The news has broken that long-standing British retail fashion favourite, Jaeger, has gone into administration. As the latest casualty to hit the high streets, what was it that went so terribly wrong for the 132-year-old retailer?
Of course, in that time frame, the high street has changed a lot. According to retail sales statistics from the Office for National Statistics, online sales in February 2017 increased year-on-year by 20.7% and by 3.3% on the previous month, accounting for approximately 15.3% of all retail spending.
There is now an expectation that fashion is as fast as the click of a mouse and the shopping experience from your sofa is expected to mirror that of a bricks and mortar store.
What’s more, the ever-changing British weather plays havoc with fashion retailers. They are likely to plan their stock up to a year in advance, so if the UK then has a particularly warm winter or cool summer, hundreds of thousands of pounds worth of stock risks going to waste.
Was this not always the way? Isn’t one of the quintessentially English identities the changeable weather? Yes, but, with the onset of technology, the weather should become less and less of a problem.
Let’s look at fashion retailer, Zara, for instance. They have led the way in addressing this issue by increasing their ability to generate faster turnover of merchandise. This was achieved through a constant exchange of information between themselves and their supply chain to speed up the process from concept to shop floor.
This “depeche mode”, or fast fashion, depends on the effective use of data and identifying key trends, whether that is to do with a sudden fashion change in the marketplace, or in the weather itself. This use of data is crucial for retailers in both the online and offline world to survive.
Retailers can also use data and technology for effective predictive analysis in other ways. For example, by monitoring the previous 10 years’ trends, which detail what people buy, from where and when they buy it. There are some extra bits to bring in to the algorithm, such as bank holidays, sports events or even the Queen’s birthday. By using predictive analysis, retailers can plan and forecast their sales, cash flow and required stock levels.
Of course, it’s not always that simple. The data available is initially retrospective, which means that whilst the last May bank holiday may have been a scorcher and footfall was great, this year could be a washout. Therefore, customers may be sofa shopping rather than in-store – so stock always needs to be balanced correctly between on and offline.
In Jaeger’s case, it simply suffered from intense competition from the likes of Burberry, H&M and, interestingly, Zara too. It has also been criticised as losing sight of its core clientele, and heavy discounting which caused its confused customer base into voting with their feet, and perhaps even more so with their mouse.
Let’s hope that the solution lays in a part-buyout, similar to Austin Reed when it closed last year, so that at least some of the jobs in the 46 stores, 63 concessions and logistics centre, can be saved.
In the meantime, I doubt this hard lesson in wanting virtual market presence will be the last to be had by a high street retailer.