UK and European roll out installation specialist offering display, merchandising, POS/POP storage, collation, distribution and implementation for retailers and brands.
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Hello and thanks for visiting our blog - here you will find interesting articles on what's happening in the world of point sale, visual merchandising and display innovation.
Most of the big department stores have done well this Christmas with the exception of Debenhams having issued lower than forecast sales over the festive period followed by the departure of chief financial officer, Simon Herrick.
John Lewis was up by 6.9% from the previous year on like for like sales, with a 60% increase in click and collect helping those figures. House of Fraser also reported strong sales.
Next are the big winners having issued outstanding profits on both their directory and in store sales. Resisting the pre Christmas discount route many other retailers took has paid off. Their profits for the first time have just overtaken M&S despite being half the size. It is predicting full year profits to be between £684m and £700m by the end of January with positive January discount sales continuing their success.
M&S hasn't done as well as expected on clothing sales having gone into discounting items before Christmas. Their profits are down on last year in clothing and household, however food sales remain strong.
Overall it has been better than expected trading during Christmas and retail spending has been good for most retailers for both online and in store sales.
Pound shops have done very well and large expansion plans are in place for many of the discount retailers and supermarkets.
Retailers that have done badly are having to implement further discounts as they go into the next two trading quarters to recover from slow Christmas sales. However Next shareholders will be very happy to learn that a surplus of £300 million in the business will mean Next will be issuing one off dividends of 50p, costing the business £75 million. They are being cautious with forecasts for the next year but overall it's looking like they will continue on the run of success and share prices have increased reflecting this.
It's that time of year when the retailers release their Christmas adverts. We always look forward to seeing what our favourite retailers will come up with, especially the ones we work with throughout the year to install their promotional displays. We've chosen five retailer and five supermarket adverts that are memorable for various reasons.
M&S has outdone itself this year with a story book fantasy adventure for Rosie Huntington-Whiteley, entering a magical world as Alice in Wonderland and exiting as Dorothy from the Wizard of Oz. The 'Magic & Sparkle' advert, featuring Helen Bonham-Carter as the Wicked Witch of the West, looks like a tantalising trailer for an epic adventure!
The Debenhams 'Wishes made Fabulous' advert takes us on a vaguely nostalgic journey through London, capturing Christmas in the capital whilst reminding us of the wide range of brands available in the department store.
The John Lewis 'Bare and the Hare' advert is like a Disney animation, seeing two best friends journey through the woods to Christmas celebrations. The theme is all about the gift of giving, with a rather touching moment where the hare leaves a thoughtful present for his bear friend in hibernation so he can join him for the party on Christmas day. There are already several spoofs of this on you tube.
Harrods 'Everything You Want, Anywhere You Want' advert is like an old black and white film. Set on a railway platform with a glamorous young woman disembarking from a steam train after arriving back from her London shopping trip. She's counting out her parcels from Harrods with the help of a dashing young gentleman who gallantly finds a lost little present.
Boots sees a misunderstood 'hoodie' teenager dashing through the snow looking rather shady like he could be up to no good, but as it turns out he's actually leaving gifts anonymously for all his nearest and dearest. It remains unclear how he obtained these gifts at this stage, we'd like to think it was paper round funded, although seemingly that didn't stretch to affording wrapping paper.
The supermarkets have a mix of reinforcing their heritage, family values and financial value, all competing as usual for the big Christmas shop.
Asda is focusing on their price guarantee offer this year with snowmen in colourful scarves depicting the four major supermarkets. It's a wonderfully simple ad' and really gets across their '10% better off' assurance with the bigger and better smiling ASDA snowman, suitably attired in a green hat and scarf.
Tesco chose to show the meaning of family at Christmas as if through video camera footage, starting with a young family (with granny in tow) in the seventies and progressing through the eighties and nineties to 2013 (minus the gran but with baby bump). It's quite emotive at the beginning as it does remind those of a certain generation how Christmas was when we were kids.
Sainsbury's have several adverts from the one below detailing various family escapades in putting up the tree, to Jamie Oliver food recipes. Their theme is all around the 'Moments that make Christmas' captured very well in the 'Homecoming' advert, where mum and two kids are singing a Christmas carol for the camera when soldier dad walks in and surprises them all.
Morrisons 'Go on - it's Christmas' advert has Ant and Dec tucking into a decadent Christmas dinner whilst gazing in the general direction of a little singing ginger bread man in uniform. He is then joined by an army of miniature bakers prancing up and down the table, reminding us all of the indulgences to come over the Christmas period.
The Co-operative 'Everything Your Need For Christmas' advert has chosen to focus on the heritage of the brand with their 'Here for you for life' motto and shows a woman blissfully walking from a store through an energetic snowy street scene and serenely into her party full of Christmas goodies.
The M&S advert nailed it though and remains our personal favourite for the retailers. For supermarkets we enjoyed the ASDA snowmen for its simple yet effective message. We have enjoyed working with all of our retailers this year, ensuring Christmas and other seasonal events are also a magical experience in store as well as on the Television.
Things are looking up for Christmas 2013 if the recent reports in the news are to be believed with some forecasters predicting that this year will be the best Christmas for retailers since 2007.
Market Research Company Verdict has predicted that consumers will be spending £2 billion more than they did in 2012. That's welcome and happy reading for the retail sector. These figures show expected growth of up to £88.4 billion this quarter of which £36.4 billion is likely to be on grocery and £52 billion on non food items.
Sales are already up by 0.6% this September compared to August which was lower than anticipated due to the weather. According to the Office for National Statistics sales are up by 2.2% compared to September last year.
All of this is good news as strength in consumer spending is generally a reflection of the wider economy. With house prices on the up it's looking like consumer confidence is returning despite the USA problems with the debt ceiling and government shutdown shaking confidence in world markets.
Some of the reasons Verdict have given for this upward trend in spending is more job creation, a baby boom recession, PPI refunds and the Post Office float. Although wages remain low, which has reflected in the fall of food sales in supermarkets.
It is thought that many sales will be left to the last minute with Monday 23rd December expected to be the busiest shopping day. Online sales are increasing as more people shop around for bargains and take advantage of click and collect services, allowing for greater confidence in online shopping as it cuts out the risk of last minute missed deliveries.
As a result of the recession baby boom Christmas spending is going to be big for childrens items. With John Lewis M.D, Andy Street, expecting them to have the best Christmas ever here is the John Lewis top 5 best selling toy predictions for Christmas 2013:
The Mini Kitchen (£50) ~ LEGO Creator Winter Village Cottage (£89.99) ~ Furby Boom (£59.99) ~ John Lewis Spy Watch and Pen set (£15) ~ Doc Mcstuffins Doctors Set (£19.99)
As our Christmas roll outs are about to start it's our busiest year yet! We're seeing retailers investing in making the most of the anticipated consumer spending with wonderfully creative displays which we'll be installing up and down the UK in the coming weeks.
Men's apparel has led retail growth in the last couple of years and is expected to grow faster than other categories such as electronics or music.
In the UK this market has grown by 12 per cent in the past five years and is worth £10.4bn, according to the study by Mintel.
The market research group believes the market will maintain this growth and rise by 11 per cent between 2012 and 2017. (source)
Online shopping appeals to men and many retailers are now waking up to the fact that department stores and shopping centres are designed specifically with women in mind and quite off putting for the male shopper. As Ben Lerer, founder of men's lifestyle website, Thrillist says “Men don’t hate fashion, they just hate shopping the way it’s designed for women,” and he has a good point.
“The young generation of guys love to shop, they love to talk about the brands they like and they really care about how they look.”
Online shopping seems to suit the way men shop and has accounted for a lot of the growth, although women's online sales still double those of men. However men's online sales are growing at a faster rate than women's with the growth gap set to increase.
It's not just online retailers that are taking advantage of the boom in menswear, luxury brand menswear is a growth area and bricks and mortar flagship stores are opening all over the world's fashion centres. Here in the UK Dolce and Gabbana have opened their second men's only flagship on Bond Street, London and Alexander McQueen have opened up a men's only tailors in Savile Row, London. Whereas before these high end luxury fashion brands had menswear as an addition to the women's wear ranges they are now recognising the potential new growth market and investing accordingly with designer brands like Gucci, Dior, and Ralph Lauren all opening men's stores across the globe.
As retailers respond to men's shopping habits and recognise this growing market in the young and affluent professional we shall see more choice for men on the high street follow too. We look forward to installing more men's wear displays in this rapidly expanding market!
There's a shift in retail environments happening and Tesco is leading the way by looking at alternative uses of their huge supermarkets, having discovered that shoppers prefer smaller supermarkets and more frequently shop online they are now left with space to develop in their Extra stores.
Tesco opened their first new concept Extra Store in Watford, one of the biggest stores in their estate, on the 12th August bringing in new shopping and eating experiences. As well as developing the home ware and new look boutique clothing areas Tesco are also set to open family friendly restaurant Giraffe in 12 stores across the Tesco estate, having recently bought the chain for £49 million. Alongside Girraffe Tesco are offering the artisan coffee experience Harris and Hoole within stores and a deli style bakery experience with the Euphorium Bakery, The Bakery Project. They are also looking at offering cookery classes, baby gyms and yoga classes free of charge, and being more community led with some of the uses of space. It's almost like they are becoming the new town centres!
UK Managing Director, Chris Bush commented: 'We’ve spoken a lot about our vision to create compelling retail destinations in our larger stores; places where customers come to spend time and meet their friends and family. Watford is the first store where many of our innovations and ideas have come together and it’s great to see it all under one roof. Watford represents a fundamental change in the way that people are doing their shopping. More and more of our customers are shopping for leisure; they want to browse for clothes, eat a meal or grab a cup of coffee, as well as do their weekly shop. It offers us a glimpse into what stores of the future might look like and we’re really excited to be sharing that with our customers.'
Meanwhile Mary Portas has recently been discussing how retail has to change on the High Street and become more community focused, much in the same vein as Tesco's concept, offering a hub for the community in the empty shops around the retailers. The aim is to keep our town centres alive by attracting shoppers with crèches, health clinics and other service based businesses, as part of her on-going mission to save the High Street.
“We have been obsessed with high streets being retail. In the future we know that cannot be the case. I would imagine about 30 per cent needs to be the case,”
“We need a new vision, we need to trial new ideas and we need to give opportunities to new businesses. Those could be businesses that are about well-being, health and sports.” said Mary Portas.
So it looks like the future of retail in bricks and mortar terms has to embrace the community and attract people in for experiences whether that be eating, drinking, socialising, exercising, and accessing services alongside retail environments. An evolution of sorts with Tesco trail blazing the way in reaction to consumer trends and needs.
As people move away from the everything under one big brand huge aircraft hanger style supermarkets and frequent independents for the shopping experience, Tesco responds in kind offering a similar experience in-store but with prices that cannot be matched by smaller retailers. Harris and Hoole has for example come under much criticism for masquerading under its original small indie coffee chain roots when actually having since partly been bought out with 49% reportedly now owned by Tesco. It's now out there with the chain being developed within the Tesco Extra stores themselves.
So as supermarkets invest in smaller convenience stores with new openings they are left with what to do with the larger parts of their estates..and smaller more personal shopping experiences are offered under one roof.
We can only wait and see if shoppers will respond well to these new concept stores, there's certainly been a lot of thought and investment in refurbishment and I do think they will be successful. Whether the High Street will evolve in the way Mary Portas and No. 10 want is another matter, perhaps these new stores will be yet another prohibitor of the revival of the great British High Street.
We're already half way through 2013 and have seen some of the expected rise in food prices, however there are more on the way with this year predicted to see the largest hike in the cost of food and grocery items for a long time.
Mark Price has been preparing his Waitrose customers to expect "massive" rises in food prices as has Tesco Boss Philip Clarke, warning of escalating food costs over the next decade and the era of cheap food being over. J Sainsbury are getting involved in government funded research into agricultural practises that will benefit the food industry and invest in more locally grown food with an eye on the longer term future of sustaining a much larger demand for food.
The food price increases currently are environment led with wet weather in the UK and parts of Europe and drought over in the USA, both of which have caused crop failures and difficulties for farmers, seeing UK food inflation increasing. Combined with recent poor harvests globally in large arable growing nations such as Russia and the Ukraine stocks are at an all time low.
The meat industry has also recently been hit by scandal and retailers are addressing consumer concerns by investing more in UK supply chains, which again has cost implications. Consumer research has indicated however that we would be happy to pay more for meat products if the farmer was the beneficiary.
Longer term the global economy will impact on food prices as the world population keeps growing rapidly and demand outstrips supply. Dietary changes in developing economies and growing middle classes in China and India also impact in pushing up food prices. As Philip Clarke has said Tesco are now competing with global retailers when buying in regions such as South Africa, whereas previously they were the only buyers. The crude oil and food industry are intrinsically linked as one pushes up the price of another - all of which impacts on living costs for the consumer.
So what does this all mean for our retailers?
As the average family feels the squeeze of rising prices their shopping habits change accordingly. Retailers see less loyalty as people shop around looking for the best bargains, supermarkets such as Aldi and Lidl are really benefiting from the recession and attracting shoppers from the big four.
Branded products also suffer as consumers look for the best value for money with unbranded or supermarket own brand products. People have less brand loyalty as they look for the offers and discounts and switch brands accordingly. The use of technology in store allows shoppers to see if they are really getting the best value for money.
Part of the reason food prices have been cheap for so long is a mixture of low cost imports and supermarkets pushing down prices in price wars. As the imports are becoming more expensive and production costs increase retailers have no choice but to put up their prices. Co-Operative are already feeling the effect on their food sales, seeing a decrease in profits in the last four trading period.
As prices increase pressures on retailers to make sure that your pound is spent in their store is not a bad thing from a POS and display point of view. More in store promotions need advertising and that means a healthy continued supply of print and display materials.
Retailers will have to work harder to show consumers that they offer the best value for money and that bargains can be had. I think we'll see a lot more of the BOGOF and other multiple type promotions, greater rewards for loyalty cards encouraging shoppers to stick with one supermarket and reap the benefits. Focus on customer care and added value experiences in store will attract shoppers as the likes of John Lewis have proved in their business model.
We are also seeing supermarkets tightening up on their supply chain to find extra savings and increase profits. Closer monitoring of their estates and POS needs to ensure materials are not overproduced and discarded where it is not needed. This is an excellent way to save money and it all starts with site surveys and store audits, which we are completing more of as retailers look at ways to save. A little investment up front can save millions down the line as print supplies are streamlined and more accurate.
Interesting times ahead - there's no doubt the era of cheap food is indeed over and how retailers react to that will probably see some change in the current dynamic of the supermarket giants.
