Spring is in the air, the economy is finally starting to look up and businesses are thinking about the future.
The ICT industry on the island faces challenges of course but is increasingly taking its place as a sector which is recognised in its own right. In fact for the last few decades developments in information technology have been transforming, or some would say disrupting, pretty much every field of business.
The effect on retail has been particularly profound, as consumers we are increasingly willing to avail ourselves of greater choice, availability and price from efficient and trusted brands like Amazon. Yet at the same time we bemoan the associated decline in the offering on the high street. This Christmas has seen yet another increase in the proportion of goods bought on line, but behind the headline statistics there is something much more interesting going on.
If you look at the winners and losers amongst the big retail brands this year it is those with the most mature hybrid models that seem to be doing best. John Lewis for example saw an increase in like for like sales of 6.9% overall with online sales up 23% and click and collect up 60%!
Overall 'click and collect' seems to have been the big winner this year, and not just for the retail chains. Services like Collect+ mean that any retail outlet be it corner shop or 24hour petrol station can become a collection point for a huge selection of branded stores from eBay to ASOS.
Personally I think this is just the start of a really exciting phase in the development of retail business models. The critical mass of customers willing to engage on line is undoubtedly there, but the benefits of going to a retail outlet of some kind for at least part of the process is also undeniable. So, is it just about having a decent website? Well, whilst I would be the last person to dispute the value of a well-crafted website, the answer is still no, not really or at least not only…. The answer, or rather the question to be answered lies a little deeper in the design of your business - how and for whom do you create value?
Speaking as a consumer (as opposed to an expert on retail) I would suggest that value is created in a number of broad categories the importance of which varies depending on what I am buying.
Price is particularly important when buying a highly standardised or commodity item, why pay more when you know precisely what you want and it is always the same.
Convenience quite often trumps price once you factor in the value of your own time (or health when you need that anniversary present, today! )
Choice, there is nothing worse than going down Strand Street with someone who can't find anything they like in stock, in their size… enough said, sort it out please!
Service and in particular after sales service is a vital component particularly with more expensive purchases. This should be a major plus for bricks and mortar retailers but they often squander their advantage by being awkward about returns or lacking in depth product knowledge.
Expertise, specialist products often require detailed explanations, demonstration, fitting, adaptation etc. Sometimes this expertise is hard to emulate online although big sites like Amazon do a good job of 'crowd sourcing' product expertise through their ratings system.
Sociability, shopping is partly a leisure activity undertaken with friends and family (and varying degrees of enthusiasm) the appearance of coffee shops and comfy chairs in book shops is I would suggest just the start. Just remember that your retail space can be more than just a place to display your wares, particularly if those wares are out there in the cloud.
For Manx businesses there are also local factors to consider, but the overriding priority for our economy is for businesses to create a value proposition which replaces imports and creates opportunities for export. Each of the factors described above can be used to create value regardless of where a product has been manufactured, and it is important to remember that one of the main achievements of the revolution in technology is to make services easier to export.
There isn't space here to analyse the importance of each of these factors to any particular product type but it is easy to see how they might relate differently to say a fashion purchase when compared to the weekly shop or buying a first new car. My view is simply that the smart approach for retailers is to think about their value proposition first and then see what technology can do to make them stand out from the competition. Innovation is about making technology work for you and where possible, allowing you to serve a much larger market than will ever be available on Strand Street.