It isn’t Colonel Mustard.

If it was a game of Cluedo the prime suspect would be Amazon, in the
high street with a web browser, but the causes of the devastation of retailing
in many town centres is actually more complex than this, even though it is easy
to blame the increase in e-commerce and online shopping.

Like most industry sectors, 80% of retailers are struggling or just
getting by. Only 20% are successful with fewer than 5% really crushing it. And
it’s the 80% of strugglers who seek to blame external factors rather than
examining their own actions.

The recent spate of creditors voluntary arrangements (CVAs) used by
retailers such as Mothercare, Carpetright and House of Fraser to cut their
costs, close stores and make redundancies may appear to be sensible business
decisions but will shutting a few stores make a well managed business out of a
poorly managed one? I doubt it.

The retailing landscape has changed hugely in recent years and yet very
few ‘bricks and mortar’ retailers have adapted their business models to keep up
with these changes. Those that have are reaping the rewards.

Keeping with the department store analogy, during this time Selfridges,
a chain of high end department stores, has increased its turnover by 16% and
made record profits of £180m by making its stores a destination for shoppers
with theatre and events. Supermarkets such as Lidl and Aldi are also thriving
by focusing on a particular customer demographic.

So what differentiates these businesses, the top 20%, from the rest? The
answer is knowing their customers and giving them the shopping experience they
want.

And it’s the same in your business. Whilst the growth in e-commerce, the
economy, business rates and Brexit may be outside of your control, you can and
must understand what your customers want and be singularly focussed on finding
new and innovative ways of delivering it.

Here’s what you can do:

  • Identify your ideal client (your avatar in marketing speak);
  • Find where they hang out (where they live, visit online etc.);
  • Get to know their goals, aspirations and what drives them;
  • Understand their pain;
  • Create a customer journey that will engage them;
  • Find ways to encourage them to transact with you more often;
  • Give them a reason to keep coming back

​​​​​​​It is likely that the outcome of this process will require some changes to your existing business model; you don’t change your results by doing more of what you’ve always done. Successful businesses understand the need to adapt, differentiate themselves and find new and innovative solutions.

Noel Guilford, Principal at Guilford Accounting
Noel Guilford is the principal of Guilford Accounting a small business accountancy practice specialising in advising owner-managed businesses on current accounting, finance, and tax matters. You can reach him via email at noel@guilfordaccounting.co.uk or by phone at 01244 660866. He is the author of the 'Figure it out - an entrepreneurs guide to understanding your business numbers' which you can obtain by visiting guilfordaccounting.co.uk.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ His latest book, How to Build a Successful Business' will be published in 2018.

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