Interview: Retailers old and new can learn from each other

Online pureplays such as Amazon, Shop Direct and are often held up as beacons of innovation within the retail space, known for their agile working processes and ability to test and learn in a flexible manner. Their lack of property portfolios is also regularly cited as a factor in their ability to trial new concepts and technology without too much damage to the bottom line.

It is difficult to imagine any retail business other than Amazon proposing changes in airspace regulations to cater for a potential drone delivery network, which is exactly what happened this week at a Nasa convention in California. Although traditional retailers have increased their focus on innovation in recent years and they now typically understand the importance of embracing technological change within their organisations, they are still far more likely to be focused on making their store estates operate in the most positive way.

Net-a-Porter is another online-only retailer on a steep growth trajectory, with EBITDA up £37.8 million to £54.2 million and revenue jumping 22.8% to £654 million in the 12 months to 31 March 2015, but the company's merchandising and retail director Paul Brennan argues that the traditional method of merchandising products via stores still has significant value.

"With regard to pure merchandising I don't think online retailers have the advantage," he told Essential Retail.

"We don't have the physical closeness to stores, customers or staff that can give you some of the qualitative data around customers' purchasing habits and behaviours. We have different ways of capturing the data."

Brennan added: "If you're in London you'll probably have a flagship store where you have the most traffic. You can go down there, spend some time with the store manager on the shop floor and see what customers are doing. It's incredibly valuable."

The Net-a-Porter director believes the pure disciplines of merchandising are the same no matter what type of retailer, be it a luxury fashion e-tail proposition or a large grocer, and he says there are benefits in sharing expertise with one another in order to benchmark one's position.

"The core disciplines are the same; we're planning and trading the range as profitably as possible," he noted.

"Ultimately we have to remember the customer and what our position is, as well as ensure we've got a credible, appropriate depth and width aligned with our product strategy and key KPIs, whether that be gross profit, stock turn, closing stocks or how we manage our sale period."

Technology in merchandising

Net-a-Porter announced last week that it is working with Riverbed Technology to aid its application performance management strategy but from a merchandising perspective, Brennan acknowledges, the company does not use particularly sophisticated planning software.

"The iPhone and iPad have been incredible technologies for us," he explained.

"Gone are the days when you would go to a buying meeting with a bag of reports. You can now take all the files you need on one device in a readable way. You are able to be much more efficient when you are on the road, and these Apple products have enabled us to be much more efficient in the way we are conducting meetings outside head office."

Brennan also suggests the most beneficial technology for the group is the capability of the cloud, Excel and the data warehouse because when combined they have enabled Net-a-Porter to share files and store files "more easily", and store, collate and analyse data "in a more complex, quick and reliable way".

In terms of investment in infrastructure, Brennan views an SAP or Oracle system as arguably too high a cost and not bespoke enough for Net-a-Porter's requirements as the company continues to expand at pace. This growth in recent years includes the addition of men's clothing portal Mr Porter and The Outnet, as well as the group's latest addition, The Net Set, which is described as a "shoppable social network".

"Having a strong management information systems team and some very strong technical merchandisers means we can drive so much out of Excel using SQL and Power Pivots which can give us incredible amounts of information.

"We're getting very close to using Excel at the peak of its powers."

Brennan is a confirmed speaker at the inaugural Buying and Merchandising Summit, which is set to take place at London's Cavendish Centre on 22 September 2015.

As part of a line-up of big name speakers from the world of retail buying and merchandising, the Net-a-Porter director will join three other industry leaders in a panel debate evaluating the technologies currently available to boost retailers' efficiency as they embark on their digital journeys.

Michel Koch, former eCommerce director for Maplin Electronics, Julie Price, IT director at White Stuff, and Simon Harrow, CEO of Elevaate and ex-COO of Kiddicare, make up the panel debate on the morning of the one-day event.

"My vision for the Net-a-Porter Group is to build a world class merchandising retail function and when I look at who we have on the team, the processes we have in place and our performance, I think we are making good progress along that path," noted Brennan.

Commenting on what he expects to gain from the summit, he added: "As our disciplines are centrally located, we often don't have the opportunities to meet our counterparts as frequently as maybe other functions do.

"Buyers will see lots of different brands, other buyers and people at shows. Merchandising is more of a central and back office function, so we don't necessarily have as much chance to compare notes."

Brennan argued that merchandisers – whether they work for Selfridges, John Lewis, Neiman Marcus or Walmart, for example – share many of the same challenges: they all want to drive gross profit, manage inventory and understand that there is the correct amount of depth to their product ranges.

"This is where the summit serves as a great way to share those ideas and develop the entire discipline across sectors and continue the progression of our individual vision across all areas," he remarked.

"Merchandising itself can continue to evolve and develop. It's about how can we share tradition and create new traditions."

Many of the issues addressed by Brennan will be topics of debate at the Buying & Merchandising Summit 2015, which takes place at London's Cavendish Centre on 22 September. Speakers from Adidas, Cath Kidston, Jacques Vert, Levi's and Topps Tiles – as well as Victoria Plumb chairman George Adams – are among those confirmed for the one-day event, which includes a comprehensive educational conference programme and a valuable opportunity to network with industry peers.

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Buying & Merchandising Summit 2015

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