nickshanagher

There is a scene towards the end of the Hurt Locker where the hero (or antihero) is back home in the US from his job defusing bombs in Iraq and he is standing in a massive supermarket shed dwarfed by thousands of packs of cereal boxes and unable to make up his mind which one he wants to buy. The outcome, he goes back to work in Afghanistan risking his life solving tricky wiring problems. Perhaps sadly for me, I was more worried about the poor quality of the product display. It was obviously not a real store - there was no attempt at point of sale, no differentiation. Perhaps the hero could have used his decision making skills to inject a bit of order into the cereal display? However, some manufacturers may be there ahead of him. The FT says Unilever has cuts 40 per cent of its stock keeping units in the UK, armed with the view that 95 per cent of net revenues are generated by 60 per cent of SKUs. This statistical analysis from the Boston Consulting Group appears to be simi...

The final of three poaches from Vanessa Friedman's FT interview with Mickey Drexler, chief executive of J Crew, is on his views about brand values. His company is looking for a store in London because a store "really articulates what the brand is. It's an emotional, visual experience in a way a catalogue or website is not." How good is your store at making an emotional and visual connection with local shoppers? How much better than a web site are you? Remember, if you are selling a commodity, Tesco will win every time. Remember also that good customer service takes in the emotional and visual connection. Check how clean your floor is, how welcoming your door mat.

Vanessa Friedman of the FT says there were two reasons why Mickey Drexler helped clothes retailer J Crew to sales of $1.7billion in his eight years with the company (previously he took Gap from $400 million to $14 billion in 18 years). First, he saw the opportunity to raise the style quality and move to where there was a "lot of white space" between very cheap clothes and designer. Second, he "took a page from Brooks Brothers' book and it was a high margin, high profit page: you don't pay wholesale. Because if you pay wholesale you have two problems: one, discounters - you always have to drop your prices; and two, margin. Say something costs you $50 to make. You mark it up to $150 for wholesale. The retailers mark it up 2.2 or 2.3 times, which is standard. You can't undersell them, so you have to sell your sweater for $350. But if you are the only retailer, you sell it for $150." Two questions for local retailers: Where is the white space for you?...

"Wherever I go I always ask what the bestseller is," says Mickey Drexler, chief executive of J Crew, the US preppy clothes company he has headed since 2003. Meeting Vanessa Friedman, fashion editor of the FT, for lunch, Mr Drexler explains that when he dined at the Wolseley in London he asked and was told 1) wiener schnitzel and 2) cobb salad. He ate the second. For pizza, the answer is always Margherita and this was the case at Pulino's in New York where he dined with Ms Friedman. In ice cream it is always chocolate and vanilla. In cookies it is chocolate chip and then oatmeal raisin. "I tell this to my team when we go out together: you need the Margherita! People like consistency. Whether it's a store or a restaurant, they want to come in and see what you are famous for." J Crew's top sellers are: 1) the Jackie sweater, 2) the Café capri and for men the prewashed shirt. What is it you are famous for?

On-line retailing still requires great customer service, Nick Robertson, chief executive of ASOS, told retail employers at a Skillsmart Retail seminar this week. Set up before the rise of social media (Facebook and Twitter and YouTube), ASOS has expanded internationally on the back of customer demand. It had no plans to launch in Australia but has huge sales there because social media helped shoppers to find ASOS. A key measure of customer satisfaction for on-line businesses is to measure the number of shopper contacts to orders. For ASOS this trends between 25 per cent and 30 per cent (which means a shopper asks a question about every fourth sale). Heavy snow in the UK last year caused this to spike over 40 per cent. Distribution problems caused it to spike over 35 per cent. Customer contact is driven by email. The call centre will only call back if the first two emails fail to solve the problem. Most emails are questions about colours and sizes which are easi...

Get out and mingle, venture capitalist and FT columnist Luke Johnson advised business people in a column last month. While he targeted his remarks at people sat behind desks, they are equally valid for business leaders who stand behind a counter. Local retailers need to visit other shops and see what they are doing. In addition, they should attend trade shows and conferences to meet other people and share ideas and know-how. They should also think about going somewhere new to refresh their minds. With this idea in my head, I toured the Speciality and Fine Food Fair in London’s Olympia last month – now incorporating Chocolatefair. The organisers have already announced that more than 8,300 people visited the show, now in its 12th year, at which more than 550 businesses exhibited. While the fair is targeted at fine food outlets, there is plenty for local c-store operators to learn and the first thing is about selling. What is great about this show is that most of the stands are run ...