The fall of the Department Store
It was more sad news for the high street recently as House of Fraser announced they were closing 31 of their shops resulting in huge job losses and yet another empty unit in some town centres.
In Torquay we’ve had some losses – British Home Stores and Woolworths to mention just a couple. Some have survived like Marks and Spencers. Some are clinging on like Claire’s Accessories. And some have returned like Borders book shop which closed, reinvented itself then came back to exactly the same unit, having been empty for several years with a thriving coffee shop attached and a more experience driven philosophy.
I was reading an article with interest on the BBC News website entitled “Why we no longer love department stores”. I don’t necessarily think we don’t love them any more – the likes of Harrods and Selfridges are testament to that. And some department store chains are still doing well like John Lewis. The thing is – like any business, you must move with the times.
If Apple were still producing computers the same as thirty years ago it would be a very different company and probably not exist at all. We expect manufacturers of things like cars, sofas and televisions to move on and continually evolve, so why not department stores too?
The BBC article gives five reasons why they think we no longer love department stores and these can easily be related to any industry, but it struck me that hotels are no different.
Why is it that some hotels and hotel chains continue to be successful over a hundred years after opening, yet others fall by the wayside and go out of business? Some end up in such a dilapidated state that they end up having to be demolished, others however lavish in multi-million pound refurbishments.
Here’s their list, and I’ve related them back to the hotel industry:
1. Lack of investment and innovation
Research has found that some department stores have changed little, or not at all, for some ten or twenty years.They haven’t invested in their range or shop floor and certainly not in their online offering.
There has to be a unique selling point – a reason to go there rather than shop on line.How many department stores look the same sixties drab concrete they did when you were a kid and the inside looks just an un-inviting.
I’m not saying it would suit a department store but walk into a store like Abercrombie & Fitch and they have loud music, disco lights, massive TV screens, plants, different ways to display items, really visible and friendly looking staff, topless (male) models welcoming you.It’s a real experience.If you were passing, you’d pop in just for a look and just for the experience. While you’re there, how many are then tempted to buy?In contrast, how excited did you last get walking round M&S?Yes they’re professional and polite and well presented but it’s all so sedate and boring.
Hotels need constant investment and innovation too.Some larger chains have self-check in, no desks, cafés in reception, free wi-fi and a real buzz about the place – like Premier Inn’s new Hub in London. As they say in the corporate world – if you keep doing the same thing - you’ll keep getting the same results.Change, move with the times, no matter how hard it is.Investment is noticed by shoppers and they appreciate it.
We’ve changed so much since we opened only just over three years ago.We added aircon, iPads, Readly, Nespresso coffee makers, changed some seats, re-decorated some rooms, replaced some headboards, the list goes on and on.Our latest innovation is making two of our rooms so far Smart rooms with Alexa.Our regular guests can see that each time they come back, the experience just got better, so they keep coming back and keep recommending us.If they know what to expect and they always get the same as last time, no matter how good it was, they will eventually get bored and move on.
2. Out of fashion
The BBC point out that some department stores have not kept up with the pace of fashion.Some clothing retailers like Primark continually lead with new product ranges and up to the minute fashions at a fraction of the price.
Why not but a cheap top which is height of fashion, wear it a few times and then get rid of it?You can do that at their prices, but with an expensive item that was already “a bit last year” then you’re going to need it to last a good couple of years and you know you’re not going to be wanting to wear it again by next summer.
Fashions regarding hotels can be tricky and a costly mistake.It’s better to make your own trends than to follow fashions.A classic style with easy to replace cushion and throw accents works best.
We could be described as cutting edge with our style.But we’re leading the way very much with our own design ideas.It’s rather nice to know that I started the trend for black and white with citrus yellow and zebra accents that now seems to be available all over the high street as well as copied on the Big Brother set.
I read the other day that the open lamps with vintage style bulbs that have been used so much in both domestic and commercial settings, and particularly those in the latest copper type colour are already now going out of fashion.Better to lead and create something unique than to follow and soon fall behind.
3. Too much discounting
I talk about this a lot in B&B circles and also in my training course.It’s just like department stores who decided the January Sale was not enough, so they added their summer sale, the pre-Christmas sale, the Autumn sale, the Easter sale and so on until their customers will only shop there when there’s a sale.This may keep the till ringing for part of the year but with lesser profit margins there’s less to spend on the investment and innovation we’ve talked about above.You also get to the point where shoppers refuse to pay full price and they wait for the next sale.
Take Blackpool as an example of a seaside town which has suffered considerably over the years and although it’s finally part of a regeneration programme, many of the old problems persist.
To gain more business, a B&B would reduce it’s price by £10.This was seen by the next door neighbour who did the same and so on along the road.The first person ends up the same price as the others in the road and decides to go down a further £10.Before long, you end up with rock bottom prices (I’ve seen B&B at £9.50 per person!) and no one wins as everyone is making no profit (and quite possibly a loss) and no one has money to invest or improve their property.Fast forward twenty years and that’s why you have hundreds of B&Bs in a terrible state giving the industry a bad name.I’m glad to say some B&Bs in Blackpool are bucking the trend and proving that cheap is not always best and managing to fill their rooms at prices over £100.These run down properties are why you can buy a 25 bedroom hotel for less than £200,000!They probably need a million pounds spending on them to bring them to the point where you could charge a decent price again.
We do have occasional offers at The 25 and our VIP Guest List rewards repeat and direct bookers, but we generally hold our prices.Once you knock off the VAT, the costs like food, linen, toiletries, and the many extras we put in the bedrooms, then commission to third parties, advertising, licenses, bills, tax and National Insurance and on and on, there’s not much left even at our prices and doing everything ourselves.However, we hope we make enough to be able to plough the profit back in to continually invest and improve The 25.
4. Hard to navigate stores
Some department stores are huge and it makes sense to downsize or sublet some of the space, others are in old buildings where the layout is not open plan and effectively lots of small rooms, making it easy to get lost and hard to find your way round. It also makes it difficult to entice customers to look at or buy other products or impulse buys if many shoppers never see the displays.
Like a department store, accommodation providers need to be easy to navigate both on line and in person. It can be hard for a smaller B&B, and your first impression can often be of a small enclosed dark hallway making it difficult to check in – particularly with large suitcases. We are lucky at The 25 and have a large reception area. However, when we arrived, it was packed with many more chairs, another sofa, a massive desk, leaflets everywhere, plants, curtains and so on. It made for a very busy area and was not so easy to move around. Having moved our office into what was once the guest lounge, the desk could go and we reduced the amount of seating. There’s still a couple of chairs and a small sofa but it’s now a bright and open space. Our rainbow mannequin lamp is a statement piece in reception and instantly makes our guests realise they’ve arrived somewhere a little bit different to the standard accommodation offering.
Likewise, a website should be easy to navigate too, with clear menu options and plenty of references to where you should go next. Every page on our website has the main menu across the top, but also a large “Book Now” button, our phone number, and links to commonly used pages.
5. High Street slowdown
Finally, there’s been a general change in shopping habits in recent times.Less people go out for the day to wander round the shops and fewer and fewer need the likes of a department store.
However, despite the doom and gloom of the end of the traditional high street, many shops and indeed high streets are thriving.Totnes is a twenty minute drive from The 25 and I’ve never seen it anything other than packed.It has fought and won against the incoming chains and instead of Starbucks and Costa you’ll find an array of independently owned tea and coffee shops selling homemade cakes.The whole street is full of independent small businesses, interspersed with an interesting museum, the odd pub and office and a market square.High streets can thrive and so can department stores but there needs to be a point of difference, an experience, a reason to go.
At The 25 Boutique B&B, we realised (when we were still Glenross Guest House) that to survive in the very overcrowded market in Torquay we had to be offering something different.That’s why we wanted to be five star and top of our game.We also wanted our boutique philosophy to differentiate us. Our whole experience needs to be different and unique, from our décor to our daily homemade treats, from the technology we offer to the excellent and personal level of customer service.
I wish all the shops on the high street well and personally like to spend a good few hours wandering round the shops but hope they can maybe look back at us in the accommodation sector, those that are doing well, those that survive, those that continually adapt and change and emulate some of that themselves to help take them into the future.
Don't end up like them!
Is your small hotel or B&B struggling? Do you need a fresh pair of eyes? Andy offers consultancy and overnight mystery shopper visits to help point you in the right direction. Give Andy a call now or email to discuss your requirements.