Wednesday, 25 June 2008

Advantage in recruitment and retention

Retail Bulletin is promoting the 2nd Annual Retail HR Summit which is aimed, as you might expect, at retailers but in reality it will probably not attract many SMEs - but that will not be the fault of the organisers (although it is marketed in a way that might deter many!). The lessons to be learnt at this event are fundamental even to the small employer.

The headlines are citing that it will be advantageous to differentiate your brand in the recruitment market - I have to say that that is more than possible even if you only employ a few people. They are promoting training input as an important tool for staff retention but also for adding value to the bottom line.

All too often the SME retailer falls into the trap of believing their own unfounded statements of woe and doom when it comes to training; "I can't afford for him/her to be off the shop-floor", "I can't afford to pay for any training", "They'll only leave if I train them". These perfectly understandable comments are not based on a well planned training strategy as a fundamental function within the business plan and often arise from a lack of understanding about how to capitalise on well trained and motivated staff.

My experience comes from when I devised a training programme to counter the fact that my store was based within half a mile of several major store groups, each with an effective training policy. In embracing an established programme I was able to attract funding (although there were associated costs); I was able to focus the training on the weaknesses that I had previously identifed in a simple SWOT analysis; equally I was able to build on the strengths. By ensuring that the individual needs of the staff member was also taken into consideration and that they were duly recognised for their efforts, I was able to reduce the turnover of staff, improve the performance of staff in each of the departments thus cutting costs and increasing revenues by making the sales staff better able to convert sales. The chosen route was to work towards awards that were within the National Vocational Qualifications framework, so that even though we were small, our training suited the requirements of a recognised award.

Staff were rewarded for effort, producing a far better return on the firm's investment in them and customer loyalty was noticeably improved and costs reduced. What can I say? If I can do it...

Just a small aside, depending on the size and location of the business, there are funds available to subsidise relevant training and you will be surprised how well motivated staff will commit to working in their own time. Try it, you might get the bug yourself! Contact Train to Gain and your local Business Link for more information.

Monday, 23 June 2008

Re-running the problems of the 1970s

Today the news that council workers are to strike sends shivers down my spine. I remember, all too well, the problems that beset the people and businesses during the various challenges that were put up by pressure groups and the Unions to the Government of the day in the 1970s.

One cannot help but imagine that the present Government is being seen as weakened by the economic conditions, their persistence in pursuing unpopular policies and lack of leadership when the going gets tough. If this is the perception of even a moderately sizeable section of the population, then we must all prepare ourselves for the fall-out. In the case of SME Retailers it is essential that you have contingency planning for the continuance of your business during periods of disruption of essential services.

If the Government is weak then there will be many people wishing to exploit that weakness to further their causes, for good or ill. It will be interesting to see if the messages of 'prudence' that were given to the nation by the last Chancellor of the Exchequer have actually provided the Exchequer with the wherewithall to withstand a period of internal conflict such as we saw thirty years ago with similarly weak Governments; it will be also interesting to see if there are Statesmen (or women) in the present Government that act for the common good rather than the thought of losing the next election.

Sunday, 22 June 2008

Tough times for consumers as well as retailers

Each week now we are fed more bad news about the economic conditions and tales of woe in the High Street. This week the Observer has commented on warnings issued by Lord Harris of Carpetright fame, a very experienced and successful British retailer, who sees real problems for consumers as well as retailers with rising prices affecting the entire supply chain.

The Chancellor, Alistair Darling, has told the world that Britain needs to have restraint in wage demands in order that the Government's inflation target of 2% might be reached, yet we hear that the fuel drivers have settled at 14% in their claim. The Governor of the Bank of England has stated clearly that the country is heading into a period of rising inflation and hints that the Monetary Policy Committee is likely to recommend raising interest rates to compensate for the predicted 4% inflation.

Gordon Brown, the Prime Minister, is attending a summit called to discuss the high and rising global cost of oil. It is unlikely that he will be able to make much difference given the conflicting pressures and constraints that exist in the world markets and in individual producing countries, but it makes for a positive press that the PM is standing up for the country. The real problem is that these rising prices must impact upon all parts of the supply chain and will directly affect consumers with higher prices at the retail pumps, indirectly by the costs of transporting goods to the High Street shops and those associated with manufacturing those goods.

The combination of these pressures is bound to exacerbate the already toughening trading conditions; so can SME retailers be optimistic about the future? Of course they can, retailers must be optimistic above all things. The economy will move through cycles and the current cycle, though likely to be really tough, will end. The wise retailer will allow for the changing conditions in their planning and will ensure that they are entirely fixed upon the changing needs of the consumer. It might seem obvious that they will spend less - they'll be less to spend all round, but whether consumers buy fewer products, buy less often or a combination of these strategies will depend on a range of factors - too many to rehearse here, but the wise retailers mentioned before will be trying very hard to understand the buying habits of their particular customer sector and will change their own marketing habits to suit. Let us pity those larger retailers who have non-retailing shareholders that demand continuous growth and rising profit - when things are really tough, prepare the ground for future growth but be content with holding ground and retaining a reasonable profit.

Tesco under cover

The Sunday Telegraph has today published a piece about an unusual tactic being employed by Tesco in making a planning application for a store in Barnstaple in Devon.

Apparently the application was formally made in the name of a local retailer called Brian Ford, a business that they have taken over and have represented as the true identity of the applicant. My interest was piqued not simply because it begs the question as to why Tesco felt the need to conceal their identity but also because, in the Telegraph piece it suggests that, other retailers have complained that Tesco has acted in an "underhand" manner. That begs the question about whether they are more upset that Tesco stole a march on them in Barnstaple or that Tesco had thought of the wheeze first.

What I would hope is that the planning authority in Barnstaple consider the need for the town to have a new 80,000 sq ft supermarket and the potential impact that it might have on the trading environment of real local traders and the long term choice available to consumers.

Wednesday, 11 June 2008

Internet - the death of shops?

Mark Chirnside (Chief Executive Officer at Ukash) makes some interesting observations in a piece that he has written for the Retail Bulletin today. He reminds us of the forecasts in the 1990s, at the commencement of the boom, that many believed that the end of the high street shop was coming shortly. Some of us never did believe it but there is strong evidence, according to what Mark Chirnside is saying that some of the largest store groups were completely wrapped up in this Wilsonian 'heat of the technological revolution' thinking.

The technology certainly arrived in a truly revolutionary manner and there is no denying that a substantial amount of retail trade is carried out online but, as Mark Chirnside comments, there remains a substantial cross-section of the population who are not on-line; I would go further and say that other factors are also at play in this scenario - with the current development in the mortgage lending in the UK where a growing number are moving into negative equity and a further number being subjected to repossession, the worries about personal credit will inevitably drive down the ardour for spending on-line. In fact I can foresee a small but measurable upturn in the use of cash, which goes against the trends of the past decade, and which proves tricky to those wishing to make use of the on-line bargains that Chirnside uses in his argument.

The piece which prompted this blog was primarily about on-line useage and the fact that Sainsbury's have had to acknowledge that having trumpeted about having only on-line job applications have now had to make a concession and install terminals for making these applications in stores. It does however, also raise the issue about growth in on-line trading and how this might pan out during this current retail down-turn. We know from past experience and current turnover eports from the retail press that the value food sector with retailers such as Lidl are performing at a higher than previous level and that the premier brands are not growing their turnover at the same levels as before. It seems to me to be reasonable (without a shred of empirical evidence to support it) to assume that these factors will be reflected in consumer attitudes and spending on-line as much as appears to be happening in physical shops. Does this signal the end of trading? Of course not, but here in the UK the sophistication of the population is often underestimated, the customer will respond to whichever channel they have access to, that they have confidence in and which does what any retail activity must do - to provide the right goods at the right time at the right price and in a customer friendly manner.

Personal experience of on-line shopping has provided me with prima facie evidence that at least one major on-line retailer is absolutely hopeless in providing the sort post-sales after care that a physical shop is able to do. OK! So that's another issue for another blog at another time. For the moment I must lock myself away in a darkened room to ponder how I am to get this message out to all those folk who are currently not on-line - I wonder if Sainsbury's will give access to my readers through their in-store terminals?

Tuesday, 10 June 2008

Tough times - let's not allow training to be the victim!

The signs of a retail downturn are very much in evidence now and, as will happen in any period of downturn in the trading cycle, businesses will be looking for ways in which to reduce costs. It is an unfortunate fact that very often training budgets are amongst the first to be cut back as these are regarded by some as 'soft' budgets and not productive. This is, of course, a real mistake.

The one aspect of any cyclical downturn is that there will be an upturn along in a while. The businesses that will be best placed to not merely survive but to prosper are those whose planning takes that aspect into consideration. The ways to prosperity are many, but the essential ingredients in retailing are cost control, informed range planning, low stock holdings to meet short-term needs and the best trained and motivated staff available to sell the product.

If you think that you might benefit from an analysis of the training needs of your business, did you know that you can get free advice and possibly get free training provision? Contact your local Business Link - use this link to track down your local business Link :
When you contact them ask them for all the advice that they have to offer and also have them put you in touch with local Skills Brokers.

Retailing does not have a good investment record in training, although this has been improving, and now more and more opportunities exist to upskill the workforce - which includes you!