“Trading is not just a sideline for me. It is what I do. It is how I make a living. I spend much of my time sourcing items at a price that I can sell”
On the surface what he has to say has an uncomplicated, ‘cut and dried’ ring to it. Ten minutes or so later you discover that John Lewis, 37-year-old Managing Director of John Lewis Styles has a lot more to say and that what he has to say is thoughtful, contemplative and reflective of the thinking of a man whose focus on the vicissitudes of the retail trade rank second only to his interest in the welfare of his family.
By virtue of his family background (the popular retail outlets the Gift Centre and Shoe Source are run by other members of a family that has been in the retail business since 1981), Lewis has been intimate with business for all of his life. John Lewis Styles, almost certainly the single largest clothing and apparel retail outlet in the country, is 12 years old. It is, however, just another year for the proprietor. Business, he says, is about finding ways to stay ahead of the competition.
Lewis believes that the biggest issue currently facing the local retail trade is the ferocious competition that it faces from its e-commerce rival; e-trading, these says, accounts for more than 10 per cent these days, up from less than 5 per cent a decade or so ago. In the cases of some categories of consumer goods the figures for e-trading are higher.
The benefits of internet trading to its service providers, Lewis says, include significantly lower operating costs since the need to invest in display and storage space and specialist staff stock as well as advertising is, more or less, removed. For the average e-commerce website
the cost of storing and referencing a product is a fraction of storing and referencing a product for physical stores.
Other advantages which internet shopping service providers enjoy include prices. This newspaper’s own research indicates that as e-commerce traders have increased their sales volumes they have better positioned themselves to negotiate purchase prices and secure discounts from suppliers, advantages that are all the more important given the reality of limited purchasing power in a country like Guyana. The fact that many e-commerce ‘stores’ are open ‘24/7/365’, also provides vendors with another significant advantage.
Lewis also points to “other ways” in which internet shopping is now challenging high street trading. He alludes to lower shipping costs associated with the consolidation of several customers’ goods and the consequential lesser shipping, customs and duties charges plus the fact that, these days, increased volumes of cargo shipped by service providers in the e-commerce sector means that they now exercise greater leverage with international shipping lines. “Local shipping companies have confirmed this,” Lewis says.
Rather than see the rise of internet shopping as the sounding of a death knell for conventional trading, Lewis says he sees it as a challenge. “Essentially what it means is that you search for whatever competitive advantage you might have and you seek to exploit it,” he says.
Not surprisingly, much of Lewis’s time is taken up with formulating and rolling out strategies to ensure that his store, challenged as it as by high overheads, can remain competitive. He says that operating costs for his Waterloo Street complex, including staffing and utilities when added to the administrative and physical costs of acquiring and holding stock, can be as high as 20 per cent more than those of the e-commerce operator.
Accordingly, his purchasing trips abroad are carefully planned and measured undertakings. These cut out the cost of the middle man and provides him with valuable direct access to “the sources” from which some of his merchandise comes. He says that much of his focus is on acquiring merchandise through deals to which internet shopping service providers do not necessarily have easy access. “If I can get the good cheaper of even at the same price that they can I will sell it,” Lewis says.
A trademark of the popular Water street is that its display areas are usually well-stocked, a practice which, Lewis says, is integral to his own product promotion strategy. He believes that such success as he has realized derives from the fact that he offers his customers “the full range of sizes,” a service which he says is not commonplace in the local retail trade and which is an area of vulnerability of e-commerce traders. “What this means of course is that you must invest in larger quantities of stock so that we can make the various sizes available,” Lewis says.
Questions inevitably arise about the survivability of the country’s traditional high street traders some of whom have stuck doggedly to conventional retail trade for as many as 40 years. That, however, is not a matter with which Lewis concerns himself. He is in no doubt that conventional trading arrangements must adapt to the reality of e-commerce and he is preoccupied with making that transformation.
Conventional marketing strategies too have had to be adjusted to respond to the emergence of new tools brought on by information technology. These days, John says, ignore the marketing advantages afforded by social media at your own peril so that much of the promotional focus of John Lewis Styles is, these days, centred around the ‘addiction’ of an important target market, teenagers and young adults to social media. He talks about a marketing initiative which he had undertaken in a search for a group of attractive and talented young women to model women’s fashion. The vast majority of the marketing was done on Facebook.
To remain competitive John Lewis Styles has disengaged from what used to be a near addiction to apparel. When we visited the store last week we were greeted by an eye-catching luggage collection. To remain competitive, the company must begin to embrace the idea of diversification.
When you ask Lewis how he has been faring in business in recent years he begins to answer then pauses, mindful not to appear unduly pessimistic. Eventually he comes up with a response. The two additional floors that had been planned for the Waterloo street building are yet to be erected. It is his way of saying that business is not quite where he wants it to be.
