The CMA’s lack of digital foresight on the Sainsbury's-Asda forecourt

It’s been another interesting week for the retail sector. Not only has Debenhams announced the closure of 22 stores, the CMA also ended any hope of a merger between Sainsburys and Asda, citing one of the reasons as ‘it would cause longer checkout queues and petrol forecourt queues.’ This is confusing and really made me think ‘does the CMA have any digital representation on its committee?’

Many commentators and consumers are quick to cite online shopping trends as the demise of the high streets, whereas the CMA didn't seem to take any view that technologies can help solve problems such as queues. Digital transformation is an often-over-used term but in the context of more high street closures and the CMA’s apparent disregard for digital technologies, what does the future really mean?

I could have predicted a long time ago that Debenhams would have problems in the future. About 20 years ago it developed Designers at Debenhams and not once since that launch has it changed. The retailer failed to use retail principles of innovating and changing its products. You go into a Debenhams store and as a customer you feel there are rails and rails of poorly sourced products piled high with no storytelling or excitement around them.

Yet, on the other hand you have a brand like Primark which has worked hard to make its stores a destination and get the product right (cheap). Its new store at the Bullring in Birmingham has five restaurants, you can get your nails painted, get a new hairstyle or use social media with selfie signs throughout the store telling you what’s trending now. Primark, due to its cheaper prices and the large quantities customers buy, have not invested in eCommerce but its stores and social media compensate for that.

Primark has been really strong with its social media strategy. It has used social to create conversations with the public to show them what’s in-store. And its Instagram has over seven million followers. Debenhams has a pitiful 250,000.

Behind the scenes there is much digital innovation in how brands are becoming more intelligent in using new technologies from effective stock management to re-organising supply chains to deliver faster and cheaper services to customers. Take click and collect for example which accounts for many brands online sales, it just wouldn’t have been possible without digital innovation. Boots last year saw 75% of customer opt to pick up parcels in-store and M&S had 71% picked up in-store too. This is a great example of how brands are becoming smarter in how they link their in-store and online presence. Argos has massively invested in this area offering a fast track same day click and collect option to meet consumer demands.

All of this indicates that digital and technology is moving the retail sector on at a pace yet the CMA response makes me wonder if they have been living in a bubble.

Self-service checkout is the norm in almost every grocery store up and down the country. Petrol forecourts offer self-service solutions. Amazon is already trialling the first staff-less supermarket really capturing the essence of digital technologies to provide customer centric solutions in using computer vision and machine learning. It will only be a matter of time before UK retailers in the grocery sector start to invest in similar solutions.

Digital is enabling brands to have deeper connections and conversations with customers by using social media. Consumers have more choice than ever before in choosing how they shop, so for the CMA to cite long queues as a valid reason to stop a merger is short-sited and just demonstrates their lack of understanding of the wider impact digital and technology is having on the retail sector.

The CMA claim to work with a range of organisations but anyone even with a basic understanding of the digital landscape would tell the CMA that technologies are changing the face of the sector and should be seen as an enabler and solution provider to enhance the customer experience.

I hope in the future the CMA take the time to consult with a far broader range of experts before ridiculous statements, like the one mentioned, are given any airplay.