Andrew Jennings: Businesses don’t fail because they are understocked
Andrew Jennings: Businesses don’t fail because they are understocked

Chances are you’ve heard of Andrew Jennings. The British national has held positions in some of the world’s most illustrious retailers: Harrods and House of Fraser in the UK, Saks Fifth Avenue in the US and Karstadt in Germany.

It’s partly thanks to Jennings that we can walk into Woolworths to buy figs, cottage pies, toilet paper and Chuckles. As MD of retail at the upmarket chain he implemented the first iterations of Woolworths’ trolley-shopping and larger-sized stores strategy that forms the essence of its food business today.

In fact, Jennings coined the chain’s phrase: "We must have the mind of a supermarket and the soul of a deli."

Jennings was brought in as a turnaround man in 2006, and during his three years at Woolworths introduced new ways of thinking about customers; reorganised buying, planning and design functions; and put the retailer back on track with a clear strategy.

Jennings famously butted heads with Woolworths chairman Simon Susman (then the retailer’s CEO), but in the end he got the job done.

"We brought him in to put in a segmented strategy," said Susman in September 2009. "He is the most difficult man I have ever worked with. But what you see [in the store] is testament to him."

The Financial Mail interviewed the retail veteran about his new book, Almost Is Not Good Enough, and about the evolution of retail, merchandise that becomes like dead fish and where to shop.

The current changes in the industry are being described as a "new dawn" for retail. What differentiates the transformation we’re seeing in the market now from shifts there have been in the past?

Retail has always been a dynamic industry, but right now it is going through an unprecedented change of pace. The continual economic shifts and breathtaking technological advances are altering the shopping experience faster than most retailers are able to react. Any retailer who wants to stay in the game — let alone ahead of it — needs to think in an entirely different way. Get it wrong or move too slowly and the customer will be lost to you forever.

Customers are demanding ever more exciting experiences. They have higher expectations of product, service, value and environment; and if that isn’t enough to contend with, there is the multichannel reality to get to grips with as well — which means the lines are continually blurred between virtual and physical space.

Do you think that to be successful or have an edge over competitors retailers need to have a footprint outside their home market? Some SA retailers, for example, have gone offshore with mixed results at best.

In my book I talk about the dangers of taking your brand to an international stage before it is thriving in the domestic marketplace. Too many retailers believe that international expansion [ensures] future success. It can do that, if your brand is already well-established and successful; if you are able to transplant the essence and point of view in international markets; and if you are aware that it will take much time, deep pockets and a lot of attention to develop the brand overseas.

Which three global retailers or brands do you think are "winning"? And why?

One is [Irish clothing company] Primark. It’s an exceptional retail brand that is growing and developing — it is now in 12 countries. It offers customers fashion-first merchandise at great value for money.

Another is [Japanese casual wear group] Uniqlo. Owned and developed by Fast Retailing, it has been hugely successful. It offers clothing basics that are current and respond to what is going on in art and design. The merchandise is quality and provides value for money. It is now in 14 countries.

Then there is [fashion house] Louis Vuitton. Moving from opening-price garments to pure luxury, it is in a league of its own, offering quality, fashionability and exquisite styling in its handbags, shoes and clothing. It is consistent and always in demand for investment pieces.

Much has been said about the "death of the department store". Do you think the format has a future?

I am very clear that department stores of the future have to be unique and differentiated, and must become stores of discovery and delight.

I do not see a great future in department store chains. The future is in "trophy stores", for example Selfridges and Harrods in London, Lane Crawford in Hong Kong and Le Bon Marché in Paris. These are stores that are relevant.

For retailers to remain relevant, they need to:

  • Know their customers and understand their emerging wants, needs and desires;
  • Innovate constantly, and with excellence, supported by technology;
  • Hire talented people who are passionate about what they do and about how they can make the shopping experience special;
  • Ensure that their merchandise assortments are current and support the market trends; and
  • Be authoritative and support customer needs and expectations.

The retail graveyard is full of once great department stores that became irrelevant. There are many of those in the SA retail graveyard.

If you look back at your more than 45 years in the industry, can you name three progressions or advancements that you believe changed the face of retail?

During the past decade we have been introduced to multichannel media, mobile commerce, personalisation, next-day delivery, next-hour delivery, disruptive retail models and beacons — the innovations just keep coming.

Arguably one of the biggest shifts is online purchasing. Worldwide, sales are set to top US$27 trillion by 2020. And our tablets and phones are integral to our decision-making process. More than 50% of our in-store purchases are influenced by research conducted online beforehand.

And don’t forget — voice will be the next big technological shift.

What was the most recent item you added to your wardrobe?

A Ted Baker suit. I love the Ted Baker brand because it is fashionable and comfortable, and represents value for money.

You call inventory management (having the right merchandise in the right quantities and at the right price) the lifeblood of a retail business, as sitting on unsaleable inventory ties up cash. In what other ways can players be at a disadvantage if they don’t have a tight system in place?

Old stock is like dead fish in barrel – it stinks after a while. Nothing is more important than current inventory and in the right quantity.

Too many retailers focus on markdowns on a weekly and seasonal basis rather than looking at weekly and seasonal sell-through.

I have never seen a business failing that is understocked. They are always overstocked with the wrong merchandise.

In every business I have ever run I [was] always personally focused on inventory management, inventory currency and inventory innovation.

When you shop, where do you go?

It depends on the country I am shopping in, but in London I love Selfridges, Ted Baker, Harrods and Uniqlo.

In five points, how can one be a relevant retailer?

  • Know your customer;
  • Constantly innovate;
  • Hire talented people;
  • Embrace change; and
  • Never accept that things are nearly OK. Remember: almost is not good enough.

Almost Is Not Good Enough is available at book stores for R399. Profits from the sale of the book go to the Prince’s Trust charity in the UK

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