To See Concorde Fly Again

How amazing would that be? Attending the "Save Concorde" evening last week gave me a really strong sense of what a stunning British icon we have lost. I can recall what a thrill it was to look up and see it flying over and remember our excitement when I pointed Concorde out to my daughter through the air plane window as we taxied round Heathrow. Who can forget the amazing spectacle of the fly past at the Queen's jubilee with Concorde leading the Red Arrows? What a shame it couldn't be part of the Diamond jubilee or the Olympic ceremonies.

Last Thursday was the 10th anniversary of the last commercial flight by Concorde and I wonder now how many people, like me, regret never having flown on her? I was lucky enough to mark the occasion by having dinner with the incredible Mr Fred Finn (in the photograph) who appears in the Guinness Book of Records for having flown the most miles, 15 million in fact, and for having flown 718 times on Concorde.

Mr Finn still makes his living by travelling the world, not for his employer any more but to speak to people about his travels and most particularly his experiences on Concorde. Without this remarkable aircraft he would not have this career as it would not have been possible to travel so many miles.

The function I was attending was held by the Save Concorde group in commemoration (not celebration) of the last commercial flight. My colleague Martin and I were there to promote our fine art prints of Concorde with authenticated seat belts, which I have to say were received with huge enthusiasm, as well as to donate one of the prints for a silent auction.

In return we received endorsement from Fred for our website: www.britishairwaysconcorde.com. He told us that he didn't do this lightly but he was really impressed with the site and loved the prints. Thanks Fred and don't forget to ask Richard Branson to have a look at the site next time you see him! (Thanks also to Sara Hemp from Creative Remedy for all her hard work developing the site).

The dinner menu was carefully chosen from the most popular dishes served on Concorde:

Starters

Leek and Potato Soup or Prawn Cocktail

Main

Poached Salmon or Roast Lamb (Not chicken or beef? I hear you ask)

Dessert

New York Cheese Cake or Creme Brule

The meal was accompanied by videos of the last flight and landing along with the Sky News coverage and followed by a talk from Fred, a lovely gentleman with a naughty edge! Some of Fred's experiences include being hijacked and landing without the wheels in place! For a laugh take a look at the YouTube video of him performing his version of the safety spiel on Concorde - after a few cocktails!

According to Fred there is no such thing as "jet lag" (although perhaps he was never in one time zone long enough to find out!) Fred reckons it is all about dehydration. His advice is to set your watch to the destination time as soon as you get on board and start living, eating and sleeping in that time. Drink lots, moisturise your face frequently and close your eyes for a few minutes every hour to keep them moist.

Overall it was a most enjoyable and interesting evening. Save Concorde is a serious group of people here and in France who are determined to see Concorde fly again. Apparently it is a combination of politics and British Airways that are keeping it on the ground. 

The group had 11,000 members on the morning of the 24th, but due to some blogging, facebook and twitter activity from a couple of individuals at the event, grew to 11,500 by the end of the day. A thought provoking lesson in the power and reach of social media.

Written by Jane Fransen-Hale: Director JEM Retail Consultants.

Retail Winners and Losers in 2014: JEM Predictions!

The last few weeks has seen some great sound bites from leading politicians such as "Britain is on the path to prosperity" (David Cameron) and more poetically "The sun has started to rise above the hill" (George Osborne) so does this mean retailers can look forward to improving sales in 2014? Not all, I suspect.

 

According to official figures published in October the economy grew at its fastest rate for 3 years with the result that David Cameron has promised a "recovery for all" shared by every region and all groups. With 15.5% of households in the SE being in the richest 10% compared to 7.6% in the NE and NW this seems about as probable as "an end to boom and bust" but how is retail likely to fair?

The Centre for Retail Research reports that retail sales have improved in 2013 although "price competition is so vicious that there is little retail inspired inflation about". The ONS sales figures for August show that retail sales rose by 2.3% in volume terms and 3.9% by value compared to 2012. They cheerily conclude "Better therefore than we have seen in the last five years, but there are plenty of problems yet to come!"

So what is it going to take to be successful?

First and foremost great product. Being second rate really isn't good enough any more and if you haven't got something that people really desire then they are unlikely to part with their hard earned cash. Next is excellent service  in terms of channels and routes to market supported by appropriate and seamless IT platforms. Increasingly "tech savvy" consumers expect nothing less. Finally first class logistics to ensure that your product is where you want it, when you need it, it the right quantities as well as providing B2C order fulfilment and delivery.

Who is likely to thrive in 2014? I would predict the following groups will do well:

Prestigious designer brands. As these cater to people with a lot of money and social inequality has never been greater they are essentially "austerity proof". Burberry manages to tap into both its luxury and "British" image (despite manufacturing in the Far East!) Then you have the super brands like Chanel and Dior whose customers in this country are largely from overseas. Changing the visa system to make it easier for people from China to visit will inevitably help. Many of these brands also have diffusion brands so regular customers (like me) can buy into the Brand dream.

Aspirational brands. Not designer as such but clearly desirable. These brands benefit from the "Sainsbury's"effect in that wealthier customers are happy to shop there while also being an affordable luxury that provides that essential "feel good" factor. Mulberry would be one example as well as the emergence of premium ranges from those brands who wish to head upwards in terms of price and desirability, like Ted Baker and AllSaints.

Value brands. Britain has become addicted to the "value" market since 2008 and the continuing uncertainty caused by tightly controlled (or non-existent) wage rises and fuel prices means that this isn't going to end any time soon.

More speculatively brands associated with with active leisure or lifestyles such as GOoutdoors. The seemingly endless news items about the obesity "crisis" means that people will become increasingly conscious of the amount of exercise they do and having the right gear is a bit like having a gym membership. You may not use it, but it makes you feel better.

And who will suffer? Any retailer in the middle ground. Those that lack prestige but are too expensive to be regarded as value. Any brand without a clear identity or those that have lost their way such as Jaeger and LK Bennett. Finally those that rely on some of the big department stores, particularly Debenhams, as the service proposition just isn't good enough any more.

These concession based businesses are always in danger of being "de-ranged" (Fenn Wright from John Lewis) as many department stores now seek out brands that are harder to find on the high street. Any brand still in Debenhams is unlikely to find a home in any more upmarket store both in the UK and, increasingly, internationally. Those CEO's whose business relies on someone else for its future will have many more sleepless nights than those who can, to a far greater extent, shape their own destiny.

In summary worry about what you can control, not what you can't. Get the very best people into your team and ensure that you have the right creative talent for your brand, who understand what your customer desires and how to give it to them. Ensure that your customers can get what they want, when they want it however they choose to shop.

Deceptively simple, but it's these factors that will sort out the winners from the rest, not the creation of a great omni-channel strategy document.

Written by Erica Vilkauls: Director JEM Retail Consultants.

What Does Omni-Channel Mean and Can Every Retailer Deliver It?

Firstly what is omni-channel? The Webcredible report in 2012 defined it as "Doing multi-channel properly". It is delivering a seamless experience to your customers and "ability to choose any technology or communications channel they wish, at any time, anywhere."

 

Omni-channel is an open platform approach that enables the customer to see the retailer as a brand rather than a channel within a brand. From the customer's perspective they are able to make a purchase online, in store, on a mobile app, on the phone etc and have access to the same full product offering and stock availability.

Once purchased the customer then has the ability to decide time and place of delivery e.g. home, office, store. Perhaps the trickiest technical piece of the jigsaw is for the (returning) customer to be recognised immediately they start the transaction and have any previous delivery information, payment and credit information presented to them thus reducing the transaction time and continual re-entry of information.

Within the retailer's technical infrastructure all channels must work from a single database of products, prices and promotions and the all important customer history and information must be readily available to any device / point of sale. The bricks-and-mortar stores must become an extension of the Supply Chain.

The Webcredible report acknowledges that "Generally omni-channel is not being done well at the moment" and "Fully developed omni-channel experiences (such as Burberry's) are only currently feasible thanks to innovation and budget that can be justified in flagship stores for exclusive brands".

So is "omni-channel" just the latest buzzword or is it an essential development that retailers can't afford not to invest in? Consider the following scenario:

It is a Thursday afternoon. Your customer, a regular though infrequent shopper, calls into your flagship city centre store on her way home and sees a dress that she likes in your sale. In a hurry she doesn't try it on and leaves your store.

30 minutes later she is relaxing in her train seat and decides to take advantage of your mobile app. She saves the dress along with 2 matching items to view them later. Once home she accesses your website through a tablet, retrieves the saved items and asks for them to be sent to her nearest store, which happens to be a concession, with the intention of trying them on before deciding to purchase.

As it is the end of the season the concession only has stock of one of the items. Your DC has one of the others, but only your flagship store has the third. No one place has all 3 items in the sizes required. All the items were available to the customer as omni-channel displays 100% of the stock irrespective of physical location. To add to the challenges the Department Store where the concession is based will not take deliveries on a Saturday.

The first issue is that the software has to take the customer's order and use it to generate instructions to 3 different places: 1) the concession that the customer will visit 2) one other store to tell them to move an item to the concession and 3) the DC to move the item that will complete the order.

Secondly there is a big issue here with timing. The order was placed on a Thursday evening and the customer, may arrive as early as 09:00 on Saturday. While this may (I repeat "may") be possible from the DC, how many retailers would be able to complete the inter-branch transfer within the required timescale?

Next is cost. This order will generate 2 exceptional item movements and will inevitably generate additional cost. As the customer's perception is that they are buying from a store they don't expect any of this to be passed on to them and it will therefore come out of an already diminished margin.

Finally there is service. The customer has high expectations of the way she will be treated at the store, which given that it is a concession may not even be by your employees. It should also be noted that she doesn't perceive herself to have actually bought the items yet. If she doesn't turn up on the Saturday, or decides not to purchase one or more of the items then it won't be a return, it will never have been a sale.

Under these circumstances isn't it more realistic for most retailers to restrict the customer to a home delivery option at the point of ordering? After that everything becomes logistically much more straightforward and the costs easier to control. Surely it is better to do this well than attempt something more complex and fail?

Whilst the desire is to be omni-channel, the execution may not be if you want to a) make money from the sale and b) satisfy customer expectations, which has got to be what it is all about. As a customer I don't mind being restricted to home delivery, or receiving multiple parcels, all I want is what I ordered. As long as the interaction with the website lets me know what to expect, why would I really care?

Surely the key thing has got to be: don't promise what you can't, profitably and reliably, deliver.

Written by Mike Gamble: Director JEM Retail Consultants.

Retailers and Designers Continue to Ignore Real Women

Real women are not size zero and everyone knows it! The Mail online reports that "Nearly half of UK women are a dress size 16 or above" but researchers Mintel report that "larger" women tell them much more still needs to be done to provide clothes that look good on a more rounded frame.

According to the Mail online "The average size for a British woman is a curvy 16". As this equates to about 11m women it is no surprise that providing clothing for them is proving the fastest growing market for the fashion chains worth £3.8 billion a year.

The 45% growth in the value of sales of larger clothes over the last 5 years compares to a rise of just 15% across women's fashions so it is clear that demand is strong.

With this in mind I visited some designer stores in London and found the following: Miu Miu, Louis Vuitton, Moschino, Prada and Versace - maximum dress size is 12. Alexander McQueen stock 14 in some styles but the sales assistant says they come up so small that she advised buying a size larger. They don't stock 16 so no luck there.

Donna Karen and Gucci make an effort by going to 14 but "Hurrah" for Chanel who do stock size 16 and on some occasions 18.

So what is the real reason that designers don't go above a size 12? According to Robin Lewis, co-author of "The New Rules of Retail" commenting on the sizing policy of Abercrombie and Fitch (who don't sell trousers above a US size 10, UK 12) to Ellen DeGeneres "they just don't want larger women shopping in the store". The appalled host exclaimed "Since when was something over a size 10 plus-size?"

Recently Lululemon said that clothes above size 12 were not part of their business strategy and there is an almost sinister move here to equate a woman's dress size to her financial and social status. In an ironic reversal of history "thin" and "rich" go together so in their prejudiced minds only thin people can afford their clothes. They need to get out more!

This is also true of some well known retailers. In 2009 Selfridges stopped selling anything above a size 16 and got rid of those brands that do cater for those sizes. So if "larger" women want good quality clothing where do they go? Until recently Jaeger was a good bet but they have lost their way and although they stock larger sizes I defy you to find anything you would want to buy. My advice would be to go online to Scandinavian stores (and occasionally the US).

So what do you think? Are these brand designers right to protect their prestigious images in this way or should they wake up and manufacture for the real world?

Written by Erica Vilkauls: Director Jem Retail Consultants.

Why RM is Past Its Sell-by

The BBC reported this morning that the initial price for Royal Mail shares will be 330p valuing the company at £330bn. The Government will sell 52.5% of the company generating £1.7bn for the Treasury.

Despite the share price of 330p being at the top of the range indicated it is likely that the level of demand for the shares when combined with the limited supply will create something of a free giveaway when the shares begin full trading on Tuesday. Commentators suggest that shares could reach 400p or over, theoretically creating a healthy 20% profit.

So why wouldn't anyone with funds languishing in savings accounts and being eroded by inflation take a risk and buy into this offer? Well I won't and there are several reasons why.

Moving from the public to the private sector can be painful for any company but Royal Mail with its 150,000 employees is a labour intensive, people led business. A fact of which the CWU who have been campaigning against the "Great Mail Robbery" are extremely well aware.

The CWU is set to announce the results of a strike ballot on October 16th with the possibility of industrial action if they get a "Yes" result as they would like as early as the 23rd. The purpose of this industrial action? To quote their website "We want an agreement that means, regardless of who owns the company, that your job and terms and conditions are protected."

This is not the real world. Parcel delivery is a highly competitive business that operates on very small margins and Royal Mail has both benefited from and been the victim of the internet as it has increased parcel volume but reduced the use of the mail. To have a future it has to compete with the likes of UK Mail and courier delivery companies such as Hermes and this means that there can't be anything that isn't open to negotiation.

The Chief Executive, Moya Greene has done an excellent job in the last few years of limiting the number of days lost due to industrial action but Royal Mail has already warned the Business Select Committee that "the company will employ fewer people in the future, whoever owns it". Given the attitude of the CWU isn't a return to the level of strike action seen in 2008 and 2009 more likely?

There are a couple of other things worth worrying about: the first is to understand what claim the pension fund, which is in the hands of the Government, has on the business and its assets. The second is that, like most state owned enterprises, the infrastructure has been heavily under invested in. To reorganise and upgrade its sorting equipment is likely to take at least 3 - 5 years.

The employees of Royal Mail are certainly looking to cash in with The Telegraph reporting that "just 368 out of 150,000 employees turned down the share offer". No trace of hypocrisy there then if the CWU are to be believed when they say that "most staff are still against privatisation".

Let's hope that the business can be saved with more investment, but it is likely to be an uphill struggle given the attitude of the current workforce. There is a real risk that the CWU will materially damage any prospect of success and if the image above (taken from their website) is anything to go by then they will certainly do so.

Written by Erica Vilkauls: Director JEM Retail Consultants.

 

 

Social Media or Recruitment Agencies?

The opportunity to reduce recruitment costs by finding candidates through the use of social media has never been more appealing. With agencies taking anywhere between 15% and 30% of first year salary the option of direct recruitment would seem far more cost effective. But is this always the case?

 

Amongst a number of things I have in common with my colleagues at JEM Retail Consultants is that we have all done more recruitment of people on behalf of the companies that we have worked for than we have been recruited and we have each had a lot of approaches as a result of our LinkedIn profiles. Between us we have also dealt with a large number of recruitment agencies as both recruiter and candidate.

This got me thinking both about the optimum way to recruit new talent as well as the best way to find the next opportunity myself. Figures validated in studies conducted by The Institute if Interim Management and The Interim Management Association suggest that the average day rate for interim managers is between £600 and £700. On a typical assignment of 8 months this could mean paying an agency fee of around £26k, making sourcing your own candidates a very attractive proposition.

Information provided in The Interim Report for 2013 published by Executives Online shows that 52% of clients would initially "See if I can find one myself, within my own or my colleagues' circle of contacts." This is consistent with the experience of interim managers themselves: "Almost two thirds sourced projects themselves, but over a third were making use of interim or recruitment providers to find work".

The same survey, however, found that 47% of clients in 2013 would "prefer to make use of a recruitment or provider company of some sort". This is a significant increase from just 25% in 2011.

Recommendations from people you trust have to be one of the best ways of finding new people as well as new opportunities and this is as true of agencies as it is of your personal contacts. To add value to the recruitment process the agency you use should send you a small number of high quality candidates, all of whom fit the requirement providing an efficient recruitment process and a higher chance of candidate acceptance and retention.

I get very nervous when I am contacted by multiple agencies in connection with the same role as it suggests that the client doesn't have a strong relationship with the agency and is employing a "scatter-gun" effect hoping to hit lucky. I am also worried, both as a recruiter and a candidate, if the agency hasn't taken the time to meet the person they are putting forward beforehand.

For many years now (more then either of us care to remember) I have worked with Mary Anderson Ford from Aqua Retail. From our first acquaintance Mary represented, in my view, the height of good practice by taking the time to understand both how I work and the culture of the business I am representing. As a result she became a trusted referral expert and I can rely on the fact that she has already checked the technical expertise and obtained "soft" references for each candidate I see.

In the same way, if she talks to me about a new role, I can be certain that it will be of interest and that I would be a good fit. The rest is down to me.

That is how agencies can add real value to the recruitment process. My advice would be to find an agency partner who takes the time and effort to do their research well and really understand you, your business and the role you want to fulfil. That is worth the money.

Written by Erica Vilkauls: Director JEM Retail Consultants.

Vendor Selection - How Difficult Can It Be?

Selecting the right software vendor can be a minefield with disastrous results for the business if the wrong supplier and system is selected, so how can the worst of the pitfalls be avoided?

Perhaps the first thing to remember is that you are selecting a commercial operating platform rather than a system and the process must be business led and IT supported rather than the other way round.

The biggest error of all is to follow through a managed selection process involving the key business users, vendor scoring and due diligence only to ignore the outcome and let IT make the decision based on technical ability. This will often result in a very standard application with uninspiring functionality that meets perhaps half of your requirements but will be a huge technical beast whose robustness cannot be questioned as it is already proven in companies several times larger in volume and capacity than your own.

Stepping back to the beginning of the selection process the two key pieces of work are: firstly to produce a decent set of requirements for the Invitation to Tender (ITT). This does not need to take 6-months to produce but must provide absolute clarity to the responding vendor about the business objectives and key functional requirements. This document will become the foundation of your selection process and provide the basis on which you will "score" vendor submissions.

The second piece of work is to decide which vendors you want to invite to tender. This does not need to be a long list, probably 6 - 7 suppliers, as any more becomes unmanageable and the key business users involved will suffer presentation fatigue and death by PowerPoint.

Do not include a vendor (however well known) just because IT told you to. The vendor may be technically sound but if the particular application the business is looking for is not part of the vendor's top product suite you may find yourself reviewing "vapour ware".

I had recent personal experience of this when a very well known supplier was asked, against the advice of the business users, to submit a proposal. This involved scheduling a 4 - 5 hour presentation to key stakeholders during which it became so apparent that this was a mistake the vendor was stopped and asked to leave the building. This was a shocking way to behave and only amusing as the person who did it was the very person from IT that insisted the vendor be included. Certainly a first for me!

Finally remember one very important aspect of vendor selection: the people selling you the system are not the people who will be implementing it with you, or working with you as your partner in the years to come.

Written by Jane Fransen-Hale: Director JEM Retail Consultants.

The "Spinning" Of Results

Jaeger has more than halved its group loss after tax from £35.5m to £13.1m in its full year results to February 23rd.

The fashion retailer Jaeger revealed that losses shrank by 63% in the year to February 23rd. However sales fell 17% to £70.7m while gross profit also dropped 17% to £40.9m from £49.3m the year before.

It interests me that certain parts of the media seem to just regurgitate retailer's results. There is no journalistic content or analysis and the real story is not revealed to the reader in these publications.

Take the above headline regarding Jaeger: "Yes" the facts are there but this does not reflect the true state of Jaeger, which is that Better Capital have got to grip with costs. The fact that SALES FELL under their year in charge is shocking, but very typical of Private Equity ownership of fashion businesses.

As with every blog I write about retailing I highlight the need for product that the customer desires and actually wants to buy. Cost cutting, of course, strengthens the cash position of a business and enables the management team to feel secure. This is a false sense of security if the product is not desirable or relevant.

Congratulations to the team at Jaeger for getting the business on a sounder financial footing. However.... I tried yet again to find something, anything, to buy from Jaeger, even after the coat I bought in the summer started to fall apart after just one wear! The coat only had one button and that had gone by the time I got home after wearing it for the first time. But "No!". Nothing to tempt me.

Jaeger's heritage (as outlined on their website) is the key to its future. Beautiful fabrics made with quality should be the top priority for its garments. Jaeger used to revolutionise. Now what a sorry state its product ranges are in.

No amount of cost control will actually build this business up again and even loyal customers like me have reached the conclusion that "we must move on".

My message to the new CEO: PLEASE focus on product and look back to what you used to do so well. That gap in the market is still there but I'd guess for not much longer.

As for the media: more analysis and less taking well-spun results at face value.

Written by Erica Vilkauls: Director at JEM Retail Consultants

Was It Worth It?

My colleagues and I at JEM Retail Consultants recently took an Exhibitor stand at the Retail Week Technology Summit. Was it worth it, what did we learn, and would we do it again?

The Interim Survey Report 2013 published by Executives Online reports that 62% of interim managers generate new opportunities themselves, with the remaining 38% relying on interim or recruitment providers. "The provider share of assignments has remained virtually constant in all Executive Online's surveys conducted over the past six years".

When it comes to finding the right interim manager the survey goes on to report that clients and interims connecting directly is the most prevalent method of engagement but the use of agencies has grown: "However, many more clients in 2013 - 47%, almost half - reported they'd prefer to use a recruitment or provider company of some sort, up from just 25% in 2011.

In my own experience, referral has been a far more important source of new assignments. I have successfully completed 5 contracts since I became an interim in 2006. Only one of these has been as the result of going through an agency, the rest have been the result of be referred by people I have worked with in the past. Most of my contact with agencies has, in fact, been as a recruiter rather than candidate.

One of the reasons that Jane, Erica and I established JEM earlier this year is that we have worked together in various combinations on 3 of these contracts, most recently the replacement of all the key operating systems at The Jacques-Vert Group, so we know there is a demand for our combined services. The reason we attended the Retail Week Technology Summit was to meet more retailers directly and make our name better known. We want to reach the 47%.

So how did it go for us and what did we learn? Well, there were one or two issues from the outset. Our stand was positioned next to a coffee area, which we thought was a good idea. Unfortunately the venue also served coffee immediately outside the main meeting area with the result that delegates obtained refreshment and then resumed their seats without venturing as far as us. The same happened at lunch time leaving us rather lonely.

A quiet word with Andrew Walker from the EMAP team sorted this out with the added benefit that the drinks reception that evening was restricted to the area of our stand. Andrew and the rest of the team from EMAP were, in fact, very helpful throughout the two days. Very useful for event novices such as ourselves.

So what did we gain from the summit? Well, we made some great new contacts meeting people from retailers such as Mammut, GOoutdoors, and Gap. We had the chance to discuss some interesting partnership opportunities with leading hardware and software suppliers as well as Syntel, a US based multi-national provider of integrated technology and business services.

Would we do it again? This particular event, probably not, but we did talk to the EMAP team about some other opportunities and I think we'll be taking advantage of those in the near future. We are also looking forward to the forthcoming Retail Business Technology Expo (RBTE) next March, where we have already booked a stand.

If nothing else it was a great opportunity to compare promotional freebies with the other Exhibitors!

Written by Mike Gamble: Director JEM Retail Consultants.

Why Retail Can Never Be Led By Technology

Speaking at the Retail Week Technology Summit editor-in-chief of Wired UK David Rowan said there are several new trends that retailers must be aware of if they are to thrive in the future: "The business that succeed in retail will be the ones that get rid of the friction. We want to be given simple solutions."

He continued to say that services like extremely simple on-line payments, easy returns and close to immediate delivery will all feature in retail's future.

He added one of the biggest problems for retailers is legacy systems: "If you work for a big established company you probably have to make a long-term commitment to systems you're running and suddenly something big comes along and changes the rules. There is an argument that the big company is not going to survive because they're unable to move fast enough - the Nokia effect."

Now whilst I agree technology which improves the customer experience will set those retailers apart.... retail is about the gratification of buying something new.... something you really desire. Technology helps you get the product quicker, easier etc but successful retail is about the creation of products consumers really want. How they get it is, at best, SECONDARY.

Those retailers who create products we desire and stock them in the size we need, when we want it, will be the winners. Product is the key to a successful retailer and NO amount of slick technology will ever take first place. All this technology stuff is INTERNAL to us as retailers. All the buzz words and jargon mean nothing to the customer. We should be very careful we don't forget what we are doing and why: designing; producing; moving; and selling products people want.

Of course doing this efficiently is important. But NOT as important as ensuring we have size availability of those desirable products our customers want. Not doing this is the road to administration. There is no longer room for "adequate" products. Being out of stock of sizes is unacceptable. The answer to getting this right is the "retail detail" and technology can support us in finding a solution.

Please don't lose sight of what's important and DON'T let your IT Director become more important than your Design Director!

Written by Erica Vilkauls: Director JEM Retail Consultants

Is It Ethical To Keep Buying Clothes From Bangladesh?

A recent edition of Panorama “Dying for a Bargain” reported the continuing concern about working conditions in Bangladesh focusing on long shifts and dangerous working conditions. But was Richard Bilton’s summary that “Retailers say they want to change but it feels like it’s money that is still calling the shots in the factories of Bangladesh” a balanced view and if it was should more retailers follow the example of Walt Disney Co and cease production in the country?

To understand why I would argue that the answer to that question is “No” first requires a little history and a few salient facts:

When Bangladesh gained its independence from Pakistan in The Liberation War of 1971 the newly formed government of Sheikh Mujibur Rahman nationalised the textile industry creating a state owned enterprise called the Bangladesh Textile Mills Corporation (BTMC). 

The role of BTMC within the textile industry was substantially altered from around 1990 by the denationalisation of a large number of public sector textile mills. Since then the number of workers employed in the $19 billion industry has risen from 400,000 in 1990 to around 4 million, most of them women. Bangladesh is second only to China as an apparel exporter of western brands with 60% of contracts being European buyers. Only 5% of factories are foreign owned, with most of the production being controlled by local investors.

The textile and clothing industry is vital to economic growth and the encouragement of the garment industry as an open trade regime is argued to be a much more effective form of assistance than foreign aid.

 

But can well known global retailers remain true to their ethical standards following horrific events such as the collapse of the Rana Plaza building?

As Sara Hossain, a high-court lawyer in Bangladesh says “The question should not be shutting down the factories. It should be how do you make employment safe and secure.” The Ethical Trading Initiative reports that rather than focusing anger on the role of the brands the media reporting in Dhaka has concentrated almost exclusively on the failure by government agencies to implement the law on occupational safety and health and the building code. “This in turn is blamed on the nexus between garment factory owners and politicians – sometimes the same people”.

The extent of the law breaking is staggering. Since 2008 any new structure has to obtain an occupancy certificate from a government agency before it can be used for any purpose. Since that date only 6 certificates have been issued. It is estimated that between 4,000 and 5,000 new buildings have been constructed each year. Retail brands cannot be expected to police law breaking of this magnitude; it must be for the government to get a grip.

In May 2013 BBC News Asia reported that many textile factories near the capital Dhaka had been shut on safety grounds due to widespread unrest amongst workers. 

I currently work with well-run factories in Bangladesh, with responsible owners and good working conditions but this disruption has resulted in delivery failures with the result that I am now reluctantly pulling back on volume orders.

The government has taken some actions, amending the 2006 Labour Act to lift restrictions on forming trade unions and creating a new panel of union representatives and factory workers to raise the minimum wage, which is still one of the lowest in the world. According to Kalpana Akter of the Bangladesh Centre for Workers Solidarity this may not be enough as “In the past whenever workers tried to form associations they were subjected to beating and harassment”.

“It’s the responsibility of the government to protect its citizens” says Alonzo Suson, Bangladesh country director for The Solidarity Centre a labour rights organisation, “It’s not the brand’s responsibility to do that”.

The Panorama programme reported that a million textile workers in Bangladesh are still subject to unacceptably dangerous working conditions but as shocking as this is it means that 75% of the people working in the industry are doing so safely for reputable factory owners that comply with the codes of conduct demanded by their brand clients.

Retailers shouldn’t increase the suffering by “throwing the baby out with the bathwater” (Sara Hossain) but need to ensure that they only partner with these owners and the people with the real power, the customers who buy fast fashion, should demand that they do.

Written by Erica Vilkauls: Director JEM Retail Consultants