Minutes For The APPG For Textiles And Fashion On Retail: The Future Of High Streets And Online Shopping

Minutes For The APPG For Textiles And Fashion On Retail: The Future Of High Streets And Online Shopping

CHAIR

DR LISA CAMERON MP

 

Speakers:

 

1.     PROFESSOR WILL JENNINGS - WJ

2.     BEV MALIK - BM

3.     FRANCES CARD - FC

4.     ANNE ALEXANDRA - AA

5.     CHARLOTTE TAYLOR-PHILLIP - CTP

 

•       Tamara introduces herself and informs meeting that Lisa is running 10 mins late and introduces first speaker - Professor Will Jennings

 

 

Professor Will Jennings - Political and Social Scientist from CENTRE OF TOWNS

•       WJ explains what he does and gives fast intensive slide show starting with:

•       Growing political divide is different between small towns and cities

•       Looks at geographical location, economic geography and huge progress of cities with side effects and consequences

•       Data driven by social and economic issues and by place and people

•       Identity is key issue feeling represented or not eg. Bolton - small ex-industrial town

•       Typography of villages, small towns, medium towns and cities is very different. Ex-industrial towns are different again to Coastal towns

•       Statistics and graphs from slide show core cities dominate

 

•       Asks:

Why care?

What are the challenges?

What can be done?

 

•       More slides with statistics show - changing patterns of employment

•       Core cities no longer have manufacturing

•       Large Med and Small towns seen big drop in manufacturing very recent not just consequence of Thatcher

•       Core cities seen drop in retail but towns have had big growth over last 10yrs

•       In contrast big brands like M&S have closed 92 stores in small medium towns but not in cities 

•       Growing divide - Cities - generally young diverse creative and liberal creating different type of consumer. Cities more Labour voters. Towns - conservative less diverse need more care for ageing population hence less footfall in shops 

•       Old age dependency Graph - since 1991 big divergence of core cities that have younger population to towns where population is older. The exception to this is University Towns

•       Skills and Education Graph - More Graduates in cities than villages therefore work force very different according to place. Transport much better in University towns than Ex-Industrial towns e.g. Oldham (ex-industrial) has 37% with no qualifications Brighton (University) has much higher qualified population 

•       Broadband connection and download speeds slower outside big cities

•       Deprivation in Ex industrial cities is v. bad

 

•       Big rise in Foreign direct investment in core cities but not in towns

 

•       Citizens perception - Towns less well off core cities better off

 

•       Dynamics driving trends:

Aggregate Economics

Infrastructure

Higher Education

Internal migration

 

WJ Suggests visiting website for further information:

www.centrefortowns.org

 

13.52

 

Lisa arrives and stresses how important this is and wants slides passed on as we need regeneration and support to the Retail Sector

Thanks Tamara for pulling it together for the most popular and hardworking APPG

 

Lisa introduces Bev

 

Bev Malik - Fashion Retail Expert at Fashion Roundtable

 

•       BM Reads her script - Introduces what she does and has always worked in retail. Her observations are:

•       Increased shift in brands going direct to consumer

•       State of retail - weathering retail Armageddon

•       KPMG - Score only 77 historical low 76

In 2018 2400 stores closed

Bricks and mortar are down

Fashion biggest losers 104 units down followed by Pubs 99 down 

•       Causes:

Fashion - Brexit uncertainty and confidence

British brands suffered bad PR

Staffing supply chain

Consumer concerns - ageing pop and

Fashion is not a necessity it’s a desire

Online challenges it is not cookie cutter model

Rapid delivery from online

Hard to Omin retail

 

•       Smaller Bricks and Mortar businesses are suffering more and being left behind

•       CEO of larger stores are not picking up on service

•       Visiting M&S in Marble Arch for her father - they no longer have full size range anymore because they steer customers to buy online for sizes unavailable in store. Older customers are not online shoppers so are being left behind and service is lost

 

•       Product and consumer are badly matched. The are not listening to the customer

•       Risk aversion happens

•       Consumer transparency is a pleasure DeMarker

•       Leeds students buying very differently from London

•       Brexit is soother of woe

•       Shop in sale Black Friday mid season not before

•       Luxury market is too reliant on Asia and ME - all eggs are in one basket and not future proof. It is vital but masks income from other sources

•       Super Brands and Super winners make up just 20 e.g. LVMH and NIKE at the top but little or no backing for new or smaller players

•       To evolve:

B&M (Bricks & Mortar) shops need to provide shopping through pleasure

Selfridges greatest store providing - theatre innovation inspiration experience

Consumer desire - Listen to consumer - story of thought

LVMH - Creating Boutique Hotels for Experience

Engage with customers

Coffee shops doing well because they are engaging

Collaboration - seeds today are not harvested today

Wholesalers looking at retail to give healthier margin and closer contact with customers

 

Awareness innovation and Engagement

  

Lisa introduces Frances

 

Frances Card - Advisor to Fashion Roundtable former COO to Matches 

•       FC

Going to disagree a bit with BM and I am more positive - I love it

Lucky place is online

Reversal of online to B&M (Bricks &Mortar) even Amazon going B&M

Big Change but positive

Sustainability - Blockchain (bit confused)

We have evolved in our Industry

How? - When we had mail order that was difficult creating a different market place because of logistics etc.

In 2000 the Internet arrived - not work so well because of the crash

Online tried to replicate B&M but it didn’t work.

Brilliant Sale person has a vocation - they are retails best asset but paid mini wage but know what customer wants how much they will spend and can offer alternative choice etc. This is not possible online - How do I buy for Internet consumers? B&M and online same but very different

Moving business into online for Matches HN and Liberty we were able to access the world

Lots of issues interacting with customer online

How do we use PR? Photography?

It was great evolution - only windows available online

No need to open B&M today - No need for security guards on the door for instance so reduces costs

We made lots of mistake

Tamara interjects and reminds FC only couple minutes left

 

FC - Let online have its own personality - social media has released the online market

Tricky thing - relationship with stock because how do you buy it for delivery in 50mins

Skill set for retail has evolved - Customers in University towns with degrees are more intricate

Need to create separation between Online and B&M - average order traffic and conversion

‘Maisy' - build databases so we can see what they were buying - they were equity metrics have changed

Returns - how do we not get returns - online can see what comes back

Out of 19 online purchases 17 come back

How do we reduce and manage returns

 

•       The Future:

Farfetch.com - online store

FDI (stock control)

 

Lisa adds that she has been invited by the APPG for Blockchain. This is good to attend because she is still confused by Blockchain technology. Lisa also mentions:

•       Innovative - recycling clothes bin in Houses of Parliament

•       Going to Copenhagen

•       Going to V&A

There is great interest in this

 

Lisa introduces:

Anne Alexandre RSM Manager British Retail Consortium

 

•       AA - It is good to look at real retailers - uses slides and graphs for presentation

•       KPMG is Sales monitor - we give back information of what is sold

•       3 things influence this: Environment Digital Policy for Retail

 

Shows graphs that focus on last 3yrs

•       Brexit - £ has dropped

•       Low real wage last year had negative growth just clawed back to 1% growth this year

•       Inflation on food seen big increase but declined after last year

•       Non food slowing down - constraint on food spending means less to spend on non food

•       In last 2yrs food took lion share

•       Clothing and footwear in last 2 years growth is flat

•       Challenging environment since 2016 - Negative growth and only growth from online overall

•       26% growth online in last 10yrs but might not continue at that rate - there is more to stores than B&M and online

•       Shift from Store to Online has seen big growth but there is stagnation

•       Fashion has decelerated especially for stores and continuing

•       Fulfilment has boomed from stores to online

•       Warehousing is 24% higher

•       Online on non food is going down - GDPR to do things a bit differently being one factor - Online has its own problems

•       Clothing Sales over year Christmas and Black Friday and June both online and store are same

•       Revenue 3% Wages10% Business Rate 8% means more costs

•       CVA cutting costs going to lenders - BRC 9%

•       Retail bears the heavy burden of business taxes

 

Effects:

Brexit - concerns how import export taxes and tariffs will change

Business Rates - sometimes free will it continue

Employment - better training for jobs etc. 

Lisa - We have put written questions forward in parliament for policy for those interested in this APPG.  We did learn about CVAs and business rates and changes. We need to make Fashion from Fashion and Retail a priority.

Lisa introduces -

Charlotte Taylor-Phillip Senior Public Affairs Adviser at the Federation for Small Businesses

CTP - Introduces herself and explains role and function of FSB and how it represents its 170,000 members

 

•       In last 20yrs seen irreversible change. The arrival of Amazon and other online services provides a new competitor of which we have not seen before. The retail sector and small businesses will never be the same

•       Issues like rising business rates and soaring employment costs are out of control of small businesses

•       British Retail Consortium (BRC) analysis estimates 9000 less jobs in retail by 2025 with women taking the brunt of these losses

•       Add Brexit to the domestic picture with its continued uncertainty lowers small business confidence

•       FSB is neutral re Brexit however a No deal could seriously damage small businesses and we therefore supporting a transition period, whatever happens

•       5th of businesses trade overseas, overwhelmingly with EU and will need to adapt to new procedures etc. after Brexit

•       1 in 5 small businesses employs some from the EU - settlement system is complicated as I have just been through it with my husband

•       Administration burdens will stop small businesses trading overseas (1 in 10 said so) and turn down opportunities to trade in new market because of lack of access to skilled workers to grow business

•       Uncertainty continues and concerned by reports that larger businesses are passing on risks to smaller businesses through their supply chains

•       UK Shared Prosperity Fund provides regional funding and support to business - this is all on Hold until we leave EU

 •       Small Business Confidence Index provided worrying results:

Confidence is at lowest level since Index began 9ys ago

9 in 10 small businesses are not planning to take on new staff

Exports are at record low

Positives:

•       Click and collect is growing and increases footfall

•       Independent retailer is increasing particularly in outlet services

•       Consumer needs are changing and so too town centres which gives new opportunity for small business to take advantage

•       75% small local retailers had no online presence - this is opportunity for them to access global markets

•       FSB has worked with Government to reform Business Rates that are complicated bureaucratic and restrictive e.g. Relief is provided for small business on first site but then has heavy business rates to pay on a second site when a business grows - this does not encourage small businesses to grow

•       Lack of free parking and local infrastructure is big issue for small business 65% of small business view their van or car as crucial for their business

•       Lack of access to cash machines and banks has negative impact on consumer and businesses

•       Looking to protect Post Office network and build banking services into this network

 

Be positive there is no quick fix and need joint effort from central and local government. Small business community is resilient and confident that we will see new businesses starting and existing ones growing despite the many issues that they face.

Lisa - Point raised about finish time 3pm not 3.30pm. Please do email with question and will put it forward - Tamara will share data via Fashion Roundtable

Lisa - we talk cars every other day in parliament but Fashion is key industry

 

Close 14:55

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