Stuart O'Brien, Author at The Retail & Hospitality Design Forum - Page 3 of 44
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Stuart O'Brien

How can retail trade suppliers prepare for Brexit?

With the UK’s upcoming exit from the European Union finally confirmed following the Christmas general election, John Leyden FCA, CEO and Founder of Carbon Accountancy, discusses how trade suppliers can prepare for the UK’s exit from the single market…

2019 was undoubtedly a difficult year for UK retailers. Whilst more generous economic analysts may describe the year as ‘challenging’, let’s be under no illusions – we ended a decade of high street fragility with a particularly tough year. According to The Centre for Retail Research, 300 stores closed their doors every week with 2,700 jobs lost with them. We lost no less than 37 high street staples, affecting almost 43,000 employees – Jack Wills, Mothercare, Clintons and Bathstore to name but a few. And within days of ringing in the new decade, Debenhams announced its resolution to their ailing fortunes by revealing the 19 locations that will permanently shut up shop in the coming weeks. 2020 could have started on a cheerier note for retailers.

The crisis on our high street shows no sign of subsiding, as online shopping continues to evolve and provide better experiences for consumers and preferred business rates and overheads for retailers. Other problems, however, have been caused by the ever-looming uncertainty of Brexit. Unfavourable foreign exchange rates have pushed up prices for retailers and consumers alike, whilst the latter’s confidence has sunk to new lows.

The Conservative re-election over the Christmas period has, at the very least, removed one level of uncertainty. Like it or not, the UK will be leaving the European Union. But with it will come further bumps in the road for UK retailers, particularly following the end of the transition period and our exit from the single market. It all relates to the cash impact of VAT imports – and it could be the final nail in the coffin for many more retailers if they aren’t prepared for the changes afoot.

What changes are coming?

As a single market, retailers do not have to pay tax on imports from the EU. This will all change following the end of the transition period on 31st December 2020. At this point, goods will come through a custom border with import duties and VAT payable at the point of entry. This will apply to the majority of goods coming into the UK from EU suppliers. Foodstuffs are one of few exceptions to this rule so major food retailers will be largely spared from these changes.

What could this mean for consumers and retailers?

Consumers will feel the brunt of the cost of import duties, as retail prices will increase to cover these additional costs. And whilst retailers can reclaim the VAT of goods imported from the EU from HMRC in the quarterly VAT return, it is the payment at the point of entry that presents the real problem.

Within the single market, not only are goods imported from the EU exempt from VAT but retailers purchase goods with a significant credit period, which can be up to 150 days for larger retailers. Such a credit period allows retailers to begin selling goods to the end consumer before payment to their suppliers, maximising their cash flow – all-important in the current retail climate. If retailers are required to pay VAT on entry, it could have a significant impact on their business.

For example, a retailer purchasing £100 million in imported goods each year will now need to pay a total of £20 million in tax on these purchases. And with the tax on imported goods payable on day one and, in many cases, unable to be reclaimed for four months – the retailer would lose £6.6 million in ready cash within the first four months of Brexit.

Could this spell the end for more high street retailers? Possibly not. Retailers may already have a solution – and their salvation may come at the expense of their suppliers.

What could be the impact on EU-based trade suppliers?

Word on the street is that large retailers plan on passing the VAT payments on to the trade suppliers themselves, sparing themselves the initial cash hit. It’s an unsurprising outcome considering retailers like – or rather need – to hold on to their cash.

But is it realistic to expect EU-based trade suppliers to be able to take the hit? They too will need to reclaim VAT within the UK, which will require a UK-based branch for them to import their own goods to before selling on to retailers. Whilst such a global infrastructure is likely to already be in place for large companies, it could spell trouble for smaller or medium-sized suppliers. It is these suppliers who may need to prepare for the future.

How could smaller and medium-sized EU-based trade suppliers get around this?

If UK retailers plan on passing the VAT cost onto their EU suppliers, those without a UK presence face a difficult decision. Their first option is to work with a distributor – a separate UK based company who will facilitate the purchase and sale of their goods. Whilst this may be a good temporary solution, it adds a layer of complexity to trade and suppliers lose a significant profit margin. It’s unviable in the long-term.

As the all-too-familiar phrase goes, ‘Brexit means Brexit’. There is no going back. Biting the bullet and building a UK presence is by far the most sustainable and simplest option. Luckily, the UK is an easy place to do business.

One saving grace which could soften the blow of Brexit for both retailers and suppliers is the prospect of a trade deal. With no clear visibility currently on what this could look like, we can be certain that it will be a world away from the ease of trade we experience with our European neighbours at the moment. And, of course, that’s assuming a deal can be reached. ‘No deal’ remains a very real prospect, and one our government doesn’t seem too shy of.

What’s clear is that either retailers or suppliers will bear the brunt of the pain once we leave the single market. Just who that will be – we’ll have to wait and see. In the meantime, it wouldn’t do any harm to either to formulate a contingency plan.

About the Author

John Leyden FCA was shortlisted for the Finance Director of the Year Awards 2012 by the ICAEW. He spent 7 years at KPMG before starting Carbon Accountancy, which prides itself on outstanding client service and meeting client needs through trust and dedication. John specialises in business advice, audits, tax planning, corporate finance, due diligence and share option schemes.

The firm was shortlisted in Accountancy Age’s British Accountancy Awards 2012 as Independent Firm of The Year, Greater London and was named as one of the “runners and riders” – one to watch – in Accountancy Age Top 50 + 50 firms in the UK. 

 

Have you secured your guest pass to the Total Security Summit?

We’d love you to be our guest at the Total Security Summit, which takes place on 30 & 31 March at the Radisson Blu Hotel, London Stansted.

This unique event is entirely free for you to attend. Benefits include:

• Meetings with new innovative and budget-saving suppliers
• Access to inspirational seminar sessions from industry thought-leaders
• Networking with like-minded peers who share your challenges
• Complimentary overnight accommodation, plus all meals and refreshments
• An invitation to our networking dinner

As our guest, you will be joining fellow senior security professionals from the likes of:

AB Foods
AEG Europe
Allsaints
BRE
Brighton BCRP
Birmingham 2022
Bournemouth City Council
Chelsea Football Club
Como Metropolitan London
Demipower
Dorset and Wiltshire Fire and Rescue
Ebenezer Cobbold
Essex County Council
Ei Group
Freedom Group of Companies
Firmenich
Heathrow
HSBC
Hull University Teaching Hospitals NHS Trust
Hogarh Worldwide
Kering International
Iron Mountain
London Borough of Redbridge
London Stansted Airport
Mandarin Oriental Group
Marks & Spencer
Marley
Mercedes-Benz
Michael Kros
NatWest Markets
Newell Brands
Pearson
Peel Media
Procter & Gamble
Portsmouth Guildhall
Sodexo
Theo Phaphitis Retail Group
Topshop
Transport for London
Wych Cross Place Estate
WeWork

Guest passes are limited so register your place today to avoid disappointment.

Learn from the best at the Retail Shopfitting & Display Summit

The Retail Shopfitting & Display Summit is a unique event, which allows retail, shopfitting and visual merchandising professionals to meet with innovative and competitive suppliers to the industry. This two-day event takes place on March 9th & 10th at the Radisson Blu Hotel, London Stansted.

As our VIP guest, you will be able meet with shopfitting and display suppliers based on your requirements and upcoming projects, as well as network with like-minded peers who share your challenges. It’s FREE for you to attend and we’ll also provide all hospitality throughout, including lunches, refreshments, overnight accommodation and an invitation to our networking dinner.

In addition, you can hear from inspirational thought-leaders in retail design and shopfitting, with seminar programmes including:-

The Psychology Of The Consumer – What You Really Need To Know

Andrew & Zana Busby of Retail Reflections explore the current scenario and how we arrived here, the nature of today’s consumer and why we behave as we do, including the role our emotions play and the nature of motivation.
• The High Street’s not dying but it is in need of some support
• The consumer of today is very different to that of our parents
• Are we as consumers rational?
• The basic human need for emotional attachments
• Women shop, men buy

Visual Merchandising & Retail 2020

Davy Pitoors, VM Co-Ordinator at Louis Vuitton asks: What can independent retailers learn from big brands?
• Successful VM campaigns
• Tips for developing VM projects
• Current VM trends
• Q&A

You will be joining just 60 other senior VM and shopfitting professionals, including representatives from the likes of Booths, Co-Op, EE, Hotel Chocolat, Hush Homeware, Liz Earle, L’Oreal, Lotus Cars, Michael Kors, Nike, Oak Furniture, Office Shoes, Primark, Regatta, Superdrug, Topshop/Topman, The Body Shop, The Range, Topps Tiles, Unilever, Vodafone, WH Sniths and more.

To register your place, simply click here.

Will digitalisation save the High Street?

By Chris Long, Managing Consultant at Capgemini

High Street retail sales have been at an all-time low for the past few years. Accountancy firm BDO recently confirmed that September recorded the worst consumer spending in eight years, and yet business rates continue to rise, and the slide of the Sterling is pushing up costs. All of this makes bleak reading for retailers…

Nevertheless, we shouldn’t write off brick-and-mortar just yet! Recent innovations like Amazon’s Go concept stores, Virgin Holidays opening a new chain of stores allowing customers to try out holiday experiences, and Action for Children opening a pop-up store to drive more participation for their Secret Santa campaign, shows that mortar isn’t heading the way of the dodo anytime soon. In fact, far from shying away from the high street, digital-native brands such as Warby Parker and Casper are actually moving from online-only to having a physical presence.

So, what is causing this renewed focus on brick-and-mortar and how can retailers create an in-store experience that can compete against the ever-growing popularity of online retail?

Thinking omni-channel

Customer expectations are constantly growing, with demand focused on convenience, speed, and the ability to choose where and which channel to shop through. In order to fulfil these criteria, retailers need to ensure they have both a physical and digital presence.

The main issue is that most retailers have been far too slow to adapt to this new shopping experience, resulting in sub-par service as customers move between the two. To solve this, retailers are attempting to leverage their stores to balance out the discrepancies between the in and-out-of-store experience; transforming their business to an ‘omni-channel’ experience.

However, many retailers tend to mistake ‘omni-channel’ with ‘multi-channel’.  Whereas multi-channel relates to providing customers with the ability to shop and complete a purchase with a brand through more than one channel, omni-channel provides more of a comprehensive and integrated approach to retailing. Customers can start and stop their customer journey in one channel then pick up and complete it in another.

While customers still have a single view of a brand through an omni-channel experience, behind the scenes the picture is far more complex, with master data management required to piece together the jigsaw of  orders, payments, products and inventory into a single view of the customer to offer a seamless cross-channel experience.

It is an ongoing battle and challenge that retailers are facing – but one that will allow retailers to derive real value. True omni-channel transformation will enable stores to act as fulfilment centres, creating hassle-free shopping for customers, whilst also increasing footfall and reducing the cost to serve.

Immersing yourself in the in-store experience

Omni-channel transformation provides retailers with the foundations and capabilities to transform their customer experience. But what does great customer experience mean and look like in the digital age?

Firstly, it should be centred on breaking down the barriers between a retailer’s online and offline offering through delivering an inspirational, immersive and interconnected experience for customers. At the moment, for example, consumers are increasingly shifting from wanting to buy individual products, to buying into the types of experiences and lifestyles that they view on online platforms like Instagram and Pinterest. Retailers must take advantage of this and reimagine both the in-store and online experience to showcase products that inspire and surprise, rather than stacking them in aisles or on traditional displays. Stores should also be trialling more immersive initiatives, such as 360-degree displays or product-testing areas in-store, to create a hybrid physical-digital experience that draws customers into the store and makes them want to connect with a brand.

The omni-channel also enables retailers to connect customers through technology, augmenting the store experience and empowering customers with all the information they need at their fingertips. Asking a chatbot which aisle the milk can be found in a sprawling supermarket, where the nearest store is that stocks your size of shoe, where to find your favourite store in a busy shopping centre; all these possibilities enable the customer to engage in a 1:1 conversation with a brand and help maintain and drive customer engagement.

So far so good, but the key to great customer experience isn’t just to offer each of these elements in isolation – it is to tie them together into an interconnected digital and physical experience that has been genuinely personalised for each customer.

The retail industry is in the midst of one of the biggest disruptions it has ever faced, and many businesses are at risk of reacting too late. Retailers must seek change now and address the barriers between their in and out-of-store experience by using omni-channel and customer experience transformation to rethink the store’s role.

The benefits of a balanced and optimised channel strategy will be the increased recruitment of customers across channels. This ‘omni-channel recruitment’ will be central for bricks and clicks retailers in the digital age. Store conversion rates can be up to 14x higher in-store than online, highlighting that if retailers are able to develop a compelling channel strategy that drives customers into key stores and retail locations, they can boost sales and growth.

Westfield enjoys Boxing Day footfall cheer

Westfield London and Westfield Stratford City attracted a combined 363,000 punters on Boxing Day through a combination of retail deals and experiences, up 3.4% on the same period in 2018.

It was Westfield London’s busiest day since it opened in 2008, with more 189,000 consumers descending on the west London site, with the company attributing a great portion of the success to experience activations.

Among those launched for 2019 were the Winter Village Christmas market, a Nordic-themed Christmas grotto, Naomi Campbell’s Fashion For Relief pop-up store and Merry Mutts Motel at Westfield London.

The firm also said the in-centre services it offers added to its festive attractiveness, including hands-free shopping, gift-wrapping,  concierge  and valet parking.

Myf Ryan, CMO Europe and Group Director of Brand and Strategic Marketing for Unibail-Rodamco-Westfield, said: “Boxing Day has once again proved to be one of the busiest days of the year and we’ve welcomed more than 363,000 visitors across both Westfield London and Westfield Stratford City which is up 3.4%. Local and international visitors have flocked to our centres to make the most of the festive season by combining the best in retail with leisure and entertainment.”

One Stop trumpets influencer success

Convenience store chain One Stop says it smashed its engagement targets on Instagram by working with a team of lifestyle influencers.

The chain, which has more than 950 stores across the country, wanted to highlight the accessibility and quality of its Own Label ranges – specifically their frozen food – and worked with a small group of influencers, challenging them to create meals and post them on their Instagram feeds in order to inspire others.

Working with marketing technology specialist Relatable, the chain says the campaign surpassed its targets of a three per cent engagement rate.

Head of Marketing at One Stop, Nigel Prendergast, said: “We recently launched our Instagram account as a platform to showcase a range of mouth-watering recipes featuring tasty ingredients from our Own Label range.

“Through Instagram we’ve been able to successfully create high street ‘heroes’ from our 450 ‘Own Label’ products, with shoppers invited to join the One Stop team for ways to enjoy quick and healthy meals, kitchen ‘hacks’ and shopper shortcuts.

“In order to explore new ways to harness the influence of Instagram even more, we decided to engage further with communities where our stores are based and trial working with 10 hand picked influencers. Their brief? To create high-quality content that was authentic to their feeds and would resonate well with their followers.

“These influencers were able to perfectly highlight, through their own hands-on approach, the convenience of being able to create delicious meals using One Stop’s Own Label ingredients and the results have been outstanding.”

The select brand ambassadors – chosen for their high engagement rates – set to work posting one to two high quality images of their meals to their feeds, achieving an engagement rate of 3.15 per cent through their genuine and quality content.

Five of the influencers also created ‘Instagram Stories’, highlighting the ‘behind the scenes’ footage of using and creating a meal with One Stop products, focusing primarily on the Own Label frozen food range. The stories were watched by almost 90 per cent of the channel’s audience, which is 40 per cent more than the average story on Instagram.

In total, the campaign outperformed reach by 18% and was seen by 1.25m users on Instagram, increasing awareness of the brand significantly across the channel.

Do you provide Complete Shopfitting solutions to retail? We want to hear from you!

Each month on Retail Briefing we’re shining the spotlight on different parts of the retail market – in January we’ll be focussing on Complete Shopfitting solutions.

It’s all part of our new ‘Recommended’ editorial feature, designed to help retail and eCommerce buyers find the best products and services available today.

So, if you’re a supplier of Complete Shopfitting solutions and would like to be included as part of this exciting new shop window, we’d love to hear from you – for more info, contact Courtney Saggers on c.saggers@forumevents.co.uk.

Here are the areas we’ll be covering, month by month:

Jan – Complete Shopfitting
Feb – Digital Signage
Mar – Display Props & Materials
Apr – Graphics
May – Interactive Displays
June – Lighting
July – Marketing
Aug – POS
Sept – Retail Design
Oct – Shop Equipment
Nov – Window Displays
Dec – Shop Fronts/Entrances

For more information on any of the above, contact Courtney Saggers on c.saggers@forumevents.co.uk.

Register now for the Smarter Payments Summit

The Smarter Payments Summit is a unique one-day event which allows senior retail and payment transaction professionals from the UK’s biggest brands to meet with innovative and competitive suppliers to the industry.

These meetings are pre-arranged and based on mutual interest, meaning there’s no time wasted – and there’s no hard sell.

It is free for payment transaction professionals to attend, and each guest pass also includes access to a series of seminar sessions hosted by industry thought-leaders.

Lunch and refreshments are complimentary, while there is plenty of opportunity for more informal networking.

And it all takes place on 8 September at the Hilton London Canary Wharf.

Simply register your place here.

Retail Shopfitting & Display Summit – Don’t miss out!

The 2020 Retail Shopfitting & Display Summit will connect you to new suppliers and level up your knowledge in series of insightful and inspirational seminar sessions.

This unique event takes place on March 9th & 10th at the Radisson Blu Hotel, London Stansted and is free for you to attend. Overnight accommodation, all meals and refreshments, plus an invitation to our networking dinner is also included with your complimentary guest pass.

Simply register your place here.

In addition, you’ll have plenty of opportunity to network with like-minded professionals, with our current guest list including representatives from the likes of:

  • 111SKIN
  • Booths
  • Carrefour/Carmila
  • Co-op
  • Dixons Carphone
  • EE
  • Hotel Chocolat
  • Howdens Joinery
  • Hush Homeware
  • Liz Earle
  • L’Oreal UK
  • Lotus Cars
  • MAG
  • Merlin Entertainments
  • New Era Cap Co
  • Oak Furniture Land
  • Pentland
  • Primark
  • Jon Richard Ltd
  • RAF Museum Enterprises
  • Quiz Clothing
  • Regatta
  • Regatta Great Outdoors
  • Saturday Co Limited
  • Save the Children
  • Superdrug / AS Watson
  • The Body Shop
  • The Range
  • Topps Tiles
  • Unilever
  • Walls Ice Cream
  • WH Smiths
  • Wilko

We have just 60 guest passes available, so register your place today to avoid disappointment.

Centre:MK shines spotlight on Christmas shopping habits

Modern men take pride in being skilled Christmas shoppers – compared to their parents who believed present buying was a ‘woman’s job’.

A poll of 2,000 men found that in the 1970s, Christmas shopping was largely a female job, with 73 per cent of husbands leaving the task solely to their wives.

Generations later, men’s attitudes towards gift buying have moved on, with 56 per cent believing men put more time and effort in today than in previous years.

And 43 per cent said modern men independently buy gifts rather than leaving it to others, while 45 per cent think they are more thoughtful and generous.

The study was commissioned by shopping centre centre:mk, and also found the average modern man spends almost two hours selecting the perfect gift for his partner.

But the older age group of 65+ take the least amount of time, at just an hour and 20 minutes.

More than half of younger men also remember their Dad leaving all present buying to their mum.

It also emerged 74 per cent of men enjoy Christmas shopping and 42 per cent rate themselves as ‘good’ at present buying.

A fifth go as far to describe themselves as ‘very good’.

The research also found more than a third of men describe themselves as a ‘listener’ and take hints when present buying, compared to a sixth who admitted they are a last-minute shopper.

And a third believe male shopping habits have been affected by the rise of female independence and prosperity over the past 40 years.

Kim Priest, Head of Marketing at centre:mk, said: “We are seeing a move away from the ‘Last Minute Shoppers’ – men who traditionally leave it to the last minute then run into the centre on Christmas Eve.

“There will always be some man-dashers but it’s fantastic to see that men’s attitudes today have shifted with over a third of men referring to themselves as ‘The Listener’.

“They feel organised, take the hints and know exactly what to buy – how times have changed.”

As part of the research, centre:mk, on the year of its 40th birthday, collaborated with men’s fashion expert and author, Josh Sims, to explore the change in male attitudes to Christmas shopping.

Sims said: “Four decades ago, attitudes to male gifting were very different to today.

“Women were still typically considered home-makers rather than professionals – their Christmas gift was an indicator of the man’s status as the breadwinner.

“Employment for women over the second half of the 1980s then rose at the fastest rate than at any time in the last 40 years which changed things.

“The increased financial independence among women means their partners are free to buy what they want for themselves regardless.”

More than a quarter of respondents reported feeling ‘excited’ about the prospect of gift buying while 18 per cent said that shopping for their loved ones made them feel ‘content’.

More than two fifths of those polled via OnePoll also spend the most money on their significant other, splurging an average of £137.

Perfume and jewellery were revealed as the most popular modern-day items gifted from men to the loved ones in their lives.

In this way, gift-giving in 2019 aligns with 1970s trends, where perfume and jewellery were also popular.

Interestingly, there was more disparity between the percentage of women receiving domestic items as Christmas gifts.

Between 1971 and 1989, one in every three items gifted to women from their partners fell into this category, with prime examples being ironing boards, washing machines and kitchen gadgets.

In 2019, however, such items make up only 12 per cent of favoured women’s presents.

According to Sims, there are the main categories male gifters fall into:

THE LISTENER: He’s taken the hints and made a list. Although there may be no big reveal on the day – half of men buy their partners whatever it is they’ve been asked to buy.

THE FRUGAL SHOPPER: The times are tight. Or he is. Either way, for 18 per cent of men Christmas is about keeping the money wrapped up in the bank and not under the tree.

THE LAST MINUTE SHOPPER: Has he been planning for months, only at the last minute choosing to execute his plan? Or has he not realised Christmas comes the same time every year? Some 16 per cent of men leave their shopping to the week before the festive day.

THE BIG SPENDER: Mr. Big splashes the cash. It may not be on something you actually want but never mind that. He’s one of the eight per cent of men who like to impress with an expensive gift such as a tablet or a phone.

KING OF CASH: What could that slim, envelope-shaped gift under the tree be? Oh, it’s an envelope – with cash in it. Playing it safe, seven per cent of men give their partners money for the festive season.

MR. ME: You live together, right? So what he buys for you could be, something for him as well. Around four per cent of men buy a gift they actually want themselves