. 30: booksellers and stationers, 1994, p.44. 6. Ibid. 7 . Mintel. Retail intelligence:' specialist book and stationery retailers, vol. 3, 1993, p.67. 8. Ibid., p. 68. 9. Ibid. 10. Economist Intelligence Unit, ref. 5, p. 44. 11. Min tel, re f. 7, p. 1 0 . 12. Ibid., p. 71. 13. Ibid., p. 1 2 . 14. Economist Intelligence Unit, ref. 5, p. 39. 15. Ibid., p. 40. 16. Ibid. 17. Ibid. 18. Mintel, ref. 7, p. 72. 19. Economist Intelligence Unit, ref. 5, p. 46. 20. Euromonitor. Retail trade UK, vol. 1, 1993, p. 26. 21. Euromonitor, ref. 1, p. 18. 22. Economist Intelligence Unit. Retail trade review, no. 27: mixed retail businesses, 1993, p. 29. 23. Ibid., p. 32. 24. Mintel. Retail intelligence: mixed goods retailers, vol. 6, 1991, p. 5. 25. Distributive Trades Economic Development Committee. The future of the high street, 1988, p. 23. 26. Ibid., p. 57. 27. Economist Intelligence Unit, ref. 22, p. 30. 28.' Ibid., p. 31.
29 29. Mintel, ref. 24, p. 59. 30. Ibid. , p. 60. 31 . Ibid. , p. 61 . 32. Economist Intelligence Unit, ref. 22, p. 31 . 33. Ibid. , p. 29. 34. Ibid. , p. 30. 35. Ibid. , p. 31 . 36. Mintel, ref. 24, p. 7. 37. Euromonitor, ref. 1, p. 12. 38. Business monitor, ref. 4, p. 66. 39. Ice Stockbroker Research Ltd and Key Note Ltd. IeC INTERNATIONAL BUSINESS RESEARCH (Dialog version, File 563, rn=01.6619), 1993, [ref. 52]. 40. Price war to continue in '94. Super Marketing, January 14th 1994, 14. 41. Pelligrim, Luca and Svinivas K. Reddy eds. Retail and marketing channels. 1989, p. 19. 42. Business monitor, ref. 4. 43. Mintel. Retail intelligence: food retailing, vol. 1, 1993, p. 10. 44. The battle of the brands rages on. Retail Week, March 4th 1994, 7. 45. Saturation. Super marketing, January 7th 1994, 19. 46. Not so super markets. The Economist, June 13th 1992, 37. 47. Economist Intelligence Unit. Retail trade review, no. 28: grocery retailers, 1993, p.22. 48. Mintel, ref. 43, p. 10. 49. Ibid. 50. Ibid., p. 11. 51. Key note market review: industry trends and forecasts: retailing in the UK, 2nd ed., 1990, p. 47. 52. Mintel, ref. 43, p. 11. 53. Economist Intelligence Unit, ref. 47, p. 20. 54. Ibid., p. 7.
30 55. Ibid.
31 CHAPTER THREE: METHODOLOGY
It was decided for the purposes of this study, to concentrate on the information needs and supply of large retailing organisations, where there has been no previous research comparing information needs and supply across sectors of the industry.
Many business information needs surveys have been carried out, which encompass industry as a whole. For example, the British Library funded an enquiry in 1992, to identify business information needs and supply in Scotland, in preparation for the Business Information Plan for Scotland(l). The study examined companies of varying sizes and the sample population was weighted to reflect the industrial activity and geographic distribution of the community.
There has also been much research, in recent years, into the information needs and supply of small and medium sized enterprises (SME' s) . Following a successful study into information use and needs of small manufacturers, a British Library funded venture examined information use and needs of small retail and service firms in the U.K. in 1985(2). The project was very much a quantitative analysis using personal interviews of a total sample of 96 small firms and served to hi-light the diversity of retailers and retailing organisations, even when divided into sectors.
By focussing on large companies, it provided the opportuni ty to analyse the information consciousness and value that is placed on information, where finance and resources are not lacking. It was also felt that large companies would respond more positively to the survey.
32 3.1 LARGE COMPANIES DEFINITION
According to the 1989 Companies Act(3), a large company is defined as meeting at least two of the following conditions: * annual turnover must be more than E11,200,000; * the balance sheet must total more than E5,600,000; * the average number of employees must be more than 250.
3.2 CHOSEN SECTORS
The diversity of interests in retailing is such that to obtain meaningful data across the board would require a very large sample indeed, for which this study does not have the resources. Newman Books' Retail Directory, for example, divides multiple shops into thirty-one broad groups(4). A more selective approach was therefore adopted, focusing on three sectors of the retail industry; grocery retail multiples; mixed retailers; and booksellers, stationers and newsagents. Research into the retail industry and data provided, more often than not divides retailers into food and non-food areas for comparative purposes(5). For this reason, it was decided to select a food retailing sector, a non-food sector and mixed retailers, to ensure, as far as possible, a representative sample.
3.3 CHOSEN SURVEY METHODOLOGY
It was decided at an early stage of the study to adopt a multiple methodology using 4 case studies, 1 from each of the chosen sectors and a retail information service and 45 postal questionnaires, 15 for each sector.
33 3.4 CASE STUDIES
Case studies were chosen to assist in the questionnaire design process, to test validity and clarity of questions and also to provide in-depth examples of the kind of information that the questionnaires would later yield. It was decided to carry out case studies on one company from each sector and a further case study on a company providing an information service to retailers. Al though it was initially planned to use a library, providing an information service, as a case study for sector comparison, this did not prove possible for several reasons. Upon enquiring at a central London library it became clear that many company enquiries could not be linked to a particular sector because companies did not have to identify themsel ves, thus preventing comparison. Secondly, enquiries from retailers were not necessarily channelled to one collection/information point within the library and an overview of information requests was not possible without consul ting several library services. It was therefore decided that a retail consultancy providing an information service specifically to retailers, and where company name and sector are identifiable, would be more appropriate for the purposes of this study.
Four case study companies were selected randomly from the A-Z of UK Retailing (6), which provides a comprehensive alphabetical listing of all the key retailers with more than twenty outlets. All listed companies had an equal opportunity of being selected.
Negotiating access to companies met with a mixed response. Management Horizons (retail consultancy and retail information service), WH Smith PLC (bookseller, stationer and newsagent) and the John Lewis Partnership PLC (mixed retailer - department store) all agreed readily to be used as case studies, with all three companies possessing a
34 central information service. However, negotiating access to a food retailing company proved difficult, as it became clear at this point that in those food companies contacted there are several different departments responsible for information provision, requiring alterations to be made to the questionnaire, which had originally been aimed at companies with a central information service. As access to a food retailer was impossible for these and other reasons, such as, company policy not to answer student questions or to provide interviews, it was decided to rely on questionnaire response from food companies that had not been contacted for case studies to provide information on grocery retail multiples. It was also hoped to derive information concerning grocery retail multiples from both the retail consultancy case study and also from the John Lewis Partnership case study, where the company also operates as a grocery retail multiple.
Prior to conducting the case studies, the aims and objectives of the research were explained by telephone to each respondent and an overview of what the case studies would involve was provided. A fixed amount of time was negotiated for interviews, half an hour for the retail consul tancy and one hour each for WH Smi th and the John Lewis Partnership. Permission was given to use a dictaphone, thus ensuring the accuracy of the information provided. One company required a letter of permission from a supervisor and identification, which was provided on entry to the organisation. It was also agreed that each company would be provided with a detailed synopsis of the results and conclusions of the study.
Although it was intended to use the case studies to pilot the questionnaire, a rigidly structured interview was not desired at this stage. A more open approach was adopted and although all questions were asked, a flow of conversation was permitted by altering the question order
35 and drawing out information and issues which had not previously been considered.
Each case study is described in its own chapter. (Chapter Four - Management Horizons, Retail Information Service; Chapter Five Large Mixed Retailer, The John Lewis Partnership PLC; Chapter Six - Bookseller, Stationer and Newsagent, W H Smith PLC)
3.5 QUESTIONNAIRE
Postal questionnaires were chosen in conjunction with case studies, primarily to permit a wider sample than could be obtained using solely personal interviews, within the time available. They were also selected for financial reasons because the administrative centres of large retailing organisations are dispersed throughout the UK, concentrated mainly in the South-East and as stated earlier, difficulties arranging case studies were anticipated at an earlier stage. Of course, postal questionnaires provide anonymi ty, which is important in a highly competi ti ve industry and they require less financial support than both telephone and personal interviews.
The sample population was restricted to 45 companies for financial reasons and 15 questionnaires were sent to each of the selected sectors. Again, as with the case studies, companies within each sector were randomly selected from the A-Z of UK Retailing (7), with all listed retailers having an equal opportunity of being selected. It was recognised that the sample size for questionnaires could only represent a small selection of the total population of retailers within the chosen sectors and therefore to attempt to obtain quantitative data would provide inconclusive results. It was therefore decided to obtain qualitative data, which although difficult to analyse(8), would be manageable with the chosen sample size and would
36 yield useful information even if the response rate proved to be poor.
The questionnaire consisted of 15 questions, grouped together in 3 main subdivisions: Information Provision, Information Needs and Information Supply (see Appendix Two). It was decided that, to encourage response, the questionnaire should be no longer than four sides of A4. All questions had an open-ended component, requiring space for response and therefore all four sides were used. According to Slater, "the layout of the ques tionnaire and the order of the questions is important" (9) . Questions were therefore designed as simply as possible with the more general, but still relevant, questions at the beginning and the more sensitive questions further into the questionnaire. Respondents were given an opportunity to provide additional comments at the end of the questionnaire.
3.5.1 PILOTING
The questionnaire was piloted during two case studies, WH Smith and the John Lewis Partnership. The aims and objectives of the research were explained to the respondents at the beginning of the interview and questions were checked for clarity and sensitivity., During the pilot study, several of the questions were either wrongly interpreted or found to be inappropriate and as a result were either reworded or omitted. For example, it became clear that providing a list of types of information (e.g. economic data, store location, EC information etc) and attempting to identify frequency of use was impossible. One company had produced a list of types of information of interest to particular Company members which, in itself, was several pages in length. Also, wi th many people involved in information provision in large companies, individuals have their own areas of expertise and are
37 unable to give detailed specific answers outside their area of responsibility. However, the case studies were able to answer broader questions providing indications of general trends in information needs.
3.5.2 DISTRIBUTION
A covering letter was distributed with each questionnaire, providing an explanation of the aims and objectives of the research, a guarantee of absolute confidentiality and a suggested return date. All information gathered from companies is presented in such a way as to preserve the confidentiality promised in the covering letter. Questionnaires were coded for administrative purposes only, to allow for sector identification and this was also explained in the covering letter. Respondents were given two weeks to complete and return the questionnaire. To encourage a high response rate a stamped addressed envelope was provided for questionnaire return. Unfortunately, although it was considered that a higher response rate would be achieved by telephoning companies to obtain a contact name to whom to send the questionnaire, financial restrictions prevented this. Therefore, all questionnaires were addressed to 'the information officer' in the hope that it would be passed to the appropriate company member.
3.5.3 QUESTIONNAIRE RESPONSE RATE
The questionnaire response rate was relatively poor. Of the 45 questionnaires sent, 12 replies were received (26% response rate), with only 6 questionnaires completed (13% completion rate). The response rate is summarised in TABLE ONE. Of the 12 ini tial replies; 4 were from the mixed retail sector; 4 were from the booksellers, stationers and newsagents sector; and 4 from the grocery retail multiple sector. The replies yielded only 6 completed
38 questionnaires, 3 from mixed retailers, 1 from the booksellers, stationers and newsagents sector and 2 from grocery retail multiples.
TABLE ONE: QUESTIONNAIRE RESPONSE AND COMPLETION RATE
Sent Replies Completion
Mixed 15 4 3 Retailers
Booksellers, 15 4 1 Stationers and Newsagents
Grocery 15 4 2 Retail Multiples
TOTAL 45 12 (26%) 6 ( 1 3 % )
The six completed questionnaires were filled in quite fully, particularly so by the 3 mixed retailers. The 6 companies who replied to the questionnaire but did not complete it stated that although they wished the research project every success, it was "company policy not to participate in research surveys". One letter stated, "the company does not take part in any surveys or research other than that which is obliged by law". The grocery retail multiples who did not complete the questionnaire, did send detailed information packs and company reports.
Although a very high response rate was not expected because the companies surveyed had little to gain from the exercise and also the questionnaire did not contain a contact name, it was hoped that the questionnaire would yield a 50% response rate. For financial reasons, follow-up
39 questionnaires were not sent to the companies who did not respond. The qualitative nature of the information supplied and the very small sample allowed manual analysis. Due to the low response rate, information gained from the questionnaires is not presented in a chapter of its own but rather it is identified as questionnaire data and incorporated into the case study chapters (Four, Five and Six) and used to substantiate results and add further information where possible.
40 REFERENCES
1 . Reid, Christine and Keith Webster. Business information needs and supply in Scotland. Business Information Review, 1993, 10(2), 36. 2. Capital Planning Information. Retailing and services, information and the small firm: report of a study of information use and needs in small retail and service firms in the ~K, 1985. 3. Companies House. Disclosure requirements, 1993, p. 7. 4. Euromonitor. A-Z of UK retailing, 2nd ed., 1989, p. 20. 5. Grant, Deborah. Retail industry: how to find out. Business Information Review, 1987, 3 (3), 4. 6. Ibid., 1 37 -151 . 7 . Ibid. 8. Bell, J. Doing your research project: a guide for first-time researchers in education and social . science, 2nd ed., 1987, p. 77. 9. Slater, Margaret, ed. Research methods in library and information studies, 1990, p. 73.
41 CHAPTER FOUR: CASE STUDY, MANAGEMENT HORIZONS, RETAIL INFORMATION SERVICE
4,1 THE COMPANY
Established in 1975, Management Horizons is Europe's foremost retail consultancy, operating throughout Europe in London, Richmond, Frankfurt, Paris and Madrid. The company consists of a team of consultants whose remit is to work with client companies on profit improvement assignments; a team of information analysts and retail analysts who monitor and analyse the retail industry worldwide; and a team of designers who work with clients on sales and profit improvement through in-store environment design and communication.
Management Horizons information service was ini tially intended for use by clients investing in the total information package called 'Retail Intelligence' . 'Retail Intelligence' incorporates the consultancy and design divisions, the unique pan-European business library and information service, a comprehensive range of publications, a 35mm slide library with worldwide retail coverage as well as a conference and events programme. However, enquiries to the information service from non-investing clients increased rapidly and in 1989 it was decided to open the service to ad hoc users on a subscription basis( 1).
4.2 THE RETAIL INFORMATION SERVICE
The retail library and information service is run by a team of business information specialists and is the most substantial source of specialist retail and consumer market informatiqn in Europe. The library has pan-European coverage and holds a unique and comprehensive collection of published data for research into issues such as retail technology, new store
42 formats, retail and product market sectors and distribution.
other organisations providing information services to retailers such as the Financial Times Business Information Service, London Business School and First Contact are generalist in nature compared to Management Horizons and this is reflected in the price of the Management Horizons information service. For those companies -that subscribe to the total 'Retail Intelligence' package, the information service will spend up to 45 minutes working on enquiries before placing charges. Subscribing company members are also entitled to use the library and its resources in person and to carry out their own research. Those companies that are not subscribing to the complete 'Retail Intelligence' package are charged by research-hour to use the information service, with a premium charge levied for urgent requests. The business information specialists are very familiar wi th the library contents and companies are highly dependent on their expertise. If an enquiry requires more than 3-4 hours work, it will be referred to the consultancy division. According to associate director Sue Edgar, one of the benefits of using the service is that, ... many existing information departments come under scrutiny when times are hard, and so an al terna t i ve source has to be found. By using a pay as you go information service, or by subscribing on a yearly basis, many overhead costs etc, can be saved.(2)
4.3 CASE STUDY RESULTS
This case study is based on information supplied by a business information specialist working in the retail information service, who will be referred to as 'the respondent'. Questions were asked with the aim of achieving the following objectives:
43 * To identify the client base of the information service * To establish the frequency of information service usage by individual sectors * To examine the nature of information service usage by individual sectors * To assess the impact of key trends and developments in retailing, on client information needs * To ascertain if, why and how information needs are changing
Where appropriate, an attempt was made to retrieve comparative data concerning the three sectors of the retail industry selected for this study. In the absence of a food retailing case study, information is incorporated, where pertinent, from the two completed food retailer questionnaires, to enable a sector comparison to be made across all three sectors, in the conclusion.
4.3.1 RETAIL INFORMATION SERVICE USERS
Four questions were asked concerning company use of the information service. Firstly, the respondent was asked who the information service is targeted at. This question was asked for two reasons, firstly, to establish whether the information service is intended for industry in general or solely for the retail industry and secondly, to establish whether the service markets itself to particular sectors of the retail industry, which could effect service usage and therefore data provided concerning the sectors chosen for study. Secondly, the respondent was asked to identify the size of their client companies, to ensure that the information provided is based on large retailing organisations to which this study is focused. Thirdly, the respondent was asked about the frequency of information service usage by the three retail sectors. The final question concerning information service
44 use required the respondent to identify the nature of information service usage by individual sectors.
Management Horizons does not market itself individually to any particular sector, but to the whole retail industry and to retail suppliers. The respondent stated: ... as an information service, we are interested in companies who are looking to expand into Europe and vice versa, at foreign companies who want to find retailers to sell their products or want to break into the UK market. We have a specialist knowledge of European markets and we can help them. The service is predominantly used by large organisations, many of whom are well known high street names, but it is also used by a few medium sized companies. The three sectors selected for the purposes of this study, all use the service on a regular basis. Food retailers use the service most frequently, followed by mixed retailers, particularly department stores and then stationers, booksellers and newsagents. Large projects and subscription to the 'Retail Intelligence' package, come predominantly from food companies "not necessarily food retailers, but food manufacturers and retailers."
This is illustrated by the two food retail companies who responded to the questionnaire. One company has a central information service whose role is ... to provide competi ti ve in telligence, product/market analysis, company financial information, monitoring of trade press etc. The nature of the service is based on current awareness and enquiries. In the other company, many departments are responsible for information provision. However, both companies stated that they use Management Horizons information service on a regular basis for European and worldwide retail trends and for market information. Both companies use a range
45 of other external information providers for information outside information service areas of specialisation.
4.3.2 IMPACT OF KEY TRENDS AND DEVELOPMENTS IN RETAILING, ON COMPANY INFORMATION NEEDS
In order to assess the impact of industry wide trends on informa tion needs, three issues were selected from chapter one; retail internationalisation and the opening of the Single European Market[l .11; green consumerism[l .41; and the recent recession[l.31. Firstly, the respondent was asked, based on enquiries received, if the opening of the Single European Market and the trend towards internationalisation has had any effect on information needs. The respondent was asked to attribute these effects to particular sectors. A similar question was asked concerning the trend towards green consumerism. Finally, the respondent was asked to assess the effect of the recent recession on company usage of the information service.
4.3.2.1 RETAIL INTERNATIONALISATION AND THE OPENING OF THE SINGLE EUROPEAN MARKET
The respondent stated that the trend towards retail internationalisation has had a marked effect on client information needs . . . . demand for information concerning non European countries is growing rapidly, particularly for Eastern Europe and North America, especially Canada. There has also been increased demand for information concerning Australia, Turkey and Asia, but not to the same extent. The respondent stated that client companies were particularly interested in information relating to retail trends in North America. The respondent also identified a difference in the information
46 seeking behaviour of retailers, stating that ... the mixed retail sector, particularly concerning clothing products, tends to look further afield for supplier information.
Both food retailer questionnaire respondents identified an increase in demand for information relating to the US. One respondent stated: There is a need for awareness of the impact of US retailers ideas/innovations on the UK market. This effect of internationalisation on company information needs, is clearly an industry wide experience, as illustrated in both the mixed retailer [5.2.3.1] and the bookseller, stationer and newsagent [6.2.3.1] case studies.
Concerning the opening of the Single European Market, the respondent identified an increase in demand for "European company information". Although the respondent was unable to attribute this increase in demand to a particular sector, both food retailer questionnaire respondents have experienced this informa tion need. One questionnaire respondent, although stating that the opening of the Single European Market had not directly affected information needs, acknowledged a need for "awareness of the acti vi ties and expansion plans of continental food retail groups". The opening of the Single European Market has had a similar impact on the information needs of the food retailing division of the John Lewis Partnership [5.2.3.1].
4.3.2.2 GREEN CONSUMERISM
According to the respondent, the trend towards green consumerism has had surprisingly little effect on client information needs, The information service receives very few
47 enquiries of an environmental nature ... occasionally the service receives a few enquiries from food retailers concerning the green consumer and packaging of goods. No enquiries are received concerning competitor environmental strategy at all . . . . demand for environmental information is very uncommon compared to the rest of the enquiries that we get... perhaps companies are providing this type of information in-house or perhaps they are using other information providers.
This is certainly the case because all sectors have stated that they have experienced a sharp rise in demand for environmental information [5.2.3.2), [6.2.3.2).
Only food retailers, then, use the information service for environmental information.
Both food retailer questionnaire respondents have experienced a sharp increase in demand for environmental information, particularly concerning competi tor strategy, but it has now begun to level off. This is a similar experience to all sectors involved in the study [5.2.3.2), [6.2.3.2).
4.3.2.3 THE ECONOMIC SITUATION
The respondent stated that as a result of the recession a few people had withdrawn from the service, I think that if companies are not performing well then something has to give and it's outside companies! organisations like us that suffer. I think that companies are focusing on in house research. Food retailers continued to use the service duri~g recession and the respondent stated that this sector in particular
48 ... value information a lot and are aware that it does keep them informed of competition, trends and issues affecting the sector. Although other sectors were not specified, the respondent stated: ... there has been a bi t of a cu t back perhaps with people who haven't used us much in the past ... they obviously felt they hadn't benefitted from the service.
Both food retail questionnaire respondents stated that as a result of the recession, more information was demanded concerning "competi tors acti vi ties, particularly pricing". This is an information need pertinent to the food retail sector. Chapter two [2.4.6), demonstrated that price wars are a key feature in this sector and are set to continue aggressively as a result of the recession and as a result of the invasion of the discounters.
4.3.3 CHANGING INFORMATION NEEDS
The respondent was asked if the information service had experienced a significant change in the information demanded from client companies in the last five years. When the respondent answered "yes", she was asked to explain how and why client information needs had changed.
The respondent found it difficult to identify changes in information needs due to only two years with the company. However, based on two years experience, the respondent identified an increase in enquiries of a European nature stating: ... more people are interested in companies and trends outside the UK ... the only trend/change you could specify is an increase in demand for pan-European or other overseas enquiries. The respondent stated that this change in information needs
49 was a general trend experienced across all sectors of the retail industry and not attributable to anyone sector. "I think everyone is aware or becoming aware of European competition and needing to know about it".
The fact that the Management Horizons retail information service has only experienced an increase in demand for information of a pan-European nature is not necessarily providing a true picture. This can be accounted for by the nature of the service, with its European slant and the fact that all companies involved in this study have stated that it is used specifically for trend type information and for information on European markets.
Both food retailer questionnaire respondents indicated that their information services had experienced an increase in demand for competitor information because of increased competition and also for more detailed information concerning individual product sales performance, a change in information needs experienced by both the mixed retail sector [5.2.2] and the bookseller, stationer and newsagent sector [6.2.2].
SUMMARY OF CASE STUDY FINDINGS
RETAIL INFORMATION SERVICE USERS
* Used predominantly by large retail organisation * All three sectors involved in the study use the service * Used most frequently by food retailers, followed by mixed retailers and then booksellers, stationers and newsagents * Food retailers in particular, subscribe to the complete 'Retail Intelligence' package. Other sectors tend to subscribe only to the retail information service
50 FOOD RETAILER INFORMATION PROVISION
Two companies responded to the questionnaire * 1 company has a central information service whose role is to provide corporate, strategic and operational information * In the other company, several departments are responsible for information provision
IMPACT OF KEY TRENDS AND DEVELOPMENTS IN RETAILING, ON COMPANY INFORMATION NEEDS
RETAIL INTERNATIONALISATION AND THE OPENING OF THE SINGLE EUROPEAN MARKET
* Retail internationalisation has had a marked effect on information needs of companies in all sectors * Increased demand, from all sectors, for information relating to consumer trends and developments in North America * Mixed retail sector tends to look further afield for supplier information * Need for food retailers, in particular, to moni tor activities and expansion plans of continental food retail groups
GREEN CONSUMERISM
* Only food retailers use Management Horizons to obtain environmental information * Food retailers have experienced a sharp rise in demand for environmental information and this has begun to level off
51 THE ECONOMIC SITUATION
* As a result of the recession, several companies withdrew from the Management Horizons service * Food retailers, in particular, retained their subscription to the service * Increased demand, by food retailers, for information concerning competitor activities and pricing
CHANGING INFORMATION NEEDS
* Management Horizons has experienced a significant change in information demanded by clients, in the last five years
HOW HAVE INFORMATION NEEDS CHANGED?
* Increased demand for information relating to companies and trends in Europe * Increased demand, particularly by food retailers, for competitor information and more detailed analysis of product sales performance
WHY HAVE INFORMATION NEEDS CHANGED?
* Awareness of threat posed by European competitors * Opportunities for expansion in Europe * Increased competition in the marketplace
52 REFERENCES
1. Edgar, Sue. The independent information service. Aslib Information, 1990, 18(4), 116. 2. Ibid., 117.
53 CHAPTER FIVE: CASE STUDY, LARGE MIXED RETAILER, JOHN LEWIS PARTNERSHIP PLC, BUSINESS INFORMATION SERVICE
5.1 THE COMPANY
The John Lewis Partnership is classified as a mixed retailer because of its department store operations. However the company also operates supermarkets, textile printing, spinning and weaving, mail order wines, fitted kitchen furniture, bedding and farming businesses. The principle activities of the company are split into two divisions; 22 department stores, operating under several names such as John Lewis, Peter Jones, Robert Sayle, Bonds etc; and 108 Waitrose supermarkets. In the absence of a food retailer case study, this divisional split will be used, where possible, to highlight differences in information needs and supply between food and mixed retailers.
After four years of declining profit, 1993 saw the John Lewis Partnership witness a 31 % rise in pre-tax profi ts, wi th turnover at E2,420m(1). The department store division saw a rise in sales by E64m to El, 270m, attributed in part to a "tight control of costs"(2). An additional department store is planned for 1995 and hopes for a recovery in the housing market bringing wi th it an increase in demand for home furnishings, could provide the department store division with further increases in turnover in 1994. Although 1993 saw a Elm fall in sales for the supermarket division, the Chairman attributes this to ... the one-off costs of new distribution arrangements and the introduction of scanning. (3) Three supermarkets are planned before the end of 1994 and there are encouraging signs from branches where scanning has been installed(4).
54 5.2 CASE STUDY RESULTS
This case study is based on information supplied by the head of business information at the central information service of the John Lewis Partnership, who will be referred to as 'the respondent'. Questions were asked with the aim of achieving the following objectives: * To identify the role and nature of the information service * To ascertain if, why and how information needs are changing * To assess the impact of key trends and developments in retailing, on company information needs * To identify the nature of information supply * To examine the use of external information providers * To identify gaps in business information products Where appropriate, information gained from mixed retailer questionnaire response, is identi f ied as such and incorporated into this chapter to help substantiate results and add further information where possible.
5.2.1 INFORMATION PROVISION
The respondent was asked to describe the role and nature of the central information service.
The central information service at the John Lewis Partnership, is very well established, originating as 'the library' and recently re-named 'business information services'. The respondent described the role of the information service as a "management support unit" stating: We have both a continuing and a reactive mode. We obtain information on request for central management... and for management in branches and there's also a continuing programme of information
55 dissemination relating to particular companies and topics that we know people are interested in. The type of information provided by the service can be anything from trends and developments both within the sector and the industry, to individual store performance.
Out of the three mixed retailers who responded to the questionnaire, two stated that they have a central information service and one stated that many different departments are responsible for information provision within the company. However the information departments of all three respondents have a similar role, to provide "computerised management decision-making information" which is "collected in-house" and "analysed using systems". The questionnaire response reflects the trend described in chapter two [2.3.31, where al though automation and the use of systems reflects an industry wide trend, mixed retailers and department stores in particular have a history of using this new technology to relieve the problems of large multi-level uni ts and to provide links between head office, trading units and suppliers.
The nature of the service provided at the John Lewis Partnership was described as both an enquiry service and a current awareness/selective dissemination of information (SDI) service. Although the majority of users of the service ring up for information, all company members are entitled to use the service on a personal basis. In terms of current awareness provision, a daily press cuttings list is provided, but by the press and public relations department, for historical reasons. The nature of the central information service's current awareness provision was described as "SDI on a rolling basis". Although subscribing to between 700-800 journals, the information service scans between 400-500 looking for topics of interest and for 'named' companies to match user interest profiles stored in a database, and
56 information is culled from these journals and sent out, "not exactly on a speculative basis but on a routine basis".
Looking at the list of journals subscribed to, it was interesting to note such titles as 'Best' and 'Bella'! and similar magazine titles, which, although not scanned by the information department, were demanded by buyers, to gain an idea of consumer trends and new products and also to "scan for direct mentions" . The John Lewis Partnership has a department, part of ·whose role is to scan consumer magazines and to moni tor how often the company name is mentioned. Although not placing great emphasis on advertising in the past, the company is now moving into this area reflecting advertising trends within the sector[2.3.3J. New products are given to journalists to test and to review and the impact of this and hence on sales is measured.
From the information provided, a clear difference can be identified between the role of the questionnaire respondents who provide in-house generated information on an administrative and operational level and the central information service at the John Lewis Partnership, whose role extends to include provision of information gathered both in house and externally and used to assist decision making at a corporate and strategic level.
All three mixed retailer questionnaire respondents stated that they do not provide a current awareness service of any kind, rather the nature of their information service is to "process all information gathered in-house". Rowley states that "appropriate current awareness is central if a business is to maintain its competitive advantage"(5). She identifies the five basic components of current awareness as a database, user interest profiles, notifications, feedback and document delivery. Based on Rowley's definition of an effective
57 current awareness service, the central information service at the John Lewis Partnership fulfils her criteria where as all other respondents in this sector fail to do so.
5.2.2 CHANGING INFORMATION NEEDS
The respondent was asked if the information service had experienced a significant change in the information demanded from users of the service in the last five years. When the respondent answered "yes", he was asked to explain how and why needs had changed.
The respondent found it difficult to separate trends in information needs from internal organisational trends. There has been a steep decline in enquiries, particularly related to personnel management theories and approaches etc, but recent years have seen various areas of information service activity hived off and responsibility passed to other areas of the organisation. The information service continues to process some enquiries on this subject but internal organisational structure has brought a fall in enquiries. In this instance it is difficult to assess the impact of retail trends relating to employment and the work force [1.5], on information needs. However, the respondent was able to identify three key features of change. All changes relate to the type and quality of information sought. Firstly, the respondent stated: We have had to widen our scope in terms of company information and indeed sort of trends and developments type of information to wider parts of the world t'han probably we looked at five years ago.
This is very much indicative of increased competition within the industry as a whole and the need for closer, more detailed competitor analysis as well as a desire by retailers to keep
58 abreast of new developments [2.3.6] to help maintain market share. The trend towards looking further afield for information was also identified in the Management Horizons case study[4.3.2.1] as being particularly related to the mixed retail sector.
Secondly, the respondent identified information concerning technology, particularly automation, as the type of information for which the company has experienced the most rapid change in demand, stating: In terms of automation, if you look at the files that we used to maintain on retai I au toma t ion, whole areas have become obsolete, such is the rate of change. Although O'Brien and Harris state that Retailers still need to be convinced that such high technology is really in their best interests,(6) the respondent felt that information needs are very much influenced by the pace of. change and in order to maintain market share, retailers cannot afford to fall behind competitors in terms of technology.
Finally, the respondent acknowledged a change in the quality and abundance of information available stating: There's more customised specialised information around than there used to be, but at a price, market research widens that availability.
All of the mixed retailer questionnaire respondents indicated that they have experienced a significant change in information needs in the last five years. The changes in information needs described by the respondents indicated a demand for "more analytical information" than had been required before. One respondent described information service users as "informa tion hungry", wanting "accurate individual item level information on sales, stock, profitability etc". Another
59 respondent described an increase in demand for "EPoS"(Electronic Point of Sale) information, thus identifying new technology as a facilitator of changes in information needs.
5.2.3 IMPACT OF KEY TRENDS AND DEVELOPMENTS IN RETAILING, ON COMPANY INFORMATION NEEDS
In order to assess the impact of industry wide trends on information needs, three issues were selected from chapter one; retail internationalisation and the opening of the Single European Market [1.1]; green consumerism [1.4]; and the recent recession [1.3]. Firstly, the respondent was asked, based on enquiries received, if the opening of the Single European Market and the trend towards internationalisation has had an effect on the information needs of the company. A similar question was asked concerning the trend towards green consumerism. Finally, the respondent was asked to assess the impact of the recent recession on the information service.
5.2.3.1 RETAIL INTERNATIONALISATION AND THE OPENING OF THE SINGLE EUROPEAN MARKET
In relation to the opening of the Single European Market, although the respondent stated, "we're not as a company concerned outside the UK, except on the supplier front", he acknowledged that the Single European Market has had an impact on the food retailing division in particular, necessitating defensive positioning to protect against the discounter approach. We have a watching brief on companies that we probably wouldn't have been interested in before because they have announced tha t they are goi ng to open over here. The respondent mentioned by name both Aldi and Netto.
60 However, he did not feel that the department store division was under a similar kind of threat.
It is interesting to note that mixed retailer questionnaire respondents all stated that the opening of the Single European Market has had no effect at all on their information needs. One respondent stated, "none, we are a department store group trading only in England, Scotland and Wales". Another stated, "no real effect". Clearly, these mixed retai lers do not intend to venture into Europe and they do not anticipate any changes to the UK market because of the liberalising effect of the European market.
The trend towards internationalisation has affected the John Lewis Partnership in terms of trends and developments as opposed to expansion prospects. Key areas for observation are Europe and North America . . . . and particularly America because a lot of the less technical elemen ts such as customer loyalty schemes etc[2.3.3] originate and are developing there first before impacting here. The department store assortment can be up to 1/2 million items at anyone time and therefore supplier information can be required from almost anywhere in the world but buyers are relatively independent and tend to "go out there and see what they can find". The John Lewis Partnership belongs to an international buying group, reflecting a sector wide trend[2.3.3], negating the need to source products in-house. Clearly though, even for companies which do not intend to trade abroad, there is still much to gain from developments abroad in terms of access to new products and retail trends and this is reflected in information demand.
The mixed retailer questionnaire respondents did not feel that the trend towards internationalisation has had any effect on
61 demand for information at all.
5.2.3.2 GREEN CONSUMERISM
The trend towards green consumerism has had quite a dramatic effect on the information needs of the John Lewis Partnership and both the department store and supermarket divisions have quite strong concerns in that area. The environmental information sought concerns both the products and the operating practices of the company. Much of the demand is for "scientific background information to substantiate product claims". The respondent stated: Obviously, environmental claims on products are something we want to look at because we have a very strong own brand business, so we're looking a) at what competitor brands are doing and b) at how our own brands compete.
The respondent emphasised a particular company interest in waste management, packaging and recycling issues and also the importance of monitoring competitor environmental strategy, stating, "we're particularly interested in what other people are doing, both competitors and local authorities". Currently, demand for environmental information within the company has reached a peak but has not yet begun to decline. I think it's probably levelled off now, it's hard to tell, but there was a huge increase in demand and it's sort of continuing at that level.
All three mixed retailer questionnaire respondents claimed that green consumerism has had no effect on the information needs of their respective companies. One respondent stated "green information is not relevant to our business". This response can be accounted for by the type and nature of the information that the respondents are responsible for providing, which is data and statistics gathered in-house such as store performance and individual product information,
62 captured using EPoS systems. However, considering that two out of three respondents claim to belong to the central and only information service within the company, one does wonder how information relating to environmental claims on products is obtained. Perhaps companies with an own-brand product range, such as The John Lewis Partnership, need information to substantiate claims where as those companies which rely totally on manufacturer branded goods accept the claims offered by suppliers. Clearly, the information provided in the questionnaire response does not permit confirmation of this theory.
5.2.3.3 THE ECONOMIC SITUATION
The respondent felt that the information service did feel the effects of recession but to a similar extent to other central operations. We were obliged to undergo cost cutting operations during the recession, but it's part of a general push to reduce the costs of central offices as a whole ... it doesn '. t directly make money where as a store produces profit at the end of the day. According to a study by Yates-Mercer and Steward, ... seeing information as a productive resource means treating information departments as profit centres rather than as overhead expenditures. (7) Although, in this case, the information service was not cut first, it did have its budget cut and subscription to some external information providers, such as Management Horizons, were ceased.
All mixed retailer questionnaire respondents identified a change in information needs during the recession. One respondent stated that "greater emphasis was placed on information related to stock control, pricing and cash flow".
63 Another respondent stated: ... the only effect was to focus attention on information relating to the profit elements of our product mix, as any growth in sales volumes wasn't realistic.
This bears out what was stated earlier[ 2.3.4) and [2.3.5) about mixed retailers being hit hardest by recession because as a sector, they rely heavily on merchandise areas such as furniture and clothing.
5.2.4 INFORMATION SUPPLY
Four questions were asked concerning information supply. Firstly, the respondent was asked to identify what percentage of company information needs are satisfied in-house without the need to consult external information providers (online information is classified as in-house). Secondly, the respondent was asked to identify all external information providers used by the company and to identify why they are used. Thirdly, in order to identify the nature of information supply in-house, the respondent was asked to estimate the percentage of company information needs satisfied using electronic as opposed to printed sources of information. Finally, the respondent was asked to identify any gaps in the business information products available, in order to draw out sector specific problems relating to information access.
5.2.4.1 IN-HOUSE INFORMATION SUPPLY
Although the respondent had never quantified the percentage of company information requirements satisfied in-house, it was considered a useful figure to be aware of in the future. The respondent estimated that at least 75% of enquiries are answered in-house, without the need to consult outside organisations/bodies and that these enquiries are of a "core
64 business information nature". Again, the respondent found it difficult to pinpoint specific types of information gained from external organisations/bodies as opposed to being supplied in-house, stating: It depends on the enquiry, ... part of the problem with an organisation like this is that we are not just supporting department stores and supermarkets ... we have a lot of smaller, unusual business ventures such as a farm and textiles operations which will produce their own information needs for which we do not have the materials. Enquiries from these business interests quite often tend to be referred outside the organisation.
All of the mixed retailer questionnaire respondents stated that between 90% and 95% of company information needs are satisfied in-house without the need to consult external information provide~s. Clearly, the number of enquiries referred outside the organisation is dependent on the range of business operations, as iridica ted by the John Lewis Partnership, but these figures give a clear indication of information consciousness within the mixed retail sector and an ability to satisfy information needs within the company.
5.2.4.2 USE OF EXTERNAL INFORMATION PROVIDERS
The organisations/bodies used as external suppliers of information for the John Lewis partnership depends very much on the type of enquiry. The company has subscribed to Management Horizons information service at various times in the past, but financial reasons prevent its permanent use. When the company is subscribing to the information service, several other departments within the company use the service as well. When asked about the kind of information requested from Management Horizons, the respondent stated: Mostly it would relate to retail
65 enquiries of the trend variety, who is doing what and how.
The company does use the business information service at the Bri tish Library, Science Reference and Information Service (SRIS), but "subscription was not found to be cost effective and it is now used on a personal basis", although satisfying requests for information is not as time effective using this method.
Trade associations are used where relevant and so are specialist academic retailing organisations such as the Oxford Institute of Retail Management (specialising- in the provision of material on retailing and in the integration and development of commercial database systems on retail market conditions and store locations), Manchester Business School (publisher of reference material and reports relating to the retail industry) and the Institute for Retail Studies, University of Stirling (producer of various publications such as the International Journal of Retailing). Clearly, if any organisation is researching an area of interest to the company then it will be used as an information source, ... one of the universities has been doing a lot of work on public safety in shopping cen tres, which is an area of concern and therefore we have had a·lot of contact with them. Data Consultancy (a retail planning information service) is a further body consulted by the company and referred to as "a third party information source".
On a regular basis, the company uses a press association newswire service, for heavily demanded information concerning "competitors results of the day". Use of the Central Statistical Office fax services is increasing rapidly due to increased efficiency and speed within the service, to provide information such as "retail price index figures, retail sales
66 figures etc". A 1993 library resources survey (8), concerning business information libraries/units in the UK, discovered that only 25 out of 137 respondents made regular use of information services by fax, contradicting an earlier prediction in Business Information Review(9) that fax delivery in business information services presented a potentially enormous market to information providers. The survey states that: ... it could be that fax-based services, being very user-friendly, are more suited to information end-user markets.(10) Both of these services are used by the John Lewis Partnership "to get rapid and accurate data that day, ra ther than wai t to buy the Financial Times the following morning". Poynder, in his article concerning document delivery in business information( 11), confirms the importance of "speed of delivery" as a key issue for users of business information.
The mixed retailer questionnaire respondents use external information providers to satisfy between 5% and 10% of information needs. One respondent stated: We use fashion and colour consultants who provide information on future fashion trends. Another stated, "we use suppliers and personal contacts". It is clear that both the John Lewis Partnership and the companies responding to the questionnaire, aim to satisfy all enquiries of a "core business information" nature in-house and are using external information providers for speed of document delivery and for information outside mainstream company interests and specialisation.
5.2.4.3 NATURE OF INFORMATION SUPPLY IN-HOUSE
The respondent stated that approximately 15-20% of enquiries are answered using electronic sources in-house. Although a background file on a particular company may contain journal
67 articles as a product of the scanning process, ... very few enquiries are answered by only one source or the other, we nearly always use the two. When asked if particular types of information lend themselves to online use the respondent replied, Where it's a company that we've not previously collected information on, which again tends to be outside the mainstream retail area, such as textiles etc and for a large number of enquiries on retail suppliers, then it will be all online use. A 1992 library resources survey of business information libraries/units in the UK, discovered that over half of the 144 respondents felt that business information availability online and via CD-ROM has either largely or completely replaced traditional sources (12) . This is reflected in the data provided by mixed retailer questionnaire response where between 80% and 90% of information requests are satisfied using online sources. Once again, the nature and type of information that the questionnaire respondents provide should be considered, as they are systems based information services.
In terms of specific databases online, the John Lewis Partnership business information service uses FT Profile and through Profile, Textline, most often. However there is beginning to be an increase in use of Dialog, Datastar and some specialised databases on ESA-IRS, of a food and building nature, which cannot be obtained elsewhere. The explanation • given for the move towards Datastar and Dialog was, We are developing that side of things, partly because they have so many more databases that are of the abstract and reference lists type compared to Profile, for example, if we received a question about 'ethnic monitoring', Profile will not get you very far. The 1993 business information resources survey found that in industry as a whole, FT Profile is used most often, followed
68 by Dialog and then Da tas tar ( 1 3) , therefore business information service use of online sources at the John Lewis Partnership reflects general trends.
5.2.4.4 GAPS IN BUSINESS INFORMATION PRODUCTS
Both the John Lewis Partnership business information service and the mixed retailer questionnaire respondents stated that they could not identify any gaps in the business information products available.
5.2.5 ADDITIONAL COMMENTS
The respondent was given the opportunity to provide additional comments relating to information provision within the company and he spoke concerning the value of particular types of information to the company.
Clearly some kinds of information are more valuable than others in the sense that business decisions hang on them, but the respondent highlighted one particular type of information as crucial, Accurate information on competitors activities, particularly more recent than is in any published source ... we're ul timately dependent on that... almost invariably the information you want is after the last annual report.
According to the respondent, the importance of information provided is often not related to the type of information but rather to the person/department requesting the information,
In terms of individual enquiries, we will establish the basis of urgency and the basis of necessity with each individual client.
69 5.3 SUMMARY OF MIXED RETAILER SURVEY
INFORMATION PROVISION
Although the mixed retailers who participated in the study belong to the same sector, there are marked di fferences between them in the role and nature of information service provision. * 3 out of 4 companies have a central information service. In 1 company, several departments are responsible for information provision * 3 companies provide information services whose role is to provide in-house generated information on an administrative and operational level. 1 company provides an information service whose role extends beyond this to include provision of information gathered both in-house and externally, such as trends and developments in the industry and used to assist decision making at a corporate and strategic level * 3 companies have information services whose nature is very much systems based, processing in-house generated information. 1 company provides an information service whose nature is based on current awareness and enquiry services
CHANGING INFORMATION NEEDS
* All companies surveyed in the mixed retail sector have experienced significant changes in information needs in the last five years
HOW HAVE INFORMATION NEEDS CHANGED?
* Need to look to wider parts of the world for both company information and trends/developments information * Massive increase in demand for information relating to
70 technology, particularly automation * Demand for the more widely available specialised, customised information * Demand for more detailed competitor analysis * Demand for more analytical information * Demand for more systems based information, particularly EPoS generated information providing individual product/item level information
WHY HAVE INFORMATION NEEDS CHANGED?
* Increased competition has brought a need for more detailed competitor analysis * The pace of change and availabil i ty of new technology both to improve store operations and to process information * Increased availability of specialised market research reports * Recognition of the importance of information. (users are "information hungry")
IMPACT OF KEY TRENDS AND DEVELOPMENTS IN RETAILING, ON COMPANY INFORMATION NEEDS
RETAIL INTERNATIONALISATION AND THE OPENING OF THE SINGLE EUROPEAN MARKET
* Opening of the Single European Market has had no effect on mixed retailer information needs * The food retailing division at the John Lewis Partnership has been forced to operate defensi ve posi tioning to protect market share from the threat of continental retail groups
71 * Internationalisation has affected information needs in terms of availabili ty and access to trends and developments and particularly those originating in North America * International buying groups have taken over the role of sourcing products
GREEN CONSUMERISM
* Dramatic effect on John Lewis Partnership company information, needs in both department store and food retailing divisions * Information demanded concerns both the operating practices of the company and the products sold * Need to moni tor both competi tor and local authori t y environmental strategy * The steep rise in demand for environmental inEormation is now beginning to level oEE
THE ECONOMIC SITUATION
* Information service budgets have been cut, but to a similar extent as other central services * Increase in demand Eor inEormation relating to price, stock control and proEit elements
INFORMATION SUPPLY
* Companies aim to satisEy all enquiries of a core business inEormation nature in-house * A range of external information providers are used for speed oE document delivery and for information outside mainstream company interests and specialisation * No gaps in business information products were identified
72 * The most valuable information to the company is accurate and current information concerning competitor activities
73 REFERENCES
1. Jordan & Son. FAME. CD-ROM, 1994. 2. John Lewis Partnership PLC. Report and accounts, 1994, [1994], p. 5. 3. Ibid . . 4. Ibid., p. 6. 5. Rowley, J. E. Current awareness or competitive intelligence: a review of the options. Aslib Proceedings, 1992, 44(11/12), 367. 6. O'Brien, Larry and Frank Harris. Retailing: shopping, society, space, 1991, p. 152. 7. Yates-Mercer, Penelope A. and Yvonne Steward. The marketing of internal business information services. Journal of Information Science, 1991, 17, 222. 8. Business information resources 1993 survey. Business Information Review, 1993, 10(2), 2-13. 9. Ibid., 8 .. 10. Ibid. 1 1 . poynder, Richard. Document delivery in business information. Business Information Review, 1993, 9(4), 26. 12. Business information resources 1992 survey. Business Information Review, 1992, 9(1), 6. 13. Business information resources 1993 survey, ref. 8, 4.
74 CHAPTER SIX: CASE STUDY. BOOKSELLER. STATIONER AND NEWSAGENT. W H SMITH PLC. LIBRARY AND INFORMATION SERVICE
6.1 THE COMPANY
The core W H Smith retail business operates in three main areas; books, newspapers and magazines; video and recorded music; and stationery. W H Smith Retail has 449 branches, which comprise 400 high street shops, 7 airport shops, 37 station shops and 5 hospital shops(l). The company also has stores abroad in the United States, Amsterdam, Brussels and Paris, with further expansion in Europe under review. Further retail operations include; Our Price Video; Our Price Music; 50% ownership of Virgin Retail, which prov ides a one-stop shopping environment for music, video and games; Do It All, the DIY specialists; Waters tones , the leading specialist bookselling chain; and two distribution operations, W H Smith News and W H Smith office supplies. W H Smith has undergone rationalisation of some of its product ranges in recent years, but claims market leadership in books, greetings cards, stationery and magazines.
1993 saw W H Smith PLC achieve pre-tax profits of 5.3% to £113.8m(2) and turnover of E2,311.8m(3). The chairman attributes improved performance to: ... a modest revival in consumer spending and the actions ... taken to cut costs and increase sales.(4) The company has undertaken a major refurbishment programme initiated in 1986 and is continuing a £300m expansion programme announced in 1991, which includes plans for further expansion in the U.S. and continental Europe. The company is also pursuing an aggressive advertising drive which was launched in 1992 at E11m. However, the economic situation and increased competition is having a significant effect on the
75 company and the chairman highlights the need for even more emphasis on increasing sales, which means that product, price and availability are at the top of the agenda.(S)
6.2 CASE STUDY RESULTS
This case study is based on information supplied by the information Librarian at the central library and information service of W H Smi th PLC, who will be referred to as 'the respondent'. Questions were asked with the aim of achieving the following objectives: * To identify the role and nature of the information service * To ascertain if, why and how information needs are changing * To assess the impact of key trends and developments in retailing, on company information needs * To identify the nature of information supply * To examine the use of external information providers * To identify gaps in business information products Where appropriate, information gained from the bookseller, stationer and newsagent questionnaire respondent, is identified as such and incorporated into this chapter to help substantiate results and add further information where possible.
6.2.1 INFORMATION PROVISION
The respondent was asked to describe the role and nature of the library and information service.
The W H Smith library and information service was established in 1970, literally, with a copy of the Financial Times and a telephone. The concept of an information unit wi thin W H
76 Smith, came from a managing director within the company, who introduced corporate and strategic planning and recognised that information has a critical role to play in company success. The respondent described the role of the information service as: ... a management support uni t providing corporate, strategic and operational informa tion to support all W H Smith owned or controlled, business operations. The service provides information to support all W H Smith retail operations in the UK, Europe and the US, although the buying division of the company has its own librarian, with whom the central library and information service maintains close contact. The respondent stated that when the service was established in 1970, it was intended for use by senior management. The role of the service has now extended to offer a service to all company members, although senior management still use the service most frequently and have priority. The type of information provided by the service can be anything from trends and developments, both within the sector and the industry, to individual store performance.
In contrast to this, the 1 questionnaire received from this sector stated that the company does not have a central information service, rather there are ... various departments as necessary to the area of the business for which they are responsible.
The nature of the information service provided at W H Smith was described as both an enquiry service and a current awareness/selective dissemination of information (SDI) service. The culture of the information service very much reflects the information librarian's ethos of information provision. My ethos is to maintain a close relationship with clients ... to identify their needs and to provide them with
77 information quickly. Clients do not want to do a lot of information gathering for themselves ... so library activities, such as cataloguing, are given a low priority. In terms of current awareness provision, the information service circulates a daily press cuttings list, taken from both the national and trade press. The service subscribes to about 250 journals and these are scanned regularly. Also, SDI profiles are set up and run on all CD-ROM products to match senior management interests and profiles, and for competitor analysis as well. The respondent stated that the current awareness service aims to provide "targeted, accurate and timely information". In addi tion to SDI, the information service circulates bulletins to all managers concerning library holdings, informative journal articles etc. On the negative side, the respondent felt that many company members have stopped reading the trade press completely, because they rely on the information service to scan it for them.
6.2.2 CHANGING INFORMATION NEEDS
The respondent was asked if the information service had experienced a significant change in the information demanded from the users of the service in the last five years. When the respondent answered "yes", she was asked to explain how and why needs had changed.
The respondent identified two key features of .change. Firstly, the respondent acknowledged a massive increase in information demand relating to personnel issues and techniques stating: EC directives from Brussels have acted as a catalyst for this demand for information. As a British company operating in Europe, it is expected that personnel and social legislation should be an important information need. A report by OXIRM(6), described how labour
78 social legislation in most continental countries is now stronger and more operationally limiting, than in the UK and higher standards of service require substantial investment in staff training and management. The respondent identi fied issues relating to ethnic groups, the disabled, training and employment legislation as being of increasing importance to the company. This reflects an industry wide trend, described in chapter one [1 .5) and also a sector trend described in chapter two[2.2.3) towards placing greater emphasis on staff training to improve customer service.
The respondent identified multi-media information as the second key feature of change stating: Within the information service we've always taken an interest in this issue ... but now there is a company wide interest. If we were food retailers, it probably wouldn't be quite so necessary ... but in our sector, it's necessary to be right at the forefront. Again, although there is an industry wide trend towards adopting new technology and becoming automated, the bookseller, stationer and newsagent sector, in particular[2.2.3) is moving rapidly in terms of technological development.
The questionnaire respondent for this sector stated that company information needs have changed significantly in the last five years, particularly in terms of demand for "more detailed information relating to sales breakdown". This area of change was also identified by the mixed retail sector survey [5.2.2). One of the biggest problems facing retailers is having the right amount of stock available for consumers to
purchase. Too much stock will restrict capi~al flow, increase the need for storage space and increase the likelihood that products will perish or become obsolete. Too little stock .will leave shelves empty. EPoS systems enable retailers to
79 monitor stock flow by gathering information at the point of sale. According to Moore and Steele, In the retailing sector, information about stocks and sales is being used to improve the overall stock control system by reducing the amount of stock which each shop needs to hold.(7)
6.2.3 IMPACT OF KEY TRENDS AND DEVELOPMENTS IN RETAILING, ON COMPANY INFORMATION NEEDS
In order to assess the impact of industry wide trends on information needs, three issues were selected from chapter one; retail internationalisation and the opening of the Single European Market [1.1]; green consumerism [1.4]; and the recent recession [1.3]. Firstly, the respondent was asked, based on enquiries received, if the opening of the Single European Market and the trend towards internationalisation has had an effect on the information needs of the company. A similar question was asked concerning the trend towards green consumerism. Finally, the respondent was asked to assess the impact of the recent recession on the information service.
6.2.3.1 RETAIL INTERNATIONALISATION AND THE OPENING OF THE SINGLE EUROPEAN MARKET
The respondent stated that the opening of the Single European Market has affected the information needs of the company. She spoke concerning the W H Smith retail outlets in Brussels, Paris and Amsterdam stating: We started to address the issue of Europe qui te early on and now wi th barriers coming down we're looking for opportunities and of course, threats as well.
She stated that it was food retailers who were particularly threatened by the liberalising effect of the Single European
80 Market. In the food trade in particular, there's a lot of European retailers coming into the UK and not the other way really. I think it's because they're more used to crossing borders than we are. Also, the margins are a lot higher over here and wage costs are far lower than in both France and Germany. Concerning Eastern Europe, the respondent stated that the company had anticipated expanding into this region and a considerable amount of market information was demanded recently, however ... we didn't actually anticipate barriers coming down so quickly and the opportunity was lost ... it will probably be some time before we look at it in great depth again. The respondent felt that Eastern Europe was a better market for food and clothing retailers than for the bookseller, stationer and newsagent sector.
Concerning the trend towards retail internationalisation, the respondent stated that there had been a marked rise in demand for information relating to retail trends in North America, a similar experience to the John Lewis Partnership [5.2.3.1). We've always looked at the states, because we're in a consumer market and ideas seem to originate in North America, particularly the states. It used to take 9 months for ideas/innovations to reach the UK, now concepts are coming here within 3-4 months. The respondent stated that there was a particular company interest in innovations relating to "customer service[2.2.3), home shopping and other consumer issues". Japan was also identified as an area in which there has been increased demand for information. The respondent stated: The Japanese market is quite important for our sector because they are very much
81 into leisure acti vi ties, leisure games etc. China is also an emerging market in this area.
6.2.3.2 GREEN CONSUMERISM
The trend towards green consumerism has had quite a dramatic effect on the information needs of W H Smith. The environmental information sought concerns both the products and the operating practices of the company. Much of the demand concerns "product claims". The respondent stated: We started to look at environmental issues quite early on, because a lot of our core areas are paper or wood based. Do It All sells wood products from endangered species such as mahogany ... so the information service has a key role to play in producing consumer guidelines. The respondent felt that after a sharp rise in demand for environmental information, demand has begun to level off, partly because of the recession, but also because environmental policies are now very much established. However, the information service continues to provide advice for company members attending conferences and for training courses.
The monitoring of competitor environmental strategy has been a particularly important feature of the trend towards green consumerism. The information service produces a monthly competitor activity report which is sent to senior management and incorporates an environmental section.
6.2.3.3 THE ECONOMIC SITUATION
The respondent stated that the recession had hit the sector quite late [2.2.4], ... because even when finances are quite restricted, consumers can still afford to
82 purchase a newspaper or a greetings card. The respondent felt very strongly, that even during the recessionary period, the company recognised the value of information. Staffing levels within the information service remained stable and although budgets were cut, it reflected a general trend to cut costs within central operations. However, the respondent stated: If you want your service to survive, it is necessary to keep a high profile and to market yourself, quite heavily, to the rest of the company. There is a need to be aware of areas of threat and to have a strong case ready to defend resource allocation and budgets. This is reflected in the type of staff I employ, confident, with good communication skills. This move towards marketing information services internally, reflects a trend highlighted in a survey by Yates-Mercer and Steward in 1991, of information departments in company libraries(8). The survey showed a marked change towards recognition of the value of internal marketing of information services and revealed the benefits to information departments of increases in budget, staff and service performance.
The 1 questionnaire received from this sector stated that during the recessionary period, "information concerning sales analysis became more important".
6.2.4 INFORMATION SUPPLY
Four questions were asked concerning information supply. Firstly, the respondent was asked to identify what percentage of company information needs are satisfied in-house without the need to consult external information providers (online information is classified as in-house). Secondly, the respondent was asked to identify all external information providers used by the company and to identify why they are
83 used. Thirdly, in order to identify the nature of information supply in-house, the respondent was asked to estimate the percentage of company information needs satisfied using electronic as opposed to printed sources of information. Finally, the respondent was asked to identify any gaps in the business information products available, in order to draw out sector specific problems relating to information access.
6.2.4.1 IN-HOUSE INFORMATION SUPPLY
The respondent stated that at least 70% of enquiries are answered in-house, without the need to consult outside organisations/bodies and that these enquiries are of a "core business information nature". This figure would have been substantially less eight years ago, before subscribing to online information services. According to Simon and Abell, Undoubtedly, information technology has had a major impact on information provision within organisations. (9) This is very much the case at the central information service at W H Smith, where new technology has reduced the company's reliance on external information providers.
6.2.4.2 USE OF EXTERNAL INFORMATION PROVIDERS
W H Smith uses a range of external information providers to complement the provision of information by the central library and information service. The respondent stated that westminster business information service is used regularly. This is the only company involved in this study who uses a public library and information service. A study by Kennington and Edmonds, into the use made of public business libraries(10), found that in one case study, 43% of enquiries could not be answered due to lack of resources and that 36% of these enquiries were referred to other organisations. This is
84 a clear indication of why companies are not using their services.
Managem~nt Horizons is used most often as an external information provider to W H Smith. The company subscribes to the complete 'Retail Intelligence' package. The respondent stated that she found their service particularly useful because of the access gained to Management Horizon's offices throughout Europe. When asked to provide an example of the type of information sought from the European offices, the respondent stated: I have used them, for example, for a very detailed analysis of the sounds market in Germany. When staff are not fluent in a particular European language, it is not possible to search that country's da tabases. In this ins tance, the European offices of the Management Horizons information service were contacted.
Fleming's statement that European information has never been more important as we sweep on to the completed competitive Single European Market, (11) is illustrated by W H Smith's use of this information to assess potential market opportunities in Europe.
Trade associations are also used, where appropriate and so are academic retailing organisations who are undertaking research into an area of interest to the company. W H Smith also utilises the services provided by the London Business School and the Financial Times Business Information Service. However, increased reliance on online information sources has reduced company use of these information providers.
6.2.4.3 NATURE OF INFORMATION SUPPLY IN-HOUSE
The respondent stated that approximately 50% of enquiries are
85 answered using electronic sources in-house. According to an article by Nichols concerning informa tion sources for the retail industry (12), very few online databases cover the retail industry in any significant detail and most retail specific databases are concentrating on property-specific data, such as store location analysis and shopping centre development. However, more products are emerging on the market and large companies are beginning to subscribe to them. Indeed, W H Smith library and information service has begun to use Euro-Retailnet, .which was launched in Spring 1992 and includes information such as company profiles and country and sector market analysis. The informa tion service also uses Dialog and Datastar very heavily. We use Da tas tar for very spec i fic European information. Dialog is very good for US data. The information service also makes use of the internet and expects usage to rise in the future, as staff become more familiar with its services.
6.2.4.4 GAPS IN BUSINESS INFORMATION PRODUCTS
The respondent identified a substantial gap in the provision of information online, for the bookseller, stationer and newsagent sector. The information contained within the databases provided by both Dialog and Datastar is severely limited concerning the stationery, greeting card and particularly, the book market. The respondent stated: ... the 'bookseller' isn't on any databases so if you want to find out wha t' s happening in the book trade in Britain, you can't do it online ... all you can find are company profiles. As a direct result of these gaps in information products, the information service is forced to use printed sources for information relating to the core areas of its business.
86 6.2.5 ADDITIONAL COMMENTS
The respondent was given the opportunity to provide additional comments relating to information provision within the company and she spoke concerning the value of particular types of information to the company.
The respondent drew attention to the importance of information relating to store location. The company is willing to pay heavily for accurate information of this nature. However, the respondent stated that the information which the company values most highly is ... very very intelligent research. Everybody is providing research, particularly relating to new markets now that community barriers are coming down, but very little of it tells uS anything new or of value.
6.3 SUMMARY OF BOOKSELLER, STATIONER AND NEWSAGENT SURVEY
INFORMATION PROVISION
Two companies participated in the bookseller, stationer and newsagent survey.
* W H Smith PLC has one central library and information service, whose role is to support management activities through the provision of in-house and externally sourced, corporate, strategic and operational information. The nature of the service is based on current awareness and enquiry services * In the questionnaire respondent's company, 'several departments are responsible for information provision
87 CHANGING INFORMATION NEEDS
* Both companies in this sector have experienced significant changes in information needs in the last five years
HOW HAVE INFORMATION NEEDS CHANGED?
* Increased demand for information relating to personnel issues and labour social legislation. Speci fically, ethnic groups, the disabled, training and employment legislation * Increased demand for multi-media related information * Demand for more detailed information concerning sales analysis
WHY HAVE INFORMATION NEEDS CHANGED?
* Company activities in continental Europe * Need for awareness of EC legislation * Need to remain at the forefront of technological applications and developments * Need for greater stocks and sales control
IMPACT OF KEY TRENDS AND DEVELOPMENTS IN RETAILING, ON COMPANY INFORMATION NEEDS
RETAIL INTERNATIONALISATION AND THE OPENING OF THE SINGLE EUROPEAN MARKET
* Opening of the Single European Market has affected W H Smith's information needs * Opportunities for expansion in Europe * Need to monitor European competitors who have the
88 potential for entering the UK market * Single European Market has had most impact on food retailers who are under threat from European competitors entering the UK market * Eastern Europe holds more opportuni ties for food and clothing retailers than for the bookseller, stationer and newsagent sector * Internationalisation has affected information needs in terms of availability and access to consumer trends and developments, particularly those originating in North America
GREEN CONSUMERISM
* Dramatic effect on W H Smith company information needs * Information demanded concerns both the products and the operating practices of the company * Sharp rise in demand for environmental information is now beginning to level off * Need to closely moni tor competi tor environmental strategy
THE ECONOMIC SITUATION
* W H Smith placed a high value on information during the recessionary period * Information budgets were cut, but to a similar extent to other central services * Need for information service to maintain a high profile within the company, through internal marketing * Increase in demand for information concerning sales analysis
89 INFORMATION SUPPLY
* W H Smith library and information service aims to satisfy all enquiries of a core business information nature in house * A range of external information providers are used for information outside the library and information service's specialisation * Subscription to online information sources has reduced company use of external information providers * Substantial gaps in information products available online, particularly concerning the book trade. Need to use printed sources for these core areas of business * W H Smith places a high value on information culminating from intelligent research
90 REFERENCES
1. Mintel. Retail intelligence: specialist book and stationery retailers. vol. 6, 1993, p. 6. 2. W H Smith PLC. Annual report. 1993. [1993], p. 4. 3 . Jordan & Son. FAME. CD-ROM, 1994. 4. W H Smith PLC, ref. 2, p. 4. 5. Ibid. 6. Oxford Institute of Retail Management. Responding to 1992: key factors for retailers. 1989, pp. 47-48. 7. Moore, Nick and Jane Steele. Information-intensive Britain: an analysis of the policy issues, 1991, p. 107. 8. Yates-Mercer, Penelope A. and Yvonne F. Steward. The marketing of internal business information services. Journal of Information Science, 1991, 17, 221. 9. Simon, Elizabeth and Angela Abell. Information for business and industry. In: Mackenzie, Graham, Ray Prytherch and Maurice Line, eds. Librarianship and information work worldwide 1991: an annual survey, 1991, p. 50. 10. Kennington, Don and Diana Edmonds. Monitoring the use of public business libraries. Business Information Review, 1991, 7(3), 29. 11. Fleming, Edwin. Information Europe: government, business, the consumer. Refer. 1991, 7 (3), 1. 12. Nichols, Lesley. Information sources for the retail industry. Aslib Information, 1991, 19(4), 135.
91 CONCLUSION
This study aimed to examine whether the information needs and supply of large retailing organisations, differ across three sectors of the industry. 9 companies participated in the study; 4 from the mixed retail sector; 2 from the bookseller, stationer and newsagent sector; 2 from the food retail sector; and 1 company providing a retail information service. The 9 companies who contributed to the research, do not provide a representative sample of companies from each sector and therefore the trends obtained are not conclusive. However, the research has highlighted some of the key issues a'ffecting the information needs and supply of large retailing organisations and general trends can be drawn from the study.
The study has addressed three key areas; information provision; information needs; and information supply.
INFORMATION PROVISION
This study has revealed the heterogeneous nature of information provision within large UK retailing organisations, even when divided into sectors. Each sector survey identified at least one company with a central information service and one company where several departments are responsible for information provision. Similarly, companies within the same sector differ in both the role and nature of their information services. 3 companies operate information services whose nature is based on enquiry and current awareness services and whose role includes the provision of information gathered both in-house and externally, such as trends and developments in the industry and used to assist decision making at a corporate and strategic level, 5 companies operate information services whose nature is very much systems based and whose role is to process in-house generated information concerning sales etc.
92 INFORMATION NEEDS
This study has shown that all three sectors of the retail industry have experienced significant changes in their information needs in the last five years. This reflects the major structural, organisational and technological changes which have been, and are still, taking place within the industry.
The survey suggests that company information needs are influenced by sector-specific retail trends and issues. For example, food retailers have experienced a marked increase in demand for information" concerning European trends, markets and competitors, at a time when the food retail sector is under threat from European retail groups. Similarly, the booksellers, stationers and newsagents have experienced increased demand for multi-media related information, an area of critical importance to this sector.
The survey also suggests that information needs are influenced by industry wide retail trends and issues. For example, the information needs of all sectors have been affected by the pace of change, illustrated in demand for information relating to technology, particularly automation and EPoS systems.
The survey has further illustrated that information needs are also company-specific, reflecting indi vidual company activities. For example, companies operating in Europe have experienced increased demand for information relating to European legislation.
93 The study has examined the impact of three trends and developments in the retail industry, on company information needs; retail internationalisation and the opening of the Single European Market; green consumerism; and the recent recession.
The trend towards retail internationalisation has had a similar impact on information needs in all sec tors, not through expansion abroad, but rather through the globalisation of retailing techniques. All sectors have experienced an increased demand for information concerning trends and developments originating in North America, particularly those trends relating to customer services and customer loyal ty schemes. Only the mixed retai 1 sector indicated a move towards cross-border alliances in the form of buying groups, reflecting a sector-specific trend.
The opening of the Single European Market has had most impact on the information needs of food retailers. The liberalising effect has accelerated retail internationalisation, but for food retailers entering the UK and not vice versa, necessitating defensive posi tioning by UK food retailers to protect market share. The effect on the bookseller, stationer and newsagent sector has been to provide opportunities for expansion in Europe.
The study has revealed that the trend towards green consumerism has had a dramatic impact on company information needs, in all sectors. Information demanded, not only concerns environmental claims on products, but also the operating practices of the company. The study has further revealed the importance to companies of moni toring competi tor environmental strategy, a cri tical success factor identified by Harris in chapter one [ 1 .4) . Following a sharp increase in demand for environmental
94 information, all sectors have confirmed that demand has begun to level off due, in part, to the recent recession.
During the recessionary period, all sectors experienced cuts to information service budgets, bu t to a similar extent as other central company services. Also, the survey has shown that companies placed a high value on information at this time, coupled with an increased awareness of accountability. Also during the recessionary period, greater emphasis was placed on in-house business information provision, illustrated by a decline in the use of external information providers.
The information demanded by companies differed during the recession and reflected sector specific trends. The mixed retail sector, hit hardest by recession, experienced increased demand for information relating to stock control, pricing and cash flow. The food retail sector, involved in price wars and under threat from discounters, experienced increased demand for information concerning competitor activities and price. Finally, the bookseller, stationer and newsagent sector, hi t late by recess ionary forces, experienced a demand for more in-depth monitoring of sales.
INFORMATION SUPPLY
Limited information concerning information supply in the food retail sector, prevents sector comparison concerning this issue. However, several trends have emerged from the survey.
Retail information services aim to satisfy all enquiries of a core business information nature in-house. All sectors use a range of external information providers for speed of document delivery and for information outside mainstream information service interests and specialisation. Subscription to online information sources has increased
95 the proportion of information requests satisfied in-house using electronic sources and reduced company use of external information providers.
The survey has further revealed that only companies operating as booksellers, stationers and newsagents, have sector specific problems relating to information access. This is illustrated in the substantial gaps in online information relating to the stationery, greeting card and book markets, forcing alternative sources to be utilized.
Finally, the survey has highlighted the willingness of companies to pay heavily for accurate and current information culminating from intelligent research, particularly concerning competitor activities.
96 BIBLIOGRAPHY
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101 APPENDIX ONE: GLOSSARY GLOSSARY
BUYER: The person responsible for buying from a producer or wholesaler the goods a retailer sells.
BUYING GROUP: An alliance . formed by several retail groups, who agree to co-operate in sourcing and purchasing products. For example, Safeway (food retailer) has jointly set up a European buying group, Associated Marketing Services, with food retailers from eight other European countries.
DEFENSIVE A strategy developed to defend the companies POSITIONING: posi tion in the market place and maintain market share. For example, close monitoring of competitor expansion programmes and formation of a response.
FRANCHISING: When an existing company authorizes an individual or group to sell its goods and services in a particular way. The franchisee buys licensed rights to clone the whole business package from the franchiser in a specific territory for a specific period of time, usually based on a capital sum, the franchise fee and royalties. In exchange, the franchiser is obliged to provide an established name, reputation, product/service know-how and management/marketing back-up to help ensure the new outlet's success.
MANUFACTURER Products bearing the manufacturer's label. For BRANDED GOODS: example, Heinz beans, Coca Cola, Kellogg' s Cornflakes etc. OWN BRAND: Products made for (and sometimes by) retailers for sale exclusively in their own shops and bearing the retailer's label. These products are normally made by other manufacturers to the retailer's pro·duct specifications, and are often specially developed. 'Generic' products also known as 'no name' brands, are usually cheap and basic own brands in packages which describe the product simply as 'rice', 'washing powder' or 'raisins'.
SUPERMARKET: The Institute of Grocery Distribution's definition refers to a mainly self-service foods tore with a sales area of 4,000 ft2 or more. Popularly used to refer to any self service food shop, and particularly one which combines under one roof different departments such as greengrocer, butcher and grocer. Normally also includes a limited range of non-foods and particularly washing powders, toilet rolls and soaps. Supermarkets originated in the United States in the 1920's and 30's. The term 'superstore' is sometimes used to refer to stores of 25,000 ft2 or over. 'Hypermarkets' are stores with over 50,000 ft2 and normally stock a wide range of non foods, hardware and textiles in addition to a full range of foodstuffs.
SUPPLIERS: The manufacturers from which manufacturer branded goods and own-brand goods are purchased by the retailer. APPENDIX TWO: QUESTIONNAIRE BUSINESS RESEARCH QUESTIONNAIRE A. INFORMATION PROVISION
1. Does the company have a central information uni t/ service?
YES NO
IF YES, what is the role of the information service in terms of information provision?
IF NO, who is responsible for information provision within the company?
2. Which particular types of information is your information unit/service responsible for providing? (e.g. store location, product information, economic data etc.)
B. INFORMATION NEEDS
3. Have the information needs of the company changed significantly in the last 5 years? YES __ NO
IF YES, For which particular types of information has there been an increase in demand? For which particular types of information has there been a fall in demand?
4. What effect has the opening of the Single European Market had on the information needs of the company?
5. For which particular non-European countries has there been an increase in demand for information in the last 5 years?
How do you account for the increase in demand?
6. How has the trend towards 'green consumerism' affected the information needs of the company?
Is demand for environmental information continuing to rise or has it begun to level off? 7. Did the recent recession have an effect on the information needs of the company? (If yes, please give brief details)
8. For which particular types of information concerning competitors, has there been an increase in demand in the last 5 years? (e.g. environmental strategy)
9. Do you anticipate increased demand for particular types of information in the near future? (e.g. health and safety, training etc)
c. INFORMATION SUPPLY 10. Which external information providers do you use for information/ employ to do research and what do you use them for?
11. Approximately what percentage of information supplied by your information unit/service is satisfied 'in house' , without the need to consult external information providers. (online is classed as 'in house' )
= 12. Approximately what percentage of information supplied by your information unit/service is satisfied using electronic as opposed to printed sources of information?
13. Does your information unit/service provide a current awareness service to the company on a regular basis? (If yes, of what nature?)
14. Has your information unit/service experienced any gaps in the information available online? (If yes, please give details)
15. Are there any further comments that you would like to make?
THANK YOU FOR YOUR TIME AND ASSISTANCE
Please return questionnaire in the envelope provided by Friday 12th August I', · I . I : I I .