This column first appeared in Retail Week.
Is it the customer’s fault? No, it’s not. People have been telling retailers for years that the internet is going to affect their businesses. I can’t understand why it’s come as a shock to them.
The internet boom started more than 20 years ago. For years people had talked about ecommerce, or internet shopping, but nothing happened.
Smug people said to me then: “I told you so.” Then, perhaps many years later than expected, companies such as Amazon really made an impact and the ecommerce boom started.
“Retailers relaxed because at the time it still didn’t seem to cause them a big issue”
And then people said ecommerce would have a significant effect on the high street, but nothing happened, and the same smug people said: “I told you so.”
Now it’s killing the high street. It just took a bit longer for things to change and in that time, retailers started to relax. That’s the problem – retailers relaxed because at the time it still didn’t seem to cause them a big issue.
We are now awash with disruptors who typically adopt new business models that are different from the incumbents, models designed to appeal to customer needs. Simple really, the formula for success has always been the same.
The disruption theory is that alternative companies grow market share by starting from the edges of a market, then they work their way up and into higher-value sectors.
Then, at a certain point, the established company collapses, and the challenger becomes the new incumbent. Simple.
The truth is that the new generation has caused retail to go over the tipping point. Older people like me use the internet in a different way to younger people who have grown up with it.
The thing that changed everything was the smartphone. Wherever you go, people have a smartphone in their hand. People are addicted to it. Go on a train or bus, and people are looking down at their phones, even when they are walking down the road.
We’re in a panic when we can’t feel our smartphone in our pocket or bag. This tells me everything. Companies that are doing well are the companies that know how to exploit smartphones.
“The new generation not only live on their smartphones, but they also don’t think twice about returning something if it’s not right”
Another thing that changed is the new generation not only live on their smartphones, but they also don’t think twice about returning something if it’s not right.
Older people don’t like to send stuff back, but younger people don’t have a problem doing that. I’ve got three teenage daughters, and there is a constant stream of parcels delivered to the house and also things being returned.
Finally, Marks & Spencer in my home town is one of the stores due to close. Since the announcement, my mother has been reminiscing about the old days and wants to visit the store before it closes. The problem is that she never shopped there before the announcement of the store closures. Does that sound familiar?
The smartphone generation never bought there, so they’re not going to reminiscence about Mark & Spencer closing down – they spent their money using phones while they were on the bus or on the train.
So, the big question is, for the people who work at these big retailers’ head offices, are they still using flip phones? Have they been walking around blind?
One of the first big Internet companies was my company, Freeserve, it launched 20 years in 1998, and then the Internet boom started. For years people talked about e-commerce (now called internet shopping,) but nothing happened. Smug people said to me, "I told you so," many years later than expected, companies like Amazon finally came onto the scene and then the e-commerce boom really started.
Then people said e-commerce would have a significant effect on the high street, but nothing happened, and the same smug people said, "I told you so." So, has the tipping point finally arrived? Yes, it just took a bit longer for things to change and in that time, people started to relax.
We are now awash with disruptors who typically adopt new business models profoundly different from the incumbents, ones designed to appeal to the customer needs, simple.
The disruption theory is that alternatives suppliers grow market share by starting from the edges of a market, then they work their way up and into higher-value sectors. Then at a certain point, the established supplier collapses, and the challenger becomes the new incumbent, simple.
Retail Week is busy with stories of doom and gloom in the high street. We’ve been talking about e-commerce for years, so this shouldn’t come as a surprise to anyone. The truth is the next generation have caused retail to go over the tipping point. Older people like me use the Internet in a different way to younger people who have grown up with the Internet.
The thing that changed everything was the smartphone. Wherever I go, people have a smartphone in their hand. People are addicted to it, go on a train or bus, and people are looking down at their phones, even when they are walking down the road. Companies that are doing well are the companies that know how to exploit this technology.
The other thing that changed is the next generation not only live on their smartphones, but they also don't think twice about returning something if it's not right. Older people don’t like to send stuff back, younger people don’t have a problem sending stuff back.
I've got three teenage daughters, and there is a constant stream of parcels delivered to the house. I still prefer to go to town to spend my money, but my daughters are happy to use technology.
When the Internet first arrived, people used it just to surf the Internet, they didn’t use it to buy anything, now I am in a panic when I can’t feel my smartphone in my pocket, this tells me everything.
The tipping point has arrived and the companies that are doing well are the ones that know how to exploit technology, every time I pay for my pasty at Greggs using Apple Pay, I have a smile on my face, it’s absolutely fantastic.
As you are reading this, you’ve probably got in a smartphone in your pocket so don’t be the ones that said, “I told you so.”
#CuttheCr*p Lessons Part 2
By Chief Provocateur @Ajaz_Ahmed
A while back I wrote about my ‘Cut the Cr*p’ talks, the response was amazing, so here’s part two.
#GarlicBread Peter Kaye’s famous Garlic Bread sketch - “I’ve seen the future, I’ve tasted it, we’re all going to be eating 'Garlic Bread.' Am I hearing you right? Garlic bread? Bread with garlic on it? No, I don’t think so. No thank you.” While this is funny, this is the problem with people in business. When you come up with a good idea, the first thing your boss will say is “No” without even thinking about it, it’s happened to me many times. Don’t fall into ‘Garlic Bread syndrome.’
#ConfirmationBias Most people have a built-in bias and look for ways of confirming that bias. They look for ways of proving they're right and you're wrong, especially if you are low status ‘Colleague’.
#NoOneCaresAboutYou You can learn this the hard way, in business, no one gives a damn about you. For example, people are nice to you when they want something, but nobody will knock on the door to say, “We think you’ve done a great job, you deserve this bonus.” Life doesn’t work that way, get used to it.
#DontWalkAroundBlind We’re bombarded with stimulus from the minute we wake, to the minute we go to sleep. The Internet, TV ad’s, newspaper ad’s, billboards, shops, etc. We’re exposed to so much inspiration, so why do I see so many cr*p in business. People must be walking around blind, can’t they see how cr*p they are compared other successful businesses? Open your eyes and get inspired.
#NickIdeas I knick ideas all the time, I’ll see a colour here, a font there, navigation on a website, a way to describe something. My boring firm does well because I’ve applied retail principles to it, lessons I've learnt from lots of companies. Walk around with your eyes open, borrow ideas and use them in your business.
#DontListenToCustomers Becoming the customer, use empathy, I don't do market research or customer surveys. I’m not the only one, great businesses use empathy.
#ArseCovering Market research is for insecure middle managers who want to cover their arse in case something goes wrong. Learn to take risks and go with your gut.
#CustomersDontSayGoodbye In case you hadn’t noticed, customers don’t say goodbye, they just go. Don’t take your customers for granted, they might not be there tomorrow.
#GetToThePoint Learn to get to the point.
#DontIgnoreDisruptors Incumbents generally ignore disruptors, they think they are too small to affect them. The disruptor gets bigger and bigger, and then one day it’s too late. History has lots of examples of incumbents ignoring disruptors. Don’t ignore them because you might live to regret it.
#OutsideTheIndustry Disruptors generally come from outside your industry, and incumbents like to maintain the status quo and carry on doing the same thing today that they did yesterday.
#Goingout&Holiday At a certain point in life, people give up on their dreams and then they the only thing they look forward to is, going out on a Friday or Saturday night. They then spend six months talking about the holiday they're going on and the other six months talking about the holiday they went on. Don’t give up on your dreams.
#YourBiggestAsset For some reason people think that their house and car is their biggest asset, they spend time and money on them. Wake up, you're your biggest asset. Spend time and money on yourself and then buy a bigger house and car.
I hope you get the idea, encourage everyone in your company to #CutTheCr*p.
It's really simple.
This blog first published in Retail Week
Demand for your products will not fall. Instead, customers will start spending their money with newer retail firms, and ‘they won’t be phoning you to say goodbye.’
Most retailers have yet to board the new technology train. Customers buying patterns have started to change, and it is not a case of it might happen, it has already begun to happen. The critical question is, will your firm be on board the new train?
The problem is straightforward. Customers want to buy things that most firms won't be selling, and they want to buy it in a different way. New start-ups and new technology will sort out the problem, and in the future, that is where the money will go. As demand changes, old retailers will carry on selling the same old products in the same old way.
We can’t pretend that change isn’t going to happen, so we can’t carry on making well-crafted arguments for maintaining the status quo because no one person can delay the inevitable, it's going to happen whether we like it or not.
The choice is yours. Directors can carry on thinking about what wine to drink this weekend and where to go on holiday or reflect on the insolvency company they might have to appoint in the future. Don't forget that disruptors always come from outside an industry.
If you don’t change, you will not be able to respond to the future needs of customers. Rest assured that if you don't respond, the market is so large that someone else will take your customers.
The bigger question is when the disruptors arrive, and the incumbents ignore them, are you going to behave like the Luddites? If you are, then start reading your history books now and learn from the past.
A disruptor is a new, alternative source of supply that appeals to customers in ways that the existing supplier can’t. The disruptors appeal lies in its ability to provide unique value to the customer in a way or a manner that the incumbent providers have overlooked, ignored, or as often is the case, they believed to be impossible. A disruptor typically adopts new business models profoundly different from the incumbent, one designed for the customer needs.
The disruption theory is that alternative suppliers grow market share, starting from the edges of a market of its least complex and lowest-value needs, then they work their way up and into higher-value sectors.
Then at a certain point, the established supplier collapses, and the challenger becomes the new incumbent. There are many examples of this pattern from retail, Internet, mobile phones and many other industries.
You can’t afford to put off worrying about disruption for one moment longer, and it's not about the millions you are turning over today, it's about the rapid loss of turnover that you will experience once the disruptors arrive. Don't put it off any longer. Don’t carry on adjusting the window dressing when it’s the foundations that need some attention.
When I talk to retailers, they always start with a little laugh and then tell me why things can’t change and how it’s not in the customers best interest. Retailers it seems are glass half empty people.
In 2006 I told the MD of a large firm that they better get ready, Amazon is coming, the response was, “we’re not worried about Amazon, they don’t have a sustainable business model,” I’ve still got the email.
A retail MD’s favourite line is “Look, you just don’t understand,” yes, I do.
This blog was first published in Retail Week
Should the Government think about an ambitious plan to bring more BAME minorities, (BAME - Black, Asian, and Minority Ethnic, used to refer to members of non-white communities in the UK) into Britain's boardrooms.
The aim could be for one in five directors of FTSE 100 companies to be from a BAME background. Lord Davies' review into women in the boardroom, which began in 2011 and has had some success in increasing the numbers of women in senior business roles.
But is this a good thing? Do we need quotas?
My father's generation came to this country to work in the textile mills. Most were uneducated, but times have changed. We now don't think twice when we see a BAME doctor, surgeon, nurse, dentist, optician, pharmacist, lawyer or accountant. We read success stories of BAME business people and are sometimes surprised when we find out that the well-known brands we love are owned by BAME business people.
Someone recently came to see me at our office in Leeds, and it turned out he was Scottish, the first thing he said to me was "Did you know that your lift has a Scottish accent?" He was so pleased that he even tweeted about our lift having a Scottish accent. I would feel the same way if I met a BAME business person sitting on the board of a company, I would want to tweet about it to the world. That's the problem, we just don't have many BAME business people selected to sit on the boards of companies.
If we are to have more diversity on boards, to get our numbers up, quotas must be a good thing, right? No, I don't agree. Companies should not be forced to take people on just to meet a target, another box that's ticked. I wouldn't want to be selected just because a company needed to reach a target number.
Have we got a problem? Yes, we have. Boardrooms are just not representative of the world we now live in, and the customers their companies serve, they don't represent the people that spend money with them. Something needs to change, and we shouldn't be afraid to discuss it - it's a subject that will undoubtedly generate a lot of debates.
I looked at an online article about the Government's intention to change the rules, it attracted 294 comments. Some had to be removed because they broke the house rules, and many were racist in the way they talked about the subject.
Many people have strong views but only express them when they can hide behind made-up names on the comment bit on a website. I've also noticed that on some sites the most common name is 'Anonymous.' I didn't realise it was such a popular name.
So, if quotas are not the solution, what should we do? The CEOs of companies have got to be more aware of the world their companies live in. They need to recognise the mix of people that work for them. They can learn a lot from the public sector which is very good at employing people from all ethnic backgrounds.
Is change possible by itself? Can people change? Probably not.
One of the observations I've made in my time in business is that people are very good at making well-crafted arguments for why there shouldn't be any change. They are well-versed at explaining why you don't understand and why the status quo can't be changed. Most of the time I just listen and don't say anything, it's not worth the argument.
I honestly can't remember the last time I met a non-white person who sits on a board. That means there has to be a problem. We can't carry on with lots of Ethnic professionals in business, but very few sitting on the board.
That change must come from the businesses themselves because otherwise the Government will impose quotas, and that's wrong. It has the potential to breed resentment and bring only short-term tokenism rather than a long-term solution to this problem.
And if you're wondering, do I ever get asked to sit on the board of a private or listed company, no is the answer.