In retail marketing academia, as well as life in general, there is a tendency to dismiss or “poo-poo” old theories, concepts and opinions. Something that is new and trendy is seen as inherently relevant and useful. In my view this can be fallacious and dangerous. While some theories and frameworks are naturally replaced by paradigms and concepts due to advances in technology or major shifts in consumer behaviour, some retain the same resonance now as they did “all those years ago”.

Recently I was reviewing the continued progress and development of the so-called “discount retailers” such as Aldi and Lidl. Many commentators attribute their continued success and growth to the deep global recession that took place in Europe over the past decade: some argue that it is still happening in a virulent fashion.

There is evidence that such retailers, particularly Aldi, are moving away from the “hard” discount positioning strategy that has been their mantra since they were founded. “Hard” discounting reflects the focus on low prices and on brands that are private labels or are not that well known to shoppers in a particular location.

However Aldi and Lidl have made significant changes to its product range and its pricing strategy in recent years. In summary they have begun to move upmarket in an attempt to attract wealthier shoppers who traditionally have eschewed the opportunity to shop at their outlets. This might be an unfair perception of so-called “wealthier shoppers”. For instance many such consumers have had to tighten their belt in recent years due to a decline in real income. Some have been forced to try out Aldi and Lidl. Many have been pleasantly surprised by what they have seen there. Although brands might not be that familiar to them, the taste, quality and price, when combined have led to favourable impressions. It could be argued that this segment of shopper has experienced a change in perception of such retailers as a result.

Lidl has responded by setting up a “concept store” in the Republic of Ireland. This is a major shift in terms of store design and layout. No longer in this instance, is the shopper confronted with the Spartan conditions that are the preserve of the traditional discount store: basic shelving and merchandising, a cluttered feel to the place and a lack of staff to provide hep and guidance. In this format, the aisles are wider, more shop floor personnel populate the floor and surprise, surprise, and they are friendly and knowledgeable. They are there to help the shopper! It opened a similar “store of the future in the UK a month after its introduction in Ireland.

We are now witnessing more subtle shifts in approach across Aldi and Lidl stores. We are seeing wine cellars, baby- changing facilities, longer tills so that people have more time to unpack their items and self-checkouts.

In Italy, Lidl has produced an “Italiano” range in order to tap into the psyche of the Italian shopper.

In Germany, Lidl has introduced a new generation of stores which focus on value as opposed to the more narrow area of price. It highlights choice, quality, product ingredients and freshness and uses expert endorsed quality wines.

Aldi has placed a stronger emphasis on organic items and increased its range in this category substantially. It has also added a number of Fairtrade products to its range under the banner of “Fair”.

In the United Kingdom, a recent survey published by the consultancy firm Him, has shown that Aldi and Lidl are increasingly attracting more and more shoppers from the AB socioeconomic category, with figures showing an increase of around thirty per cent. Interestingly an increasing percentage of these shoppers are using discount retailers for their main shop as opposed to “top-up” shopping. This would appear to reinforce the view that they are making a greater appeal to this segment and significantly overcoming any snobbish and / or negative perceptions.

Both retailers are also beginning to increase the number and range of items in their stores. This appears to go against one of its basic principles; namely that it carries less than half of what one might expect to find in the traditional supermarket: 12,000 – 15,000 items as opposed to 35,000 – 40,000 items.

In summary we appear to be witnessing a “sea-change” in the respective strategies of Lidl and Aldi. The old shibboleths of low prices, low-to average quality merchandise, spartan store designs and so on, appear to be augmented by a move to a more “mid-market” to “up-market” positioning exercise. This, it could be argued is potentially taking them from a clearly articulated positioning strategy to a more mainstream “supermarket” position.

What are we to make of these developments?

Gainsayers will argue that this potentially will damage them in the longer term. They will lose their point of distinctiveness and become part of a wider and more homogeneous group of mainstream supermarkets. They will be replaced by existing hard discounters who will capture their position in this segment of the market. They will send “mixed signals” and messages to their loyal customers. By trying to appeal to a wider number of groups and segments, they will get lost in the “fog” of confusion.

Conversely it can be argued that they are following the natural law of “evolution and revolution”. This view suggests that all companies: retailers included, have to adapt and respond to changes in the environment. By remaining static and resistant to change signals complacency and torpor. Occasionally companies have to take major and radical decisions (revolution) and embark on a strategic direction that leads to a major shift away from traditional and established building blocks of success. Look at retailers such as BHS and Woolworths. They certainly failed to adapt sufficiently and they have now “left the building”.

I would suggest that we look at the “Wheel of Retailing” theory. This proffers the view that a retailer typically enters and makes progress in the market by going in with a low-price, low-margin strategy. As it becomes established in that market, it is faced with the challenge of widening its customer base. It also its product range and increases prices and margins. By becoming successful it naturally attracts competition. Over time it is usurped by one or two of these protagonists and loses its position in the market. In the “worst case scenario” it goes out of business or is taken over by another retailer.

Does this sound familiar?

Although this theory has been criticised by commentators: it is based on anecdotal rather than research-based evidence, it appears to stand the test of time.

We certainly can see some resonance in the manner with which Lidl and Aldi are adjusting, refining and implementing their current strategies.

As long as Lidl and Aldi avoid going too far in terms of more upmarket and higher priced product – in other words, retaining a balance, then they should continue to prosper in the short to medium-term.

We should remember at all times that the key principle of retail success revolves around retaining a coherent, consistent and relevant value proposition. If that is diluted too much, the retailer will lose its loyal customer base and more worryingly in the longer term, confuse the overall market-place. New entrants and formats will supersede existing concepts and we witness the wheel going round and round. At some point, old formats will reappear in various guises and provided they are relevant at that time to the shopper they will re-emerge once again.

Hence the value and contribution of the concept of the Wheel of Retailing!

No, I am not giving up on these blogs (fortunately or unfortunately – depending on your point of view). I am using the title of a famous song most notably recorded by Andrea Bocelli and Sarah Brightman, to capture some thoughts on the continued debate over the future of the high street in the United Kingdom. For those of you outside of the UK, I would ask you to reflect on the standard of retailing that exists in the prime areas of your city or town.

As we know from our discussion on the high street in chapter eight of the book, the high street in many cities and town has undergone major decline over the past couple of decades. Some commentators argue that it is irreversible and a reflection of the changing patterns of shopping behaviour and preferences. Others think that certain initiatives can inject a major improvement and draw shoppers in their droves back to these areas.

I was enthused to reflect on this aspect of retailing when I read of yet another organisation that has been set up to “rejuvenate the high street”. This new body is called “SaveTheHighStreet.org” and has been established by organisations who rejoice in titles such as Future High Street Forum, Tech City UK and google Digital Garage”.

We have seen many such initiatives and projects in the UK over the past ten years or so. As mentioned in chapter eight of the book, Mary Portas, a well-known retail expert and commentator was commissioned by the government to undertake a major review of the state of play with high street locations. She generated a wide range of recommendations; some of which were acted upon by the government and others which were dismissed as the product of someone who had an agenda and used the investigation to put forward her own idiosyncratic views and opinions.

Regardless of how you might view Mary Portas, she highlighted practical areas which contributed in no small measure to the decline of the high street. These included: the difficulties and costs of parking for shoppers in these areas, the high business rate charges, the high rents associated with acquiring premises, the run-down nature of such areas and the high levels of anti-social behaviour in town and city centres – particularly at night. When combined, these factors have led to a negative picture of the high street. Unfortunately for retailers such an uninviting and intimidating environment has led to a fall-off in shoppers.

It is not just the environment surrounding the high street and prime city centre locations. We have witnessed the inexorable march to the tune of online shopping. As discussed in previous blogs, retailers – particularly the large ones, have invested heavily in complementary online websites in an attempt to develop an omni – channel strategy.

Put simply, many city centre, high-street locations are not the most attractive places to be during the day or at night. Dilapidated buildings, charity shops, beggars, lousy buskers and the ever-present danger of being “jumped on” by chuggers (people representing charities who are desperate to get you to sign up) can at best be intimidating and at worst totally off-putting to potential shoppers. Most city centres and high streets are reporting a decline of around ten per cent in the number of visitors to such locations in the previous year in the United Kingdom. Shops are closing every day.

To be fair this decline cannot be fully explained by the unattractive nature of such locations. The stalling economy, doubts over Brexit and a lack of growth in real incomes also have contributed in no small manner to this position.

The ever-present high costs associated with locating in the high street are deeply off-putting to retailers. In the United Kingdom also contribute significantly to the decline of the high street.

Large retailers tend to require large box locations; something which many high street locations cannot provide due to their traditional designs. The move to out-of-town locations, where retailers can build or lease such sites is more popular.

Mary Portas advocated a broader view of what can be done with the high street. Part of her recommendations revolved around a need to make such locations more popular to visit in terms of treating them as an entertainment hub. Street markets, music, themed festivals, encouraging local artisan producers to operate there and more imaginative use of pop-up outlets appeared in her report.

Certainly such initiatives would appear to address some of the negative perceptions that we highlighted in earlier paragraphs. They work on the principle that such events and activities act as a magnet for drawing people into such locations. The pleasant and “community” atmosphere can encourage repeat visits and stimulate people to make purchases from an eclectic group of varied retailers.

Have a check in your own city or town to see if any such initiatives are taking place? If you are visiting other parts of the world, reflect on what is on offer in central locations in such cities.

So, what are we to make of these developments and trends? In my view the move to treating high street locations as centres of entertainment and fun provides a point of difference that is not easily replicated at out-of-town locations or online. Quirky, traditional, artisan-type retailing offers choice to shoppers in a more positive environment. Regular theme-based events e.g. around Christmas, Halloween and Easter, or around sporting events, can generate a community-driven atmosphere that can build up a regular coterie of loyal shoppers.

However this has to be juxtaposed against the rapacious, greedy nature of local authorities and government. In the United Kingdom, local bodies are encouraged to generate their own income as central government cuts back on investing in the city centres. To be fair, local authorities have to seek ways of generating income. Business rates and parking charges are typical sources of “easy” revenue. However there is a “bigger picture”. If these charges are too high, retailers will struggle to survive and close. Shoppers will go elsewhere in the face of unsustainable parking charges and fines.

A balance has to be achieved. More far-seeing local bodies and authorities should recognise that a vibrant high street will generate more income for everyone in the longer-term than through the punitive charges they currently impose in many cases. Any short-term financial gain in my view is tempered by the long-term damage that high costs does to the sustainability of such locations.

As we noted in chapter eight, online shopping will continue to grow. However many shoppers also value the experiential aspect of the shopping task. While we will continue to witness a high degree of “churn” in terms of retailers moving in and out of the high street, initiatives such as those highlighted earlier will help to provide a vibrancy to the high street that is missing in many cities and towns.

Reverting back to my opening paragraphs in this blog, Savethehighstreet.org also intends to provide help and support to the small independent retailers in terms of coping with and using social media strategies as well as giving guidance on the issue of data collection and management on their respective shopping databases. In other words it will introduce them to some of the tools and techniques that have been adopted by the large retailers. This form of mentoring, while unlikely to make major inroads into the problem, should nevertheless help to establish some retailers on the high street.

Maybe it is too soon to say goodbye. I am willing to suspend my scepticism and cynicism and see if these initiatives will have an impact.

The title of this blog is taken from a song delivered by that hoary old crooner Frank Sinatra. I was reminded of it recently when reading about the continuing developments within Amazon with regard to their work on mobile air deliveries i.e. drones. Its more technical term is the use of Unmanned Aerial vehicles (UAV’s).

Within the United Kingdom Amazon received clearance from the UK government and the Civil Aviation Authority to test out the use of drones as a mechanism for delivering items to its customer base. The overall aim of Amazon is to be in a position to deliver parcels within thirty minutes of the placement and payment of an order.

The permission is contingent on a number of restrictions; most of which are obvious and focus on issues of health and safety. These include the avoidance of obstacles and flight patterns and how they are operated. The basic idea was proposed by Amazon as far back as 2013 and it has been working on the concept ever since.

What is the specific value proposition?

Amazon is striving to develop drones that are capable of delivering a parcel of up to 25kg in weight over a distance of around ten miles. This could be to the home, office or a specific designated pick-up location (depending on the preference of the shopper and safety concerns)). In essence it takes the concept of mobile delivery to a new level. Up to now, retailers have experimented with conventional transport modes such as lorries, vans, motor bikes, bicycles and walking to the location. Taking to the air is seen as a potential game-changer in terms of speeding up the process of delivery. It also potentially overcomes the challenges of driving to the destination via potentially horrendous traffic jams and congestion experienced in many of the major cities and centres of high urban population.

How practical and achievable is this development?

In terms of health and safety for instance it doesn’t cause any potential difficulties in terms of collisions with planes: the UAV’s do not fly above 400 ft. However there are some practical issues to be overcome.

Current legislation within the UK means that such drones cannot be flown within 50 metres of a vehicle, person or building. It has to remain in line of sight and within 500 metres of the pilot.

How do you deliver to customers who live on the tenth floor of an apartment block?

In terms of customer service it could be argued that it is the essence of low –touch; indeed non-touch. The customer does not meet or is not greeted by a representative of the retailer, nor is there a friendly smile or tangible reassurance if there are errors with the delivery.

On a more practical level is there any evident demand from shoppers for such a service?

As I have noted in the book, the problem with mobile marketing is that there is an ever-present danger that companies can abuse their strong position (from having so much data on the individual’s shopping patterns) that they invade people’s privacy. Imagine a scenario where you have stepped out of your shower and are caught by a UAV passing by as you look out the window.

Do most people expect or want deliveries within thirty minutes? Will the sky be swamped by hundreds of drones flying this way and that way to deliver and drop parcels?

The short answer is that I don’t know. As a shopper such activities are likely to irritate me and as long as I have a firm indication of the delivery period then it is unlikely that I would want my weekly Tesco shop to arrive within thirty minutes.

From a more cynical perspective is this typical of companies who become obsessed technology and allow their research “boffins” to play around with very innovative but ultimately irrelevant designs? A classic case of being “R&D-led” as opposed to being “customer-led”?

Other practical considerations come into play. The nature of the items to be carried via such UAV’s is very restrictive. For instance it cannot carry “white good” items such as refrigerators or cookers.

However the concept is viable in terms of technology: currently Amazon is partnering with appropriate organisations who specialise in this field at a location outside Cambridge (a technology hub). The vast majority of items stocked by Amazon are less than 5 lbs in weight. In a sign that there must be something substantial behind the concept, companies such as Google, Flirty and Wal-Mart have also applied to US regulators for permission to engage in similar testing procedures to that of Amazon.

Amazon have actually been beaten to the punch by Seven Eleven. This retailer recently used a drone to deliver a customer order in Reno, Nevada (to a customer located within one mile of the store).

What are we to make of it all? Science fiction gone wrong? A logical incremental development in mobile technology? The face of the future? The lunatics taking over the asylum?

Firstly we can assume that governments will adopt a very cautious and risk-averse approach to the granting of licenses for the use of UAV’s. This will be driven by the ever-increasing risk of terrorism activities that are happening in many parts of the world. Sadly the concept of using drones is something that fits into the plans of terrorists in order to disrupt 9at best) or cause material damage (at worst). It is highly unlikely that we shall see hundreds of drones clogging up the lower air space and resembling conventional traffic congestion.

Secondly I presume that there will be a premium price for the use of such services – particularly if there are such major restrictions on the use of drones.

Thirdly it is more likely in my view that instead of delivering to the home or the office (and if permission is granted) retailers like Amazon will deliver to a designated and secure landing zone at a “drop-off / pick-up” point. Such a facility is likely to resemble a warehouse type construction and the shopper will have to make his / her way there to pick up the item. In some ways this defeats the original proposition of being able to deliver to the customer within thirty minutes. It also adds a layer of complexity to the proposition.

Fourthly practical issues such as hi-jacking (people re-directing the drones to another site or taking down a drone) would have to be fully tested in order to eliminate / reduce such risks.

Fifthly while it could be argued by idealistic environmentalists that it may reduce the number of vans and motor bikes in congested areas, this is unlikely to happen in the foreseeable future. It could equally be argued that this development simply transfers such congestion to the air.

Finally it can be argued that the use of drones would be better served in the context of inventory and warehouse management within the supply chains of companies in general and retailers in particular. Imagine the benefits that could accrue from the speedier and more accurate movement of inventory around a warehouse or distribution centre. This could to real efficiencies and savings for the company. This could be passed on (unlikely perhaps in its entirety) in the form of lower prices to the shopper.

It will be interesting to see what happens over the next couple of years.

Fly me to the moon

 Let me play among the stars

 Let me see what spring is like on

           Jupiter and Mars…………

La La La La La La La La……..