tag:theconversation.com,2011:/au/topics/marks-and-spencer-18186/articlesMarks & Spencer – The Conversation2023-11-09T10:00:44Ztag:theconversation.com,2011:article/2171252023-11-09T10:00:44Z2023-11-09T10:00:44ZIsrael: why the brand boycotts probably won’t make much difference<p>McDonald’s and Starbucks are among numerous western companies facing consumer boycotts over the Gaza conflict. <a href="https://news.sky.com/story/man-arrested-after-videos-online-show-pro-palestine-protesters-releasing-live-rodents-into-a-mcdonalds-12998121">McDonald’s</a> found itself caught in the crossfire after an Israeli franchisee said it was providing thousands of free meals to the Israel Defense Forces.</p>
<p>Similarly, <a href="https://www.dailymail.co.uk/news/article-12697291/pro-Palestine-vandals-smash-Starbucks-window-Yorkshire.html">Starbucks</a> faced boycott calls after disagreeing with a post on the social media platform X (formerly Twitter) by the chain’s union expressing solidarity with Palestine.</p>
<p><a href="https://www.alestiklal.net/en/view/20489/boycott-campaigns-from-starbucks-kuwait-to-mcdonalds-egypt">In both cases</a>, customers have been voting with their feet in countries including Lebanon, Saudi Arabia, <a href="https://www.newarab.com/news/moroccans-boycott-pro-israeli-businesses-amid-gaza-war">Morocco</a>, <a href="https://www.al-monitor.com/originals/2023/10/official-boycott-sit-ins-target-starbucks-turkey-amid-protests-against-israel">Turkey</a>, <a href="https://www.france24.com/en/video/20231031-jordanians-boycott-american-brands-over-support-for-israel">Jordan</a> and <a href="https://www.pagalparrot.com/starbucks-mcdonalds-getting-boycotted-by-malaysians-heres-why/">Malaysia</a> – despite franchisees expressing loyalty to the local community. There were <a href="https://www.dailymail.co.uk/news/article-12698161/How-pro-Palestine-boycott-movement-fuelling-fast-food-high-street-cancellation-sweeping-social-media-yobs-launch-attacks-McDonalds-Starbucks-franchises-support-Israel.html">also attacks</a> on the two chains in the UK. </p>
<p>Many other American companies are being targeted, in some cases purely for their government’s support for Israel. These <a href="https://www.arabnews.com/node/2398351/middle-east">include</a> KFC, Pizza Hut and <a href="https://www.newsweek.com/burger-king-faces-boycott-giving-free-food-israeli-soldiers-1837005">Burger King</a>, as well as brands such as <a href="https://www.france24.com/en/video/20231031-jordanians-boycott-american-brands-over-support-for-israel">Coca-Cola</a>, <a href="https://themedialine.org/by-region/jordan-anti-israel-boycott-campaigns-target-american-british-french-products-companies/">Pepsi</a>, <a href="https://bdsmovement.net/news/what-boycott-now-help-stop-israel%E2%80%99s-unfolding-genocide-palestinians-gaza">Wix</a> and <a href="https://www.news24.com/citypress/news/sa-bds-coalitions-calls-for-boycott-of-mcdonalds-puma-and-cape-union-mart-for-business-links-with-israel-20231028">Puma</a>. Google and Amazon face <a href="https://bdsmovement.net/news/what-boycott-now-help-stop-israel%E2%80%99s-unfolding-genocide-palestinians-gaza">boycott calls</a> for offering services to the Israeli government and military to sustain what <a href="https://www.tandfonline.com/doi/full/10.1080/0377919X.2022.2091382">many contend</a> is apartheid against the Palestinians. </p>
<p>Meanwhile, UK retailer <a href="https://www.mirror.co.uk/3am/celebrity-news/tan-france-defends-insensitive-marks-31340447">Marks & Spencer</a> has faced similar calls after running a Christmas commercial with a fire that was burning coloured paper-hats that looked a bit like the Palestinian flag – the commercial has since been withdrawn. This took an uglier turn after critics of Israel <a href="https://www.thetimes.co.uk/article/m-s-ad-conspiracy-theory-is-ugly-new-low-q55qbq0jh">pointed out</a> that the company has partially Jewish roots. </p>
<p>Other brands with Jewish roots have been targeted too, including <a href="https://www.scmp.com/week-asia/people/article/3240503/anti-israel-boycotts-indonesia-hit-mcdonalds-pringles-malaysians-quit-singapores-grab-over-gaza-war">Danone</a>, <a href="https://inthesetimes.com/article/starbucks-israel-gaza-lynne-fox-palestine">Starbucks</a>, <a href="https://www.siasat.com/firms-with-israel-links-suffer-as-arab-world-gives-boycott-call-2766046/">Dunkin Donuts and Netflix</a>. Lists of products founded by Jewish business people have also been shared on <a href="https://www.tiktok.com/@sym_syed/video/7289827743192059138">TikTok</a> and <a href="https://twitter.com/BoyDivSan/status/1004517168724226048?lang=gu">Facebook</a>.</p>
<p>Boycotts relating to the Middle East have a long history. <a href="https://www.theguardian.com/world/2003/jan/08/davidpallister">Twenty years ago</a>, American brands were being removed from Arab shelves over the Iraqi invasion. <a href="https://www.bbc.co.uk/news/magazine-19550067">Coca-Cola</a> was boycotted by the Arab League from 1968-91 because it traded in Israel. Sometimes the activism has also come in the other direction, with <a href="https://www.theguardian.com/world/2021/jul/20/israel-pm-aggressive-action-ben-jerrys-ban-ice-cream-naftali-bennett-occupied-territories-unilever">Ben and Jerry’s</a>, <a href="https://www.theguardian.com/world/2015/jun/04/orange-says-it-plans-to-terminate-contract-with-brand-partner-in-israel">Orange</a>, and <a href="https://www.theguardian.com/business/2014/oct/29/sodastream-move-factory-west-bank-israel-slash-forecast">SodaStream</a> all pulling out of illegal Israeli settlements.</p>
<p>More broadly, there have been boycotts over everything from the <a href="https://boycottrussia.info/">Ukraine war</a> to <a href="https://www.theguardian.com/business/2023/jun/14/bud-light-loses-top-us-beer-spot-after-promotion-with-transgender-influencer">“woke” branding</a>. The logic is straightforward enough: governments will listen if you hurt their companies’ bottom line. So, in what circumstances is this effective?</p>
<h2>Case study 1: Danish cartoons</h2>
<p>In 2005 Danish newspaper Jyllands-Posten <a href="https://en.wikipedia.org/wiki/International_reactions_to_the_Jyllands-Posten_Muhammad_cartoons_controversy#:%7E:text=Danish%20newspaper%20Jyllands%2DPosten's,of%20Muslims%20in%20the%20West.">caused huge offence</a> to many Muslims over cartoons satirising Prophet Muhammad. Much of the outrage was directed at the Danish government for refusing to take action, while Danish-Swedish food group Arla became a lightning rod for calls to boycott Danish products. After 40 years of building <a href="http://news.bbc.co.uk/1/hi/business/4676614.stm">its business</a> in the Middle East, it suffered financial and <a href="https://www.diva-portal.org/smash/get/diva2:142175/FULLTEXT01.pdf">reputational loss</a>. </p>
<p>Arla found it <a href="https://www.diva-portal.org/smash/get/diva2:142175/FULLTEXT01.pdf">extremely difficult</a> to stay out of the debate and faced further criticism from politicians for not explicitly supporting Denmark’s freedom of speech. Even then, it took two years for the company <a href="https://eprints.soas.ac.uk/21190/1/MIP%20Paper%20-%20Case%20Study%20-%20The%20Boycott%20of%20Arla%20Foods%2008%20-%20Revision.pdf">to re-establish</a> itself in the Middle East. </p>
<p>Denmark’s economy <a href="https://www.npr.org/templates/story/story.php?storyId=5199960">wasn’t hurt</a> by the broader boycott, though the newspaper <a href="https://www.theguardian.com/media/2006/jan/31/religion.saudiarabia">did issue an apology</a> to Muslims four months after the row began. </p>
<h2>Case study 2: the Ukraine war</h2>
<p>Both <a href="https://www.ethicalconsumer.org/ethicalcampaigns/boycotts/should-we-boycott-russia">consumers and western companies</a> boycotted Russia and Belarus after the Ukraine invasion in 2022. Among the companies pulling out or temporarily halting operations were <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcorporate.mcdonalds.com%2Fcorpmcd%2Four-stories%2Farticle%2Fmcd-exit-russia.html&data=05%7C01%7CIjaza%40edgehill.ac.uk%7C9abd8ab2bf9841189b3b08dbdc55a2e0%7C093586914d8e491caa760a5cbd5ba734%7C0%7C0%7C638346032864317708%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=hFUZxiIScKVBRUSWjy%2BQk4%2Fj6uNZZK7GcEcDzt5qOK8%3D&reserved=0">McDonald’s</a>, <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.forbes.com%2Fsites%2Fdereksaul%2F2022%2F05%2F23%2Fstarbucks-will-exit-russia-close-130-cafes%2F%3Fsh%3D8fccc1a295be&data=05%7C01%7CIjaza%40edgehill.ac.uk%7C9abd8ab2bf9841189b3b08dbdc55a2e0%7C093586914d8e491caa760a5cbd5ba734%7C0%7C0%7C638346032864317708%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=ZBiwBgP0lZGa5QYI3m%2B8zZmYdjbZ0epEfGsKTMvzd5o%3D&reserved=0">Starbucks</a>, <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.independent.co.uk%2Fnews%2Fworld%2Famericas%2Fcoke-starbucks-russia-boycott-ukraine-b2031512.html&data=05%7C01%7CIjaza%40edgehill.ac.uk%7C9abd8ab2bf9841189b3b08dbdc55a2e0%7C093586914d8e491caa760a5cbd5ba734%7C0%7C0%7C638346032864317708%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=h5h6QJBhlx212mF17euseIECksAlQDGZcsbwr9kRrPU%3D&reserved=0">Coca-Cola</a>, <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.export.org.uk%2Fnews%2F597544%2FGlobal-brands-boycott-Russia--including-Apple-Ford-Nike-and-Disney-.htm&data=05%7C01%7CIjaza%40edgehill.ac.uk%7C9abd8ab2bf9841189b3b08dbdc55a2e0%7C093586914d8e491caa760a5cbd5ba734%7C0%7C0%7C638346032864474084%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=L5M93cZmVw4mO%2FUHlNRXcdcDxqx7LSKEkddoKP%2Fb40M%3D&reserved=0">Nike</a>, <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.ft.com%2Fcontent%2F8e5164dc-a907-4211-a58f-726c9342f372&data=05%7C01%7CIjaza%40edgehill.ac.uk%7C9abd8ab2bf9841189b3b08dbdc55a2e0%7C093586914d8e491caa760a5cbd5ba734%7C0%7C0%7C638346032864474084%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=fQbUB%2BpwY772O7IK%2F%2Bs0IXseyfu37rRspAdOxngmlLo%3D&reserved=0">Apple</a>, <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.theguardian.com%2Fworld%2F2022%2Ffeb%2F28%2Fshell-to-exit-joint-ventures-with-gazprom-and-pull-out-of-nord-stream-2&data=05%7C01%7CIjaza%40edgehill.ac.uk%7C9abd8ab2bf9841189b3b08dbdc55a2e0%7C093586914d8e491caa760a5cbd5ba734%7C0%7C0%7C638346032864474084%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=53r6yP6dNUqwtpnmRlKbwCN8i5N%2F1drZaK8CsnGuNmE%3D&reserved=0">BP and Shell</a>. The boycotts damaged the <a href="https://www.economicsobservatory.com/ukraine-whats-the-global-economic-impact-of-russias-invasion">Russian economy</a>, but clearly didn’t stop the invasion.</p>
<p>Of course, many of these companies are now being targeted over Israel. The <a href="https://www.theguardian.com/world/2022/mar/07/us-sanctions-against-russia-but-not-israel">US was actually criticised</a> in the weeks after the invasion for encouraging this Russia boycott while refusing to take a similar line over Israel. </p>
<p>In fact, there are laws in place to prevent American municipalities from boycotting Israel themselves, which were upheld by <a href="https://www.theguardian.com/law/2023/feb/21/us-supreme-court-arkansas-anti-boycott-israel-law">the US supreme court</a> earlier this year. <a href="https://www.ft.com/content/c6a9855b-1817-4b71-ba24-a4db5b4c923d">There are plans</a> to introduce a similar bill in the UK, and opponents worry it might make it harder to boycott countries like Russia in future.</p>
<h2>Case study 3: anti-wokeism</h2>
<p>In 2015, <a href="https://stories.starbucks.com/stories/2015/discussing-race-relations-in-america-at-starbucks/">Starbucks initiated</a> a national conversation about race relations and attempting to bring different racial groups together. This attracted <a href="https://www.fastcompany.com/3046890/the-inside-story-of-starbuckss-race-together-campaign-no-foam">much criticism</a> online for being self-serving, with people pointing out that the chain’s staff weren’t particularly ethnically diverse. </p>
<p>It further backfired in 2018, following <a href="https://www.theguardian.com/business/2018/apr/19/starbucks-black-men-feared-for-lives-philadelphia">an incident</a> in a Philadelphia outlet where a member of staff got two young black men arrested for refusing to leave because they were waiting to meet someone and wouldn’t order anything. Video footage on social media significantly worsened the situation. </p>
<p>Many people thought it smacked of racism and called for boycotts, prompting Starbucks to <a href="https://www.nytimes.com/2018/04/15/us/starbucks-philadelphia-black-men-arrest.html">publicly apologise</a> and promise to <a href="https://www.theguardian.com/business/2018/apr/17/starbucks-racism-training-close-stores-may-us">train employees</a> about unconscious race bias. </p>
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<p>More recently, <a href="https://www.theguardian.com/business/2023/jun/14/bud-light-loses-top-us-beer-spot-after-promotion-with-transgender-influencer">Bud Light</a> faced a two-week boycott from conservatives after its “woke” campaign online featuring trans activist Dylan Mulvaney promoting a tallboy can. Sales fell 25% and Bud Light lost its position as the top-selling US beer, prompting owner InBev to try and repair <a href="https://brandequity.economictimes.indiatimes.com/news/advertising/wokewashing-are-brands-preying-on-peoples-optimism/95132736">the brand damage</a> by <a href="https://www.wsj.com/articles/ab-inbev-bud-q2-earnings-report-2023-90a57dee">saying it would avoid</a> controversial subjects in future. However, this hasn’t dissuaded companies such as <a href="https://www.telegraph.co.uk/news/2023/04/06/dylan-mulvaney-nike-trans-influencer-social-media-post/">Nike</a>, <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.nytimes.com%2F2023%2F08%2F16%2Fbusiness%2Ftarget-sales-pride-backlash.html&data=05%7C01%7CIjaza%40edgehill.ac.uk%7C9abd8ab2bf9841189b3b08dbdc55a2e0%7C093586914d8e491caa760a5cbd5ba734%7C0%7C0%7C638346032864474084%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=OoG3%2FMcNpH3Zp1QysDdG2QPTkls4XzsLxv4i1OuwMmc%3D&reserved=0">Target</a> and <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.theguardian.com%2Ffilm%2F2022%2Fmar%2F21%2Fdisney-faces-backlash-lgbtq-controversy-dont-say-gay-bill-florida&data=05%7C01%7CIjaza%40edgehill.ac.uk%7C9abd8ab2bf9841189b3b08dbdc55a2e0%7C093586914d8e491caa760a5cbd5ba734%7C0%7C0%7C638346032864474084%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=9WxwrXVOCabv9iikuze3MmMDFuo%2BwzSEfrRxI9jivlE%3D&reserved=0">Disney</a> from adopting similar pro-trans/LGBTQ strategies. </p>
<h2>What it means for the Israel boycotts</h2>
<p>Judging by the experiences of Denmark and Russia, brand boycotts appear to <a href="https://www.sciencedirect.com/science/article/pii/S0148296396002792">exert minimal influence</a> on the target nation’s economy. The Russia case suggests they are most likely to succeed
as part of coordinated sanctions, though on that occasion the boycott was still undermined as <a href="https://inews.co.uk/news/world/western-firms-making-money-russia-two-british-2656660">European businesses</a> and <a href="https://www.ft.com/content/d5cf8b2f-27f0-42ee-b22b-695eca7122e1">third countries</a> found <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10072797/">ways to</a> get <a href="https://www.ft.com/content/233891c0-2c8c-484a-88d3-86ba252d5b31">around it</a>. </p>
<p>The best solution is for the international community to implement a system <a href="https://www.econstor.eu/bitstream/10419/251680/1/bpb1808.pdf">penalising</a> such activities, which hasn’t existed with Russia. In the absence of coordinated sanctions against Israel, <a href="https://journals.sagepub.com/doi/full/10.1177/0022002717721392?casa_token=8COjaA8p7t8AAAAA%3AujGBogiS8Rxh6fARJ9Qhp0CDkUp4v7PTxIUUcL2SSv7nDef5HldJ5rbv4zj-IYtCFC9Iw__ogh2W">social media</a> is likely to be the <a href="https://www.nytimes.com/2021/05/18/world/middleeast/palestinians-social-media.html">sole means</a> of <a href="https://www.trtworld.com/business/did-you-kill-a-palestinian-western-brands-face-sweeping-boycott-in-mideast-15710204">pressuring companies</a> and <a href="https://citeseerx.ist.psu.edu/document?repid=rep1&type=pdf&doi=d1bd6322f7674613347ed9e4f00eed1087c21784">governments</a> into change. </p>
<p>Western brands have <a href="https://www.provokemedia.com/latest/article/brands-play-it-safe-on-israel-hamas-conflict">been noticeably quiet</a> on the humanitarian crisis in Gaza (and also Ukraine), in contrast to their willingness to <a href="https://journals.sagepub.com/doi/pdf/10.1177/00936502211001622">risk supporting</a> anti-racism and LGBTQ+. </p>
<p>Many people will find this extremely disappointing, though of course, the examples of Starbucks and Bud Light show how companies can end up in trouble if their stance is seen as inauthentic or <a href="https://biopen.bi.no/bi-xmlui/handle/11250/3097302">“woke-washing”</a>. Companies trading in Israel or even whose government is backing the offensive could easily fall into that category. </p>
<p>In sum, the boycotts against American companies have succeeded in <a href="https://heinonline.org/HOL/LandingPage?handle=hein.journals/isudijo14&div=38&id=&page=">raising awareness</a> about Israel’s treatment of the Palestinians, but probably won’t have a huge economic impact. </p>
<p>If the <a href="https://www.proquest.com/openview/b406bd4394738597da0782fd1aa21bef/1?pq-origsite=gscholar&cbl=26627">international community</a> would encourage corporate action against Israel like it did with Russia, it might make all the difference, but there is little sign of that happening so far.</p><img src="https://counter.theconversation.com/content/217125/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aisha Ijaz does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The consumer boycotts over the Gaza crisis are the latest in a long line. Here’s when they’re more effective.Aisha Ijaz, Lecturer in Marketing, Edge Hill UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1611302021-05-28T14:24:21Z2021-05-28T14:24:21ZHigh street brands cannot rely on history and familiarity to survive — new research<figure><img src="https://images.theconversation.com/files/403363/original/file-20210528-14-ngio4g.jpg?ixlib=rb-1.1.0&rect=156%2C91%2C8388%2C5605&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/worthing-west-sussex-uk-april-23-1962813244">Shutterstock/J Woodhouse</a></span></figcaption></figure><p>At a precarious time for the high street, a sense of <a href="https://www.globalblue.com/destinations/uk/london/london-top-10-heritage-brands/">brand heritage</a> might be considered a great strength. The theory is that well known stores are able to boast – and attract customers with – a proud history of originality and quality. </p>
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<p>In reality though, heritage appears to have become something of a blind spot for some retailers. <a href="https://www.retailresearch.org/whos-gone-bust-retail.html">Last year</a> Debenhams (aged 243), Jaeger (aged 137) and Laura Ashley (aged 68), all went into administration before reemerging as online only brands. Similarly familiar rivals including <a href="https://www.independent.co.uk/news/business/marks-and-spencer-sales-results-loss-b1854047.html">Marks & Spencer</a> and John Lewis <a href="https://www.independent.co.uk/news/business/john-lewis-store-closures-jobs-b1821655.html">are struggling</a>. </p>
<p><a href="https://www.emerald.com/insight/content/doi/10.1108/IJRDM-10-2020-0412/full/html">My research</a> indicates that one reason for this is retailers continuing to over value their status as heritage brands. As a result, they fail to keep up with <a href="https://www.retailgazette.co.uk/blog/2019/08/department-stores-in-2019/">changes in shopper behaviour</a> and risk becoming dated, sluggish and digitally inept – unwilling to try new ideas in case they risk the loyalty of their <a href="https://www.bbc.co.uk/news/business-53478403">established customer base</a>.</p>
<p>But <a href="https://theconversation.com/how-businesses-need-to-get-creative-if-they-want-to-survive-coronavirus-and-any-other-crisis-in-future-146125">innovation and agility</a> have never been more important. The threat of digital disruption and evolving shopper behaviour mean retailers need to always look afresh at what they do. </p>
<p>Yet to established high street names, protecting their own heritage means not making mistakes, sticking to old ways and minimising costs for shareholders. It is the complete opposite of innovation, of trying out new and possibly risky ideas. </p>
<p>Take Amazon for example, arguably the most successful retailer on the planet. It evolved from a bookseller into a dominant and ever expanding retail marketplace. It recently opened its first UK <a href="https://theconversation.com/will-amazon-do-to-the-grocery-industry-what-it-did-to-ecommerce-96874">checkout-free grocery store </a> and <a href="https://www.forbes.com/sites/quickerbettertech/2021/04/25/why-amazon-is-opening-a-hair-salon-and-other-small-business-tech-news/?sh=1f9091c89fb1">a hair salon</a> to expand its move into the bricks-and-mortar landscape (surely proof that physical shops still matter despite high street woes). </p>
<p>Of course, one might argue that it is easier for a businesses like Amazon to be innovative and agile because of its strong financial backing and technical expertise. But while technology can help to implement innovation, it does not produce it. </p>
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<p>For instance, having <a href="https://www.youtube.com/watch?v=X_wcptfTD2c">“smart fitting rooms”</a>, or an interactive touch screen mirror does not instantly make a retail store innovative and attract large numbers of customers. </p>
<p>Consumers’ needs have become more complex. They do not simply go to a physical store to buy something, as they easily do that online. They go to explore, to be inspired and entertained, as part of the “<a href="https://hbr.org/1998/07/welcome-to-the-experience-economy">experience economy</a>”. </p>
<p>At the same time, efforts to address these needs should avoid being perceived as sales gimmicks like the “<a href="https://www.drapersonline.com/news/john-lewis-unveils-services-for-new-experiential-store">experience desk</a>” at John Lewis, a concierge-style service that tell shoppers about the store and can book them into other services. </p>
<h2>Lifestyle changes</h2>
<p>One example of a shop successfully <a href="https://www.crfashionbook.com/culture/a25470880/historical-look-at-liberty-london/">mixing heritage with innovation</a> is Liberty London, which regularly refreshes its range of products and services (and even its physical spaces) to encourage shopping. As a customer there, I do not feel I am always being “sold to”, but instead am inspired by the surroundings. As I admire the displays and check out the merchandise, the buying follows on naturally, but the process is subtle and enjoyable. I cannot say I have the same experiences when visiting House of Fraser or John Lewis. </p>
<p><a href="https://www.emerald.com/insight/content/doi/10.1108/IJRDM-10-2020-0412/full/html">Our research</a> on perceived authenticity shows that brand survival can by no means be taken for granted. It requires a sophisticated strategy which combines convenience and continuity with the ability to survive new trends and look forward. </p>
<p>To survive and prosper in the long term, high street retailers cannot rely on quality, consistency and nostalgia (the known attributes of brand heritage). They need to be innovative, agile and responsive (or better still, pre-emptive) to change. </p>
<p>This is not about asking high street retailers to ditch or dismiss their hard won heritage. But it does mean critically rethinking the meanings of heritage in the retail landscape, both current and future. Failing to do this can have <a href="https://theconversation.com/topshop-how-the-once-trendsetting-brand-fell-behind-the-times-151135">catastrophic consequences</a>. </p>
<p>For heritage has very little commercial value when a retailer is unwilling or unable to break some of the old fashioned rules. Otherwise, heritage would simply mean history – the place where so many established brands have been consigned to after disappearing from the high street.</p><img src="https://counter.theconversation.com/content/161130/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kokho Jason Sit does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Well known retailers are too often stifled by risk averse corporate culture.Kokho Jason Sit, Senior Lecturer in Marketing, University of PortsmouthLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1570712021-03-17T13:45:58Z2021-03-17T13:45:58ZHow retail giants could thrive on the post-pandemic high street<figure><img src="https://images.theconversation.com/files/389841/original/file-20210316-21-gctjhv.jpg?ixlib=rb-1.1.0&rect=60%2C30%2C6683%2C3811&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-uk0613-pedestrians-walking-pass-flagship-1755767099">Shutterstock/Yau Ming Low</a></span></figcaption></figure><p>Even before COVID-19, the British high street was undergoing <a href="https://www.thisismoney.co.uk/money/markets/article-7866275/High-Streets-worst-year-record-Sales-fall-time-2019.html">slow and painful decline</a>. Independent shops were struggling, department stores were <a href="https://www.retailgazette.co.uk/blog/2019/04/debenhams-falls-into-administration-lenders-take-control/">fighting for survival</a>, and well known chains were scrapping over market share. </p>
<p>A year on from March 2020, and shopping habits have changed drastically. “Non-essential” stores have been closed for months at a time, and <a href="https://blog.ons.gov.uk/2020/09/18/how-the-covid-19-pandemic-has-accelerated-the-shift-to-online-spending/">online spending has soared</a>. In 2020, e-commerce accounted for more than 30% of retail sales in the UK for the first time, up from 20% in 2019. Such a large increase in <a href="https://www.emarketer.com/content/pandemic-pushes-uk-retail-ecommerce-past-30-of-total-retail-sales-2020">one year is unparalleled</a>.</p>
<p>So has COVID-19 changed everything? Or did the pandemic just rapidly accelerate changes that were already being planned?</p>
<p>Take the <a href="https://www.johnlewispartnership.co.uk/">John Lewis Partnership</a> for example, the employee-owned company often seen as a reliable indicator of the <a href="https://www.ft.com/content/2c0659c8-0083-4071-baa5-0d6bcce93c0c">state of UK retail</a>. It recently <a href="https://www.itv.com/news/2021-03-11/john-lewis-warns-over-more-shop-closures-after-tumbling-to-517m-loss">announced a £517 million</a> annual loss (the <a href="https://www.thisismoney.co.uk/money/markets/article-9352451/John-Lewis-shut-department-stores-suffering-loss.html">first in its history</a>) and plans to close more stores. </p>
<p>Its CEO, Sharon White, has certainly had a challenging time since <a href="https://www.theguardian.com/media/2019/jun/06/sharon-white-leaves-ofcom-to-join-john-lewis-partnership">taking over in 2019</a>, responding to a massive increase in online demand, and an economy battered by uncertainty.</p>
<p>Her plans to <a href="https://www.retailgazette.co.uk/blog/2020/08/what-does-john-lewis-partnerships-proposed-retail-to-residential-shift-entail/">“re-purpose” company-owned premises</a> and develop small-format John Lewis <a href="https://www.retailgazette.co.uk/blog/2021/03/john-lewis-plots-hundreds-of-shop-in-shops-in-waitrose/">stores within Waitrose supermarkets</a> may appear a brave response to changes brought about by the pandemic.</p>
<p>Yet earlier in 2019, John Lewis <a href="https://www.facilitatemagazine.com/news/2019/01/29/cbre-appointed-provide-services-john-lewis">had hired a specialist company</a> with expertise in “repurposing retail real estate” to oversee its “facilities management”. In other words, it was already thinking about new ways to use the property it owns. So perhaps such changes were not unplanned. </p>
<p>Another British stalwart, Marks & Spencer, has also announced a major change in its operations – by creating a one-stop shop for fickle customers and <a href="https://www.theguardian.com/business/nils-pratley-on-finance/2021/mar/11/marks-spencer-plan-sell-rival-clothing-customers">stocking competitor brands</a>. These will include Jaeger (which the <a href="https://www.retailgazette.co.uk/blog/2021/01/ms-rescues-jaeger-from-administration-but-stores-set-to-close/">company has bought</a>), Hobbs, Joules and Sloggi, which will all be sold alongside its own label items. </p>
<p>This strategy is a smart move, creating a single destination where shoppers can browse different designers, styles and prices. Offering branded and own label goods enables them to better compete with e-commerce specialists and win back lost market share. </p>
<p>It is a necessary departure from the inefficient and outdated notion of chasing an M&S “core customer”. Instead, the company has accepted that it needs to appeal to consumers who defy strict categorisation. And <a href="https://www.retailgazette.co.uk/blog/2020/08/how-will-ocado-deal-pan-out-ms-waitrose-online-grocery-partnership/">after a deal</a> to supply the online grocer Ocado, M&S gains the huge benefit of access to that company’s <a href="https://www.managementtoday.co.uk/i-play-long-term-ocados-tim-steiner-m-s-vertical-farming-making-brexit-work/leadership-lessons/article/1596252">informative data base</a> which will be instrumental in their understanding of customer behaviour. </p>
<p>This behaviour, known in the industry as consumers’ “<a href="https://www.investopedia.com/terms/a/activities-interests-and-opinions.asp">activities, interests and opinions</a>” (or AIOs) is extremely important, with or without a pandemic. As <a href="https://www.bloomsbury.com/uk/marketing-fashion-footwear-9781472579317/">my own research has shown</a>, to be successful, retailers need to constantly think about brand identity, consumer behaviour and the impact of globalisation and regional trends.</p>
<h2>Following trends</h2>
<p>This can be seen in the changes announced by John Lewis and M&S, which echo a broader trend in the US, where retail giants like <a href="https://www.nordstrom.com/browse/services/nordstrom-local">Nordstrom</a> and <a href="https://www.retaildive.com/news/macys-opens-second-market-by-macys-strip-center-location/593397/">Macy’s</a> have been experimenting with the way they sell. Significant changes include the establishment of small scale and <a href="https://www.cnbc.com/2017/10/05/take-a-peek-inside-nordstroms-first-tiny-store-without-inventory.html">“inventory-less” stores</a> – shops which do not carry full ranges or stock and operate more like showrooms, where purchases are followed by home delivery or collection. </p>
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<p>These stores also offer services such as styling, alterations, tailoring and regionally specific product lines. They can also offer exclusivity and expertise, as was the case with the award-winning <a href="https://www.sneakerboy.com/stores.php">Sneakerboy</a>, which opened in 2013 in Melbourne, Australia, selling rare and limited edition products without stocking inventory. </p>
<p>The fashion for inventory-less stores and localised flexible retail solutions was influenced by the success of the 2011 opening in New York of Story, a store which regularly changed its product theme.</p>
<p>Founder Rachel Shechtman (who went on to become “brand experience officer” at Macy’s, and shape its <a href="https://www.forbes.com/sites/walterloeb/2021/01/18/macys-opens-second-market-by-macys-in-texas/?sh=610af1804858">small-format strategy</a>) <a href="https://www.nytimes.com/2014/03/15/business/a-store-with-media-in-mind.html">explained</a>: “Story has the point of view of a magazine, everything changes every four to eight weeks like a gallery, and it sells things like a store.” She added: “A magazine tells stories between pictures and written words, and we do it through merchandising and events.”</p>
<p>A shift to this small-format shopping is also being driven by the popularity of “direct-to-consumer” brands, which sell online, via their own stores and pop-up stores. </p>
<p>Department stores are also now competing with <a href="https://www.bloomsburyfashioncentral.com/products/fashion-business-cases/article/allbirds">direct-to-consumer brands</a> who sell online and via their own flagship stores without employing a more traditional wholesale approach. They are free to operate in a far more agile manner, using social media as a rapid feedback loop with customers.</p>
<p>This kind of agility is now being forced on languishing UK department stores, where development strategies planned for years are now having to be achieved in months. Dramatic shifts in consumer behaviour due to lockdowns expedited these changes <a href="https://www.retail-week.com/customer/analysis-seven-consumer-trends-for-2021-that-retailers-need-to-know/7036431.article?authent=1">at a dizzying pace</a>. </p>
<p>But these changes do not necessarily mean the future is gloomy for traditional well known retailers. It does mean though, that they need to be open to a variety of solutions.</p>
<p>Online shopping is not the only option. Small formats which focus on products and services for their customers’ varied lifestyles allow greater flexibility to market test solutions that work, at regional and local level. To survive post-pandemic, businesses must consider which elements of “retail theatre” they wish to provide to remain relevant.</p><img src="https://counter.theconversation.com/content/157071/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tamsin McLaren does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Small-scale stores and flexibility could be key to future shopping habits.Tamsin McLaren, Lecturer in Marketing, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1300262020-01-24T13:38:15Z2020-01-24T13:38:15ZWinning worker hearts and minds is key to companies achieving their green goals<figure><img src="https://images.theconversation.com/files/311777/original/file-20200124-81346-1svitz5.jpg?ixlib=rb-1.1.0&rect=12%2C162%2C3999%2C2508&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Every employee needs to embrace a company's sustainability mission if it hopes to succeed. </span> <span class="attribution"><span class="source">pcruciatti/Shutterstock.com</span></span></figcaption></figure><p>A lot of companies say they care about the environment and commit to certain goals but don’t end up doing much about it.</p>
<p>A <a href="https://corpgov.law.harvard.edu/2018/12/03/state-of-integrated-and-sustainability-reporting-2018/">whopping 78% of companies</a> in the Standard & Poor’s 500, for example, issued sustainability reports in 2018 and <a href="https://www.cbd.int/financial/2017docs/un2017-scr100.pdf">66% of all U.S. companies committed</a> to the U.N.’s Sustainable Development Goals in 2017 through either explicit statements about the goals or implicit actions that support them. </p>
<p>But <a href="https://www.mckinsey.com/business-functions/sustainability/our-insights/sustainabilitys-deepening-imprint">relatively few</a> say they’ve actually embedded the sustainability goals into their business strategies or into departments such as communications, <a href="https://www.greenbiz.com/article/why-human-resources-your-sustainability-ally">human resources</a> and <a href="https://www.supplychaindigital.com/supply-chain/sustainability-supply-chain-key-cost-saving-and-efficiency-hsbc-report-finds">supply chain management</a>, corporate functions that can play a huge role in boosting sustainability. A <a href="https://www.bain.com/insights/achieving-breakthrough-results-in-sustainability">2016 report</a> found that just 2% of companies actually achieve their sustainability goals. </p>
<p>This matters because the <a href="https://thehill.com/policy/energy-environment/411444-trump-administration-doubles-down-on-climate-skepticism">Trump administration’s skepticism</a> about the threat of climate change has made it clear that the federal government won’t be leading the charge to avert the worst of it. That means it’s up to companies to pick up the baton. </p>
<p>So what separates companies that succeed at becoming more sustainable from those that fail? </p>
<p>I spoke with over 100 CEOs, managers and regular employees at 25 multinational companies that have committed to becoming more sustainable in hopes of answering that question. My research, published in my book “<a href="https://smallactionsbigdifference.net">Small Actions, Big Difference</a>,” suggests it begins with a shared purpose – and winning over employee hearts and minds. </p>
<h2>Elevating sustainability</h2>
<p>Part of the problem is that companies have made <a href="https://www.nytimes.com/1970/09/13/archives/article-15-no-title.html">profit maximization</a> their primary purpose for decades. That has made all other aims, such as sustainability, secondary and separate from a company’s main mission.</p>
<p>The result has been that companies tend to departmentalize sustainability efforts, depriving the company of the ingenuity and passion of the employee base in addressing one of the most complex problems of our times. Since sustainability permeates every aspect of a company’s operations – from procurement to disposal – it’s vital to embed a purpose promoting it in every department. </p>
<p>Perhaps not surprisingly, companies that want to achieve goals like reducing their carbon footprint or waste tend to do better when they make sustainability an integral part of their core purpose and communicate this commitment to the entire staff. That’s clear from a recent analysis I conducted of environmental, social and governance performance data on <a href="https://my.refinitiv.com/content/dam/myrefinitiv/products/9753/en/BrochuresandF/ASSET4assetmasterExecutiveFactsheet_a4.pdf">over 3,000 companies during a 10-year period</a>. I found that companies that said they have an “overarching vision” that combines financial goals with social and environmental ones tended to perform better on a measure of their impact on the environment. They also tended to perform better financially as well.</p>
<p>Why? Because workers like a corporate purpose that trumps profit. Research has shown <a href="https://static1.squarespace.com/static/5c03c5ab96e76fd25bee4c32/t/5d6b98cfc6d43900015b3f74/1567332560551/Harvard+Business+Review+August+2019.pdf">articulating a purpose</a> beyond profit <a href="https://books.google.com/books?hl=en&lr=&id=Ls1HOwAi3lcC&oi=fnd&pg=PR1&dq=corporate+purpose+employee&ots=7pkhnQgVHX&sig=XN3ju8FMgr4e3yB8AY5KIYBL8u0#v=onepage&q=corporate%20purpose%20employee&f=false">resonates</a> with a company’s workforce. </p>
<p>For my book, I spent countless hours over a period of five years interviewing executives, middle managers and factory workers to try understand what separates the companies making successful strides in reducing their environmental impact from those still struggling. </p>
<p>What I learned from the reams of interview data that I collected and transcribed is that the successful companies endow a sense of “sustainability ownership” in their employees so that everyone – from the mailroom to the boardroom – picks up the baton as part of his or her day job. And it all starts with defining a corporate purpose, the all-important question of “why do we do what we do,” something that three companies did particularly well. </p>
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<img alt="" src="https://images.theconversation.com/files/311694/original/file-20200123-162185-kfl1ll.jpg?ixlib=rb-1.1.0&rect=7%2C169%2C4913%2C3105&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/311694/original/file-20200123-162185-kfl1ll.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/311694/original/file-20200123-162185-kfl1ll.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/311694/original/file-20200123-162185-kfl1ll.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/311694/original/file-20200123-162185-kfl1ll.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/311694/original/file-20200123-162185-kfl1ll.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/311694/original/file-20200123-162185-kfl1ll.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Employee buy-in has been vital to Unilever’s success in becoming more sustainable.</span>
<span class="attribution"><span class="source">John Thys/AFP via Getty Images)</span></span>
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<h2>Saving lives by selling soap</h2>
<p>When Paul Polman took over as consumer goods giant Unilever CEO in 2009, he realized that the company had to transition to a new business model that accounted for the environmental and social realities of today’s world in order to survive.</p>
<p>Working with his leadership team, he came up with a <a href="https://www.unileverusa.com/sustainable-living/">new purpose for Unilever</a>: “to make sustainable living commonplace,” which was widely communicated to all workers using a variety of means from company YouTube channels to embedding “sustainability ambassadors” throughout the company. </p>
<p>The effort worked. Employees I spoke with clearly internalized and appreciated the new corporate purpose and culture. One factory worker in India put it succintly: “I would rather save lives than sell soap.” </p>
<p>Corporate executives credit this integration with Unilever’s success in becoming a greener company. From 2008 to 2018, the <a href="https://www.unilever.com/Images/uslp-performance-summary-2018_tcm244-536032_en.pdf">company says it cut greenhouse gas emissions by 52%</a>, water use by 44% and waste by 97%. Like the financial results companies report, sustainability figures are audited and verified by accounting firms. </p>
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<img alt="" src="https://images.theconversation.com/files/311771/original/file-20200124-81403-11nkt14.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/311771/original/file-20200124-81403-11nkt14.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=451&fit=crop&dpr=1 600w, https://images.theconversation.com/files/311771/original/file-20200124-81403-11nkt14.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=451&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/311771/original/file-20200124-81403-11nkt14.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=451&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/311771/original/file-20200124-81403-11nkt14.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=567&fit=crop&dpr=1 754w, https://images.theconversation.com/files/311771/original/file-20200124-81403-11nkt14.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=567&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/311771/original/file-20200124-81403-11nkt14.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=567&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Former British Prime Minister Tony Blair, left, and Marks & Spencer CEO Stuart Rose, far right, discuss how to fight global warming in 2007.</span>
<span class="attribution"><span class="source">Leon Neal/AFP via Getty Images)</span></span>
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<h2>No plan B</h2>
<p>British retailer Marks & Spencer began incorporating sustainability into its operations in 2007 <a href="https://global.marksandspencer.com/plan-a/">under the provocative name</a> “Plan A” – because “there is no Plan B for our one planet,” the company said. </p>
<p>From my interviews I learned the company uses a variety of strategies to ensure the mission is embraced by every employee, in part by appealing to the heart. For example, Marks and Spencer sponsors trips into local communities where their stores are located to show the impact of a changing climate and organizes informal after-work drinks at local pubs to discuss the crisis in a personalized way.</p>
<p>The efforts have paid off. For example, the company says <a href="https://corporate.marksandspencer.com/documents/reports-results-and-publications/plan-a-reports/plan-a-performance-update-2019">carbon emissions have plunged</a> 75% since 2007 and waste is down 35% compared since 2009, with none being sent to a landfill. </p>
<h2>Appeals to the head</h2>
<p>At IBM, environmental goal setting has long been an integral part of the company’s sustainability strategy. In contrast to Marks and Spencer’s appeal to an employee’s heart, however, IBM primarily appeals to the head – and the bottom line – as you might expect from an information technology company. </p>
<p>When discussing proposed goals with business units, IBM’s corporate staff identifies opportunities for cost savings as well as revenue growth. This helps employees gain an understanding of the environmental drivers and objectives behind each goal as well as the business and societal benefits. </p>
<p>For example, consolidating multiple computer servers that aren’t well utilized into one larger and more energy-efficient server not only reduces energy demand and greenhouse gas emissions but also frees up space, electricity and cooling capacity to support new business. </p>
<p>Seeing this kind of data motivates workers to innovate on the sustainability front because they’re able to see how it’ll lead to more money and environmental well-being for the company – and ultimately greater financial rewards and a sense of contributing to a greater cause as well.</p>
<p>These types of initiatives helped IBM <a href="https://www.ibm.com/ibm/environment/annual/IBMEnvReport_2018.pdf">reduce its carbon emissions</a> by a third from 2005 to 2018 and its nonhazardous waste by 68% since 2014. Almost 90% of the remaining waste gets recycled. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/311773/original/file-20200124-81411-14ep985.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/311773/original/file-20200124-81411-14ep985.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/311773/original/file-20200124-81411-14ep985.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/311773/original/file-20200124-81411-14ep985.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/311773/original/file-20200124-81411-14ep985.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/311773/original/file-20200124-81411-14ep985.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/311773/original/file-20200124-81411-14ep985.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Amazon and other tech employees staged a walkout during the Global Climate Strike in 2019, another example that many people prefer to work for companies that have a higher purpose.</span>
<span class="attribution"><span class="source">Karen Ducey/Getty Images</span></span>
</figcaption>
</figure>
<h2>A higher purpose</h2>
<p>My interviews, <a href="https://hbr.org/2018/11/9-out-of-10-people-are-willing-to-earn-less-money-to-do-more-meaningful-work">countless surveys</a> and <a href="https://link.springer.com/article/10.1007/s10869-010-9159-4">scholarly research</a> show employees – particularly younger ones – prefer to work at companies that serve a higher purpose. </p>
<p>The good news is that companies <a href="https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans">are increasingly vowing</a> to pursue more than just profits and incorporating issues like protecting the environment and their communities into their purposes. </p>
<p>But it’s not enough to make promises. And even companies that sincerely want to do better can find it hard if they don’t bring their employees along for the ride. Small actions can lead to big difference. </p>
<p>[ <em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/130026/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>CB Bhattacharya has previously consulted for some of the organizations he researched for "Small Actions, Big Difference." He also founded the Sustainable Business Roundtable at ESMT Berlin and the Center for Sustainable Business at the University of Pittsburgh, both of which had some organizations researched for the book as members, including IBM.
</span></em></p>Companies that want to reduce their environmental footprint need to ensure their entire workforce feels a shared sense of purpose.CB Bhattacharya, Professor of Sustainability and Ethics, University of PittsburghLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1186402019-06-16T19:29:12Z2019-06-16T19:29:12ZMajor corporate failures have more in common than you’d think, and can be avoided<figure><img src="https://images.theconversation.com/files/278951/original/file-20190611-32347-v8n2ym.jpg?ixlib=rb-1.1.0&rect=0%2C90%2C1506%2C1037&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Enron: Once powerful, now gone.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/hanneorla/72929925">Hanneorla/Flickr</a></span></figcaption></figure><p>Well-known firms such as AIG, American Airlines, Arthur Andersen, Blockbuster, Chrysler, Citigroup, Delta Airlines, Dunlop, Enron, General Motors, Kodak, Marks & Spencer, Nokia, Parmalat, Polaroid and Woolworth have one thing in common: They’re cases of major corporate failures. Any resemblance seems to stop there, as they worked in widely different industries and the reasons behind their declines and collapses seem quite different.</p>
<p>However, in <a href="https://doi.org/10.1111/joms.12341">April 2018 research</a> published in the <em>Journal of Management Studies</em>, my colleagues and I asked whether there are any recurring patterns explaining how and why large corporations fail, a fundamental question that has puzzled organisations and management scholars. This article was co-written by Stefanie Habersang (Leuphana University of Lüneburg, Germany), Jill Küberling-Jost (Technical University of Hamburg, Germany), and Markus Reihlen (Leuphana University of Lüneburg, Germany).</p>
<p>To explore such patterns, we used a qualitative meta-analysis research design. This allowed us to synthesize the wealth of previously published single-case studies on corporate failures.</p>
<h2>Four common processes leading to corporate failure</h2>
<p>A first salient finding of our analysis was that all the failure cases seemed to converge around four distinct process archetypes. We named these processes imperialist, laggard, villain and politicized.</p>
<ul>
<li><p><strong>Imperialist</strong>: This process archetype describes the failure of a firm due to overexpansion. For example in the cases of Parmalat, WorldCom, and News of the World, a dominant firm leader (often either autocratic or charismatic) fostered an aggressive expansion strategy. These firms failed due to an unfocused overexpansion of the firm which gave rise to conflicts with internal and external stakeholders.</p></li>
<li><p><strong>Laggard</strong>: In the cases of Kodak, Nokia and Polaroid, once industry leaders, they failed because they did not adapt to changing market environments. These firms were stuck in their identity of being leaders, even as their dominance slipped away. While the management of these firms saw the need for change, they were not able to change a previously well-established business model that had made them so successful before – a similar process is described by Joshua Gans in discussing how the <a href="https://theconversation.com/why-apple-and-its-iphone-confound-disruption-theorists-38205">iPhone disrupted the mobile-phone industry</a>.</p></li>
<li><p><strong>Villain</strong>: Here the case involves the process of a previously good corporate citizen into a villain. In the cases of AIG, Enron and Fannie Mae, previously well-regarded firms with ambitious goals increasingly engaged in questionable business practices (<a href="https://theconversation.com/why-powerful-people-fail-to-stop-bad-behavior-by-their-underlings-73828">see also Kennedy and Anderson discussing how unethical practices can become routine</a>). After repeated discovery of such questionable business practices, these firms failed because they lost the trust of their customers and more generally their legitimacy in society. They lose their social “license to operate.”</p></li>
<li><p><strong>Politicized</strong>: This model describes how firms fail due to increasingly severe conflicts with internal and external stakeholders. In cases such as Arcandor, Chrysler and Delta Airlines, the firms failed because they engaged in “trench warfare,” which strained resources and did not allow them to adapt to changing customer demands.</p></li>
</ul>
<h2>Two underlying mechanisms explaining the four processes</h2>
<p>When examining the four typical process types in more detail, we were intrigued that each one could be explained by two underlying and self-reinforcing mechanisms: rigidity and conflict.</p>
<ul>
<li><p><strong>“Rigidity mechanisms”</strong> are processes of converging interactions. In the case of Marks & Spencer, top managers overestimated the firm’s stature, which lead to middle managers developing an illusion of invulnerability, which was fed back to top management. The process took hold and led to the company becoming locked in to an erroneous self-perception.</p></li>
<li><p>In contrast, <strong>“conflict mechanisms”</strong> are contradicting interactions and are also self-reinforcing. In the case of Nokia, changing consumer preferences for mobile innovations collided with the organisation’s strategy to diversify into businesses unrelated to mobile phones and caused it to lose sight of its core business.</p></li>
</ul>
<p>In total, we identified five types of rigidity mechanisms (e.g., identity rigidity, obedience rigidity, etc.), as well as five types of conflict mechanisms (e.g., identity conflict, authority conflict, etc.)</p>
<p>While the rigidity and conflict mechanisms are fundamentally different – one is based on convergence, the other on divergence – both are capable of bringing about or preventing firm-level change contributing to the failure. Furthermore, we find that it is the distinctive pattern of rigidity and conflict mechanisms over time that gives each process archetype its pronounced characteristics and explains why firms fail.</p>
<h2>Helping executives avoid corporate failure</h2>
<p>No manager wants to experience or be the cause of a corporate failure. But at the same time, it is notoriously difficult to detect early on the subtle signals of factors that could lead to a downward spiral. In this regard, the outlined process archetypes hold two important implications.</p>
<p>First, we provide evidence-based conceptual frameworks that can help managers recognise patterns that may threaten the survival of their firm. For example, the “laggard” archetype draws the attention to the role of organisational identity in corporate failure. When firms must engage in a radical technological shift – for example, the automotive industry needing to shift from thermal to electric motors (as explained by <a href="https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=2ahUKEwiAiIqX0a7iAhWp3eAKHenCCukQFjABegQIAxAC&url=http%3A%2F%2Fisiarticles.com%2Fbundles%2FArticle%2Fpre%2Fpdf%2F40660.pdf&usg=AOvVaw2hTBRdY2aZ6wKoF-1MN2OU">Stefan Tongur and Mats Engwall</a>), converging on a new identity becomes a crucial task in the turnaround process.</p>
<p>Second, the good news is that we find that each of the outlined processes can be overcome. While it is important to note that some rigidity and conflict is actually desirable within organisations because the former increases efficiency and the latter has creative potential, it is the extreme forms of these two mechanisms that contribute to organisational failure. The practical implication is that effective leaders will have to strike the right balance between rigidity and conflict within their organisations…</p><img src="https://counter.theconversation.com/content/118640/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christoph Seckler ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>Once-leading firms such as Chrysler, Citigroup, Dunlop and Nokia have one thing in common: they failed. While each case seems unique, research points to key processes that lead to corporate failures.Christoph Seckler, Assistant Professor of Entrepreneurial Strategy, ESCP Business SchoolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1098272019-01-15T16:25:38Z2019-01-15T16:25:38ZConsumerism in crisis as millennials stay away from shops<figure><img src="https://images.theconversation.com/files/253888/original/file-20190115-152989-1smloz7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Pur-leeeze. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/shopping-tourism-concept-woman-bags-263312894?src=aZnfBilPCi6hPujhzjNWfA-2-4">Syda Productions</a></span></figcaption></figure><p>Christmas may seem like a distant memory, but retailers won’t forget it in a hurry: <a href="https://londonlovesbusiness.com/2018-was-the-worst-christmas-for-retail-since-2008/">it was</a> the worst on the UK high street since 2008. <a href="https://corporate.marksandspencer.com/media/press-releases/5c2f8d617880b21084450f5e/q3">Marks & Spencer</a> and <a href="https://ir.debenhams.com/news-releases">Debenhams</a> saw sales fall, while the likes of specialist retailer <a href="https://www.halfordscompany.com/investors/rns/rns-announcements/3555642">Halfords</a> and discounter <a href="http://www.bandmretail.com/%7E/media/Files/B/BM-Stores/reports-and-presentations/financial-reports/q3-18-19-trading-update-final-pdf.pdf">B&M</a> also struggled. Even that most Christmassy of stores, John Lewis, is <a href="http://www.johnlewispartnership.co.uk/content/dam/cws/pdfs/media/regulatory-announcements/john-lewis-partnership-plc/2019/john-lewis-partnership-christmas-trading-statement-to-5-January-2019.pdf">forecasting</a> a dive in profits after discounting to keep up with competitors. </p>
<p>Put simply, the British high street is a horror story just now. Debenhams, founded in 1778, has seen its <a href="https://uk.finance.yahoo.com/quote/DEB.L/chart?p=DEB.L#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%3D">share price</a> drop more than 90% over the past year. HMV <a href="https://www.theguardian.com/business/2019/jan/13/potential-hmv-buyers-given-until-tuesday-to-make-an-offer">has gone into</a> administration for the second time in six years and is seeking a buyer. M&S is closing 100 stores, with the latest tranche <a href="https://www.mirror.co.uk/money/breaking-locations-next-17-ms-13858665">just announced</a>. An <a href="https://www.drapersonline.com/news/high-street-closures-claimed-93000-jobs-in-2018/7033633.article">estimated</a> 93,000 UK retail jobs were lost in 2018, and 2019 could well be even worse. </p>
<p>Economic stagnation, unfair online competition and global warming are all cited for the malaise – and certainly not for the first time. Brexit fears are <a href="https://www.ft.com/content/ceedad7e-1404-11e9-a581-4ff78404524e">said to be</a> dampening the economy, for example. British brand Superdry <a href="https://corporate.superdry.com/investors/results-and-presentations/">blamed</a> its poor autumn results on unseasonably warm weather reducing demand for its jackets. And it has not gone unnoticed that Amazon’s UK business rates tax bill for 2018 <a href="https://www.dailymail.co.uk/news/article-6571389/Amazon-pays-just-63m-business-rates-despite-8billion-worth-sales.html">was significantly less</a> than smaller high street rivals. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/253880/original/file-20190115-152965-16qq7c8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/253880/original/file-20190115-152965-16qq7c8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/253880/original/file-20190115-152965-16qq7c8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=808&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253880/original/file-20190115-152965-16qq7c8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=808&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253880/original/file-20190115-152965-16qq7c8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=808&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253880/original/file-20190115-152965-16qq7c8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1015&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253880/original/file-20190115-152965-16qq7c8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1015&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253880/original/file-20190115-152965-16qq7c8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1015&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Old news.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/kuala-lumpur-malaysia-june-24-2018-1151275526?src=SwqLKeuyzo9VU5244sVZfQ-1-1">TY Lim</a></span>
</figcaption>
</figure>
<p>Though online sales have in fact <a href="https://internetretailing.net/industry/industry/online-sales-grow-half-as-fast-in-september-as-last-year-while-store-sales-continue-their-decline-brc-18511">also struggled</a> in 2018, poor business practice must also be playing a part in the wider problems. Many retailers are overburdened with debt, focused on cost-cutting rather than reinvestment, have poor stakeholder relationships, or simply lack vision. WHSmith, to take just one example, <a href="https://www.bbc.co.uk/news/business-44274654">came bottom</a> of a 2018 survey of British shoppers by consumer magazine Which?, criticised for its overpriced and out-of-date stores. Its latest results are due later in the month. </p>
<p>Yet there is another crucially important culprit that is mostly overlooked. It happens to be the one that poses the most serious long-term threat to traditional retail – more than Brexit or even Amazon. Consumerism is arguably in terminal decline, with millennials leading the change, not only in the UK but <a href="https://www.bloomberg.com/news/articles/2018-12-19/europe-s-consumer-and-retail-woes-five-things-to-watch-in-2019">in many</a> other leading economies <a href="https://www.retailgazette.co.uk/blog/2018/06/global-retail/">around</a> the world. </p>
<h2>The omens</h2>
<p>Consumer studies academics have been picking up on changing habits for a number of years. This includes an increased ambivalence towards consumption itself: people are <a href="https://www.theguardian.com/society/2016/mar/01/goodbye-curtains-clutter-learned-to-buy-less-stuff-shopping">buying less often</a> and <a href="https://www.vice.com/en_uk/article/xd79n3/we-asked-a-removal-guy-if-people-really-have-less-stuff">less overall</a>. This is <a href="https://www.bloomberg.com/graphics/2018-death-of-clothing/https://www.bbc.co.uk/news/business-40523171">particularly</a> true in the clothing industry, where research <a href="https://www.bloomberg.com/graphics/2018-death-of-clothing/">shows that</a> millenials <a href="https://fashionunited.uk/news/fashion/millennials-prefer-to-buy-less-buy-better-buy-authentic/2018030328471">are especially</a> unforthcoming – even after you factor in the shift to online retail. A lack of bricks and mortar did not, for instance, prevent online fashion retailer Asos from <a href="https://www.theguardian.com/business/live/2018/dec/17/asos-profits-warning-retail-sector-sales-november-business-live">shocking</a> the City with a profit warning shortly before Christmas. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/253875/original/file-20190115-152968-1ee33f2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/253875/original/file-20190115-152968-1ee33f2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/253875/original/file-20190115-152968-1ee33f2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253875/original/file-20190115-152968-1ee33f2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253875/original/file-20190115-152968-1ee33f2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253875/original/file-20190115-152968-1ee33f2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253875/original/file-20190115-152968-1ee33f2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253875/original/file-20190115-152968-1ee33f2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Shop or drop?</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/DiO3iZjMrMU">Allef Vinicuisa</a></span>
</figcaption>
</figure>
<p>The American car industry is another harbinger of generational change: sales are <a href="https://www.bbc.co.uk/news/business-40523171">stalling</a> because younger people seem less interested in ownership. The <a href="https://www.federalreserve.gov/econresdata/notes/feds-notes/2016/the-young-and-the-carless-the-demographics-of-new-vehicle-purchases-20160624.html">average age</a> of a new car buyer in the US was 50 in 2015. Or to give one more example, witness Apple’s <a href="https://theconversation.com/what-is-really-eating-apple-and-why-steve-jobs-would-not-be-doing-a-lot-better-109377">recent</a> trading problems. People are not only opting for cheaper smartphones, but they are keeping them for longer. If the world’s first company to pass <a href="https://theconversation.com/apples-1-trillion-value-doesnt-mean-its-the-biggest-company-101225">the trillion dollar value mark</a> is showing signs of struggling, we ought to take note.</p>
<p>Some of this shift in consumption may be ideological. Researchers have <a href="https://onlinelibrary.wiley.com/doi/pdf/10.1162/1088198054084734">suggested that</a> environmental concerns might be pushing some people to consume less. Economic drivers are also probably involved. Since the 2008 financial crash, for instance, alternative consumer communities <a href="https://www.tandfonline.com/doi/full/10.1080/0267257X.2012.668922">have emerged</a>. They are more collaborative and self-sufficient; doing things among themselves rather than buying in from outside. The rise of the <a href="https://stitchedup.coop/5-reasons-swapping-is-better-than-shopping/">swapping movement</a> is a good example. </p>
<h2>Post-consumer?</h2>
<p>Yet more broadly, lifestyle changes are seeing us moving away from the consumer model which has dominated post-war capitalist economies. Buying more and more things as a source of identity and meaning seems to be gradually but consistently falling out of favour. People are <a href="https://techcrunch.com/2018/03/17/the-rise-of-experiential-commerce/?guccounter=1">increasingly interested</a> in experiences instead; the priority is making and sharing memories – interacting with other people and places, attending events, undertaking adventures and so on. We could be talking about the era of the post-consumer. </p>
<p>To fit this new ethos, it has repeatedly <a href="https://www.prospectmagazine.co.uk/economics-and-finance/why-the-future-of-the-high-street-is-all-about-experiences">been said</a> that the future of the high street lies in providing experiences. Retailers have tried to incorporate new, interactive and surprising experiences into their offerings for years now. Success stories include the bath bomb and politics-peddling cosmetics retailer <a href="https://engagecustomer.com/how-the-customer-experience-strategy-of-lush-made-it-the-uks-number-one-customer-experience-brand/">Lush</a>; or the revitalised bookseller <a href="https://www.theguardian.com/books/2017/feb/03/balancing-the-books-how-waterstones-returned-to-profit">Waterstones</a>, which promotes books using everything from huge in-store murals to themed events. </p>
<p>Experiential marketing is not a panacea, however. The casual dining sector, for example, once held up as the answer to the woes of struggling shopping centres everywhere, has itself <a href="https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/ConsumerIndustrialProducts/deloitte-uk-casual-dining-market.pdf">had a difficult 2018</a>. The problem with selling experiences is that it is easier for someone to create them themselves. We buy things because it is convenient or we don’t have the skills to make them. But some of the best experiences, such as going for a walk or meeting a friend, are free. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/253863/original/file-20190115-152977-11scibg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/253863/original/file-20190115-152977-11scibg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253863/original/file-20190115-152977-11scibg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253863/original/file-20190115-152977-11scibg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253863/original/file-20190115-152977-11scibg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253863/original/file-20190115-152977-11scibg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253863/original/file-20190115-152977-11scibg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Trolleyed.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/empty-shopping-cart-on-blue-background-796791667?src=5KcmAoiJuKpAcpC2JH_yZA-1-84">Zhenzhirov</a></span>
</figcaption>
</figure>
<p>In short, there’s not necessarily an easy answer for this long-term decline. We’re talking about a growing dissatisfaction with the idea that passive consumption equals happiness. The reasons are certainly varied and complex, but if consumption is increasingly passé, we must start thinking about how to respond. </p>
<p>The retailers that survive will be the ones that genuinely understand what is happening; the answer is likely to lie in offering objects, services and experiences that feel genuine and enriching. In many cases, it will be about building a long-term relationship that foregoes selling things now and perhaps, say, provides a space where people can make meaning for themselves – French beauty chain Sephora looks like a pioneer here, with its very casual, try-before-you-buy <a href="https://www.nytimes.com/2017/05/11/fashion/sephora-beauty-retail-technology.html">approach</a> to retailing. </p>
<p>Whether such initiatives can sustain economic growth is another question, however. Consumerism has been the beating heart of Western economies for generations; if it can’t be resuscitated, it raises profound questions about how society will function in future.</p><img src="https://counter.theconversation.com/content/109827/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Brendan Canavan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Forget Brexit or online competition. Millennials are just not consuming with the same fervour as their mums and dads.Brendan Canavan, Senior Lecturer in Marketing, University of HuddersfieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1028142018-09-10T13:35:14Z2018-09-10T13:35:14ZHigh streets are being strangled by council tax and business rates – here’s how to save them<figure><img src="https://images.theconversation.com/files/235593/original/file-20180910-123113-19dqqxo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/bracknell-uk-august-11-2013-empty-248778991?src=9B6xlydQq3PwsxaOuqRa8Q-2-8">Lucie Lang/Shutterstock.</a></span></figcaption></figure><p>BHS, Carpetright, Homebase, House of Fraser, HMV, Maplin, Marks & Spencer, Mothercare, New Look, Toys R Us, Woolworths: a decade ago this list wouldn’t have looked out of place in the store guide of a well-appointed shopping centre. Today, it reads more like a wall of remembrance commemorating casualties suffered in the ongoing battle between the internet and the high street.</p>
<p><a href="https://theconversation.com/there-is-hope-for-the-high-street-heres-how-to-transform-it-99242">These victims</a> have either folded completely, been taken over or closed a substantial number of stores in attempts to save cash. And while the growth in online shopping with sites such as Amazon is undoubtedly a big factor in the decline of the high street, it’s by no means the only one. </p>
<p>At the moment, the law on business rates means large and small retailers have to pay sums of money in local taxation, which are disproportionate to their earnings, or even the value of their premises. This is having a significant effect on the financial strength of high street chains. Indeed, <a href="http://www.pressreader.com/uk/the-week/20180818/281586651439739">it’s been reported</a> that House of Fraser’s £4.62m business rates bill for its store on Oxford Street in London is the same as <a href="https://www.independent.co.uk/news/uk/home-news/amazon-corporation-tax-bill-uk-halves-profits-rise-jeff-bezos-a8475716.html">Amazon’s total corporation tax bill</a> in the UK for 2017. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/235587/original/file-20180910-123119-efju9n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/235587/original/file-20180910-123119-efju9n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/235587/original/file-20180910-123119-efju9n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/235587/original/file-20180910-123119-efju9n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/235587/original/file-20180910-123119-efju9n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/235587/original/file-20180910-123119-efju9n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/235587/original/file-20180910-123119-efju9n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Doesn’t come cheap.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/londonengland-december-162016-christmas-lights-decorations-544558120?src=_hPH1TUGuLf4AKRb3pUi2w-1-17">Pajor Pawel/Shutterstock.</a></span>
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<p>The current system dates back to 1990, when a tax burden <a href="https://www.legislation.gov.uk/ukpga/1988/41/contents">was imposed</a> on all non-residential properties in England. The rate was set by central government on a yearly basis, based on the rental value of a business property with relief available to smaller businesses.</p>
<p>But central government recently began <a href="https://www.bbc.co.uk/news/business-43632000">increasing business rates</a> – and bills don’t always reflect a property’s current value. Even where there have been cuts to the business rates, these weren’t always in proportion to drops in a property’s <a href="https://www.bbc.co.uk/news/business-43632000">rental value</a>. </p>
<p>As a result, some businesses are finding it harder and harder to make ends meet. In 2017-18, councils reportedly sent bailiffs to <a href="https://www.independent.co.uk/business/uk-firms-struggling-money-business-rates-81000-a8508901.html">222 business premises</a> every day, to recover <a href="https://www.localgov.co.uk/Councils-sending-bailiffs-to-200-firms-every-day-over-unpaid-business-rates/45904">unpaid business rates</a>. </p>
<h2>Time for change</h2>
<p>Things need to change, for local retailers to stay in business and absorb losses caused by competition from online shopping and <a href="https://www.gov.uk/government/news/national-living-wage-workers-set-for-600-pay-rise-from-1-april">increases in the minimum wage</a>. Business rates must be reformed: a new system should give local councils more power to change the amount due – to better reflect a business’ annual profits (or losses) – while at the same time limiting central government’s ability to adjust the rates.</p>
<p>But even this won’t be enough to revive high streets in towns and cities across the UK. For the past decade, councils have themselves <a href="https://www.nao.org.uk/report/financial-sustainability-of-local-authorities-2018/">suffered severe cuts</a> to their budgets, as part of the UK government’s programme of austerity. To combat this, councils are being allowed to retain a greater proportion of the business rates <a href="https://www.local.gov.uk/topics/finance-and-business-rates/business-rates-retention">collected in their areas</a>. This policy aims to encourage councils to do more to help local businesses prosper, potentially so that they, in turn, can contribute more to council coffers. </p>
<p>But as businesses find it more and more difficult to pay these increasing bills, this policy is unlikely to be effective. More fundamental reform is needed, and the UK government must find alternative methods to improve the financial situation of local councils. This could mean giving local authorities other ways to raise their own revenue, or strengthening partnerships between private companies and councils, so that they can share the costs of providing basic services. </p>
<h2>A new arrangement</h2>
<p>But there may be a simpler option still: rather than charging businesses higher rates to make up the shortfall in central government funding, local authorities could place the burden on their wealthiest residents. The current system of council tax sees residents paying an amount to their local authority, based on their property’s value. </p>
<p>One of the biggest problems with the current system is that the council tax bands are based on property values from 1991, and are therefore <a href="https://theconversation.com/hard-evidence-five-maps-that-prove-its-time-to-reform-council-tax-in-england-53991">hopelessly out of date</a>. According to The Guardian’s economics editor, Larry Elliott, this <a href="https://www.theguardian.com/commentisfree/2018/aug/02/scrap-council-tax-redistribute-wealth-fix-housing-market">could mean</a> that someone living in a home worth £100,000 in 2015-16 faces an effective tax rate five times as high as someone living in a £1m property, with residents in very valuable properties enjoying lower rates, at the expense of the council.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/235598/original/file-20180910-123113-1sg63o7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/235598/original/file-20180910-123113-1sg63o7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/235598/original/file-20180910-123113-1sg63o7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/235598/original/file-20180910-123113-1sg63o7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/235598/original/file-20180910-123113-1sg63o7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/235598/original/file-20180910-123113-1sg63o7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/235598/original/file-20180910-123113-1sg63o7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">House prices in Islington have shot right up.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/angel-london-uk-january-2018-facade-788490928?src=n0ggoNtbNIF3Iy-VLyldww-1-21">Drima Film/Shutterstock.</a></span>
</figcaption>
</figure>
<p>When you factor in <a href="https://www.winkworth.co.uk/articles/30-years-of-house-prices#close">rising house prices over the last 30 years</a>, it’s clear that in practice the current system of council tax <a href="https://www.theguardian.com/commentisfree/2018/aug/02/scrap-council-tax-redistribute-wealth-fix-housing-market">does not tax wealth</a>. But there are <a href="https://theconversation.com/council-tax-reform-is-long-overdue-so-how-do-we-do-it-45534">several possible alternatives</a>, including a land value tax – which is based on the value of the land only, rather than the property that stands on it – or a local income tax, factoring in a household’s yearly earnings. </p>
<p>Prominent Oxford economist, <a href="https://www.economics.ox.ac.uk/materials/working_papers/4660/housing-debt-and-the-economy-a-tale-of-two-countries.pdf">John Muellbauer</a>, advocates a system which imposes a standard per-square-metre charge on land. This system would ensure a more proportionate charge on wealth, since those who can afford bigger houses would pay a higher level of tax than those in smaller properties. </p>
<p>Of course, property size is not always an indicator of wealth: homeowners who bought decent sized houses 30 years ago would have done so at a much more affordable rate. In such circumstances, property taxes <a href="https://www.economics.ox.ac.uk/materials/working_papers/4660/housing-debt-and-the-economy-a-tale-of-two-countries.pdf">could be deferred</a> until the sale of the house. There’s also the case of luxury apartments to consider – which might take up little space but still be worth a great deal – but further measures could be incorporated to ensure that this new system is fair and proportionate. </p>
<p>Alongside <a href="https://www.theguardian.com/commentisfree/2018/aug/02/scrap-council-tax-redistribute-wealth-fix-housing-market">other benefits</a>, this new system would at least allow councils to draw revenue from those who can afford it – such as more wealthy homeowners – and ease the stranglehold on struggling businesses and retailers, by lowering business rates.</p><img src="https://counter.theconversation.com/content/102814/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Stanton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Councils are facing their own revenue crisis – and local businesses are paying the price.John Stanton, Senior Lecturer in Law, City, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/991152018-07-25T12:30:16Z2018-07-25T12:30:16ZThe forgotten grandeur of Britain’s department stores – a historian reflects<figure><img src="https://images.theconversation.com/files/229275/original/file-20180725-194140-1xrt2pm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Debenhams in Lavender Hill, London. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-england-9-january-2013-debenhams-706308202?src=vcDSeuoLuIeRKaZeMvlqbQ-10-50">Vicky Jirayu/Shutterstock.</a></span></figcaption></figure><p>Department stores seem to be in terminal decline. In the UK, the demise of <a href="https://theconversation.com/bhs-collapse-why-a-rescue-is-not-for-the-faint-hearted-58388">British Home Stores</a> <a href="https://www.independent.co.uk/news/business/poundworld-shop-closures-disappear-high-street-administrators-a8455651.html">and</a> <a href="https://www.ft.com/content/31f9a7cc-8dc0-11e8-bb8f-a6a2f7bca546">Poundworld</a>, together with store closures by <a href="https://www.theguardian.com/business/2018/may/22/marks-spencer-close-stores">Marks and Spencer</a> and <a href="https://www.bbc.com/news/business-44394948">House of Fraser</a>, are local symptoms of a wider malaise. Luxurious Parisian store La Samaritaine <a href="https://www.theglobeandmail.com/report-on-business/paris-retail-landmark-la-samaritaine-shuts-its-doors-over-safety-concerns/article982445/">closed in 2005</a> and Sears – once a cornerstone of North American retailing – has also <a href="http://uk.businessinsider.com/sears-closes-72-stores-as-sales-tumble-2018-5">shut dozens of stores</a> in recent years. </p>
<p>The job losses and economic fallout from these closures are enough cause for upset. But what makes this decline all the more significant is the role that department stores have played in shaping towns and cities for the last 150 years or more. Their closure casts a shadow of doubt over high streets and town centres across the UK. That’s why it’s worth reminding ourselves what is being lost – and why department stores are so special.</p>
<p>Most department stores in Britain started small, often as drapers – such as <a href="http://www.housefraserarchive.ac.uk/">House of Fraser</a>. They grew bit by bit, adding new lines and gradually growing their premises through piecemeal acquisition. By the early 20th century, most small towns had a department store and many larger centres had several competing for customers or targeting different social groups. </p>
<p>Regional chains of stores grew in the early decades of the 20th century, but many were swallowed up – along with a large number of independent stores – by national chains such as Debenhams, the Drapery Trust and later House of Fraser. Carefully tracing stores through <a href="https://e-space.mmu.ac.uk/619323/">trade directories</a> reveals 600 or more department stores across Britain by the 1930s. Their influence was widespread, even though they never enjoyed more than about <a href="https://archive.org/details/retailtradinginb030623mbp">5% of total retail sales</a>.</p>
<h2>Shaping the high street</h2>
<p>The impact of department stores on the high street grew with the size of their premises. The companies built large, integrated stores – such as Beatties (lately House of Fraser) <a href="https://www.expressandstar.com/news/business/2018/06/07/140-years-of-city-history-faces-the-end-with-beatties-set-to-close-next-year/">in Wolverhampton</a>, which occupied most of a block in the centre of town. Once established, these stores often became linchpins around which other shops congregated, drawn by the growing footfall. </p>
<p>Architects and planners have been inspired by the pulling power of department stores when designing successive generations of shopping centres – from Milton Keynes Shopping Centre, in which John Lewis was the linchpin, to the Trafford Centre in Manchester and Bull Ring in Birmingham, both of which have Selfridge’s as their “anchor store”. Such monumental buildings were designed to impress, of course. But they were also needed to accommodate an ever-expanding range of goods. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/229264/original/file-20180725-194143-kgxmli.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/229264/original/file-20180725-194143-kgxmli.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/229264/original/file-20180725-194143-kgxmli.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/229264/original/file-20180725-194143-kgxmli.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/229264/original/file-20180725-194143-kgxmli.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/229264/original/file-20180725-194143-kgxmli.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/229264/original/file-20180725-194143-kgxmli.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Machester’s Trafford Shopping Centre.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/manchester-uk-june-19-2015-peel-258596774?src=sy2yDN5Y-SZTbxS2TdRPoQ-1-3">Smiltena/Shutterstock.</a></span>
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<p>As early as the 1870s, the unlikely-sounding Civil Service Supply Association in London <a href="https://www.thehistorypress.co.uk/publication/spend-spend-spend/9780752443690/">boasted that</a> it sold “anything from a blotting-pad to a bicycle or a billiard table – from ginger beer to carte Blanche champagne”. The range and scale of this operation made such stores the Amazon of their day – and unsurprisingly, they drew howls of protest from small retailers, who complained about unfair competition from leviathans.</p>
<p>As with Amazon, department stores introduced innovative new technology, such as elevators, escalators and air purification systems, as well as new systems of stock control that allowed them to track which stock lines were selling well and which were slow moving. Many also operated both in-store and mail-order businesses, sending out price lists and receiving orders by the thousands. </p>
<h2>Putting on a show</h2>
<p>By the 1890s, some large stores were doing as much as one third of their business by post, and developed separate departments to <a href="https://www.thehistorypress.co.uk/publication/spend-spend-spend/9780752443690/">deal with demand</a>. Yet the physical shop remained the cornerstone of the department store’s business. And it was the experience of coming into the shop that marked department stores as different from most other shops. There was a growing emphasis on the display of goods, both in the shop window and inside the shop. </p>
<p>Plenty of other shops had their wares out on display, but department stores offered their customers a different scale of choice and variety in the things that could be seen and handled. </p>
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<p>American visitors were wont to complain about “shop-walkers”, who escorted well-heeled customers between departments and discouraged the “wrong type” of person from entering the shop. But these were most evident in larger London stores: browsing was encouraged by many shops and advertisements reassured customers that there was no obligation to buy. </p>
<p>Self-service was pioneered in some stores, such as Lewis’s, but counter service remained the norm through to the interwar years and beyond, and persists today in lines such as perfume and make-up.</p>
<p>What really marked out department stores was the array of services that they offered in addition to the goods on sale. They provided toilets, restrooms and tearooms, which kept women in particular in the store for longer, increasing the opportunity for sales. There were also fashion shows, string quartets, Santa at Christmas, exhibitions and art galleries, roof-top golf courses, balloon launches and even novelty acts such as a girl, <a href="https://books.google.co.uk/books?id=mmqfDgAAQBAJ&pg=PA140&lpg=PA140&dq=anita+kittner+bentall%27s&source=bl&ots=5plms5_B84&sig=TwTzaO7r-ve-Rrt-vPzvfy1U28A&hl=en&sa=X&ved=2ahUKEwj5vtWwi7rcAhVBCMAKHYU5BZgQ6AEwCnoECAQQAQ#v=onepage&q=anita%20kittner%20bentall's&f=false">hired by Bentall’s in Kingston</a>, who would dive 20 metres into a tank of water. </p>
<p>This is what made the department store more than a shop: it was a place to go, a place where memories were made. Today, online retailers can offer a much greater array of goods, often at much keener prices than is possible in-store. What department stores have lost, perhaps, is the excitement that they once held as an experience. If they can find ways to reclaim that magic, then perhaps their prospects won’t be so bleak, after all.</p><img src="https://counter.theconversation.com/content/99115/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jon Stobart does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>From grand designs to diving girls, department stores were once the star attractions of Britain’s towns and cities.Jon Stobart, Professor of History, Manchester Metropolitan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/790652017-06-28T14:06:33Z2017-06-28T14:06:33ZM&S delivers – but is it too late?<figure><img src="https://images.theconversation.com/files/175854/original/file-20170627-24813-w8gtfv.jpg?ixlib=rb-1.1.0&rect=0%2C30%2C5116%2C3377&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/liverpool-uk-3rd-november-2016-people-511384453?src=bWVRj9_srFK-b5sdTmoUvA-1-12">Kenny1/Shutterstock</a></span></figcaption></figure><p>Over the last five years <a href="http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11282688/How-the-UK-embraced-the-online-shopping-revolution.html">a revolution</a> on the British high street has seen businesses and their customers wholeheartedly <a href="http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9157237/More-High-Street-shops-to-close-as-shoppers-move-online.html">embrace online</a> shopping. </p>
<p>Some companies seized the opportunity to branch out into often unfamiliar territory, while others failed to recognise how forcefully and quickly this market trend would blossom. When Marks and Spencer – the iconic socks-to-sausage rolls retailer – finally gets round to <a href="https://www.theguardian.com/business/2017/apr/27/this-is-not-just-any-online-grocer-ms-plans-food-delivery-service">trialling food deliveries</a> this autumn, it will find out if that particular lucrative ship has sailed.</p>
<p>M&S is playing catch-up with pretty much every one of its direct competitors in food retail. And the warnings are there for high street laggards. Now gone are places like <a href="https://www.theguardian.com/business/2013/nov/06/blockbuster-video-closes-remaining-stores">Blockbuster video</a> and <a href="http://edition.cnn.com/2011/US/09/12/first.borders.bookstore.closing/index.html">Borders bookshops</a>, which failed to adapt their business to the “<a href="http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11714847/Online-shopping-is-king-high-street-stores-must-adapt-or-die.html">sofa-surfers</a>” whose shopping style was attuned to the advent of rivals such as <a href="https://www.forbes.com/sites/gregsatell/2014/09/05/a-look-back-at-why-blockbuster-really-failed-and-why-it-didnt-have-to/#759e41fa1d64">Netflix</a> and <a href="http://business.time.com/2013/03/18/amazon-prime-bigger-more-powerful-more-profitable-than-anyone-imagined/">Amazon Prime</a>. </p>
<p>It’s worth remembering that Netflix in 2000 <a href="http://www.cnet.com/news/blockbuster-laughed-at-netflix-partnership-offer/">proposed a partnership</a> to Blockbuster CEO John Antioco and his team, only to be turned down. Choosing your moment can be crucial.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/175861/original/file-20170627-24760-48qt69.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/175861/original/file-20170627-24760-48qt69.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/175861/original/file-20170627-24760-48qt69.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/175861/original/file-20170627-24760-48qt69.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/175861/original/file-20170627-24760-48qt69.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/175861/original/file-20170627-24760-48qt69.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/175861/original/file-20170627-24760-48qt69.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/175861/original/file-20170627-24760-48qt69.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Ancient history.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/chichester-england-november-10-closing-down-163045838?src=cHAnMG8TRnX4mXn1KqCaKw-1-1">JLRPhotography/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Belly up</h2>
<p>Whether or not a company survives depends on a number of factors, but mostly it concerns one key objective – can it remain profitable? What this often translates to is how well a company can maintain a market presence by offering a <a href="http://www.economist.com/node/14301696">unique selling proposition</a> – what marketing types like to call a USP. This can include offering the best price, best quality, market-leading service, widest choice, best guarantee or a market-leading product. In short, anything that distinguishes it (positively) from the main competition. </p>
<p>M&S has traded on its reputation for quality and a mixed offering, but with equally mixed results. Clothing has consistently struggled, while food has <a href="http://news.sky.com/story/ms-to-trial-online-food-delivery-service-this-autumn-10853563">underpinned its performance</a>. When trying to maintain a fine balance like that, the line between thriving and failing becomes a fine one. </p>
<p>Many in the past have offered a USP, and been much-loved by the public. Once-renowned companies such as <a href="http://www.bbc.co.uk/news/av/business-36127732/three-things-bhs-got-wrong">BHS</a>, <a href="http://www.bbc.co.uk/news/business-25345257">Blockbuster</a>, <a href="https://www.theguardian.com/business/2009/nov/26/borders-closure-stores-amazon">Borders</a>, <a href="http://www.bbc.co.uk/news/business-20164228">Comet</a>, and <a href="http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/6570626/Woolworths-the-failed-struggle-to-save-a-retail-giant.html">Woolworths</a> were all once market leaders in their respective fields, but eventually they all failed. They failed to remain relevant in their respective markets and often failed to embrace technology which would have allowed them to keep up with the competition.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/175863/original/file-20170627-24776-10zt5t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/175863/original/file-20170627-24776-10zt5t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/175863/original/file-20170627-24776-10zt5t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/175863/original/file-20170627-24776-10zt5t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/175863/original/file-20170627-24776-10zt5t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/175863/original/file-20170627-24776-10zt5t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/175863/original/file-20170627-24776-10zt5t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/175863/original/file-20170627-24776-10zt5t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Hitting the wall.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/lwr/4692390873/in/photolist-89DJjV-7e6ir4-5HLdDR-6LwTFc-92NEia-7dayCk-5Lxgjk-7DEecT-7AL8xy-fxAHaS-wXrc51-7dnC8v-5UVy6C-favAL-9nWBqA-5UVKtR-5UVw8d-5UVx2Y-6gpPLH-62DRrS-5jvi5Z-5MyiK2-pNdgWn-dtGTR4-4pvgss-q5pN5p-844rKR-p8QybK-p8MYXL-5WZDRF-5NU1ti-4xAVW-q5pMcn-pNdi9T-5Xve7t-78upnz-6fXYfR-dhcFdP-6gvrvJ-6yTmKo-6fXXQx-7BiBXE-6oZYnB-jLsJF-5WFFh9-69DV6L-63fCzd-9HGreM-6g3aLA-5Ns5pq">Leo Reynolds/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
</figcaption>
</figure>
<h2>Staying alive</h2>
<p>Survival involves much more than management making the right decisions, it often involves being ahead of the curve. We can see the effect of this dynamic in the UK high street right now. It is why M&S has had its <a href="http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11513251/Marks-and-Spencer-has-no-place-in-the-modern-world-which-is-why-its-recovery-should-be-celebrated.html">place in the modern world questioned</a> on a number of occasions. </p>
<p>M&S’ sustained issues with <a href="http://www.bbc.co.uk/news/business-35251415">its clothing range</a> have been masked by strength in food, which has made it all the more odd that the move into deliveries <a href="http://www.bbc.co.uk/news/business-39743611">has taken so long</a>, and seems so tentative, even now. At a time when retail space is no longer entirely essential, M&S is caught between <a href="http://www.telegraph.co.uk/business/2016/11/04/marks--spencer-to-shut-uk-stores-in-shop-shake-up/">closing some stores</a> and opening new food-only stores as it tries to understand changing demand.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/175865/original/file-20170627-24776-phhw5t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/175865/original/file-20170627-24776-phhw5t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/175865/original/file-20170627-24776-phhw5t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/175865/original/file-20170627-24776-phhw5t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/175865/original/file-20170627-24776-phhw5t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/175865/original/file-20170627-24776-phhw5t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/175865/original/file-20170627-24776-phhw5t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/175865/original/file-20170627-24776-phhw5t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">New benchmarks.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-uk-november-19-2011-ikea-422348707?src=9j2NkAzwAxMSXFxQOi3WCg-1-5">Tony Baggett/Shutterstock</a></span>
</figcaption>
</figure>
<p>The warnings from retail experts are all about failing to latch on to <a href="https://www2.deloitte.com/uk/en/pages/consumer-business/articles/retail-trends-2017.html">market movements and trends</a>, but M&S has seemed more worried about the risks of being the front runner. It is true that trends can quickly fade, but anyone watching Tesco, Asda, Ocado and Sainsbury’s vans rattling up and down our streets every day must have wondered what M&S was playing at.</p>
<p>Clicks are king for the moment, and for “bricks and mortar” retailers to thrive, they must develop a business structure that makes sense right now. If M&S wants an example to follow it could do worse than <a href="https://www.forbes.com/sites/walterloeb/2012/12/05/ikea-is-a-world-wide-wonder/#2434bd8f27b9">Ikea</a>, which has worked to get rid of inefficient practices and established teams that collaborate across all channels, not just one, a tactic that may help M&S with the challenge of running its clothing offering alongside food and homewares. </p>
<p>Food deliveries are an effort to meet new customer demands, but M&S would do well to view its all of its operations from the position of the consumer – from the outside in – to develop an environment that actually enhances brand loyalty across all products. <a href="https://www.dezeen.com/2013/01/25/apple-trademarks-design-stores/">Apple’s product showrooms</a> are world leaders in this respect.</p>
<p>M&S faces another testing year on the high street and on the internet. It no doubt hopes that a late foray into food deliveries will expose its business to more sofa-surfers and in turn help its ailing clothing division. But, a word of caution. Competition will be fierce, and if those previous company failures have taught us anything, it is that brand loyalty can vanish in the face of poorly handled strategy.</p><img src="https://counter.theconversation.com/content/79065/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Wood does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>What the lessons of failed high street brands mean as M&S finally makes a big move.John Wood, Lecturer in Law, University of Central LancashireLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/778212017-05-17T15:09:53Z2017-05-17T15:09:53ZWho needs experts? UK retail giants take a calculated risk with new bosses<figure><img src="https://images.theconversation.com/files/169597/original/file-20170516-11956-hw7kxz.jpg?ixlib=rb-1.1.0&rect=245%2C303%2C4955%2C3227&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/manchester-uk-may-11facade-marks-spencer-638496250?src=BDlY_untuPuhm47idK3dPQ-1-19">george green/Shutterstock</a></span></figcaption></figure><p>Two established British high street stores have announced senior appointments, both of which have sparked some surprise across the industry. A new CEO at department store House of Fraser and a new director of home, clothing and beauty at Marks & Spencer share an intriguing characteristic: both will arrive in these posts with little relevant experience of their new fields.</p>
<p>You might think this taps into a wider, global trend, where in the US and France, Donald Trump and Emmanuel Macron have both won the presidency after seeing off rivals with more impressive and relevant CVs. </p>
<p>But business, and in particular the retail business, tends to reward detailed industry knowledge gleaned from time spent at the coal face. That’s why there was much surprise at <a href="http://www.telegraph.co.uk/business/2017/05/03/ms-poaches-halfords-bossjill-mcdonald-run-struggling-clothing/">Jill McDonald’s move to M&S</a> from automotive retailer Halfords, and <a href="https://www.theretailbulletin.com/news/house_of_fraser_names_new_chief_executive_12-05-17/">Alex Williamson’s switch to HoF</a> from running the Goodwood sporting estate in Sussex. Both are tried and tested managers, but both would appear to be fish out of water in their new roles.</p>
<p>Although the leadership turnover in the retail world is relatively high – across the UK’s largest 300 retailers there were 41 changes at CEO level <a href="http://www.kornferry.com/institute/uk-retail-tracker-2017">in the past year alone</a> – these kinds of unconventional appointments are rare. </p>
<h2>Sporting chance</h2>
<p>But perhaps the electoral success of Trump and Macron could help explain it. Do those at leadership level in UK retail really need to have had specialist functional skills or prior sector experience?</p>
<p>Both M&S and HoF already have product design, buying, marketing, data analytics, supply chain and store management teams, full of very talented individuals, and so it may be that exemplary transferable skills, in particular leadership, are the real requirement, whether gained in the retail sector or not.</p>
<p>There are some parallels that can be drawn with recruitment and development programmes in high performance sport. They include <a href="http://www.eis2win.co.uk/expertise/pathways/">Performance Pathways</a>, the collaboration between UK Sport and the English Institute of Sport (EIS), which sought to identify talented athletes who had no previous experience of a specific sport and develop them for success at Olympic and Paralympic Games. That project has resulted in over 100 newly identified athletes across 17 sports, and secured more than 150 international medals. </p>
<p>Their <a href="http://www.independent.co.uk/sport/olympics/from-pitch-to-podium-footy-rejects-get-lifeline-1693418.html">Pitch to Podium scheme</a> tried to do a similar thing with young footballers who hadn’t made it to the highest level in their chosen sport, but who might have the right physiology and attitude to succeed in other sporting disciplines. In both these examples, it is transferable strengths that were sought after and valued, rather than specific previous experience.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/169599/original/file-20170516-11952-amvh9x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/169599/original/file-20170516-11952-amvh9x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/169599/original/file-20170516-11952-amvh9x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/169599/original/file-20170516-11952-amvh9x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/169599/original/file-20170516-11952-amvh9x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/169599/original/file-20170516-11952-amvh9x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/169599/original/file-20170516-11952-amvh9x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/169599/original/file-20170516-11952-amvh9x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Second chance?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/football-soccer-387311377?src=NNDrG6TCmz40YloVLbTaSg-1-23">makieni/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Team talk</h2>
<p>At M&S, McDonald will have the support of an experienced clothing and beauty director, and will also work with Neal and Mark Lindsey, the former sourcing gurus at high street rival Next, who have been retained to sharpen M&S’ <a href="http://www.telegraph.co.uk/business/2017/05/03/ms-poaches-halfords-bossjill-mcdonald-run-struggling-clothing/">clothing supply chain</a>.</p>
<p>Similarly, HoF have built up one of the strongest retail management teams to ensure they <a href="http://www.telegraph.co.uk/business/2017/05/11/house-fraser-hires-new-boss-no-retail-experience/">have a balance of skills</a> and so Williamson will be leading a team recently strengthened by the recruitment of several experienced retail operators from, among others, online fashion retailer Asos, M&S and rival department store John Lewis.</p>
<p>While McDonald’s appointment prompted predictable <a href="http://www.vogue.co.uk/article/marks-spencer-new-boss-jill-mcdonald">“from jump leads to jumpsuits”</a>, press coverage, M&S CEO Steve Rowe sought to highlight her customer knowledge and experience in running dynamic, high achieving teams <a href="http://www.telegraph.co.uk/business/2017/05/03/ms-poaches-halfords-bossjill-mcdonald-run-struggling-clothing/">which he felt</a> “made her exactly the right person to lead this all-important part of the M&S business from recovery into growth”.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/169600/original/file-20170516-11920-1rpg1c1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/169600/original/file-20170516-11920-1rpg1c1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/169600/original/file-20170516-11920-1rpg1c1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=456&fit=crop&dpr=1 600w, https://images.theconversation.com/files/169600/original/file-20170516-11920-1rpg1c1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=456&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/169600/original/file-20170516-11920-1rpg1c1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=456&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/169600/original/file-20170516-11920-1rpg1c1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=573&fit=crop&dpr=1 754w, https://images.theconversation.com/files/169600/original/file-20170516-11920-1rpg1c1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=573&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/169600/original/file-20170516-11920-1rpg1c1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=573&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Trouble in store? M&S clothing lines have struggled.</span>
<span class="attribution"><a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
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<p>As Nick Bubb, a leading UK retailing analyst <a href="https://www.retail-week.com/analysis/opinion/nick-bubbs-verdict-on-jill-mcdonalds-move-to-ms/7020628.article">pointed out</a>, the role that McDonald takes on at M&S is crying out for somebody who is good with customers and people and that “leftfield” choices for key leadership positions can sometimes be inspiring. He also thought that the task of managing the inexorable decline of M&S clothing may well need new talents from outside the fashion industry.</p>
<p>The House of Fraser appointment is perhaps slightly more difficult to understand, but again you need to look behind the headlines. Last month, HoF revealed plans to turn its shops into a <a href="http://www.telegraph.co.uk/business/2017/01/11/house-fraser-defends-department-stores-online-shoppers-drive/">“lifestyle-led experience”</a> by adding restaurants, cafes and more beauty services.</p>
<p>With that in mind, Williamson’s experience at Goodwood starts to make a little more sense. And HoF chairman, Frank Slevin, focused on his new CEO’s ability to deliver “compelling and engaging experiences for the customer” <a href="https://www.theretailbulletin.com/news/house_of_fraser_names_new_chief_executive_12-05-17/">when announcing the appointment</a>. He also said: “Transformation isn’t delivered by classic retail appointments.” </p>
<p>Perhaps that says it all. It may well be a risk to bring in new retail leaders – or even presidents of G7 countries – without them ticking off all the traditional staging posts on their career path, but they certainly have the capacity to shake things up.</p><img src="https://counter.theconversation.com/content/77821/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nelson Blackley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When presidents are elected with no experience, perhaps M&S and House of Fraser are right to try the same formula.Nelson Blackley, Senior Research Associate, Nottingham Business School, Nottingham Trent UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/711082017-01-12T14:19:59Z2017-01-12T14:19:59ZM&S figures flatter the high street<figure><img src="https://images.theconversation.com/files/152396/original/image-20170111-4601-y8kupt.jpg?ixlib=rb-1.1.0&rect=6%2C50%2C945%2C574&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/blacktar/1490437708/in/photolist-pcZ4MQ-pbWeqj-4hnk2V-tQqYD5-7DdkEL-3gGTcS">Vidar Andersen/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span></figcaption></figure><p>Marks & Spencer, the bellwether of the British high street, has published its most recent trading figures including numbers from the Christmas period. It offers some encouragement to investors, but leaves it difficult to take the temperature of UK consumers. The group’s shares nudged higher thanks in part to something of a revival in its clothing arm. Still, all isn’t quite what it seems.</p>
<p>M&S’ update follows a slew of reports from high street chains like Primark and JD Sports as well as major supermarkets Tesco, Morrisons and Sainsbury’s. Most have a positive tale to tell. Britain’s biggest retailer, Tesco, posted its <a href="http://uk.reuters.com/article/us-tesco-outlook-idUKKBN14W0RN">best quarter of sales growth for five years</a>, while JD Sports impressed investors most and saw its <a href="https://www.google.co.uk/finance?q=LON:JD">shares jump more than 8%</a>.</p>
<p>Next, the clothing chain that many regard as a key indicator of the health of the British retail sector, <a href="http://www.nextplc.co.uk/%7E/media/Files/N/Next-PLC-V2/documents/reports-and-presentations/2017/Q4%20Trading%20Statement%20Website%20FINAL.pdf">kicked off the annual round</a> of Christmas results with a less encouraging story. It reported a 0.4% fall in total full price sales in the 54 days to Christmas Eve compared to the same period in 2015. It blamed a “difficult” winter season and a “cyclical clothing downturn” and warned of a “challenging” 2017 hampered by import costs after the Brexit-inspired fall in the pound. In other words, things might get even worse. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/152533/original/image-20170112-25880-70orub.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/152533/original/image-20170112-25880-70orub.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/152533/original/image-20170112-25880-70orub.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/152533/original/image-20170112-25880-70orub.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/152533/original/image-20170112-25880-70orub.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/152533/original/image-20170112-25880-70orub.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/152533/original/image-20170112-25880-70orub.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/152533/original/image-20170112-25880-70orub.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Currency woes for importers.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/pic-512552269/stock-photo-gbp.html?src=gI62ubc8ktCf0kKqqy5uHQ-1-24">pitchr/Flickr</a></span>
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<p>However, the extent to which either internal or external problems might be responsible for Next’s woes is not much clearer after looking over M&S’ performance.</p>
<h2>An extra week</h2>
<p>M&S’ announcement of improved third quarter trading results, and its best clothing performance in five years, comes as <a href="http://www.bbc.co.uk/news/business-37909268">chief executive Steve Rowe</a> continues his efforts to reinvigorate the 133-year-old retailer. Sales at the M&S clothing and home division increased by 3.1% (and 2.3% like-for-like) in the 13 weeks to the end of December.</p>
<p>However, these latest numbers look better than they are. This time last year M&S clothing sales had fallen by almost 6% and in the latest period around 1.5% of the growth in sales was the result of a longer reporting period, which included five extra days of post-Christmas trading. </p>
<p>Both M&S and Next are mature businesses, in more ways than one. They struggle with an ageing customer demographic, and are heavily exposed to all the uncertainties of the UK clothing market, including increasing competition. This includes supermarkets such as Tesco and Sainsbury’s, who are taking market share from their struggling high street rivals with often cheaper products which are to hand as you do your weekly shop. Tesco’s F&F clothing outperformed the market with <a href="https://www.tescoplc.com/news/">4% like-for-like sales growth</a> over the Christmas period, and Sainsbury’s reported a 10% increase in its Tu clothing range sales in the <a href="http://www.j-sainsbury.co.uk/media/">15 weeks to Jan 7</a>.</p>
<p>The price war in fashion retail is unfolding against a backdrop of higher costs as retailers deal with a range of inflationary pressures. These include those currency-related import costs, but also the introduction of the national living wage, the <a href="https://www.gov.uk/introduction-to-business-rates/revaluation">national business rates revaluation</a>, <a href="https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work">apprenticeship levy</a> and energy taxes.</p>
<p>UK retailers are therefore facing something of a classic “no win” scenario of either allowing shrinking profit margins to erode even further, or to pass on these increased costs to their customers and risk losing market share.</p>
<h2>Consumer confidence</h2>
<p>However, it seems that concerns about the UK economy during 2017 may already be influencing consumers’ behaviour. Despite clothing and footwear prices being 5.7% lower in December 2016 than a year earlier (according to the <a href="http://brc.org.uk/retail-insight-analytics/other-kpis/shop-price-index">British Retail Consortium’s shop price index</a>) UK high streets last month were quieter than in any December since 1998, when Ipsos Retail Performance <a href="https://www.ipsos%20retailperformance.com/resources/blog/">started tracking</a> the UK’s shopping trips. </p>
<p>This also reflects another major challenge for those clothing retailers with large networks of stores; the speed at which sales are moving from physical stores to online. <a href="https://www.imrg.org/">IMRG, the association for online retailers</a>, reported that total online sales increased 21.2% in November 2016 compared with a year ago. So, unlike online-only fashion retailers like Asos (who reported <a href="http://www.cityam.com/256895/asos-sales-jumped-during-record-christmas-trading-period-">a 36% jump in sales</a> in the quarter to end-December) “traditional” clothing retailers such as Next and M&S are struggling to produce any underlying sales growth across their combined in-store and online channels. </p>
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<a href="https://images.theconversation.com/files/152540/original/image-20170112-25855-62xoc9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/152540/original/image-20170112-25855-62xoc9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/152540/original/image-20170112-25855-62xoc9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=392&fit=crop&dpr=1 600w, https://images.theconversation.com/files/152540/original/image-20170112-25855-62xoc9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=392&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/152540/original/image-20170112-25855-62xoc9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=392&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/152540/original/image-20170112-25855-62xoc9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=493&fit=crop&dpr=1 754w, https://images.theconversation.com/files/152540/original/image-20170112-25855-62xoc9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=493&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/152540/original/image-20170112-25855-62xoc9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=493&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Off the wall? the clothing industry is changing.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/glenscott/2518504521/in/photolist-4QxZDK-czJvpu-5LDsTX-fiTkyq-gphxKr-mGNdsg-5dksnq-4sAsAy-gphhF1-pUTaZT-qHcmcH-kGvtF5-4cBURH-4Bk36e-5Nnsnc-6eUGgg-6eYPHh-ptF9cw-6eUE2H-6eUFpv-6Y6b8k-iVZhz-3nKypW-e1uZX3-8f9QoG-bCWhDp-qopnau-BNEoGa-gph7DB-gXbVf1-7fegFA-is5cKu-rwjNYB-73CKzJ-6jNazg-7EycXw-j2ybSo-rqFd6A-28VCp4-nkjzuR-snD9TV-skor5E-rmzzdj-rkjNjA-rmxrft-665imn-9dQ25i-7mvLyW-5fViWF-a5GupP">Glen Scott/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
</figcaption>
</figure>
<p>These most recent trading updates might suggest a turnaround for M&S, while Next heads for trouble, but with so many future uncertainties it’s unlikely to be as straightforward as that. M&S faces large restructuring costs as it exits part of its international business and reshapes its UK portfolio, including 30 store closures.</p>
<p>That means the comparative success of M&S clothing results at the end of 2016 shouldn’t necessarily be taken as a signal that the “troubled child of the British clothing market”, is about to swap places with Next, its <a href="https://www.bloomberg.com/gadfly/articles/2017-01-11/retail-fireworks-are-so-distracting">“golden boy” rival</a>, just yet.</p><img src="https://counter.theconversation.com/content/71108/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nelson Blackley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Two High Street titans look like they are travelling different paths, but watch out for trouble in 2017.Nelson Blackley, Research Associate - National Retail Research Knowledge Exchange Centre, Nottingham Business School, Nottingham Trent UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/497372015-10-27T01:55:36Z2015-10-27T01:55:36ZWoolies’ new loyalty program offers a glimpse into the future<p>Woolworths is set to launch its new loyalty program, Woolworths Rewards, claiming that the new scheme will enable shoppers to redeem cash discounts off their shopping basket, much faster than ever before. </p>
<p>It is estimated shoppers will <a href="http://www.smh.com.au/business/retail/woolies-junks-frequent-flyer-points-for-discount-dollars-in-new-scheme-20151023-gkh7t4.html">acquire the necessary points</a> to save $10 automatically of their grocery bill within seven weeks. </p>
<p>Resembling the model used by UK retailer <a href="http://www.telegraph.co.uk/finance/personalfinance/household-bills/11913949/How-Morrisons-is-changing-its-Match-and-More-loyalty-scheme.html">Morrisons</a>, the new Woolworths Rewards program is a smart move for the retailer hoping to claw back some market share and curtail operational costs. However, there is no such thing as a free lunch.</p>
<p>While it will remove the costs of maintaining the Qantas-Woolworths relationship, <a href="http://www.smh.com.au/business/retail/woolworths-poised-to-launch-new-rewards-program-20151022-gkft7l.html">estimated to be around AUS$80 million a year</a> and allow them to re-invest at least AUS$65 million into stores, it may force shoppers into “brand switching” behaviour. </p>
<p>Interestingly, shoppers will only accrue points toward their $10 savings on selected ticketed items. Hence, the cost of maintaining the program will be met by suppliers who elect to have their brands featured with the big orange ticket. This is simply a way of moving supplier funded promotional allowances into a loyalty program, rather than a direct price discount. </p>
<p>Commentators have often <a href="https://www.choice.com.au/shopping/everyday-shopping/supermarkets/articles/choice-supermarket-special">voiced concern</a> about the power of our supermarkets in encouraging us to purchase one brand, over another brand. When faced with the prospect of purchasing Brand A which attracts “Woolworths Dollars” versus Brand B, that doesn’t, it’s most likely shoppers will purchase Brand A. It is expected that shoppers may be critical of being forced into a brand switching situation to attain “Woolworths Dollars”.</p>
<h2>Customers tiring of points loyalty programs</h2>
<p>The larger issue facing Woolworths and others is there is no exclusivity when every supermarket, department store, dress shop and coffee cart offers you a membership card. As a result, shoppers grown tired of endlessly collecting points to eventually redeem on gifts, discounts or possibly a flight. Studies show that a third of members <a href="http://blogs.gartner.com/richard-fouts/2014/06/19/what-can-retailers-do-about-loyalty-fatigue/">never redeem points</a>. </p>
<p>Retailers imbedded loyalty programs to encourage repeat shopping, protect themselves from price wars and most importantly collect valuable shopping data. The first retailer in Australia to offer a loyalty program was Fly Buys, a joint venture between Coles Myer (now Wesfarmers) and Loyalty Pacific, 20 years ago. </p>
<p>Then, shoppers were quick to sign up, with the promise of “free” flights in return for their loyalty and of course their valuable <a href="https://www.marketingmag.com.au/hubs-c/ideal-loyalty-program-data/">personal shopping data</a>, which included brands purchased, location, frequency and demographics. </p>
<p>Back then, the only way retailers could accurately track and target shoppers was through loyalty card usage, and while this still happens today, retailers have other more efficient channels, such as <a href="http://www.wmwoolworthsmoneycreditcard.com.au/hundreds">linked credit cards</a>, like Coles Credit Card (Mastercard) and Woolworths Money (Visa). </p>
<p>As shoppers are more frequently “tapping and going”, retailers can now access a wider range of data, outside of simply their <a href="http://www.dailymail.co.uk/sciencetech/article-2219069/Mastercard-tracking-purchases-sell-advertisers.html">loyalty program members</a>. Such programs also allowed retailers to distract shoppers from <a href="https://hbr.org/2000/03/how-to-fight-a-price-war">focusing on price</a> by simply getting shoppers to focus on the ‘prize’ than the price. </p>
<h2>Need for speed</h2>
<p>Points fatigue occurs when shoppers are faced with months, if not years, of collecting points to ultimately redeem on a desired item or reach that elusive gold or platinum level. Today, shoppers are seeking <a href="http://www.ifeelgoods.com/instant-rewards/">immediacy and customisation</a>. </p>
<p>Recently, Morrisons moved away from its complex “price match” loyalty scheme to a more simplified program where shoppers now earn <a href="http://www.telegraph.co.uk/finance/personalfinance/household-bills/11913949/How-Morrisons-is-changing-its-Match-and-More-loyalty-scheme.html">five loyalty points for every £1 they spend</a>. </p>
<p>Once a shopper earns 5,000 points they immediately to receive a £5 voucher. Other retailers are also moving away from long-term points accruing programs to deliver instant and non-monetary rewards to shoppers, such as free newspapers or coffee. </p>
<p>The UK’s Waitrose recently re-launched their loyalty program of “pick your own offers”, where shoppers can choose from a list of 1000 <a href="http://www.theguardian.com/money/2015/jun/19/how-to-make-most-waitrose-pick-your-own-offers">relevant products and immediately save 20%</a>. Over time, the list changes, and shoppers get to select new products. The scheme has seen more than <a href="http://www.essentialretail.com/news/article/5620c0064fb3a-waitrose-says-loyalty-scheme-is-driving-sales">850,000 shoppers sign up</a>. </p>
<h2>Non-monetary loyalty</h2>
<p>The other problem with existing loyalty programs is that retailers have confused <a href="http://www.crmsearch.com/loyalty-risks.php#sthash.cbvrcvat.dpuf">“loyalty” with “rewards”</a>. Loyal shoppers will always consider their favourite brands and stores first and frequent them consistently. True loyalty programs should also strengthen the relationship between the retailer and customer. </p>
<p>UK retailer Marks and Spencer recently moved away from their strictly points-based shopping frequency scheme to reward shoppers for other positive behaviours, such as completing online surveys, writing online reviews or <a href="http://apparelaccessoriesluxurygoods.retail-business-review.com/news/marks-spencers-rewards-customer-loyalty-with-sparks-membership-program-4694552">referring friends</a>. </p>
<p>The program of “non-monetary” rewards - such as invitations to exclusive food and drink master-classes or fashion parades - demonstrates shoppers are seeking more than just generic deals and discounts. The program also allows M&S to demonstrate its corporate social responsibility credentials, with shoppers earning “sparks” points for donating unused clothing when purchasing new outfits, termed <a href="http://www.theguardian.com/money/2012/apr/26/marks-spencer-shwopping-scheme">“shwopping”</a>.</p>
<h2>The future: Big brother is watching</h2>
<p>What is the future of loyalty? While we see retailers around the world actively move away from long-term, points based schemes to programs that offer immediate gratification and non-monetary rewards, the next frontier will be instant customised offers. </p>
<p>Already, French retailer<a href="http://www.ledsmagazine.com/articles/2015/05/philips-lighting-deploys-led-based-indoor-positioning-in-carrefour-hypermarket.html"> Carrefour</a> and US retailer Macys have begun using <a href="http://www.zdnet.com/article/macys-rolls-out-retails-largest-beacon-installation/">Near Frequency Communications (CFC)</a>, which “pushes” targeted offers to their shoppers while they are in-store, or nearby. </p>
<p>It is expected that the opt-in technology would be the natural evolution of loyalty programs, where members receive immediate and customised offers based on where they are standing and what they are looking at within a store.</p><img src="https://counter.theconversation.com/content/49737/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Woolworths’ new loyalty program is following the international trend away from old-fashioned points-based systems.Gary Mortimer, Senior Lecturer, QUT Business School, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/438292015-06-25T06:21:19Z2015-06-25T06:21:19ZDavid Jones seeks to exploit top end gap in Australian grocery<p>While Australia’s supermarkets continue to <a href="https://au.finance.yahoo.com/news/iga-joins-supermarket-price-wars--slashes-prices-025704637.html">battle on price</a>, the South African owner of David Jones, <a href="https://theconversation.com/who-is-the-south-african-retail-giant-behind-the-david-jones-bid-25472">Woolworths Holdings</a>, has found a gap in the Australian grocery market and is preparing to exploit it. </p>
<p>Reports that the group has appointed Pieter de Wet to <a href="http://www.brisbanetimes.com.au/business/retail/woolworths-vs-woolworths-djs-new-owner-to-overhaul-food-business-20150624-ghwgqo.html">overhaul the David Jones food business</a> signals once again the ever-changing face of the Australian food and grocery landscape. A re-energised David Jones food offer will provide positive outcomes for both shoppers and suppliers, while potentially becoming another headache for Coles and Woolworths.</p>
<h2>A splintering market</h2>
<p><a href="http://www.igd.com/Research/Retail/retail-outlook/3371/UK-Grocery-Retailing/">Similar to the UK</a> and Europe, the Australian grocery market is beginning to split into discounters at one end and mainstream supermarkets at the other. While the growth of discounter-style grocers continues to outperform supermarkets and <a href="http://www.conveniencestore.co.uk/news/discounters-growing-faster-than-c-stores-and-supermarkets/520418.article">convenience stores globally</a>, the “top end” of the market appears ripe for exploitation. </p>
<p>Globalisation, innovation, multiculturalism, media, travel and the internet have shifted the power from the retailer to the consumer. Information-rich food shoppers are now more empowered to make decisions than ever before. Exotic food from around the world is available at local bistros across Australia suburbs. Reality television cooking shows and gourmet food markets tempt shoppers to seek out <a href="http://www.ift.org/food-technology/past-issues/2015/april/features/the-top-ten-food-trends.aspx?page=viewall">exclusive, unique fare</a>. </p>
<p>The days of “meat and three veg” have long gone. Herein lays the opportunity for David Jones. </p>
<h2>Value isn’t just about price</h2>
<p>Media reports are claiming that rather than reporting to David Jones’ CEO Iain Nairn, de Wit will report directly through to Woolworths SA CEO Ian Moir – something that he has <a href="https://www.linkedin.com/pub/pieter-de-wet/39/134/b84">done since October 2014</a>. This arrangement has accordingly added to the speculation that Woolworths SA is aiming to capture the high-end grocery segment by opening David Jones-branded food stores in a <a href="http://www.hartlepoolmail.co.uk/news/business/exclusive-first-look-inside-new-hartlepool-marks-spencer-store-1-7310781">similar ilk to that of Marks & Spencer</a>. </p>
<p>Such a strategy has proved successful in cushioning several international supermarkets from increased price discounting. Offering juice bars, free wine tasting, premium products and local food feature in UK supermarket Waitrose’s bid to continue to grow in a grocery market increasingly driven by <a href="http://www.theguardian.com/business/2014/may/02/waitrose-supermarket-discounters-upmarket-offers">discounters and price cuts</a>. </p>
<p>Similarly, US supermarket Whole Foods has repositioned itself as the <a href="http://wgbhnews.org/post/showdown-produce-aisle-whole-foods-vs-walmart">“healthiest grocery store” in America</a>. This demonstrates a move away from a price-focused strategy. It appears that Woolworths SA is planning to initially refresh the <a href="http://www.davidjones.com.au/Store-Services/Food/Food-hall">current David Jones Food Hall offer</a>, before potentially launching their own stand-alone sites similar to Woolworths’ <a href="http://www.thomasdux.com.au/">Thomas Dux Grocer</a>. </p>
<h2>Risks</h2>
<p>Woolworths SA was quick to hose down suggestions it was <a href="http://www.brisbanetimes.com.au/business/retail/woolworths-vs-woolworths-djs-new-owner-to-overhaul-food-business-20150624-ghwgqo.html">planning a move into food</a>, citing the current increasingly competitive environment incumbents are operating within. Accordingly, entry into the sector without careful planning would be a risk for Woolworths SA given its current competitive nature. </p>
<p>The lack of an extensive supplier base is also problematic for food retailers entering international markets. Unlike general merchandise and apparel retailers, who mostly manufacture and produce overseas and import into a country, food retailers are highly dependent of domestic supply. </p>
<p>Notably, previous attempts to launch an upmarket grocer <a href="http://www.smh.com.au/business/retail/jones-the-grocer-sparks-high-court-battle-for-l-capital-20150415-1mkwdc.html">domestically have failed</a>. Jones the Grocer’s Australian operations went bust in December 2014. Even in the UK, Marks & Spencer this week signalled the <a href="http://www.retail-week.com/property/-marks-and-spencer-proposes-nine-store-closures-as-it-focuses-on-quality-space/5076300.article">closure of nine of the food stores</a>, suggesting the current location of stores were not a “good fit” for the business. </p>
<p>Clearly, targeting shoppers seeking premium, exclusive food products will represent a very small but profitable segment – if well executed. Careful selection of store locations and securing supplier support could drive long-term growth for Woolworths SA. Following a Marks & Spencer model, possibly co-located food stores within David Jones department stores, may be the safest way to enter the market. </p>
<h2>Winners and losers</h2>
<p>It is evident that Australia is becoming an attractive market for international retailers, with its growing middle class, low unemployment and relatively strong economy. Global players such as Aldi and Costco have already set up shop, <a href="https://theconversation.com/move-over-aldi-lidl-may-be-next-for-australian-market-43185">while others like Lidl</a> and Marks & Spencer are <a href="http://www.powerretail.com.au/news/marks-and-spencer-australia/">rumored to be circling</a>. </p>
<p>As the food and grocery market continues to offer up new segments, new players will continue to enter, bringing with them greater choice for shoppers and stronger bargaining power for suppliers.</p><img src="https://counter.theconversation.com/content/43829/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While grocers slug it out with discounters, the South African owners of David Jones may be planning to exploit a gap at the upper end of the market.Gary Mortimer, Senior Lecturer, QUT Business School, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.