Retail Data – Failure to deliver
In the early 1990’s I had more Retail data on fresh milk than anyone else. It was clear that the doorstep retail business was in terminal decline, unless something changed. I spoke at conferences, supported by sales data, and yet no-one was prepared to believe that an industry that delivered daily to 70% of UK households could vanish.
Charles Hunt the then dairy buyer for Tesco was often on the same platform. Charles took a fair share of the blame for the decline as he was selling increasingly large volumes of milk, packaged in 4 pint plastic at 89 pence compared to milk in glass on the doorstep at 30 pence per pint. The Dairy Industry had a range of arguments as to why the decline would halt, but they misunderstood two things. They overvalued the ‘convenience’ to the consumer of a daily delivery to the doorstep and under estimated the change in consumer behaviour to shopping once a week for all their needs from the supermarket. The rest is history.
However there was another option. The industry had thousands of distribution depots with electric vehicles able to service 90% of UK Households with whatever goods they chose! In 1994, as a retail consultant, I tried to persuade several large dairies that such a Home Delivery Service was a great opportunity. Unfortunately there were no takers. And the rest is again history.
However, history repeats itself.
The FT reports that bricks and mortar retailers saw a 3.5% decline in shopper numbers, the worst monthly result since 2013.Furthermore footfall figures from Springboard show High Street footfall in December through non-food stores down 5.1%. The data shows a clear shift by consumers to on-line shopping away from shopping in the high street. However, pundits argue against a catastrophic collapse based on expected change of use stores, despite the fact there are only so many coffee shops and food outlets a high street can sustain!
The critical question in the 90’s was ‘Why won’t consumers shift completely to supermarkets to buy milk?’ Now it’s “Why wouldn’t consumers buy everything on line?”. Only by asking this apocalyptic question can a new strategy for retail outlets be devised. In the same way that Dairies could have transformed into an Ocado or Amazon with the right vision, retail data and strategy, there will be an opportunity to likewise transform the high street into a new retailing experience that consumers want.
Amazon get it. As others are leaving they are going into Bricks and Mortar which begs the question – what can we do to stop Amazon taking over the high street? That might be the inevitable outcome if we don’t act on the retail data and deliver the right strategy!
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