Stationery specialist WHSmith is trialling a range of new store concepts in key locations as it moves to bolster sales at its high street division.

The retailer kick-started the high street trial by fully refurbishing its store in Holborn, London.

The revamped branch now dedicates more space to stationery and stocks headphones and Apple accessories.

WHSmith chief executive Steve Clarke told Retail Week that the improvements form part of an experiment.

“The store in Holborn is a trial for us to see, if we improve the store environment, radically change the layout and improve the ranges, what sort of a return on that scale of investment we get,” he said.

He added that the 225-year-old retailer would carry out other additional trials “of different types” in the coming months.

“From those we hope to cherry-pick a number of initiatives that are affordable to roll out,” he said.

Far-flung regional stores

Clarke insisted there is ongoing investment into the rest of WHSmith’s 613-store high street estate.

“We do tend to target investment where it matters most to customers”

“We have a rolling improvement programme. Over the last three years we’ve probably replaced or repaired around 300 floors, and have done a lot of work on our storefronts,” he said.

But not every store will receive an immediate or radical facelift.

“We will target the investment where we think we will get the biggest return and where customers respond to it the most,” he explained.

“There will often be stores in far-flung regional high streets where the store could do with a little bit of an upgrade, but they are not desperately out of the context of their environment.

“We do tend to target investment where it matters most to customers. We will eventually get around to all the stores, but in a very sensible, measured way.”

Overall performance

Clarke said that the business was very pleased with its half-year performance on the high street, where profits were flat and like-for-likes were down 3%, as it came off the back of its “best Christmas in 20 years”.

“We had a profit upgrade last year. Given the living wage and everything else, holding flat is a really good outcome,” he said, adding that he expected like-for-likes to decline as the adult colouring book phenomenon died down.

“We’re feeling pretty confident about the year ahead despite the broader uncertainty,” the stationery boss concluded.

By Emily Hardy for www.retail-week.com

Yet another struggling retailer is trying to shore up foot traffic with a unique in-store experience. Staples is offering customers cooperative working spaces and is finding some success with the endeavor.

Staples’ new offering, called Workbar, resembles a tech-heavy upstart in the wake of WeWork’s success in office space sharing. Seven-year-old WeWork’s valuation has skyrocketed to an estimated $20 billion recently after it secured some $300 million in investments from SoftBank Group Corp. (See also: Behind WeWork’s Billion Dollar Valuation.)

The Framingham, Mass.-based Staples is banking on a hip vibe at Workbar – with young workers at their laptops sipping gourmet coffee amid funky art – to offset soft demand and revive its brand. At its first co-working space in Boston, where Staples opened its first location in September, there’s a putting green, skylights and happy hours.

“If you go to most people on the street and ask about Staples they’d go, ‘Oh yeah, the office-products superstore,’” Staples’ new CEO Shira Goodman told Bloomberg. “But the reality is that’s very far from where we are today, and even farther from where we want to be.” Goodman said she expects Staples’ online sales to be 80% of the retailer’s overall sales by 2020.

Staples, with $18 billion in annual revenue after years of declines, recently said it plans to close 70 stores in the U.S. and Canada to reduce costs amid declining sales. Fourth-quarter sales fell 7% from the year prior.
The company closed 13 stores during the quarter and ended the year with 1,255 stores in the U.S. and 304 stores in Canada.

The office supply retailer is also planning to launch a new marketing campaign that will underscore its role as a partner to businesses, including with its co-working space. Monthly memberships to Workbar cost $130. More than 200 people have signed on since its debut in September.

Staples stock is down 23.3% the past year, and down 6% year to date. Staples tried to buy Office Depot in 2015, but that proposal was not approved by regulators.

By Rebecca McClay for www.investopedia.com

Amazon Business launches in the UK

Amazon is adding a trade counter to its UK Web site to sell equipment such as office supplies and industrial tools to woo business customers that account for around two-fifths of online spending.

Its new service called Amazon Business launched on Monday, and offers a range of business-friendly features like being able to track purchases and set spending limits, as well as an expanded range of products specifically targeted at commercial customers.

Amazon Business will sell more than 100-million products spanning laptops to test tubes to cleaning products, and is targeted at a range of businesses, from small to large, as well as universities and charities.

It marks the latest effort by the e-commerce giant to expand beyond the typical retail business. Jeff Bezos’ firm had already started its business marketplace in the US back in April 2015, racking up $1bn (£800m) of sales in its first year to 400 000 customers, before launching in Germany four months ago.

The UK online market for business-to-business sales was valued at a cool £96.5bn for 2015 by the Office for National Statistics.

Bill Burkland, head of Amazon Business UK, said the new site “combines more than 100m business products with a new set of unique business features – from reporting and analytics to spending limits”.

In February, the online giant said it was creating 5,000 new full-time jobs in the UK this year to fill a range of positions from software developers to warehouse staff.

The recruitment will take Amazon’s UK headcount to more than 24,000 as it opens three new warehouses in Tilbury, Doncaster and Daventry. The extra space will also handle deliveries for third-party retailers who sell through Amazon’s site.

By Rebecca Smith for www.cityam.com

Britain leaves the EU

Prime Minister Theresa May has signed the Article 50 letter of notification that she will send to the European Union on Wednesday to formally get Brexit underway.

May was pictured in Downing Street on Wednesday evening adding her signature to the historic letter, which will formally notify the European Commission of Britain’s departure from the EU.

The letter will be handed to European Council President Donald Tusk at 12:30 p.m (BST) tomorrow by British ambassador to the EU Sir Tim Barrow, immediately after May finishes debating Labour Party leader Jeremy Corbyn in this week’s instalment of Prime Minister’s Questions.

A two-year process of negotiations will then get underway where May and her negotiating team will try to come to a divorce agreement with EU figures. The discussions are set to cover how much Britain must pay the EU as part of its divorce settlement and what long-term free trade deal — if any — can be finalised before the two-year window expires.

Britain is set to officially drop out of the EU no later than March, 2019.

In an address to Parliament on Wednesday, May is set to call on the country to “come together” and support a “truly global Britain” as the nation braces itself to leave the 28-nation bloc after nearly half a century of being a member.

The prime minister is expected to say:

“When I sit around the negotiating table in the months ahead, I will represent every person in the whole United Kingdom – young and old, rich and poor, city, town, country and all the villages and hamlets in between.

“And yes, those EU nationals who have made this country their home.

“It is my fierce determination to get the right deal for every single person in this country.

“For, as we face the opportunities ahead of us on this momentous journey, our shared values, interests and ambitions can – and must – bring us together.

“We all want to see a Britain that is stronger than it is today. We all want a country that is fairer so that everyone has the chance to succeed.

“We all want a nation that is safe and secure for our children and grandchildren. We all want to live in a truly Global Britain that gets out and builds relationships with old friends and new allies around the world.

“These are the ambitions of this Government’s Plan for Britain. Ambitions that unite us, so that we are no longer defined by the vote we cast, but by our determination to make a success of the result.

“We are one great union of people and nations with a proud history and a bright future.

“And, now that the decision has been made to leave the EU, it is time to come together.”

Source: www.businessinsider.com

Australian retailers are woefully unprepared for the imminent entry of US tech giant Amazon and many could go under if they don’t lift their game.

The online goliath is due to hit Aussie shores this September but a new analysis shows almost a third of Australian retailers are blissfully unaware Amazon is preparing to set up shop.
Only 14 per cent have put any serious thought in to competing with global brand.
This blissful ignorance could be a huge mistake.

While some of the smaller retailers unaware of Amazon’s plans could be hit hard, an analyst told news.com.au one of Australia’s major stalwarts could suffer greatly: Woolworths’ struggling discounter Big W.

Amazon is hoping to launch in Australia in September.

The Commonwealth Bank Retail Insights Report, released today, found 49 per cent of retailers are unfazed by Amazon’s Australian push, with only 11 per cent seeing the company as a significant threat to their business.
Yet, in the US the so-called ‘Amazon effect’ has seen its share price skyrocket as shoppers flock online, while bricks and mortar retailers shutter shops.
CommBank’s National Manager of Retail, Jerry Macey, told news.com.au many Aussie retailers had no idea what they were in for.

“30 per cent of retailers said they aren’t even aware of Amazon and that was even bigger number for small companies, purely online stores, or retailers in rural areas.
“This is concerning when you consider the impact Amazon has had on the US, a very mature market.”
A third of retailers had no idea Amazon was coming to Australia, claims the Commonwealth Bank Retail Insights Report 2017

The key area where retail is falling behind is innovation.
CommBank measured levels of innovation across a range of Australian industries.

While half of Australian retailers were experimenting with new strategies to attract and retain customers — just above the all industry average — they still lagged behind the telecommunications, education and mining and sectors.

Worryingly, retail innovation was erratic, often uncoordinated and the value retailers were generating from trying new things was less than half that of the average of all other sectors.

“In retail, innovation is not holistic. There are small innovations, in one area of business, but if you look at strong innovators they are being innovative across a number of areas like marketing, organisational structure, product and process,” said Mr Macey.

The online innovations that were occurring in retail, like click and collect, weren’t game changing and were way behind industry leaders.

“Just look at Amazon Go — this is a physical store where you pick things off the self and sensors know what you’ve put into your bag and you can just walk out — that’s innovation,” he said.

Amazon has launched the Amazon Go trial supermarket where hi-tech sensors mean customers just grab products off the shelf and go, paying directly through their Amazon account.
Amazon has launched the Amazon Go trial supermarket where hi-tech sensors mean customers just grab products off the shelf and go, paying directly through their Amazon account.Source:Supplied
Geoff Dart, a retail consultant with DGC Advisory agreed Amazon would change Australian retail.
“They will have an impact. If you’re a retailer, you always have to assume the worst when Amazon comes in.”
The US company was the next wave in a retail revolution sweeping across Australia’s high streets and shopping centres already changed forever by the emergence of international fast fashion brands.
But, said Mr Dart, new competitors — such H & M, Zara, and Uniqlo — had already forced some home grown stores to buck up their ideas. As such, many were now far better prepared for the onslaught of Amazon.
“Australian retailers were very complacent, but if you look where they are now Myer has really lifted, and so have Kmart and Target.”
Myer now stock rival TopShop’s products in their stores.

Rather than battling against the overseas onslaught, Myer is now actively working with would be competitors — such as TopShop and UK department store John Lewis — by stocking their products.

However, there was one long standing Australian retailer that Mr Dart was worried about.
“Big W don’t know who they are in my opinion, they are stuck in the past while Amazon know who they are have a good customer proposition.”
In the six months to January, Big W’s sales slumped 6 per cent while its earnings fell 137 per cent leading to a loss of $27 million.
News.com.au contacted Big W to ask how they were innovating, fighting back against increased competition and bringing in new customers. The company chose not to comment.

Following Woolworths’ closure of the Masters home improvement chain late last year, speculation is rife that the company is preparing the ground for either a sell-off or float of Big W.
Nevertheless, Mr Dart didn’t think Amazon would get a completely free ride when it lands.
While last week Fairfax reported that Amazon is planning to “destroy the retail environment in Australia”, Australia’s huge size and relatively small population would mean Amazon’s warehouse and distribution costs would be higher compared to other markets.
In particular, Mr Dart said Amazon would struggle in a key area which will please Coles and Woolies.

“They’re going to fail at food. Australians are very conservative when it comes to food and if they have a bruised banana in their delivery, Amazon is going to have to replace it and that’s not going to happen.”
For Australian retailers, their trump card was their store network, he said, as it gave brands a presence on the ground. Mr Dart predicted further consolidation in the sector, citing JB Hi Fi’s recent purchase of The Good Guys.
But the real innovation could be if competitors started working together to combat the international online threat.

“Retailer co-operation is a big opportunity. Why couldn’t you pick up a JB laptop you have ordered online from a Bunnings or Kmart? All of them have fixed costs and want to amortise that and one way of doing that is to increase traffic and people picking up goods is a way to do that.”

Mr Macey said some Aussie retailers were being ingenious at innovation.
He cited efforts to ‘personalise’ the shop by allowing customers to visualise online a new rug in their living room, say, or how they would look wearing a new shirt.
However, on the whole, retailers needed to have an innovation reality check.

“Retailers need to be honest in where they are in terms of their ability to innovate. They need to take advantage of changes in the marketplace, experiment, not be afraid to fail but if they do fail, fail fast and inexpensively.
“Retailers need to build a innovation culture and be agile and creative in the future.”

By Benedict Brook for www.news.com.au

In case you needed another reminder that girls really do run the world, it turns out the Women’s March caused a huge spike in office supply sales in the United States during the week before the protest took place.

With an estimated 4,2-million attendees nationwide, the march for gender equality is widely regarded as the largest demonstration in American history, and judging from poster board and marker sales, it also involved an astronomical amount of clever signage.

Fortune reported that the NDP Group, a market research company, looked at the January sales figures for office supplies like posters, scissors, and tape — the stuff you would need to make, say, a homemade “Love Trumps Hate” sign. According to the report, more than 6.5 million poster boards were sold over the course of the month, with nearly one-third sold during the week before the Women’s March. Poster board sales were up 33 percent overall compared to the same time last year, and foam boards were up a whopping 42%.

Writing and crafting tools were up as well. Glue and tape sales spiked 27% and 12%, respectively, and marker sales went up by up to 35%.

The result? Millions of feminist signs demonstrating for gender equality on 21 January 2017.

Clearly, the Women’s March didn’t just provide an outlet for the frustration and anxiety felt by many Americans after the results of the presidential election. It gathered together millions of women and men, and as the sales figures demonstrate, the members of the Women’s March wield substantial financial power.

In fact, although women’s economic power is often downplayed or outright ignored, past research has suggested that they will become “financial powerhouses” by 2020, and they drive around three-quarters of consumer purchasing.

Activists have harnessed economic power for political good in campaigns like #GrabYourWallet, which boycotted retailers carrying Trump products, and the Bodega strike led by Yemeni business owners in protest of the first immigration ban. More recently, the Day Without a Woman — organized by the leaders of the Women’s March — called for women to take the day off from work, unpaid labor, and shopping, demonstrating women’s vital contributions to the economy and society as a whole.

In conclusion? Women are an economic force to be reckoned with, and it’s long past time businesses took note. In the meantime, be sure to spend your own money wisely and ethically.

By Claire Warner for www.bustle.com

The death of retail as we now know it is greatly exaggerated. Retail isn’t dying; it’s evolving. Just like it has done before. There has always been disruption in the retail sector. A major disruption occurred in the late 1800s when Sears introduced the catalog and brought the entire store into the homes of U.S. consumers. This gave Sears the same advantage over brick and mortar stores that ecommerce sites have today. Sears was simply responding to the needs of its customer since 60 percent of the U.S. population lived in rural areas at the time and didn’t have convenient access to stores. Sears would bring the store right to them.

The same principle of meeting customer needs holds true for the current retail evolution, which is being driven by a confluence of change. Changing consumer attitudes, behaviors, and demographics; ongoing channel and digital disruptions; and increasing competition for consumer mindshare and dollars are forcing a shift in long-held paradigms – continuing the status quo is no longer an option.

It’s now about customer engagement, not customer acquisition. Rather than a multichannel strategy, the strategy now needs to focus on the customer and finding new ways to deliver the products they want, when they want them, whether online or at a physical location. It’s no longer about brands, big logos, and price promotions, it’s about engaging consumers with experiences, personalization, quality, service, and value.

The traditional retail business model that has stood the test of time over the decades is now transforming at the speed of light. Retailers competing to stay in the game are turning their ecosystems on end, breaking down old-school beliefs, and reinventing themselves. Amidst all of this change, however, is one constant that has been a guiding principle of retail since it began and that is: know thy customer. Those retailers and brands that survive and thrive are those that base their decisions on the needs and wants of their customers; those that know their customers best and act on that knowledge.

Knowing Thy Retail Customer

Consumer Economy:

More than eight years after the Great Recession, the U.S. economy is improving at a slow and steady pace, but the consumer landscape has been fundamentally reshaped. Consumers entered 2017 with more confidence in their financial situation than they have had in years, but their attitudes and behaviors around spending have changed.

Even though incomes are improving, real income is still comparable to where it was in 2007, and that is impacting consumer spending decisions. The growth in single-person households has also decreased the number of dual-income households. Healthcare costs are growing exponentially and will continue to erode disposable income. National student loan debt is at an all-time high-and is expected to double in 10 years, causing Millennials to delay marrying, purchasing cars, buying homes, and making other major purchases. Retail sales and overall consumer spending, key drivers of economic growth, are suffering as a result of lackluster income growth and increased expenses. Looking at sales across the broad set of industries tracked by NPD, we see spending slowing in many categories, particularly in traditional bricks-and-mortar channels.

When consumers do spend, they have a variety of options vying for their dollars, including many that are not tangible products. Consumers are exhibiting an interesting shift in spending to the experiential, demonstrating their desire for something more, and something different – like activities, travel, and entertainment. For example, the U.S. government reports that from 2010 to 2015 consumer spending on sports and recreational vehicles increased by 45 percent, spending on foreign travel by 36 percent, and on hotels and motels by 43 percent. Spending outside of measured consumer goods categories is typically increasing faster than total consumer spending on average.

A Multicultural/Multigenerational Mosaic:

Today’s retail consumers collectively represent a multicultural, multigenerational mosaic. By 2044, the U.S. Census Bureau projects that more than half of all Americans will belong to a minority group, which is any group other than non-Hispanic White alone. By 2060, nearly one in five of the nation’s total population is projected to be foreign born. Overall, Millennials are more diverse than the generations that preceded them, with 44.2 percent being part of a minority race or ethnic group. Even more diverse than Millennials are the youngest Americans: those younger than 5 years old. In 2014, this group became majority-minority for the first time, with 50.2 percent being part of a minority race or ethnic group.

Millennials and Boomers are still the sweet spot demos for many retailers. Millennials have now surpassed Baby Boomers as the nation’s largest living generation and they are coming of age, working, developing careers, and raising families. Some 1.3 million Millennial women gave birth for the first time in 2015, and they now account for the vast majority of annual U.S. births, according to the U.S. Census Bureau.

Baby Boomers are refusing to be pushed aside by the younger generation or ignored by retail, and still account for the bulk of consumer spending growth in major products and goods categories. As Boomers age, over the next 10 years we will see dramatic growth in the population of consumers over age 65, influencing spending in new ways. As consumers retire, they have less disposable income and spend less. More than half of households over the age of 65 are in the bottom 40 percent of income. Also, older consumers tend to spend disproportionally more on services and experiences instead of products.

To know thy consumer is to also understand that within each of these demographic groups are sub- segments that think and behave differently from others in the same group. The needs and wants also vary. Fortunately with the use of data, insights, and analytic solutions, like consumer segmentations, retailers can get to know their customers up close and personal.

Onward and Forward

Whether driven by want or need, consumers will always be in the market for goods and services. Retail, in whatever format —physical or virtual — will continue to exist. Retailers and brands that are in it to win it will recognize the need to rethink the retail experience they provide. They will build business models that offer experience, service, and value to their customers and reflect the diversity of generations, life stages, and other influences that make up our world today.

By Marshal Cohen, Chief Industry Analyst – Retail, The NPD Group

Packaging and paper group Mondi has confirmed that the European Commission is conducting an inspection at its Vienna office.

“Mondi understands the investigation is focused on kraft paper and industrial bags,” the group said, and that it was co-operating with the investigation.

“Mondi is committed to complying with all applicable competition laws and is not aware of any wrongdoing or contravention of the relevant legislation,” the group said.

The European Commission announced about a year ago that its antitrust officials were performing unannounced inspections of the premises of several companies in the kraft paper and industrial sack segment.

It said at the time it was concerned that the companies in question might have violated article 101 of the Treaty on the Functioning of the European Union, which prohibits anticompetitive practices such as price fixing and customer allocation.

Source: www.businesslive.co.za

Walmart in decline

The “Oracle of Omaha”, Warren Buffet, has dropped Walmart from his portfolio like a ton of bricks, pronouncing ominously that a retailer in decline is difficult to turn around.

Buffett’s Berkshire Hathaway investment vehicle sold off $900-million of Walmart stock in the last quarter, or about 90% of what he had left after years of slowly reducing his holding in the biggest big-box of all.

Pundits the globe over are seeing Warren Buffett’s rejection of Walmart as symptomatic of a broader malaise in traditional retail, embattled as it is by rocketing online sales.

“It is a big, big force,” he pronounces in doom-laden tones, “and it has already disrupted plenty of people and it will disrupt more.”

He avers that many businesses have worked out neither how to cash in nor how to counter it, a view which no doubt informed his Walmart decision.

Brick and mortar retailers had better figure out, and fast, how to compete with the online version or the carnage will continue.

Source: www.tradeintelligence.co.za

Staples’ 106 UK stores are being renamed Office Outlet by new-owner Hilco Capital, which snapped up the retailer last year for a nominal sum.

The restructuring firm, which also owns entertainment specialist HMV, said the Staples estate would be transformed in “record time”.

The entire rebadging process, along with the installation of a new EPOS system, is due to be completed by the end of this week.

“The reality is we’re kicking everything off very quickly and then we’ll be refining the proposition in the weeks to come with an improved product mix and much better pricing and promotions,” Hilco Capital marketing director Matt Bone told Retail Week.

The fresh branding on the newly named Office Outlet stores – which are largely located in out-of-town retail parks – is in keeping with Staples’ traditional red and white colour scheme.

The US-based stationery specialist agreed to sell its UK retail business and operations, which employs 1 100 people, to Hilco Capital last November.

Staples Inc says the decision was taken in order to place greater focus on its North American and mid-market divisions.

Last year, the business was pushed into exploring “strategic alternatives” for its European operations after it was forced to shelve a $6bn (£4.53bn) merger with rival Office Depot by America’s competition authorities.

Staples Inc consequently assessed the future of its European arm as it sought to wipe $300m (£226m) from its annual cost base.

When the deal to sell its British business to Hilco completed last November, its new owners unveiled plans to “phase out” the Staples brand in the UK, but provided no further details as to what that strategy looked like.

At the time, Hilco Capital chairman Paul McGowan said: “While retail in the UK has been challenged recently, a team led by retail veteran Alan Gaynor will work alongside the existing management team to build a plan for success for the business.”

By Emily Hardy and Luke Tugby for www.retail-week.com

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