Partner Sites


Logo BusinessBecause - The business school voice
mobile search icon

MBA Graduates Join Lucrative Retail Revolution

There is a retail revolution gripping Europe. Retailers are turning to ecommerce, and are using strange new ways to lure shoppers to store fronts - and MBAs are tapping into young consumers.

Sun Jul 6 2014

BusinessBecause
In a packed conference room in Old Chelsea Town Hall, in London’s most exclusive borough, Sarah Willingham is ready for a grilling. The serial entrepreneur, one of Britain’s most successful restaurant upstarters, had a stern expression when she recalled the retail revolution that is forcing Europe’s businesses to adapt to a tech-savvy and increasingly un-loyal band of customers.

Responding to the audience of monied young twenty-somethings and a crop of MBA students with witty and thoughtful answers, she left no clues of her late-night shopping excursion. She had been up all night surfing the web for retail deals.

“My daughter was sick last night,” says Sarah, who graduated from Cranfield School of Management’s MBA program in 2003.

“I did all the pet food shopping online; I ordered new toothbrush heads for the kids. I had my shopping list out from about seven or eight different stores. I did so much shopping – and all at four o’clock in the morning.”

Her buying habits this week have been extreme, but the ease with which she splashed her cash through technology-enabled platforms will interest anyone trying to adapt to the new retail sector.

Many businesses are struggling to understand a younger customer base. They have grown up in a smartphone era when recession has been pulling at their purse strings.

But the gradual fall of some established high-street brands has opened the way for new start-ups, which channel ecommerce and social networking platforms. Their use of new technology has lured many young consumers, which big brands have failed to entice. Many also turn to niche products and develop unique brand concepts.

“It’s such a transparent market – there’s no case for mediocrity,” says Sarah, the former CEO of the Bombay Bicycle Club (BBC) eatery. She grew the BBC into the largest and most successful chain of Indian restaurants in the UK. Restaurant group Clapham House, which Sarah was board director of at the time, sold the business for £4.4 million in 2008. Two years later, chicken chain Nando's bought Clapham House in a deal worth £30 million. BBC’s speciality was part of its success.

“Who goes into a restaurant now and there's everything on the menu?” Sarah says. “I think retail is no different. You’ve got to be the best at what you do… There’s no place for average in a very transparent market,” she adds.

Yet Sarah may have sold the chain at the right time. Bricks and mortar shops are losing their lustre. The biggest ecommerce upstarts such as Wanelo and Modcloth are no longer promising pretenders. For niche brands like the Cambridge Satchel Company, which has raised more than $21 million in funding, selling in the cyber world has proved lucrative.

“Online would be the way to go because of the niche aspect,” says Neil Ashworth, CEO of Collect+, the UK's leading store-based parcel service, which works with more than 5,000 shops. “A physical presence is softly-softly,” he adds.

Their success is driven by young shoppers who typically spend less than older demographics but are prized by the retail industry because they offer hints as to how changing technology is affecting both online and offline retailers.

The struggles of leading fashion chains such as Jane Norman, which last month went into its second administration in three years, are compounded by customers – who were hit by the financial crisis and are attracted to the rise of the internet – continue to shun the high-street. Underwear chain La Senza, which has 55 stores across the UK, this week went bust for the second time in two years, after suffering a pre-tax loss of £26 million.

Instead, these young consumers are on their smartphones and tablets using retailers’ apps. Most high-profile companies today are known for their ability to adapt to changes in how younger consumers operate.

“Five years ago if you said fashion online was going to work, people would’ve laughed at you; they’d say it’s a touchie-feelie product,” says Daniel Rowles, CEO of Target Internet, the leading digital marketing agency. He adds: “It [technology] can be used to enhance the experience, and we're at the early stages of that.”

Cass Business School MBA Bronwyn Lowenthal set-up fashion retailer Lowie in 2002. The ethical women’s clothing brand has since bloomed into a sprawling ecommerce site, and is worn by fashionistas including Fearne Cotton and supermodel Lily Cole. The business operates a shop front in London and is sold in boutiques across the UK. It produces clever editorial on its website and has an active social media presence. Lowie has just signed up to a new click and collect portal called StreetHub.

“Digital is constantly changing, so it's important to keep up with trends and new developments in both social media and e-tail,” says Bronwyn. “Click and collect is a strong trend... I think it's going to be big.” Sales are equally dispersed between web and shop front, but at Christmas Lowie expects to do almost five times’ more sales through the web than in-store.

To combat a potential drop in footfall, Bronwyn plans to introduce in-store yoga classes in the evenings. “Shops need to provide an experience that makes customers come back for more,” she says.

London-based fashion entrepreneur Nicolai Schümann runs start-up label Alice’s Pig. The business is small, with less than a dozen employees, but a digital offering has allowed them to reach out to global markets. The site brings together a look-book of images worn in trendy locations in London, where their target customers are likely to be.

Nicolai has had to adapt to a changing, tech-savvy consumer base. He says: “It is imperative that you target through a mix of social media channels which convey a coherent brand image. People buy what they trust. You have to make your brand their best friend.”

Direct selling has some businesses back in profit. In countries where social media does not share the same presence as the UK or United States, peer-to-peer recommendation becomes essential for retail survival.

“Direct selling is about to have a real resurgence. Retailing is fundamentally a social thing and direct selling is a social activity,” says Neil. “There’s something really important in that that you don’t get online,” he adds.

But the rise in discount store fronts has confounded many analysts and brand specialists. Some retail supermarkets have entered into a price war, and are threatened by the leading discounters such as Aldi and Lidl, which have had huge success in Europe. Giant UK supermarket chain Tesco has seen profit drop £1.25 billion since 2011-12. Its market share dropped nearly 2% in the 12 weeks to late-June, and its share price has slipped 14% this year.

Neil reckons that customers still crave a social interaction in retail environments: “We're creating a culture that really bleeds into the retail spaces the engagement [that] you want to try and achieve with the consumer.”

Although younger consumers are seen as the future of retail, tech-savvy twenty-somethings spend little, according to research by Forrester. In the US, the average is just $300 online every three months, lower than the $550 spent by people in their late 20s and early 30s.

Vicky Redwood of Capital Economics points out that by 2030, those aged 65 and over are projected to hit 15.5 million in the UK, growing faster than the population as a whole. She adds that the main challenge facing retailers will be to adapt to an ageing population. 

Richard Lowe, head of retail and wholesale at Barclays, says: “I expect not just the face but the role of the high street to evolve to meet the needs of this ageing population.”

Even the ecommerce upstarters have had trouble capitalizing on the technological revolution that is changing retail. Restaurant entrepreneur Sarah remains unconvinced: “The high-street isn’t going to die. We still like to go into a shop, and we still like to fill a basket.”

Student Reviews

Bayes Business School

Student

Verified

31/10/2023

On Campus

Best Journalism school in Europe

When I first stepped onto the campus of City, University of London, I knew I was in for a ride - and not just on the Tube! With its vibrant energy and an impressive repertoire of programs, City U became my home away from home. The Journalism program was kind of a big deal. Rumour was that we were the best in Europe! The lecturers were not just experts in their field; they’re practically journalistic royalty. They were invested, passionate, and had a knack for turning the most flat press release into a riveting news story. With their guidance, I’ve learned to navigate the chaotic world of media like a pro. The campus was a melting pot of every culture, being that we had such a diverse international crowd. Being in the heart of London, I had the world at my fingertips - there was always a new corner to explore, a hidden gem of a cafe to discover, or a street performer! City, University of London wasn't just a university; it was a chapter in my life story that I’ll never forget.

Lydia

Verified

23/02/2023

On Campus

Learning environment

The teacher-learner ration is manageable, giving each learner a chance to gain personal attention. It is also easier following up on the progress of a student, as the numbers per class is not large. the conducive environment for learning includes clean classes, standard desks, world class instructional facilities and the opportunity to engage lecturers even after their sessions. The team spirit at City is above board, with learners getting chance to learn both from instructors and colleagues. This is the university of choice; the place to be.

Nathaniel

Verified

24/01/2023

On Campus

Classes

I liked that each class had a manageable number of learners, making the professor-learner ratio favor knowledge acquisition. I also liked that study schedules were manageable, and not overwhelming. The focus on talents and gifts even within the learning environment makes it possible for learners to achieve the best of their potential, and this has worked to the advantage of those that have schooled at City, University of London

Muhammad

Verified

24/01/2023

On Campus

Classes

The diversity at City University facilitates interactions and is a direction toward the unity of the world. The classes are well built to match the number and needs of all students regardless of the elements of diversity that set people apart. The use of technology in delivery makes learning even more interesting and achievable. At City University there is no distinction pegged on the issues that make people unique.

Dorah

Verified

23/01/2023

On Campus

professors

The team of lecturers at the Uiversity are well experienced. Their level of insight and the methodologies of delivery works for the interes of the leaeners. My learning experience was largely boosted by the level of knowledge of the professors at the institution, and their passion to transfer the same to learners. I appreciate every class I attended because of the level of insight I was able to gather

Nora

Verified

17/12/2022

On Campus

The best university I’ve been to

The campus and the people I've met have made it a wonderful experience. I was reared in a small town with a graduating class of only 88 individuals, so moving to City University was a huge adjustment for me. My dorm has more residents than my whole high school combined! I enjoy the atmosphere here, and everyone is so friendly. Outstanding academic options and a stunning campus. Really great from beginning to end. The educators genuinely love what they do, and the students are ready to learn. On or around college, there is always something to do with friends, and the social scene is particularly warm.

Antonia

Verified

21/11/2022

On Campus

Bayes Business School

As a student at City university attending Bayes Business School I would totally recommend choosing this university as the experience is exceptional with great social networking opportunities . Professors are significantly helpful, delivering with excellence and professionalism. Everyone is happy to help and make you feel welcomed in such an esteem university as City, offering exceptional development and guidance through out the course.

Muhammad

Verified

15/11/2022

On Campus

Economics and Politics

Incredibly amazing university, the way they polish students and help them boost their morale and think intellectually is worthwhile. Many universities have international partnerships to allow exchanges between their students. The most obvious subjects for these opportunities would be those that involve languages, and the study of people and places.

Navya

Verified

11/11/2022

On Campus

Clinical biology

I really like it it’s perfect for me with not too many people and not too few either. All the modules are amazing. I love the toy bar. I love all the societies that I’ma part of. Especially the colour Bollywood society

Chen

Verified

5/10/2024

Blended

Unlocking My Potential at City University London

My time at City University London was truly transformative. The university's vibrant community and diverse extracurricular activities allowed me to forge lifelong friendships and professional connections that extend beyond the classroom. I was impressed by the university's commitment to academic rigor, character development, and personal growth, which created an ideal environment for me to reach my full potential. The research-driven and industry-relevant curriculum provided me with a solid foundation in international business, while the dedicated faculty and staff offered invaluable guidance and support. I feel grateful for the well-rounded education and holistic experience that City University London offered, preparing me for success in my career and beyond.

Elora

Verified

28/08/2024

On Campus

Rather interesting

The academics are tough, but in a good way. The professors are experts in their fields, so you know you’re learning from the best. They push you to think for yourself and really dive deep into the subjects. But it’s not all about hitting the books; London itself is like an extension of the campus. You’ve got museums, galleries, and just the general buzz of the city to keep you inspired.

Barbara

Verified

28/08/2024

On Campus

Urban campus life

At the University of London, I have experienced dynamic and diverse academic environment where I was challenged by rigorous coursework. You will have the flexibility to choose from the wide range of courses, participate in numerous extra-curricular activities and take advantage of the many opportunities

RECAPTHA :

33

54

50

cb