Multichannel marketing

The retail sector is facing particular challenges at present with the survival of many outlets resting upon the results of their Christmas trading.

Yesterdays results from the music and electronics retailer HMV graphically illustrates the problems facing this sector, a reported loss of £45.7 million and the share price now 90% lower than a year ago.

Much talk in recent times has focussed on the demise of the traditional British High St. There is a tendency to feel that all would be well if instead of the plethora of Charity shops, Discount Retailers and Pay Day Loan outlets they were to be replaced by Butchers, Bakers & Candlestick Makers.

In reality there is no going back to this perceived “Golden Age”. The new buzz word in retailing is "multichannel", loosely defined as a strategy that involves selling through stores, websites, mobile phones, catalogues, social networking sites, et cetera. Basically it is an all encompassing process designed to maximise sales revenues.

Not all business models can embrace this system but there has rarely been a time when the old adage of “work smarter” has been more relevant. As more and more obstacles are thrown up to threaten operating margins everyone in any commercial organisation must ensure that they are operating at optimum efficiency.

Whilst many Retailers are pinning their hopes on “multi channelling”, they are not the only sector having to radically re-think strategy in these turbulent times.

The inability to adapt to the requirements of the changing market place will inevitably see many companies joining the long list of corporate failures in the months ahead.  

Something any business can control

External factors over which little control can be exerted continue to buffet all business sectors. However, every organisation does have a potentially winning weapon in their armoury namely the opportunity to offer excellent customer service.

In these difficult times everyone expects ultimate value for their cash be it the corporate customer or the man in the street.

It is a paradox that as trading conditions become tougher and business harder to win the level of service offered by many Suppliers is falling very short of acceptable standards.

From the frustrations of automated answering (devised surely to test anyone’s patience to the ultimate degree) to the failure to meet agreed delivery schedules Customers are left feeling that their business is not valued.

Little wonder that they choose to vote with their feet.

Customer service is not a difficult act to pull off – in reality all that is required is to give the Customer the feeling that their business is important and they are valued, not just “one of a number” or even worse a nuisance.

Those businesses that master the art of Customer service will emerge from this current difficult period all the stronger.

Commercial post mortem – now we can see the problem!

All too often in the course of commercial post mortems, the Management and Shareholders of troubled organisations end up asking “how did that go wrong?”

It is an incontrovertible fact that many companies fail to address problem issues early enough to avoid an oncoming crisis. When in reality the causes of the problems were all too readily visible.

In the past days we have seen classic examples of this ostrich school of management. The IT support Group Logica whose CEO cited overestimating the amount of work it would receive resulting in a 3^rd Profit warning which now see the shares price worth half of what it was a year ago and Thomas Cook Travel Group who posted a £398m loss after taking a hit on the plunging value of its assets and brands.

The signs of a troubled business are all too apparent – these include lack of controls, lack of strategic vision, a demotivated workforce and obsolete or valueless stocks etc

Instead of grasping these nettles, often the preferred option is to engage in a variety of exercises ranging from ill judged acquisitions (think RBS/ABN), totally pointless projects such as rebranding or the launch of another product range destined to fail for the above reasons.

Inevitably the harsh realities come into play but for many companies it is at that stage too late in the day.

Battening down the hatches

We are shortly to enter the holiday season during which time we will find ourselves in somewhat of a limbo situation. At the same time the current financial inputs underscore the fact that the UK economy remains in a very fragile condition

Without question, the real effects of the cut-backs and general downturn in many people’s incomes will be felt most keenly in the first quarter of 2012.

The recent hike in utility charges ( up 22% in a year) will really bite from January onwards and a further downturn in consumer confidence appears likely. More and more will the mantra “heating versus eating” be heard.

Running any business against this background will provide challenges and there could not be a more pressing time to address the question of operating costs and the rigorous policing of stocks and Debtors.

If appropriate actions are taken now, companies should find themselves well positioned to ride out the inevitable storms.

Positioning for 2012

Do you want to maximise your profits whilst avoiding locking your company into increased overheads?

Then it appears that the time is right for a root and branch analysis of your business.

As an independent Consultant I can give your business a full evaluation and provide you with a range of successful sales strategies and cost saving efficiencies.

Why not check out my profile at http://uk.linkedin.com/in/gordonblackburn

The man at the Clapham Supermarket – a modern Everyman

One of the tests of the English legal system is “what would the man on the Clapham omnibus think?”- basically this is the reaction to any problem or situation that could be expected from a reasonably educated and intelligent but non-specialist person.

In the current economic climate many companies would do well to ask “what does the man at the Clapham Supermarket checkout think?”

The problem is that many people running businesses (or for that matter senior politicians) are too removed from the realities of life to effectively understand the economic difficulties faced by the ordinary consumer. It is a very easy exercise but a few minutes spent in the supermarket or on a garage forecourt will give a true insight into the problems and frustrations currently felt by the ordinary consumer.

Retail businesses have a matter of days left to maximise their sales in the pre Christmas run-up and the end of year sales. It does not take a crystal ball to forecast bad results for many retailers against this current backdrop with the resulting trickle down through other areas of the economy.

There is unfortunately no silver bullet so all businesses must look to operate at maximum efficiency and with rigorous policing of inventory levels and cash-flow.

Failure to spot a crisis – FSA for short

Today’s report into the failure of the Royal Bank of Scotland in 2008 will highlight amongst many issues the fact that the UK’s Financial Service Authority (FSA) really did not understand the complexities of the business which it was in the position to regulate.

The spectacular failure of RBS ( a cost to the UK taxpayer of some £45 billion in the bail out) can be attributed to a number of factors not least the total ineptitude and recklessness of the senior management as typified by Sir Fred Goodwin.

This is an outstanding example of a business out of control. At the same time it begs the question how many businesses are similarly basket cases yet by smoke and mirrors are able to befuddle and confuse both their shareholders and bankers.

For example as the owner of an SME are you really confident in the integrity of the figures presented to you by your finance department? Or as the shareholders of RBS are you merely content to receive good news without challenging the how and whys of these results being achieved?

It all boils down to the age old fact that if something looks too good to be true it usually is.