Gordons Retail Insights: Differentiate to succeed, says expert panel
In the first of two articles, we provide TheBusinessDesk.com readers with exclusive insights from Yorkshire law firm Gordons’ recent event exploring ‘The Future of Value Retail’.
Revealing the findings of independent research commissioned by the firm, the event was hosted by Gordons’ retail partner, Andy Brian and featured a panel of experts comprising Nick Glynne, managing director of Buy It Direct;Ian Schofield, head of the own label team at Iceland; and Jonathan Sands, chairman of global brand design consultancy Elmwood.
To download a free copy of ‘The Future of Value Retail’ research report click here .
Value retail is here to stay according to almost two thirds (65 per cent) of the senior retail industry executives interviewed on behalf of Gordons, contrary to views expressed by Sainsbury’s chief executive, Mike Coupe. So how can retailers succeed in this intensely competitive environment?
Elmwood’s Jonathan Sands responded by saying it was important to appreciate that value retail has been around for years and that without value, premium would not exist. Nevertheless, he believes that value retail will have to continually evolve in order to survive. “Price to a retailer is like a putter to a golfer,” Jonathan said. “Price is the most important club in your bag, but you cannot win a game of golf using a putter alone.”
Talking shop: Gordons’ retail event revealed sector insights based on in-depth research commissioned by the firm
Iceland’s Ian Schofield believes the answer to succeeding in such a competitive environment is clear; retailers must differentiate in order to ensure long term survival. “Food retailers always used to promote themselves out of a problem, with tactics such as buy one, get one free,” he said. “But that doesn’t work anymore. At Iceland, we understand that we must be different to drive success.”
Ian illustrated his point by referring to the company’s hugely successful Power of Frozen marketing campaign and how Iceland had radically expanded its range of products.
“We’re selling lobsters, scallops, Dover sole, sushi, kale and asparagus,” said Ian. “We will keep driving our business and looking for the next food and retail trends – that is Iceland’s point of difference.”
Buy It Direct’s Nick Glynne agreed that the same applies in his business of selling electrical products online. “Amazon is now the ultimate discount retailer, particularly for electrical products,” said Nick. “One way to compete is on delivery and how well you handle returns. Another way to differentiate is to provide added value services around products.”
Citing the example of Buy It Direct’s diversification into selling drones, Nick commented: “If you look at drones on eBay and Amazon, they are so commoditised that the price has been trashed out of them, so we looked at how we could add more value and margin.
“There were a number of things we did to differentiate ourselves from a pure online retailer’s way of selling. We opened a drone zone in our showroom where you could come and get a flying lesson and we provided an extra free warranty on the product. There are always ways to fight back and not be dragged down into a price battle.”
Supporting this view, Elmwood’s Jonathan Sands said only one retailer can be the cheapest, the rest have to do something else.
“Retailers, particularly in the US, are beginning to understand that shops are showrooms,” he said. “There is a need to create brand experiences, not just provide products at a price. There are only so many shops starting with the word ‘pound’ that the market will tolerate. Value retailers can develop personalities and experiences that are true to their brands and customers. This evolution through differentiation is essential for all retailers, both online and in the real world.”
To download a free copy of ‘The Future of Value Retail’ research report click here .
In next week’s article, the panel discuss their thoughts on the importance for retailers of creating brand experiences.
