Mothercare looks for balance
Mothercare plans to close some 70 stores, which is around half of its estate. That’s big news for any retailer this far into a turnaround, and an indication that we are going to see more of this as retailers increasingly wonder whether they are getting their channel balance right.
We know that all the old assumptions about location have gone, but we have not yet replaced them with a new model. Retailers are now having to think about how many stores, in what locations, what size, what layout, what function … it’s a complex calculation, and one that is not based on much certainty, as it has to take website, app, dark social, marketplace, affinity, catalogue and call centre into account.
We knew 10 years ago that retail was complex – now look where we are. This is why the media is so obsessed with the customer – they are the only ones who can tell retailers what they want, who can then determine the balance.
This raises two major problems. The first is, while we all talk about using total customer view to plan, who is actually doing it? Customer data inputs are being used in specific areas of the business, but they are not running the entire demand chain all the way back to buying.
That must come, but it’s a long journey. AI will be central to it; humans simply cannot compute that much data, or make rational decisions so quickly.
The second is, what evidence is there that consumers know what they want? I know what I want right now, but don’t expect me to tell you what I want tomorrow with enough certainty to enable you to build a predictable demand platform.
And this won’t change (just in case you thought that there is a perfect future where retailers and consumers operate in harmony to mutual benefit).
Saying that retailing is changing kind of implies that we hope one day that it will stop changing, or at least change less quickly. But if you spend enough time with retailers, a handful of forward-looking software companies and an even smaller handful of industry pundits, then you will soon be disabused of that hope.
Meanwhile, any retailer closing stores will of course get some breathing space for about a year, before they will have to again think what was once unthinkable.