Talk of the death of the high street is “overblown,” said retail veteran Sir Stuart Rose this week. Rather traditional retailers are rethinking how many stores they need and what the customer wants at a time of huge change in the industry.
Rose, who has himself transitioned from a career in high street retailing, where he was chairman of Marks & Spencer, to pureplay retailing, as chairman of Ocado, said that collaboration and sustainability were both key to succeeding in today’s industry – while many legacy retailers would find they did’t need so many shops in a world where high streets now look very different to the way they once did.
The moment of real change at Ocado, he said, had been when Amazon bought Whole Foods Market – an organic grocery chain with stores across the US and a number of shops in the UK. That, he said, “sent a signal out to the world that they were very serious about getting into the fresh food business, that they were prepared to spend billions to acquire someone.”
Rose, speaking at the World Retail Congress in Amsterdam this week, said that high streets used to be worse than they are now.
“There was a day when down every UK high street there was a Post Office, three kinds of banks, no coffee bars, no internet cafés. That’s all changed – the banks shut, post offices changed, and everyone said, oh that’s happened. But what happened then? They all got regenerated, a whole plethora of different things going on. I think actually it is overblown.
“Big space in high streets is under threat but there are some clever people who are turning that big space. There’s a start-up in London, a pop up series of restaurants in an old BHS space, where they’ve opened 30 restaurants. You can go with your mates – you have Chinese, I’ll have an Indian, you just go and have some fun.
“We just need to be entrepreneurial. Landlords have recognised that the old ways have gone, retailers have recognised that. It’s about cooperation.”
Moving on from legacy retail
Legacy retailers he said, had sometimes suffered because they “believed their own PR, that they knew everything there was to know about dealing with customers.” But, he said, “the fact of the matter is it doesn’t work like that any more. It’s a bit like chief execs who believe that because they are chief exec they have exclusivity on good ideas – a good chief exec surrounds self with people who have good ideas. You can’t do it alone. You don’t have the firepower to do it.
“Clever people start collaborating. It’s the same with the whole issue of sustainability – should businesses be a force for good, yes, re they a good place to start, yes, can they do it on their own? No, same for government and NGOs. If you bring all together you can make good progress.”
Today, he said, the customer was no longer king but master of the universe. “They want what they want, when they want it, how they want it, and in any channel that suits them. And one other critical factor has changed as well – it’s no longer at the price we choose to charge them, it’s at the price they choose to pay us.
“The thing has turned on its head, it’s become a demand-led economy and if we don’t understand that customers have plenty of opportunities to go elsewhere then we are lost.”
He added: “I came into retail a long, long time ago because I was excited by change.
“There are two kinds of people on this planet; those who like change and those who don’t like change. Interestingly in our industry many people don’t like change, but I find it exciting.
“I would say that the biggest single change that I’ve seen in the past 40 years is that the rate of pace of change is accelerating, literally daily.”
Sustainability
Rose said that he thought the recent wave of climate revolution across the UK, spearheaded by Extinction Rebellion and the visit of teenage Swedish activist Greta Thunberg, was “fantastic”.
“Was I bad-tempered 10 days ago when I was trying to get around London, and lots of young kids were lying on roads and bridges holding up traffic?” asked Rose. “Yes, I was. But when you stop to think about it, if that’s what it needs to get some actionn, if we have to rely on a very articulate 15-year-old girl to get us to look, then we need to take some notice.”
He said he had “a reasonably clear conscience” because he had started Plan A at M&S in 2005.
“That was basically a plan for us to become carbon neutral,” he said. “When we started it and told shareholders we were going to spend £200m of the company’s money investing in doing these things, I was not well received by the investment community. When I said that in two to three years it would be profit neutral – and then it was audited and it was – people began to take interest. A lot has happened but it is the whole point about self-interest and thinking outside the box.”
Today, he added: “A lot of investors do have strong sustainability credentials, they do care – and that was not the case 10 years ago. I do believe the world is going to be a better place tomorrow, despite all the difficulties, and we have to keep pushing and pushing and persevering.”
Image courtesy of Ocado
