Business Analysis: The state of retail in the current downturn

One of the many curiosities of the current downturn is the state of retail. On the one hand, we are told that consumers are short of cash and likely to become more so as tax increases and cutbacks in public spending begin to bit. On the other hand, in London and other cities there are regular arrivals of new stores and updates of old ones. Admittedly, not all are as lavish as the Louis Vuitton extravaganza in London’s Bond Street, but there is plenty of evidence to indicate that not all shoppers are heading as quickly as possible for the nearest discount store.

Moreover, the high street is only part of the story. The internet success of the likes of net-a-porter, mywardrobe and notonthehighstreet suggests that even areas of the retail industry – notably high fashion – that were hitherto seen as less vulnerable to the internet revolution are attracting increasingly significant numbers of buyers who have access to a computer but perhaps lack the time to tramp the streets in search of the perfect outfit.

Another aspect of the internet that it appears that some retailers have paid insufficient attention is the fact that it gives consumers access to worlds beyond their local high street. No longer are they constrained by what they are offered on that Saturday afternoon shopping trip. Net-a-porter and others can help with this by offering edited highlights of what is out there, but the truly adventurous can find unusual items and bargains – and not just in fashion – by trawling the internet and following up tips and hints from the experts.

In other words, shoppers have not given up buying. They are just more demanding and discerning – and much less likely to settle for the commonplace – as many a high street chain has discovered to its cost. Design is also a lot more important than it used to be. Half a century after Terence Conran tried to win British people over to the attractions of great design with Habitat, the popularity of gadgets such as the iPod and iPhone suggest that we and our counterparts around the world are starting to enjoy things just for themselves.

This is all very well if a company happens to catch the Zeitgeist as Apple appears to have done and come up with a winning formula. But it is something of a challenge if you are either focused on functionality or – perhaps even more irritating – coming up with designs that are just the wrong side of winning. The trick, of course, is to see where the next trend is coming from and be in a position to benefit from it. But how do you do that?

Many companies rely on gut instinct, others sign up for expensive research reports, still others send teams off on fact-finding missions. None of these is entirely satisfactory. Which is why Marc Worth sees an opening for an information service for all those in consumer-facing industries trying to come up with the winning formula in increasingly competitive global markets.

Worth is not just some bright-eyed visionary. He has form. In the late 1990s, just as the internet was developing, he came up with the idea for WGSN, which became the definitive information service for the fashion industry and was sold to the publisher Emap for £150m in 2005. His new venture was originally envisaged as a similar service for interiors. But he says he quickly realised that there was a much bigger market in consumer industries generally. Stylus ( stylus.com ) is officially launched in September, and will be based in London, with a team of more than 30 industry experts and trend specialists. However, there will also be representation in New York, Los Angeles, Sao Paulo and Sydney, while specialists in other important centres will also be used. The idea is to analyse macrotrends and then break these down into commercial applications for individual industries and companies.

Worth parries the suggestion that the service aims to make it easier for less inventive companies to appear in touch with current trends. “We’re creating inspiration, not trying to make everything look the same,” he says.

Easy access to the content via the internet is a vital part of the offering, which will also have art-book style production values. And the early signs are that in a smaller and increasingly competitive world, Worth could once more be on to something. More than 350 companies from sectors such as retail, food and beverage and leisure took part in the pre-launch phase.

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