What do you do when your Retail Employer brand needs a refresh?

By Jez Styles, AdMore Recruitment- Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development. 

The most challenging, and by it’s very virtue interesting recruitment is often when you are resourcing for an employer whose brand does not quite match up with candidate perceptions. This can work two ways. A business may have a great employer brand but in truth be a difficult to place to work and develop a career. Conversely, there are many businesses that have a poor employer brand but are actually a great place to work. This mismatch often arises for two key reasons; firstly businesses change - a company may have had a high staff turnover previously but due to a change of CEO/HRD the underlying problems have been removed. The second reason is that many people confuse the customer brand with the employer brand. Yum! Brands (The parent company of KFC) are a great case in point. Potential employees think ‘fried chicken?’ but do not necessarily know the fantastic, employee- focused career opportunities they offer.

So, what can you do to educate candidates?

I was recently invited to a Retail networking event at Harrods. I’ll declare my hand early; I used to work in Harrods. It was an amazing experience and I can honestly say that it was the most theatrical and exciting place to ‘retail.’ However, it would seem that many candidates do not see Harrods as being an employer of choice. Following a period of change at Harrods (click here for more information) the Resourcing team have decided that now is the time to win hearts and minds.

The event was by invitation only (thanks to Linda Treen for the invitation!) and was aimed at attracting the top talent from retail that had thus far declined to attend a formal interview. It was typically Harrods - held in the Georgian restaurant where we were offered some beautifully crafted bacon rolls served with coffee and tea. The Retail Director, Paul Thomas, kicked off the day with introductions. This was perhaps the most powerful part of the day. There were 8 Harrods employees present; they came from Asda, Zara, Tesco and a collection of large and small retailers. Not the typical luxury backgrounds one might expect. They also had interesting career paths; it would seem that the path from Operations to the Support functions was well travelled. I guess that is the benefit of having the core of your business and its supporting Head office within a few miles of each other.

Following the introductions, a chap by the name of George Hammer talked about his own experience of setting up the Urban Retreat salon concession in Harrods. George is a classic entrepreneur and was quick to cut to the chase. Harrods is not an easy place to work quite simply because the standards and expectations are so high. As he put it, if you want to work somewhere spectacular you will have to take a risk. This is an interesting point, as this is absolutely about confidence. If you are confident in your ability then why would you not be successful? His most memorable quote being; "be exceptional, do not be average." George is clearly an extremely successful entrepreneur, he was the founder of Aveda amongst many other concerns, however he seemed to connect with the audience and many of the candidates present were clearly impressed by his honesty and his passion for Harrods.

Paul Thomas went on to talk about his own career path (Asda - Saturday boy to Store Manager, Sainsburys, Harrods Food Hall) and then fielded some questions. Paul was candid about his own decision to join Harrods with the admission of a wobble during his notice period prior to joining – had he made the right decision?  He was keen to tackle the negative perceptions within the room. A few candidates opened up and to Paul’s credit he dealt with these in a way that encouraged others to raise their own concerns.  He talked about the operational roles being narrower, yet deeper, than normal. He discussed perceptions around a more mature workforce and the ‘stuffy’ stereotypes. He noted that in the four years since they have started measuring employee engagement, they have seen a marked improvement in scores. This willingness to meet these questions head on certainly engaged the audience.

I noted with interest the number of candidates that were keen to formally register their interest in Harrods following some further informal conversations. I suspect that the Resourcing team were slightly surprised to get such an immediate result. Jenny Parry, Head of Resourcing, told me that she was primarily hoping to get the message out there that Harrods is evolving.  Judging by the reaction from the candidates attending, I think they certainly achieved this. It would be interesting to know what other retailers are doing to actively manage their employer brand in what is proving to be a period of intense change in the retail industry, comments below please!

By Jez Styles, AdMore Recruitment- Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

 

What the numbers tell you about your future career in retail

  By Russell Adams, AdMore Recruitment- Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

Last autumn I wrote a blog summarising the state of the retail recruitment market. With Christmas and sales out the way and following a wave of statistics published, I thought it was a good time to look back on the market but also to look at the consequences for individuals and how they manage their careers.  

Over the last few weeks a number of figures have been released and by and large they have all painted a pretty negative picture of the retail recruitment market reflecting the pain and challenges seen by a number of retail businesses.  With these statistics based on 2012 they may take some account of Comet but won’t factor in the impact of Jessops, Blockbuster and HMV.

Figures published by the BRC show that in Q4 2012 there was a small increase in overall numbers employed in the sector of 0.6% but that this was largely being driven by growth in the number of individuals working on a part time basis. A fall in the number of units by 3.6% is of no surprise and it will no doubt increase once the true impact of the recent administrations is felt. More worryingly was the forward looking survey which suggested that some 50% of companies were planning to reduce their headcounts in 2013.

Recent statistics from the Retail Choice job board show that in the 2nd half of 2012 the number of roles advertised fell by a staggering 25% with a fall in management roles being the major driver falling some 32%. This fall in numbers could be due to a number of factors. Firstly that the overall number of roles in retail is declining, that individuals are less willing to change positions in this volatile market or a broad trend away from always advertising such roles on job boards.   In reality I suspect it is a combination. Clearly with a declining store count on the High St, even with the growth in online retail the overall need for employment in retail is likely to be in decline. Secondly, the recent failings on the High Street will have given little confidence to individuals who are thinking of moving. If you are well rated and secure in your current role, you may need quite a large incentive to move to another organisation. That said I think for many individuals they have had this in the back of their mind for the last couple of years and at some point in order to progress their careers they will need to take that risk if they are not able to gain the progression they desire internally.  On my last point I do believe that job boards are still a mainstay of recruitment for roles at a variety of levels but the recruitment market is increasing in complexity and this is having a knock on effect on how candidates go about their job search. Whatever the factors behind the fall in jobs, the upshot is that competition for roles intensifies and Retail choice reports an increase in applications for each Management role of an incredible 50%.

As I wrote in my recent blog on the future of the High St  stores need to focus on providing a compelling reason to shop their bricks and mortar store and provide a customer experience. This in turn is leading retailers to look for individuals with a different skill set and experience than in the past. So it is not all doom and gloom. As the high street changes and has to adapt to the growth in digital, some job areas will continue to grow leading to a skills shortage in some specialist areas, examples of which would be e-commerce and visual merchandising.

Another interesting dynamic is that most retailers have spent the last few years aggressively cutting their cost bases and rationalising their businesses.  From the some recent conversation with senior retailers it is difficult to see in most organisations where they can cut further in 2013 and that for many the only way forward is to now starting aggressively growing their top line sales. I think inevitably this will lead to further movement in the market over the next year or so as businesses seek individuals with a different skill set who can help them drive growth.

So what does this mean?

Without doubt the job market for candidates is as competitive as it has been over the last few years. Most commentators agree that physical footprints will decline overtime and unfortunately this will lead to less demand for Store Managers, Area Managers, Regional Directors and Operations Directors and people need to consider the consequences of that. All of the statistics support this fact with the only real question being the pace at which the decline in stores will occur. As stark as this sounds it must be a consideration for individuals working in this area. For more central roles demand is likely to be more constant but again some areas may well contract as the nature of retailing continues to change. The changes will have some positive effect, clearly in specialist areas such as e-commerce there will be continued growth as this area of retail develops.

As the market becomes more competitive, individuals need to make sure they are proactively managing their careers, taking control trying to set themselves apart from others in the market. We have previously talked about the importance of how you manage your job search.

With no sign of improvement in outlook for candidates there has been much discussion amongst my colleagues around how individuals more proactively manage their careers with a clearer long term strategy.

Overall people need to think carefully about the skills and experience they have and which businesses may be interested in these. But more than that they need to think longer term about the skills and experience they need to gain in order to fulfil their career ambitions. Which skills are going to be most sought after in the future and how can they can these be gained?

By Russell Adams, AdMore Recruitment- Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.
 

Retail: my tale of faith, love and survival

Sophie Mackenzie - Senior Partner, AdMore Recruitment

I previously worked as a Recruitment Manager in the IT industry. When I resigned in July 2011 to join a specialist Retail consultancy there was many a raised eyebrow. There were gloomy headlines about the Retail industry and that has been pretty much the case ever since. There is no question that I have taken a leap of faith: faith in the potential of the business I have joined and the abilities of my new colleagues but also faith in the future of the UK Retail Industry. So why make this perilous move in the middle of a recession where, as usual, Retail gets the biggest hammering?

The thing is, I really love the industry. I love the variety, the heritage, the way it changes constantly and most of all, the people who work in the industry. There is a common thread that runs through most retailers – they are down to earth, pragmatic and real grafters. In most cases, retail businesses are meritocracies – rewarding the best performers and offering genuine opportunities for progression. Few industries can say the same. As the third generation of my family to work in retail, you could say it’s in my blood.

My Grandfather left school at 15 because his wages were needed at home and he started work in a fancy goods shop on the Golden Mile in Blackpool (a veritable Aladdin’s cave of toys, souvenirs, and ‘saucy’ seaside postcards!), working his way up to Manager. Before long, he decided to open his own shop, a local newsagents. Meanwhile, my own father left school at 17 and, after a couple of years as a bank clerk, joined Marks and Spencer as a management trainee. He remembers fondly the days when Blackpool was such a cutting edge place to be, that M&S used the store to trial all the latest ranges – how times have changed, sadly. 20 years later when my Grandad retired, my Dad left the corporate world to take over the family business.

Our shop was the hub of the village. Dad applied ‘big’ retail techniques to his small business and so, unlike so many of the newsagents and convenience stores you see – poorly stocked, windows obscured by posters and small ads – it was well lit and presented with a decent range of product and standards were meticulously maintained, not least by yours truly who worked as a Saturday girl while still at school. Although under increasing pressure from the tighter margins imposed by the newspaper publishers and the rise of the supermarkets, Dad didn’t take this lying down and tried to ensure there were other reasons for customers to come to the shop – a photocopier, fax machine (!), an extensive greeting card section and eventually a National Lottery machine. By anticipating changes in the market and through the sheer hard graft of he and my Mum they built a successful business. They had the largest delivery round in the area, employing around 40 local children to deliver papers, most who now have children of their own. They had a zero tolerance approach to lateness and poor performance but made a point of writing detailed references for them when they left for university or for their first ‘proper’ jobs. (Retail remains a great grounding even for those pursuing other careers, something Gen Y should surely be made aware of?)

After 25 years of 5am starts, 364 days a year, my parents retired and sold the business as a going concern. 8 years on, the shop has declined significantly – it is poorly stocked and shabby. Yes, market conditions are extremely tough and there are setbacks – the pub across the road has introduced Pay and Display parking which has affected the passing trade which the local shops benefitted from. However, the owner seems to have given up and the future looks decidedly grim. As my Dad said the other day "it’s not rocket science, you just need to think about what your customers need and adapt" however I think this simplifies it too much. If you really know retail and have energy and passion, then yes, it is relatively simple but that still doesn’t mean it is easy. You need to have the commercial nous to identify opportunities and get more from less, whether you are in a large multiple or a local newsagent. Running any small business is tough and in retail even more so. Being self-employed isn’t an easy option and, as in the retail industry as a whole, you have to have the right skills to succeed: commercial acumen, resilience and passion as well as an unwavering work ethic. As a recruiter, I know only too well how rare these qualities can be.

Clearly, the changes in the retail market are affecting everyone including the most cherished of brands and this is the new reality we must all accept. However, when I think about all the talented retailers who have been made redundant in recent months, I can’t help but wonder what they could achieve with ‘our’ little shop. What impact would it have for our economy if our ‘nation of shopkeepers’ had decent retail experience and we could find a way to harness the skills of the many individuals that have been displaced?

My parents are powerless to prevent the decline of their life’s work (and my Grandfather’s before them) and it is heart-breaking to see. However it is the brutal truth that, big or small, if you aren’t able to adapt, innovate, and do it quickly, the market will find a way to seal your fate. The challenge for all of us who love our industry is to understand this new landscape and do whatever we can to adapt, create new opportunities and ensure that these ruthless market conditions do not find us wanting. Above all, we must keep the faith!

 

Harrods Head of Resourcing, Jenny Parry, talks to AdMore about recruiting for the most iconic retailer in the world.

Jenny Parry joined Harrods in 2008 and is currently Head of Resourcing. Here we talk to her about the Harrods Employer Brand and the many changes that have taken place in recent years.

Jenny, you joined Harrods from Tesco, how did you find the transition?

 Although the fundamentals of retail are the same regardless of the products that you are dealing with, I was fortunate to be surrounded by people who helped me understand the transition into Luxury which was about a different approach to service, meeting the high expectations of Harrods and its customers, as well as personal presentation.

How has Harrods developed your own career?

Harrods has provided me with some great opportunities that have helped progress my career. I initially came to Harrods as an HRBP, a role I did for 18 months before moving onto a Project Manager role for the HR transition that we went through in 2011. Managing such a large scale project provided me with the opportunity to develop a whole new skill set as well as exposing me to other areas in the business, such as IT, and external companies.

Since the transition, I was able to develop my ability to work at a strategic level as the Head of HR, which then led to my current role as Head of Resourcing. This has once again allowed me to learn new skills and develop me further as an individual.

I was part of the first team from Harrods to take part in the Times Leadership Challenge which involved a rigorous fundraising exercise which tested my entrepreneurial spirit.  I have been to a number of IMS events and was lucky to be given a mentor who sits on our main board - all opportunities that I am extremely grateful for.

What has been your greatest challenge as Head of Resourcing?

Working for Harrods means our stakeholders have extremely high expectations and a drive to push the boundaries in whatever we do.  Consequently, the main challenge we face on the Resourcing team is being able to manage stakeholder expectations. Given the volume of roles we recruit at any given time, it can be difficult to meet the hiring manager’s expectations on timescales, particularly when we deliver an end to end recruitment process in-house. We therefore have to stay one step ahead, anticipating their future needs and providing evidence to the line managers about the recruitment market for their vacancies.  We also face the challenge of delivering both permanent and temporary recruitment in-house – maintaining contact out of season with the hundreds of temporary staff we employ can be difficult.

From an Employer Branding perspective, what qualities do you personally value?

I have been lucky enough to work for some great customer brands within the UK and there are lots of companies I interact with daily who I really respect for the work they are doing to improve the engagement of their employees.  For me, I always respect an Employer Brand that looks to give something back to the community they are part of, a company that allows you to develop and grow your career, a company that trusts you to get on with your job and gives you the autonomy to do the right thing and last, but by no means least, a company that has the same values that I have.

How would you describe Harrods’ Employer Brand?

The Harrods employer brand has gone through a mammoth journey over the last four years and today sits with the very best, not just within luxury retail but across the whole of the business sector. Having listened to feedback from both prospective candidates and our current employees as to what they expect when they apply for a job at Harrods, we now offer an unrivalled package which includes extensive learning opportunities, generous benefits, an open and honest culture and a focus on how we can help others as well.  This can be seen with a learning offering which not only includes over 60 different learning courses but an opportunity to earn a BA (hons) degree in Sales. We have a recruitment programme that looks to bring in A Level School leavers as an alternative to going to University and have also launched new initiatives around Armed Forces Resettlement and with the West End Skills Shop to encourage people to think about a career within Luxury Retail. In addition we recognise that people want to give something back to the community they live and work in so we now have the option for people to take paid time off work for charitable work. The success of this and the drive to help others has led to the company launching our first official CSR working group.

The benefits we offer are able to support you through every stage of your life whether it is your birthday, your wedding day or your retirement. The employer brand and communication department proactively engages with our employees and we have a charitable focus which has seen the store raise a significant amount for Great Ormond Street Hospital and Macmillan Cancer Support.

Prospective candidates come to Harrods expecting a lot, and I feel today we are in the position to not just meet their expectations but exceed them.

How has Harrods changed as an employer over the last few years?

One of the biggest changes was the introduction of the Staff Survey in 2008. This provided the perfect platform for us to really start to understand what our employees thought of us. From the feedback we received we listened and worked hard to improve the working environment, the way we manage our people and generally to make working at Harrods simpler and easier for our employees. One instigator of this has been the introduction of the Satisfaction Forum that is headed up by our Managing Director and HR Director. Allowing our employees to speak to senior members of the company has provided a real opportunity for a strong two way communication.

How have these changes affected staff turnover and satisfaction scores?

Since the Staff Survey was introduced, employee turnover has dramatically reduced and engagement with the company has risen making the challenge of catching up with the retail average a thing of the past. Whilst the retail industry average of employees proud to work for their company is 79%, Harrods achieved 93% which clearly shows just how far the company has progressed in recent years.  Having continually broken records in sales over the last few years, I cannot agree more with the Macleod Report, which shows that by focusing on becoming a better employer, it isn’t just turnover or satisfaction that you impact but more engaged employees impact sales, profitability and customer experience.

Harrods has a reputation for being a demanding place to work, what makes it so challenging?

Our mission is to remain the number one luxury department store in the world and to achieve this we constantly need to exceed expectations in whatever we do.  This is quite a bold statement to make and one we take extremely seriously which inevitably leads to high demands. Whilst it is demanding however, there are generous rewards as a result, for example excellent commission, fantastic opportunities to develop yourself further, and the chance to work in a place where every day is completely different.

What is your greatest challenge in attracting top talent to Harrods?

The pace Harrods moves at means prospective candidates are not always aware of just how many changes the company has made. Increased investment has seen some truly stunning departments created, an improved employee restaurant, a dry cleaning service and most recently two new working areas for employees. The growth of the company has meant that Harrods can no longer operate from just the four walls of the Terracotta Palace in Knightsbridge, and has led to support areas moving into a modern head office in Hammersmith, and our distribution team moving to a brand new state of the art warehouse in Thatcham, West Berkshire.

For people interested in a career in Retail Management I think that people underestimate the opportunities and responsibility they will get working for Harrods. At all levels of Retail Management you are involved in budgets, merchandising, shop refits etc. and as all of the Directors are in the store daily, the exposure you get to some of the best retailing minds in the world is amazing.

In addition to this, a lot of top talent think of Harrods as only offering careers in retail, which is certainly not the case. Working behind the scenes of the store is a massive IT team which is always in need of top SAP and BI specialists, a team of web enthusiasts running our .com business, the biggest, and in my opinion the best, Chef Brigade under one roof in the UK, and a CRM department which is always increasing as we endeavour to find out more about our customers. There are some more bespoke roles where we need to fight harder to get access to the best talent: Online Analysts & IT specialists, Pastry Chefs, Interior Designers, Architect Project Managers and experienced Retail Managers. With career opportunities always coming up, I cannot stress the importance of prospective candidates visiting our careers site to see what we can offer them.

London is an incredibly competitive market place, how are you ensuring you are an Employer of choice? What makes Harrods a unique employer?

We know we are extremely privileged to be working for a well-established, globally recognised name. However we do not take this for granted and continually work hard to raise the awareness of people to the opportunities that we have.

We have a lot of our training accredited and run apprenticeships so people can come to work for us and not just get training that supports them in Harrods but also their future careers. We look to retain people by having a programme called ‘Your Future’ where people can express interest in a career move and we support them to get there.

There is no other employer like Harrods in terms of range of products you get to work with but also the theatre you are surrounded by. You only need to do a quick Google search to see how employees of Harrods celebrated the Jubilee this year, the Christmas Parade that we recently had to welcome Father Christmas to the store and recent exclusive celebrity launches that we have had.

How have you ensured that what you sell at interview matches up with reality, post-placement?

This is always something that is at the forefront of my mind. There are the usual statistical reviews that you can do to understand why people leave within the first few months of employment to make sure we are getting it right however it is much more than that. We have introduced Ambassadors for the shop floor employees so that there is someone on hand to help new starters find their feet and in addition, there is a robust probation training plan. For people moving into the support areas we have a bespoke induction plan so people get to know the people they will be working with and understand more about the role that they want to do. We have a broad spectrum of internal communication channels which are easily accessible to employees and will help them with any query or concern, no matter how far into their career at Harrods.

How has Social Media changed how your team has approached resourcing in the past 12 months and how do you see it changing in the future?

Social Media is a total game-changer – it’s revolutionised the way we communicate with each other, the way we consume, the way we give feedback – the list is almost inexhaustible! Most of all, it’s been an interesting, fun and important addition to Harrods Careers. As far as our approach goes, we haven’t necessarily had to change the way we think about the overall recruitment method because at Harrods it’s always been an end-to-end process whereby we engage with candidates from the beginning through to the final stage. However, what social media has given us is a totally new portal; one which is instant and highly interactive; it has given us the opportunity to reach millions of people at the click of a button; all which have, in turn, made us even more aware of our employee brand, the Harrods community and the importance of nurturing past and present relationships with employees to source future talent.

My colleague, Donna Price, is doing a fantastic job to further develop our Social Media strategy and objectives. This has already yielded results. It’s amazing to see our Twitter and LinkedIn followers grow daily thanks to our efforts in engaging people on a daily basis by responding and talking to candidates, and providing informative content about our company values. We aim to illustrate what it’s like to work at Harrods; we are opening the doors and breaking down barriers to show people they can build a lasting, rewarding career with us which is why social media is so important in our overall recruiting strategy.

Jez Styles and Sophie Mackenzie AdMore Recruitment- Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

 

Stop the doom-mongering! The High Street isn’t dead!

Russell Adams - Director, AdMore Recruitment

Over the last few weeks much has been written and discussed about the future of Britain’s High Streets and retail generally. It has dominated the news channels, the papers and even Question Time.  Clearly the sad plight of Comet, Jessops and HMV has crystalized in many people’s mind the changing retail landscape and the headwinds many retailers face. Such a period of publicity and scrutiny form the wider public has not been this intense since the demise of Woolworths. Many opinions and predictions have been voiced over the last couple of weeks but in contrast to some reports this is a highly complex issue, driven and influenced by a multitude of factors with no easy answers for retailers, the government or indeed landlords.

Many people point simply to the growth of online retailing over the last decade and the changing patterns of consumers as the major cause and decline of the high street. Without a doubt this has been a significant factor and pure online businesses with a lower cost base have been able to undercut the traditional Bricks and Mortar retailers.  However, this issue has not happened overnight and businesses like Amazon haven’t suddenly appeared.  I do think that this argument at times is still overstated. Firstly, according to some reports, approximately 90% of products are still purchased in a physical retail environment, with, according to the British Retail Consortium 43% being spent on the high street. No one questions that this figure will decrease over time but it still doesn’t justify the statement that the High Street is dead. Secondly, everyone acknowledges that much of the future is in multi-channel or Omni-channel and where businesses have got it right, such as John Lewis, it has delivered fantastic results. Further innovations such as Click and Collect are needed to respond to the change in customers’ behaviours.  Looking back over the last few weeks a number of businesses have shown the benefit of this multi-channel approach with much improved results from the likes of Argos.

Another suggested factor affecting the failing High Street is the poor management of a number of retail businesses. With the businesses that have entered administration, many fingers have been pointed but I personally would like to defend these executives. These were often well run businesses with Boards made up of experienced and successful retailers, who in many circumstances have joined the business to try and support its turnaround. I do wonder if it was more to do with whether shareholders were prepared to forego short term gains to ensure long term success. As has been seen, being a quoted company can be challenging when a major change in strategic direction is required.

There are also certainly challenging times ahead for landlords. Indeed one in ten shops on the High Street currently lay empty with demand focused on the large and successful shopping centres.  While this shift is not new, as multiple retailers look to reduce their store footprints this will only lead to less demand on the high street and a greater need to be innovative with property uses.  Many have called for tighter planning regulations to prevent more large shopping malls being built but this really isn’t a long term strategy. Fundamentally customers want to shop in a convenient and enjoyable way and we must give people a reason to visit the High Street, whether that be better parking or a better range of local products etc.  In the short term there is little hope that the leisure and restaurant sectors will snap up some of these units as they themselves struggle against the economic headwinds causing more people to stay at home. Much debate has been made around what should be done however we are seeing some form of renaissance for the independent retailers. It is difficult to argue that there is just overcapacity on some High Streets and thought must be given as to how property is reclassified and used. Going forward it is unlikely that retail demand will match the supply and it may be that residential use and the reshaping of the high street is inevitable.

Clearly the economic slump has been a major factor affecting the high street. After 5 years of negative or little growth, GDP is still 3% below pre-recession levels. I do believe though that in some cases it has just sped up the demise of businesses who faced structural changes to their market. HMV, Jessops and indeed Woolworths are all businesses described as "walking dead" or "Zombie". Many of the businesses may have survived a little longer in more buoyant times but would still have inevitably faced a bleak future because of the changes to the marketplace and sectors in which they operated. Retail history is littered with consolidation and administrations as the sector rapidly evolves and develops. As always there are winners and losers and the ability to anticipate and adapt to the changing needs is essential in delivering long term success.

Many people have looked towards the government to take more decisive action, whether that be to cut rates or to support Portas or other initiatives, however no action will ultimately change the underlying trends and headwinds for the sector.  There are no easy solutions. Portas and other initiatives are important but change needs to happen and it will be painful.

The last few years have been extremely challenging for the High Street and as times became tougher, costs have been cut which has reduced the level of service and the attractiveness of the environment giving consumers less reason to visit physical locations. Although not the only solution, service, product knowledge and in-store theatre will provide a greater incentive for people to shop both physical stores and the High Street in general. Businesses need to invest where possible to create and deliver this environment. I wish I had another example but I am afraid like many others I cannot help but admire Apple. Unlike most other businesses they have been investing in their store portfolio and can boast some very impressive sales per square foot. I do appreciate part of their success is the desirability of their products but to be fair they can easily be purchased on-line like so many other products. The reason for their success from a store perspective is they have successfully created a retail environment that enhances the purchase experience but perhaps critically, the customer service and product knowledge offers real value to the customer and gives a genuine reason to visit the store.

There are certainly many challenges ahead but I am not sure it is as apocalyptic as some suggest - there is a future and it is about adapting to that future to meet the needs of changing consumer behavior. Many retailers need to adjust their store portfolios and this will cause short term pain. High Streets are and will continue to be an important part of the retail mix but in a different format to what we see today.  People still love to shop, people love to see and feel product in certain categories but they need to be able to shop in a convenient, enjoyable and engaging way.

Russell Adams

 

HMV’s Death By A Thousand Cuts

 

By Jez Styles, AdMore Recruitment- Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

You will have read this morning that HMV has entered in to administration with the potential loss of over 4000 jobs. This is deeply sad and on the back of the collapse of Comet and Jessops in recent weeks it is perhaps the worst period in retail since the demise of Woolworths. Much of the commentary on HMV would suggest this is a result of structural failure, that the model simply has no place in modern retail. In my view this is rather simplistic. The reality is that HMV has faced a set of unique (in their combination and complexity) challenges that have served to paralyse the business over a period when change was crucial.

HMV’s demise can be traced back to the original stock market flotation in 2002. There is a conflicting argument as the reality is that the funds generated from the float served to fuel HMV’s expansion and competitor acquisitions. This expansion allowed HMV to build the best economies of scale in their market and to be the last man standing (Our Price, Virgin/Zavvi, Woolworths, Silverscreen, Sanity, Borders, MVC…the list goes on). However, being a PLC also presented the Management team with significant barriers to future proofing the business.

At the same time HMV was floating in 2002, BT had just 136,000 Broadband subscribers and additionally Apple’s IPOD had recently launched in October 2001. There were some predictions about how these two products would affect the market but in truth very few people predicted just how quickly they would be adopted. Broadband offered consumers an opportunity to not only browse products in a different way but also to consume them differently. Many critics of HMV have suggested that they should have launched a download service earlier however in reality there was stiff resistance within the wider industry. The Wild West days of the noughties and the plethora of pirate websites where you could download unlimited amounts of content for free initially pushed music and film companies to further retrench their position (on providing official channels). By the time they had realised the tide was against them, Apple amongst others had taken up the mantle (Apple were not really associated with music/film consumption before 2002). HMV have been playing catch up ever since and the brand had been severely compromised as a result.

The pirate websites also revealed an unsavoury insight in to our own cultural acceptance and views on theft. Unfortunately many people did not see illegal downloading and CD/DVD pirating as morally wrong. How often did you see individuals selling pirated product, unchallenged in pubs or street corners? I suspect this cultural acceptance is entrenched in the mix tapes of the 80’s and the romanticism that this still evokes. This created two major issues for entertainment retailers - lost revenue and erosion of what consumers were prepared to pay legally.

In 2002 it was not uncommon to pay £13.99/£19.99 for a Chart album or film and much more for older back-catalogue products. Today you will often see the same products on sale for £7.99/£13.99 respectively, or less. This is quite a dramatic price deflation when you consider that over the same period a loaf of bread (800g) has risen from an average of 60p to £1.30 today. The price deflation was deepened by competitors running loss leaders in a bid to survive, the market entry of the supermarkets and finally internet shopping.

During the same period of price deflation there has been a very real increase in costs. Payroll has continued to rise and unfortunately HMV has an expensive supply chain model. The cost of getting products on the shelves is much more expensive than it is for a Supermarket with employment-as-a- percentage-of- sales being close to double that of the Supermarkets. A typical HMV store has significantly more SCUs (product lines) than virtually any other similarly sized retailer. Each SCU has to be processed and put on shelves individually, a time consuming exercise but an essential one if you want a wide selection. The only way to have reduced this cost would have been to move this back-catalogue purely on-line.

This however was also extremely problematic. In the early days online retailers were making very little money. Amazon ran at a loss for many years…without paying much tax. HMV were in a tricky situation on two counts.  Moving their online business off-shore would attract negative press, a consumer backlash and a legal minefield. This coupled with a reluctance to under-cut the physical retail pricing model meant that the website failed to gain momentum. By the time that ‘perceived’ consumer sentiment had begun to soften, HMV had fallen too far behind. This is clearly a huge mistake but to some extent an understandable one.

The stock market- fuelled expansion brought further issues. Growth was fundamentally underpinned by store expansion with over 100 stores opened in a 5 year period. The dynamics of the market dictated that expensive leases were signed and for long periods.

The way in which we consume entertainment has changed dramatically over the last 5 years (Permira bid over £800 million for the business in 2008). I myself use SKY+ to record TV series to watch at a more convenient time while I download films directly via Apple TV. I download and play the occasional game on my smart-phone and stream music via Spotify. I still buy CDs, I love browsing and physically selecting products but not in the same quantity that I did in the past (having children hasn’t helped to be honest). The market has also changed significantly. The music industry is continuing to move towards singles rather than album releases while Hollywood is not producing blockbuster films in the same quantity that they did prior to the recession.

When I visit an HMV store I get the sense that they have lost touch with who their core customers are and could be by trying to appeal to everyone. They desperately needed to radically overhaul the product offering. They have made some inroads into the technology market but this is a relatively low margin arena and is not enough to sustain stores of their size (neither big enough nor small enough). The appetite to pursue this further has not been there and this has been driven by a Management team with either limited vision or who are constrained by the PLC ownership model. Had HMV been owned by a rich benefactor I genuinely believe the brand was salvageable. I don’t think there is a place for a specialist CD/DVD retailer for all the reasons stated but there is a place for a retailer that celebrates popular culture. A combination of fashion, technology and yes, some quirkily packaged entertainment products. Had some brave decision been made earlier HMV might not be in the position it is today.

The truth is that HMV has suffered a long and agonising death, by a thousand cuts. I can’t think of another retail market that has faced the same set of challenges and in such a short space of time. I sincerely hope that someone with a passion for the brand, and some spare cash, comes forward to save what is a truly iconic institution. Just as I was finishing this blog I received the following email from a contact that I suspect sums up what many feel about this sad news:

"It really is - I've just been reminiscing with my boss - things like; the first tape/LP we ever bought, all the presents we bought and were given from HMV, the cool posters i used to spend hours leafing through. Of all the casualties of the current retail market, this has hit me the hardest."

On a final note, a by-product of HMV and the overall physical entertainment market’s demise will be an increase in costs elsewhere. Expect your broadband cost to continue to rise (if you can only download your music you are a captive customer) and your satellite TV package costs to continue to rise…

If you like what you have read please click the LinkedIn and/or Twitter share button below.

By

Jez Styles, AdMore Recruitment- Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

 
 

Do Comet’s Redundant Workforce Face a Brighter Future than Woolworths Staff of 2008?

Sadly the last couple of weeks have been somewhat of a chilling reminder of 2008 when we witnessed the collapse of Woolworths. With store closures announced the outlook for whole group looks very bleak and as was the case with Woolworths, the collapse of Comet really couldn’t have come at a worse time for all those involved, so close to Christmas. As I drove into work this morning I started to think, from a recruitment perspective, about how it may be different for those Comet employees coming to the market now, in comparison to four years ago.

Actually, I believe for many reasons those people involved with Comet are in a stronger position than in 2008. Firstly the retail recruitment market, whilst challenging, is more active than late 2008, a time when many businesses were going through redundancy programmes simultaneously and the market was flooded with applicants. Secondly, the future is looking more positive. Whilst the news streams change daily about the level of growth we can expect in 2013, we are at least talking about growth and this a much more positive picture than in 2008 when we were heading into deep recession.

I think for many reasons the recruitment market is much better prepared to help and support those coming to market than they were back in 2008. Sadly one reason is experience. Both recruiters and other prospective employers have seen a number of retail businesses collapse and are more proactive and systematic in accessing this pool of talent. It was great to see the response that Dixons gave in trying to provide employment opportunities wherever possible and this is an example of how retailers often react to the closure of these large businesses.  However, for the volume of store staff it is going to be particularly challenging to find alternative employment. Whilst a number may be able to secure temporary roles over Christmas, come January, the competition will be intense for a limited number of roles. For Head office staff, it will be dependent on their area of expertise and the extent to which their skills are transferable.  Natural competitors of Comet like Dixons, John Lewis, Amazon and Argos all have their head offices within striking distance of Rickmansworth and hopefully they will represent an opportunity for some of the Head office staff to find other employment.

With much of the headlines dedicated to the way in which the business had been run over the last year I think the market is also very sympathetic to all of those involved. Unfortunately it is still going to be incredibly challenging as the competition for roles is as intense as ever. For many of the long standing Comet employees, they will be experiencing the recruitment market for the first time in many years and the market has changed dramatically. Their ability to quickly get to grips with the market and understand the many tools and routes available will be the key to finding another position.

When I look back over my 15 years in retail recruitment, the methods have changed substantially. The days of paper applications and pages of advertising in the press are long behind us. The growing use of social media, large in-house recruitment teams and a large and fragmented recruitment consultancy market reflect the current landscape. The market is vast and confusing and knowing how to access roles and who to talk to is the first step in finding a new position. For Comet employees unfortunately it is not a case of one size fits all; where you sit in the market will determine the best strategy for you to employ.

In the mid to senior market where AdMore recruit, LinkedIn is a critical tool in assisting people in their job search. Both agency and In-house recruiters use it as a major sourcing tool and so having an up to date and accurate profile which will allow individuals to be "found" is critical.  The use of Twitter for posting vacancies is also on the increase. It is certainly a case of using every avenue available including your own network and contacts as well as those around you. Certainly with the collapse of JJB, I know a number of the Senior Managers were very proactive in supporting their teams with recommendations and introductions to their network of contacts. I cannot emphasis enough how important it is that candidates understand how the market works and how to get the best from it.

Overall, whilst the market is still tough out there, it is arguably not at the depths it was in 2008, with a brighter future hopefully ahead. However, as the economy continues to struggle, with consumer spending under pressure and the on-going structural changes which continue to affect retailers as they become more multi-channel focused, my fear is that unfortunately, this won’t be the last major retailer to collapse.

Russell Adams

 

An overview of the Hospitality Jobs market

Having recently written a blog about the retail recruitment market I am now turning my attention to the hospitality jobs market to see whether the market is as tough for candidates looking to find new roles.

As in the retail sector, I think most candidates are often pleasantly surprised when they first come onto the market to find another position, by the volume of roles that appear to be out available matching their skills and experience.  However as has been highlighted in the recent Hospitality Employment Index statistics provided by the Caterer.com and People 1st, the competition for these roles is higher than ever.

I am afraid to say that on the surface the statistics do not make encouraging reading. The number of overall vacancies is down some 8% compared to last year and in some categories such as management roles in the restaurant sector they are down a massive 45%.  Unfortunately the competition for roles has also increased with the number of applications only falling by 2% during the same period.

However, as always we should try and put some perspective on these headline grabbing figures.  What the statistics show is that the current job volumes are some 30% higher than in 2009. To some extent during the recession we have seen a much stronger focus on retention and development in the sector. This may be an additional factor in explaining the underlying statistics. As always these statistics only show part of the picture and just reflect the volume (and level) of roles posted on the job board.

Looking at the performance of some of the key players in the market, despite the miserable weather and conflicting expectations brought by the Olympics, the market has held up well.  Looking at recent announcements, Greene King reported a like-for-like sales increase of 5.1%, Mitchells and Butler LFL of 3% and The Restaurant Group LFL of 3.25%. As always there are winners and losers however with continued growth in some areas of the market the need for high calibre individuals remains strong.

As we all know, the hospitality sector is all about people and being able to inspire, lead and motivate teams to deliver great product and great service. Many businesses continue to invest in retaining and recruiting the best people to drive and maintain that competitive edge. Being focused on recruiting middle and senior appointments we have seen strong demand for individuals since the end of the summer and are watching with interest to see how the market unfolds over the coming months.

As has been the case over the last couple of years it continues to be difficult for candidates to secure positions in different sectors, so my advice to candidates is to look at businesses where your skills and experience will be most transferable.  The expectations of clients is rightly very high as they look to drive their business by hiring candidates with experience and a strong track record of success.

Without a shadow of doubt for the vast majority of middle and senior management candidates the market out there remains tough. However, whilst the job board figures are certainly negative, as we come out of recession, the market will inevitably pick up.

Russell Adams

LinkedIn
 

Don’t worry, you’re not the only one finding the Retail job market tough……

Many of my everyday conversations are spent informing people about what is happening in the retail recruitment market. Many of the people I talk to ask me what the market is currently like for job opportunities which is interesting really, particularly given the adverse headlines that continue to hit the press. In fact it probably also reflects the conflicting signals that candidates seem to be picking up during their job search.

I think for most candidates when they first enter the market they are often pleasantly surprised by the volume of roles that appear to be available matching their skills and experience. However I think for the majority, this mild euphoria soon dissipates when they realise just how competitive it is in the market with a vast number of individuals chasing relatively lower job volumes.

So is it really as bad as people think it is? A recent report by retailchoice.com highlights some of the issues that our market is facing and I have to admit that on the whole it paints a fairly depressing picture.  Compared to last year, the number of roles advertised is down some 13% and whilst we are not down to the levels of 2009 yet, the trend unfortunately is definitely downwards. Whilst their website carries roles across a broad range of salaries, unsurprisingly it is the management roles that have been hit hardest with a fall of some 3000 roles.  This year has seen a number of large retailers go into administration such as Peacocks, Game, JJB etc. and fundamentally this has resulted in less retail stores trading and therefore the need for less management at both store and field level.

So where are people finding it toughest? Geographically there are some very different pictures. London continues to enjoy not only the highest volume of roles but also the least competition, where applications per job are at their lowest. This contrasts considerably with the North West, North East and Scotland who not only have to contend with fewer roles but much higher levels of competition.

Again, sector wise, there are quite wide disparities. Fashion has clearly been one of the hardest hit as consumers’ disposable income continues to be squeezed resulting in a 14% fall in vacancies, whilst the supermarkets have demonstrated resilience with an increase in job roles.

What is clear is that, in specialist area such as e-commerce, logistics etc. the demand and supply equation between roles and relevant candidates is nicely balanced with a good number of opportunities for people in that sector. This is further reflected across a number of other head office functions. For store and field managers the dynamics look a lot more challenging. Fewer stores mean fewer roles and the statistics show in some cases, applications are up as much as 50%.

The other interesting dynamic is the role of Linkedin; I recently read a survey conducted by Linkedin that suggested that although only 20% of candidates classed themselves as "active" , close to 80% of individuals would consider other opportunities. This was broken down as 20% "active", 15% "tiptoer" (those candidates considering a move and reaching out to close associates) and then 44% "explorer" who are not actively looking for a job but would be willing to discuss new opportunities with recruiters. They classify the "tiptoer" and the "explorer" as being approachable.  The point here is that in reality, the 20% active candidate pool are actually competing with close to another 60% of the potential candidate pool who are also happy to be approached about job roles. Unfortunately, the increased accessibility of these individuals has only served to drive competition for roles even higher and it has been argued in a number of recent surveys that clients perceive passive candidates to be more attractive.

So what advice can we give? For most senior and middle managers the competition in the market means it is proving very difficult to move sector.  Most organisations are risk adverse when it comes to appointing positions and this is understandable given the very challenging economic environment.  My advice to people is to consider businesses where your skills and experience are going to be most marketable and transferable. I would also encourage candidates to use a broad strategy to access these roles, whether that is through their own network, agencies, Linkedin or their target Employer’s website.  With such fierce competition you will need to work smart and hard to beat the competition. Our website has some advice around these aspects should you want more information.

Without a shadow of doubt, for the vast majority of middle and senior management candidates the market out there remains tough. Whilst the number s are certainly negative, as I sit here and write, more positive economic data is being released and as we do come out of recession the market will inevitably pick up . In the meantime, I appreciate it is scant consolation but you are not the only one who is finding it tough…..

Russell Adams

LinkedIn

 

Why HMV must survive

Do you remember the first cold remedy you ever bought?

Do you remember the first pencil case you ever bought?

Do you remember the first blouse you ever bought?

No?

I bet you can remember the first album you ever bought…

In the 1990s, Boots, WH Smith and M&S all endured tough times and, although customers questioned why they had lost direction, there was a general feeling amongst the British public that we needed to rally around our legacy retailers. Why is it then, that in recent years we have turned our backs on the staples of our High Street? Why has history and culture become so much less important than price or convenience? Why do we value the physical product so much less than the digital? As consumers have we lost sight of what really matters?

I began my own career with HMV in 1998. I started as a Christmas temp, like many people, lacking direction in my career and somewhat unsure what to do next. The next ten years were incredibly rewarding and exciting. I struggle to articulate to my peers who have worked for other retailers just what an exciting a place it was to work. It wasn’t just exciting for the people who worked for HMV, there was a palpable sense of excitement for our customers too.

As a Manager at HMV you really lived a great, albeit challenging, life. Summer conferences in Marbella, Dublin, Aviemore; Winter conferences at the Grand in Brighton (one that stands out was themed around a Scarface Anniversary re-release – outstanding work Trish!). There we witnessed performances from bands that genuinely needed the support from HMV to break their first album. We genuinely felt that we had an obligation to support new acts and to bring them to the public’s attention. It wasn’t retail, it was ROCK & ROLL! (to quote an ex MD, Dave Pride, at a new store opening). The conferences were also educational. We learnt about the company’s history and were reminded of our obligation to honour both the heritage and the future (Brian McLaughlin, Ex CEO, was a great story teller). You felt part of something bigger than your own experience. The business was full of egos, like any company, however somehow the sum never became greater than the whole.

We were at the forefront of youth culture however at the same time, we knew how to merchandise and sell the latest Midsomer Murders DVD. Every Monday there was a new set of singles, albums, films and games (which had a Friday release date, just to complicate things). Saturday, as for most retailers, was the most thrilling day of the week, not just because of the sales lift but also because that was the day we received the deliveries of new releases. The stock room would be buzzing with anticipation as you discovered what the album of your favourite artist actually looked and felt like. Each shop in HMV was responsible for buying approximately 70% of the stock you would see in store, entirely aiming at you, the local and regular customer. This brought challenges and risks. For instance, if an album sold well on Monday, was this because it had a very loyal fan base or did it have the legs to keep selling. Would it get any airplay? Would customers tell their friends that they had found a gem? Should you order more? This wasn’t a tin of beans, it wouldn’t eventually sell through - it was a genuine gamble.

HMV connected with customers in a way that most retailers can only dream…and yet….somehow it has all gone wrong.

Why? Technology has changed, and well, let’s be honest, HMV hasn’t. Consumer shopping habits have changed too. The customer base at HMV is very different. It feels like HMV has been caught between two very different customer profiles (sweeping statement alert!); one that is older and still keen on physical product and, well the kids who don’t really get HMV anymore.

I look at HMV now and don’t really understand what they stand for, and to be honest I am not sure they really know either. Do they cater for an ageing and dwindling customer base or do they completely reposition, fundamentally changing their product base to get the kids re-engaged? Is technology (ie. headphones and accessories) the answer? Not really. HMV has to reposition as a specialist, but of what?

Trevor Moore, the new CEO, has an enormous task. He has to choose what type of customer he wants as he cannot appeal to everyone in the manner of the HMV of old. Jamie Zuppinger of Barracuda Search, wrote an article in Retail Week earlier in the year, in which he commented that most CEOs he had spoken to felt their biggest mistake after joining a failing business was not cutting deep enough and fast enough. Unfortunately I feel that this is exactly what Trevor Moore needs to do. In all probability, the only way HMV can survive is to reduce the store portfolio to circa 100 stores and to truly specialise. The margins have became so tight that to support this the supplier base will probably need to increase their equity stake much like other specialist retailers.

And we, as consumers, have a responsibility too. There was an outcry when Woollies went under. Are you prepared to see another integral part of our high street culture disappear? Yes, you can buy an album cheaper on Amazon, but is it as fulfilling as browsing a display in HMV? We have to place a greater value on our high street.

Trevor Moore, needs time. As consumers, we have an obligation to buy it for him.

Jez Styles

www.admore-recruitment.co.uk

Linkedin Group