At Your Service: Two Case Studies
In the developed world, retailing remains under siege. As we know, a steady flow of new Internet competitors vie for consumer dollars, frequently undercutting prices of the brick-and-mortar stores. Meanwhile, amidst a sea of sameness with parity products, traditional retailers too frequently compete merely on price. In-store service levels have evaporated in all but the most high-end luxury houses or new entrepreneurial and tech brands, further propelling the “race to the bottom,” an industry trend Robin Lewis coined back in 2012.
A recent visit to London provided a refreshing respite from the frenetic U.S. promotions, both on and offline. I did arrive in the throes of sales season, so trips to Harrods, Harvey Nichols and Selfridges, as well as John Lewis, Debenhams and Primark, included surviving through racks (and racks) of markdown and clearance seasonal apparel. The sales frenzy was the same for many specialty retailers: Karen Millen, Gap, H&M, Zara and a handful more.
Store visits to John Lewis and TopShop evinced a very different value proposition: a panoply of service offerings, from wedding insurance (at John Lewis) to body piercings (at TopShop). Yes they had clearance merchandise, but it wasn’t the only focus.
Great Retailers, Create an Experience, Enrich a Lifestyle, Entertain!
Let’s face it, most shopping experiences are a grind. Time-squeezed shoppers are happy to opt out for easier solutions to get their needs met. The option of driving to a grocer or mass merchant, walking through endless aisles of goods in search of a particular salad dressing or workout shorts, and then wasting time queuing up to pay is not high on consumers’ lists. The sea change we are experiencing is the ease of online shopping, along with price transparency and free delivery.
However, a walk through the TopShop Oxford Circus flagship was a glimpse into an alternative universe. Sure the potpourri of fast fashion, vintage, incredible denim selection, and active- and sportswear were compelling. The trendy merchandise supports the retailer’s cult following. I succumbed to the magic: I tried on cool clothes, sent selfies and even made a few purchases. But it’s TopShop’s portfolio of services that are the differentiators that make the store a destination, a place to hang out, people watch, and up your cool factor. Shopping at TopShop is an experience to be remembered; the dynamic atmosphere is provocative and heady. You may potentially rub elbows with the today’s fashion celebrities, you are surrounded by the people that are setting styles and creating street fashion, and for a moment, you are part of that excitement.
Surprise and Delight.
TopShop’s 90,000 square-foot flagship offers a load of services including a barbershop replete with the candy cane pole. There is body piercing, a tattoo parlor, nail specialists, a brow bar and a braiding salon (the latter is all the rage in London’s sweltering summer heat). Similar to its sister store on NYC’s lower east side, TopShop is a source of inspiration, offering cutting-edge fashion trends, limited edition pieces as well as apparel basics. TopShop is an expert on how to make shopping fun!
Exporting a Hip Ambience
No doubt Nordstrom chose to partner with TopShop based on the palpable excitement that is integral into the TopShop brand DNA, as well as the fast fashion and on-trend accessories. Just housing TopShop in its department stores provides Nordstrom with an element of street cred that it would be difficult, if not impossible, to create under the Nordstrom banner alone.
TopShop is one of nine brands of privately held Arcadia Group, owned by Philip Green. Birthed during the counterculture of the 1960s, today TopShop has about 500 stores worldwide, 300 or so in the UK alone and five stand-alone locations in the US, as well as 67 shop-in-shops in Nordstrom. Surely the US could domicile 100 TopShop locations.
About a block away from TopShop at 300 Oxford Street sits the John Lewis flagship. It’s about a century older than TopShop and to be fair, a lot less hip. But John Lewis knows it customers intimately, providing a range of concierge-like services. And why not? The retailers we’ve shopped with throughout our lives become a trusted member of our family and the source of collective memories. Who would be better to navigate the vicissitudes of insurance (home, auto, life, pet, travel, event and special), financial services and broadband services, as well as booking travel (and then shopping on the floors below for the perfect travel wardrobe)? John Lewis is leveraging the power of its brand name and what it stands for by providing services and driving store traffic to meet its shoppers varied needs. I was particularly intrigued with the wedding insurance. Could they really insure its longevity and success? It’s a kind of a pre-pre-nup and John Lewis Insurance offers six levels of coverage.
John Lewis is the largest department store chain in the UK with 44 John Lewis shops including 31 department stores. Organized as partnership, the company inculcates a culture of service among its 96,000 co-owners (including Waitrose and its various service organizations). Its guarantee for the past 75 years has been to be “Never Knowingly Undersold,” promising that the price of any item will always be as low as the lowest price in the neighborhood, establishing value and trust as core elements of the John Lewis offering. The merchandise assortment is extensive with better, designer and contemporary labels, as well as proprietary offerings and exclusives spanning electronics and home along with apparel, accessories, and beauty. But it isn’t just the merchandise and the prices that make John Lewis a shopper’s delightful destination, it’s the unique level of service from co-owners, the trust that took decades to develop, and the span of the services provided.
Too many retail executives have responded to the ecommerce onslaught like deer in the headlights. Numbed into submission, they lower prices, provide free shipping, and continue the downward spiral, the race to the bottom. They’ve forgotten the competitive advantage they own in their brick-and-mortar store locations: They house trusted experiences that create a special place in our lives. A return to these basics could drive more store traffic, restore consumer loyalty and even staunch the corrosive deflationary practices of the past 20-some years.