Posted on April 9, 2019 by staff

‘Retailers who don’t invest will disappear’ says ex-FTSE CEO


Angela Spindler has enjoyed a stellar 30-year career in retail, including senior roles at Coca-Cola, Mars, Asda, Debenhams and the Original Factory.

In 2018 she stepped down as CEO of FTSE-listed N Brown Group, after overseeing the company’s transition from a catalogue-based business to an online retailer.

So when she shares her views on the future of retail and the impact of technology, you have to sit up and listen.

“I think technology is fundamentally able to replace stores,” she said. “Retail was all about going into shops, now it’s much more about buying things, how, when, where you want to. Whilst the shop is an important part of the mix, it can be replaced. For people who don’t like going shopping they can shop for anything and everything, probably more conveniently sat at home on a mobile phone, iPad or a laptop.”

The retail graveyard is full of big names that failed to embrace technology and Spindler accused some businesses of sleepwalking into the tech future.

“I think a lot of retailers have been too slow to respond to the obvious challenges but also opportunities if you embrace them that technology offer in terms of their relationships with customers,” she explained.

“I think it’s understandable. Time will tell if it’s excusable, defensible, because they’re so heavily invested in their physical store infrastructure, land, property, space, people, the whole supply chain and so the fear of cannibalisation, the unattractive comparable economics to when you’ve got that big infrastructure, suddenly starting to sell your products in a completely different way which doesn’t even touch that infrastructure, so I think the resistance was partly down to hard-faced economics and really trying to maintain levels of profitability that are so important if businesses are going to invest and grow.

“I think there will always be winners and losers. Retail is fundamentally about the products that we want to buy at the prices we’re prepared to pay so retailers who have unique products, who get the right products to satisfy the needs of their consumer base and who present them and sell them well and offer good service, will continue to thrive because they have things that people want to buy.

“But those retailers who don’t invest in the service experience, who don’t invest in the digital experience, who continue to allow their stores and their store experience to deteriorate and become irrelevant will of course disappear. So, it’s going to be tough.”

Reflecting on her career Spindler said she first saw the growing impact of technology at Asda in the late 1990s when it was bought by Walmart.

“It touched every single aspect of what we did so it was then that I realised just how fundamental to running a retail business technology was,” she said. “But it didn’t really touch the customer and become part of the shopping experience till quite a bit later.

“I was one of the first executives running the business from Asda, so groceries delivered to your home, picked and packed in stores then delivered direct to home and I guess that was started in the early 2000s.

“We’re talking about 15-16 years of people being able to shop online for groceries. And interestingly, given that it’s been that long, it still only represents seven or eight per cent of grocery revenue so in grocery it’s a very, very slow burn.

“I can remember though conversations about homewares and fashion and people saying that will never sell online, how wrong were they? The homeware and fashion world are now nearly a third online and growing at a much faster rate than store shopping generally.”

Spindler said that for brands to stay relevant they have to have a relationship with their customers and get the balance right between investing in physical stores and consumer-facing technologies.”

Reflecting on her stint in the hotseat at N Brown she said she had to move the business away from catalogues because its aging customer base was, literally, dying

“The company is still pretty much the same in terms of turnover and profitability but it’s a digital business and therefore has the foundations for future growth and it’s relevant and differentiated by its product,” she added.

“Catalogue shopping is a very dated and unfashionable proposition. We’ve turned it from a catalogue business to a digital business, and haven’t upset the profitability applecart. If you look at the operating margin of that company, it’s gone from about 11 or 12 per cent to 9 or 10 per cent which makes it one of the most profitable online fashion retailers.”

Spindler slashed the number of brands at N Brown to around six, focussing mainly on three (JD Williams, Simply Be and Jacamo).

“It was not a tech business when I joined and it was a tech business when I left,” she said. “Because retail is a low margin business, and very competitive, if you don’t embrace technology and the efficiencies that go with that and the modernity that goes with that in terms of routes to market then you will fail.”

Spindler said she was delighted that Steve Johnson had succeeded her as CEO and spoke of the talented team he had around him.

“The route to success for businesses is buried in data,” she explained. “It’s no good having a load of data if you’ve got no insight. So you need to have people who can draw out the relevant conclusions from the data but you also need people who can implement the changes.”

She said the Holy Grail for retailers was knowing why, what, when, where and at what cost consumers buy.

“If you’ve got £20 a week that you can spend discretionary, where do you spend it?” she asked. “The person that gets most of that is the retailer to whom you’re most loyal. And so loyalty is a really important measure. Because it means you’re getting it right consistently and using data to secure loyalty really drives the economics of a retail business.”

Spindler said Amazon’s success was impossible to ignore but felt it appealed more to men than women. “I think Amazon is a very functional shopping experience,” she said. “It’s not pleasant, it’s not inspiring, it doesn’t make me buy things that I wasn’t going to buy because it does what it says on the tin and it delivers fast.

“I would describe that, and this is probably showing my unconscious or conscious biases, as a male shopping experience. I’ve done lots of research on this. When men go into a shop, they don’t want you to put outfits together, they want you to show them where the trousers are and where are the shirts, don’t mix them all up.

“But women don’t shop like that. They say ‘how would I wear this as an outfit?’ ‘What would go with what?’ I would say that websites behave a little bit like that and Amazon to me is a very functional male shopping experience.

“I think Amazon is the biggest fashion retailer in the US. The US is a much more fragmented market with regional players so I caveat what I’m saying with that fact but you don’t think of Amazon as a fashion platform. The reason for that is that you’ve got to know what you’re going there for, whereas a lot of people when they’re buying fashion just enjoy looking at product and outfits and how it’s styled and worn. Unless your website offers that I think you’ll not get the loyalty of the fashion shopper in the way that ASOS, Boohoo or SimplyBe does.”

Spindler highlighted Manchester-headquarter Boohoo – set up by entrepreneurs Mahmud Kamani and Carol Kane – as the perfect example of a retailer that knows its audience.

“What they’re doing is creating a business that people relate to,” she said. “Boohoo is very much about teens, students, 20 somethings on a budget, want to look fabulous, don’t want to spend a lot of money on it, want it now, want to buy 20 things and return them all and have a seamless shopping experience off the back of that and Boohoo offers all of that.

“It puts pictures of cute cuddly cats and puppies on Instagram, they relate to the content that Boohoo serves up. Boohoo is not only about affordable edgy fashion but it’s also a brand that speaks to the trends. It uses influence and marketing and it creates compelling imagery that people just buy into.”

But Boohoo and N Brown aren’t the only retailers that Spindler praised. “ASOS are doing great things, not only in the way they are projecting and protecting the fashion industry but also their attitude to ethics and ethical sourcing so I’ve a lot of time and respect for that business,” she said. “Of course I admire Amazon, they’ve done an incredible job.

“In terms of physical shops I’m still a fan of John Lewis. I know they’ve been through some challenging times but they know who their customer is. I love a lot of the things about John Lewis, particularly their values and attitude to service. And they’re a business that’s working hard to reinvent itself, understanding that it needs to embrace technology to move forward.”

  • Spindler spoke to Maguire at a special event at Regent’s University London called ‘Trials and Triumphs in My Career: Lessons for Tomorrow’s Business Leaders’. The other speakers were entrepreneur Julie Meyer ; Stephanie Segoura, general manager, Marriott International in London; and Tamara Gillan, CEO of Cherry London.