Blog: Whats new?

As I was walking into the office today I saw a Fruit For The Office van on Marylebone High Street. 

I thought what a clever idea exploiting a new business niche when the government is harping on about us all getting ‘5 a day’.  But it also struck me just how relevant it was to our business - winning large contracts.

So many of the bidders we see pitching for huge multi-million pound contracts go to great lengths to answer all the customer’s questions and then wonder why they lost. The usual excuse is it was on price, but this is rarely the case.  It’s often a lack of imagination or any willingness to understand what the customer wants.  Sometimes little ‘extras’ outside the customer’s stated requirements can demonstrate innovation, or your willingness to help their business - and win an important contract.

Retailers do this sort of thing all the time. Drivers will often go out of their way to fill up at a petrol station that offers Nectar points or some sort of incentive.  It costs the retailer little, but makes the customer feel good about their decision and importantly, it brings in business out of all proportion to the investment.  I wonder in today’s cash strapped market, with companies unable to offer pay rises, just how effective small incentives like the odd free apple are in making people valued and contented.

MINI film is mighty powerful

Our film of the MINI Westfield store shows the power and value of this much misunderstood medium. It captured the whole zeitgeist of the BMW Group’s modern retailing in a way a press release or photo never could:

1. You can feel the mood – you’re almost there in the store popping on the 3D glasses
2. See the genuine reaction of customers – bringing an authenticity a quote never can
3. You can see the buzz of the place and footfall for yourself – the joint was jumping!

For us, modern retailing wasn’t about the technology…the iPads, 3D virtual products presenter or the interactive mirror.  It was about the people experience.  You would never have known that unless you had visited the store or watched the film.

Film is so easy to distribute – a couple of clicks to an FTP like YouSendIt or WeTransfer and you can send it anywhere.  Drop it on to YouTube, Vimeo, LinkedIn or Facebook as well.

For a multi-national organisation like the BMW Group the film creates the opportunity for internal people to see what cutting edge initiatives the company is investing without the expense of having to travel there.  For customers it promotes the fun of the brand and gives people an incentive to visit to the store at Westfield Stratford City.

So if you don’t think you can stretch your budget to film.  Think again.  Can you not afford to?  With a little planning and focus it can be remarkably cost-effective.  From brief to deliver was barely more than 3 days.

WATCH FILM>>

We were asked to make a short film capturing the essence of BMW’s new brand store on Park Lane.

Although a dealership has been there for 40 years it had undergone a multi-million pound refurbishment to become a flagship brand store. Proof that retail is detail, everything had been scrutinised from the introduction of touch pad displays to living walls, a giant led screen, stylish new toilets and even the suits worn by the staff.

We’re used to producing high definition, high impact short stories like this, but we had an added challenge.  The initial requirement was to produce the film to be shown to the head of BMW’s Board of Management who was flying in the following week.  Unfortunately he suddenly brought his plans forward to the following day.  Faced with 24 hours notice we shot during the day and edited through the night, delivering the finished film for 8am the following morning.  After an initial viewing it was signed-off and shown at a management meeting later that morning.

As I was leaving our office in Marylebone on a Monday recently I saw the usual queue of customers outside the Le Relais de Venise restaurant.  Queues 20 deep are not uncommon in the evening with customers standing outside shivering as a gale and driving rain chills them to the bone.

It made me think about their business model in a time of recession.  Although London is less affected than other parts of the country, there are dozens of restaurants within a stone’s throw with vacant tables – particularly on a Monday.

I’ve dined there a few times.  The service is not great.  So it’s not that.  There is no choice on the menu either.  Just a walnut salad followed by steak frites.  The only choice you have is how the steak is cooked – rare, medium or well done.  Not even medium rare – non merci!

But then again, that’s it’s secret. In a world where we’re swamped with choice it’s nice to switch off and know what you’re getting.  Spend the evening with friends or business acquaintances chatting and not worrying if the duck is cooked properly or the pasta is fresh.

With retailers trying to offer more and more choice at higher and higher cost to them, perhaps there’s a place for sticking to a simpler, more predictable customer experience.

Tesco has been queen of shops for most of our working lives.  But is their reign about to come to an end?  In the wake of a disappointing trading statement and a £5 billion slump in its stock market value, customers are legitimately beginning to ask: what’s the real value of Tesco to me?

One look at the giant supermarket’s proposition, Every Little Helps, tells you everything you need to know about why Tesco has been so successful for so long – and why it has finally stumbled.  Ask yourself what it says to the shopper.  One of its key subliminal messages is that ‘We’re on your side and we know that every little saving we give you helps to make your life easier.’  Price is a key part of the message.

Tesco has underpinned its proposition with a series of price promotions over the years designed to make us believe that we are saving real, hard-earned cash. 

The first problem is that customers have started to believe these savings aren’t real. The notorious £4 chicken (or rather, allegedly, the £5 blink-and-you-missed-it chicken) is a classic example. 

The second problem is that, according to many commentators, shoppers never really much liked Tesco in the first place.  Its ruthless expansion, bloated high street omnipresence, and tired and utilitarian store formats have created a growing unease among customers.  It’s the brand we’ve all supported by default, but without any real enthusiasm.

And the reason?  Because for years it’s been our nearest and cheapest supermarket.  Take away the ‘cheapest’ part of the equation, particularly in these austere times when people are shopping around like never before, and what’s left?  How hard can it be to drive a few extra miles to Sainsbury’s or Morrisons, if we feel that they are offering us real – rather than illusory – value?

Here’s a thought.  Who really likes flying with Ryanair?  We travel on their planes because they’re cheap as chips, with no pretence at luxury and arguably only a passing acquaintance with customer service.  Take away Ryanair’s low-fare advantage and how long do you think the airline would survive? 

When your value proposition is solely about price, there’s only one way to go when you lose that price advantage.  Could Tesco be about to find this out?

Amidst the splenetic debate about bankers’ bonuses, I was chatting the other evening to a friend with a long career in investment banking, much of it spent in Germany.  He was pointing out that Germany’s economic success is in part down to its backbone of privately-owned companies, at the heart of which is a vibrant Mittelstand community – the many thousands of small- to medium-sized private companies which feed Germany’s mighty manufacturing machine.

Germany’s Mittelstand is booming – with double-digit growth according to some measures.  René Obermann, the CEO of Deutsche Telekom, observed last year that this is “faster than the Chinese economy.”  It set me thinking.  The UK Government repeatedly tells us that our economy will stand or fall on the success of our own entrepreneurs and growing private companies.  But how much encouragement do we really give this crucial constituency?

In a surprising burst of humility, my investment banker friend said that his own industry is probably partly to blame for preventing many private companies from maturing into the adulthood they deserve.  “The problem is, investment banks are incentivised to churn the private market,” he said.  “We positively encourage businesses to grow as fast as possible, then sell out after five or six years to one of their publicly-listed competitors – or to private equity, which holds onto them for another three or four years and then sells them on.”

He has a point.  With the right financial support and fiscal encouragement from Government, how many more JCBs, Virgins, John Lewis’s and Triumphs would we have in the UK?  These are great brands, big brands, market-leading brands – all privately-owned (not a venture capitalist or private equity investor in sight), unhindered by the constraints of a listed share price or the short-termism of institutional investors.

As our investment bankers ponder their worth and their bonuses this January, it might be worth them reflecting on the Mittelstand – and how they could help create the same phenomenon here.