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2016 Masters Research Dissertation Programme Winners Announced

The winners of the CDRC’s 2016 Masters Research Dissertation Programme were recently announced at the Demographics User Group Conference.

The CDRC led programme provides the opportunity for students to work directly with an industrial partner and links students’ research to important retail and ‘open data’ sources.  Once again the standard of the projects was extremely high this year, with students working with a range of partners, including Sainsbury’s, Shop Direct, Boots and E.ON.

The Winners

Prize winner: Luis Francisco Mejia and Movement Strategies

Luis’ research used temporal geodata collected from the mobile phones of attendees at a festival to model movements across a festival site. In particular, he looked at using complex machine learning techniques such as artificial neural networks to model and predict and when each participant is likely to visit catering facilities across the festival site. His models were then tested with a random selection of data which were not used in the original analysis and were found to be very successful.

The judges felt that this was a well-executed study with very clear aims and objectives. They also felt that the commercial relevance of the work is well communicated.

View Project Abstract

Runner up: Ffion Carney and E.On

Ffion’s study aimed to identify areas that contain a high proportion of vulnerable households that should be targeted as part of the ECO, by taking into account demographic and property characteristics alongside average annual energy consumption data.

The judges highlighted that this project tackles a very interesting research area and commented that Ffion had devised an appropriate methodology which could clearly address the research questions.

View Project Abstract

Runner up: Mariflor Vega and Sainsbury’s 

The aim of Mariflor’s study was to develop a means to understand the different types of customers based purely on the content of their baskets. She used a range of text mining techniques to harvest the data and group the customers.

The judges felt that this was a comprehensive analysis which was completed, explained, interpreted and presented well.

View Project Abstract

Other projects completed this year included:

  • Modelling Multi-Channel Adoption at Sainsbury’s – Sainsbury’s
  • An investigation of what triggers customer activiation of credit facilities – Shop Direct
  • An analysis of Argos concession store performance located in Homebase and Sainsbury’s stores across the UK – Argos
  • How does competitor presence influence the performance of click and collect sites?- Sainsbury’s
  • Identifying drivers of full price sales of clothing and footwear for an online retailer – Shop Direct
  • The performance of Argos concessions in other stores – Argos
  • Can interactive data visualizations enable a retailer to identify new insights about customer purchase behaviour? – Sainsbury’s
  • Youths Spending & Geodemographics – goHenry
  • Topic extraction and document classification on textual survey data with unsupervised modelling techniques. – CACI
  • An empirical study in to Co-op On-the-Go Stores’ turn-in rate using a scorecard approach – The Co-operative Food
  • An investigation into the potential of Bluetooth Beacons to monitor the movement of people on public transport: A preliminary case study of the Norwich Bus Network – Movement Strategies
  • Customer Segmentation using spatio-temporal data – Boots

 View all previous projects

2017 Retail Masters Dissertation Programme

We are now seeking proposals from businesses for new projects due to commence next spring (2017). Further information.

We hope to advertise the 2017 opportunities towards the end of the year.

Should you have any queries relating to the programme, please contact Guy Lansley.

Demographic User Group Conference 2016

On 13th October 2016 the CDRC sponsored and supported the 13th annual Demographics User Group Conference (DUG), hosted at the Royal Society.

The conference focussed upon “Empowerment, Enquiry and Empathy – Reducing the soft skills gap” and bought together people from DUG’s 15 member companies, with special attendees from guests in government and universities, to spread knowledge and stimulate new ideas.

There were some great presentations and stimulating audience discussion over the course of the day around the conference’s key questions:

1. ‘What difference would it make to you, if analysts had clear paths along which they could develop their careers?’
2.’ In your own context what is the current balance between organisation and individual needs when considering analytical delivery?’

Presentations included:

  • Data Science and real science: Narrative and decision making in the academy and the ‘real world’ – Seth Spielman, Associate Professor of Geography, University of Colorado
  • Update on the Consumer Data Research Centre – Prof Paul Longley, CDRC Director
  • Fishbowls & Fabulous Failures: Are you curious? – Neil Wooding, Director of Strategic Planning and Performance, ONS
  • Democracy, Meaning and Negotiation: Empowering analysts both amateur and professional – James Morgan, Director of MI, British Gas
  • Team building by doing data for good – James Morgan, Director of MI, British Gas

Prof Paul Longley also announced the winners of the CDRC’s 2016 Masters Research Dissertation Programme:

Prize winner: Luis Francisco Mejia and Movement Strategies
Runner up: Ffion Carney and E.On
Runner up: Mariflor Vega and Sainsbury’s

Find out more about the Masters Research Dissertation Programme.

If you missed the conference, we will be making the videos available shortly and in the meantime you can view our Storify for an overview of the day.

Blog: Geostat2016, Albacete

In late September, CDRC Research Fellow Robin Lovelace attended Geostat2016 in Albacete.  He provided the below write up on his return.

In late September I went to GEOSTAT 2016. Given the amount of fun had at GEOSTAT 2015, expectations were high. The local organisers did not disappoint, with a week of lectures, workshops, spatial data competitions and of course lots of Geostatistics. It would be unwise to try to systematically document such a diverse range of activities, and the GEOSTAT website provides much further info. Instead this ‘miniwriteup’ is designed to summarise some of my memories from the event, and encourage you to get involved for GEOSTAT 2017.

To put things in context, the first session was a brief overview of the history of GEOSTAT. This is the 12th GEOSTAT summer school. In some ways GEOSTAT can be seen as a physical manifestation of the lively R-SIG-GEO email list. That may not sound very exciting. But there is a strong community spirit at the event and, unlike other academic conferences, the focus is on practical learning rather than transmitting research findings or theories. And the event was so much more than that.

There were 5 action packed days covering many topics within the broad field of Geostatistics. What follows is an overview of each that I went to (there were 2 streams), with links to the source material. It is hoped that this will be of use to people who were not present in person.

Day 1

After an introduction to the course and spatial data by Tom Hengl, Roger Bivand delivered a technical and applied webinar onbridges between R and other GIS software. With a focus on GRASS, we learned how R could be used as a ‘front end’ to other programs. An example using the famous ‘Cholera pump’ data mapped by John Snow was used to demonstrate the potential benefits of ‘bridging’ to other software. The data can be downloaded and partially plotted in R as follows:

u = "http://geostat-course.org/system/files/data_0.zip"
download.file(u, "data_0.zip")
unzip("data_0.zip")
old = setwd("~/repos/geostat2016-rl/")
library(raster)
## Loading required package: sp
bbo = shapefile("data/bbo.shp")
buildings = shapefile("data/buildings.shp")
deaths = shapefile("data/deaths.shp")
b_pump = shapefile("data/b_pump.shp")
nb_pump = shapefile("data/nb_pump.shp")
plot(buildings)

setwd(old)

In the afternoon Robert Hijmans gave a high level overview of software for spatial data analysis, with a discussion of the Diva GIS software he developed and why he now uses R for most of his geospatial analysis.

The talk touched on the gdistance package, and many others. Robert showcased the power of R for understanding major civilisational problems such as the impacts of climate change on agriculture. His animated global maps of agricultural productivity and precipitation showed how R can scale to tackle large datasets, up to the global level involving spatial and temporal data simultaneously.

There were a few political asides. Robert mentioned how agrotech giant Monsanto paid almost $1 billion for a weather prediction company. He detoured deftly through a discussion of ‘big data’, making the observation that often ensembles of models can provide better predictions than any single model working on its own, with political analogies about the importance of democracy.

More examples included health and estimates of dietary deficiencies at high levels of geographic resolution. A paper showing fish and fruit consumption across Rwanda illustrated how map making in R, used intelligently, can save lives.

It was revealing to learn how Robert got into R. While he was working at the International Rice Research Institute. “It forces you to write scripts.” This is good for ensuring reproducibility, a critical component of scientific research. It encourages you to focus on and understand the data primarily, rather than visualising it. On the other hand, R is not always the fastest way to do things, although “people often worry too much about this”. Your time is more important than your computers, so setting an analysis running is fine. Plus there are ways to make things run faster, as mentioned in a book that I’m working on, Efficient R Programming.

R is great if you use it every data, but if you only use it less than once a week it becomes difficult.

If you just want a one-off spatial analysis data program, Robert recommended QGIS. After a brief overview of spatial data in R, Robert moved on to talk about the raster package, which he developed. This package was developed to overcome some of the limitations with sp, the foundational package for spatial data in R.

A final resource that Robert promoted was RSpatial.org, a free online resource for teaching R as a command line GIS.

Edzer Pebesmer delivered the final session of the first day, on Free and Open Source Software (FOSS) for Geoinformatics and Geosciences. After the highly technical final C++ examples from the previous talk, I was expecting a high level overview of the landscape. Instead Edzer went straight in to talk about source code, the raw material that defines all software. The fundamental feature of open source software is that its source code is free, and will remain free.

Day 2

The second day of the course was divided in two: stream A focussed on environmental modelling and stream B compositional data. I attended the environmental modelling course taught by Robert Hijmans. The course was based on his teaching material at rspatial.org and can be found online.

We started off by looking at the fundamental data structures underlying spatial data in R. Why? It’s useful to be able to create simple example datasets from scratch, to understand them.

library(sp)
x <- c(4,7,3,8)
y <- c(9,6,12,11)
xy <- data.frame(x, y)
SpatialPoints(xy)
## class       : SpatialPoints 
## features    : 4 
## extent      : 3, 8, 6, 12  (xmin, xmax, ymin, ymax)
## coord. ref. : NA
d = data.frame(v1 = 1:4, v2 = LETTERS[1:4])
spd = SpatialPointsDataFrame(coords = xy, data = d)
plot(spd)

The basic functions of the raster package are similar.

library(raster)
r = raster(nc = 10, nr = 10)
values(r) = 1:ncell(r)
plot(r)

as.matrix(r)
##       [,1] [,2] [,3] [,4] [,5] [,6] [,7] [,8] [,9] [,10]
##  [1,]    1    2    3    4    5    6    7    8    9    10
##  [2,]   11   12   13   14   15   16   17   18   19    20
##  [3,]   21   22   23   24   25   26   27   28   29    30
##  [4,]   31   32   33   34   35   36   37   38   39    40
##  [5,]   41   42   43   44   45   46   47   48   49    50
##  [6,]   51   52   53   54   55   56   57   58   59    60
##  [7,]   61   62   63   64   65   66   67   68   69    70
##  [8,]   71   72   73   74   75   76   77   78   79    80
##  [9,]   81   82   83   84   85   86   87   88   89    90
## [10,]   91   92   93   94   95   96   97   98   99   100
q = sqrt(r)
plot(q)

x = q + r
s = stack(r, q, x)
ss = s * r # r is recycled so each layer is multiplied by r
1:3 * 2 # here 2 is recycled
## [1] 2 4 6

Raster also provides simple yet powerful functions for manipulating and analysing raster data, including crop(), merge() for manipulation and predict(), focal() and distance(). predict() is particularly interesting as it allows raster values to be estimated using any of R’s powerful statistical methods.

library(dismo)
g = gmap("Albacete, Spain", scale = T, lonlat = T)
## Loading required namespace: XML
plot(g, interpolate = T)
dismo::geocode("Universidad Castilla la Mancha")
##                    originalPlace
## 1 Universidad Castilla la Mancha
##                                          interpretedPlace longitude
## 1 Paseo Universidad, 13005 Ciudad Real, Cdad. Real, Spain -3.921711
##   latitude      xmin      xmax     ymin     ymax uncertainty
## 1 38.99035 -3.922007 -3.919309 38.98919 38.99189         131

Day 3

The third day started with a live R demo by Edzer Pebesmer on space-time data. Refreshingly for a conference primarily on spatial data, it started with an in-depth discussion of time. While base R natively supports temporal units (knowing the difference between days and seconds, for example) it does not know the difference between metres and miles.

This led to the creation of the units library, an taster of which is shown below:

install.packages("units")
library(units)
m = with(ud_units,  m)
s = with(ud_units,  s)
km = with(ud_units, km)
h = with(ud_units,  h)
x = 1:3 * m/s

The rest of the day was spent analysing a range of spatio-temporal datasets using spacetime, trajectories and rgl for interactive 3d spacetime plots.

In the parallel session there were sessions on CARTO and the R gvSIG bridge.

Day 4

Day 4 was a highlight for me as I’ve wanted to learn how to use the INLA package for ages. It was explained lucidly by Marta Blangiardo and Michela Cameletti, who have written an excellent book on the subject, which has a website that I recommend checking out. Their materials can be found here: http://geostat-course.org/node/1330 .

In parallel to this there was a session on Spatial and Spatiotemporal point process analysis in R data in R by Virgilio Gomez Rubio and one on automated spatial prediction and visualisation by Tom Hengl.

Day 5

After all that intense geospatial analysis and programming activity, and a night out in Albacete for some participants, we were relieved to learn that this final day of learning was more relaxed. Furthermore, by tradition, it was largely participant-led. I gave a talk on Efficient R Programming, a book I’ve written in collaboration with Colin Gillespie; Teresa Rojos gave a fascinating talk about her research into the spatial distribution of cancer rates in Peru; and S.J. Norder gave us the low-down on the Biogeography of islands with R.

One of the most exciting sessions was the revelation of the results of the spatial prediction game. Interestingly, a team using a relatively simple approach with randomForestSRC (and ggRandomForests for visualisation) one against others who had spent hours training complex multi-level models.

Summary

Overall it was an amazing event and inspiring to spend time with so many researchers using open geospatial software for tackling pressing real world issues. Furthermore, it was great fun. I strongly recommend people dipping their toes in the sea of spatial capabilities provided by R check out the GEOSTAT website, not least for the excellent video resources to be found there.

I look forward to hearing plans for future GEOSTATs and recommend the event, and associated materials, to researchers interested in using free geospatial software for the greater good.

Find out more about Robin’s work at http://robinlovelace.net/

 

Using Big Data To Map A City’s ‘Heartbeat’

CDRC researcher Oliver O’Brien recently developed the Tube Heartbeat, which shows the London Underground pulsing as passengers make their way around the city over the course of a typical weekday.  The visualisation combines the power of the HERE Maps API for JavaScript with data from Transport for London.

 

Nearly five million journeys were tracked in a single day to create the data visualisation, but users can also select individual Tube stations to see how passenger traffic varies from place to place.  O’Brien highlights a number of interesting examples:

  • Peak time at Leicester Square is after 10pm – the tube is a popular way to get back to homes and hotels after a night at the theatre.
  • Closing museums cause an early peak in South Kensington, while shoppers on Oxford Street can also be seen in the stats.
  • School kids cause spikes in usage across certain quieter stations, particularly in outer London
  • West ham’s morning peak entry is an hour before everyone else.  Other stations have two morning peaks.
  • Some places are changing character.  Stratford now has almost as many people arriving as leaving in the morning peak

Articles on the Tube Heartbeat can be found on Forbes, Wired and the TfL Digital Blog.

CDRC Intern Shortlisted for Information is Beautiful Award

CDRC Data Visualisation Intern, Herwig Scherabon, has been shortlisted for two categories in the KANTAR Information is Beautiful Awards.  The visualisations which Herwig developed, whilst studying for an MDes in Graphic Design at Glasgow School of Art, have been nominated for awards in the ‘Data Visualisation’ and ‘Interactive Visualisation’ Categories.

Affordability Explorer

herwig-2

See visualisation and vote

The Affordability Explorer is an interactive app that maps data about the housing affordability of 584 cities. The main intention is to inform about relation between house price, income and affordability.

Income Inequality in Los Angeles and Chicago 

herwig

See visualisation and vote

The two large prints (150x75cm) are visualizations of income inequality in Los Angeles and Chicago.  The images are abstract diagrams of these cities and show a high resolution matrix of blocks. The height of these blocks corresponds to the income in the respective output area.

Herwig is currently completing an internship at the CDRC and Leeds Institute for Data Analytics.  We will be sharing more of his visualisations over the coming months.

UK food retailing and the challenge of the ‘new retail’

Alan Treadgold is a London-based global adviser to retail businesses.

He recently provided this guest blog.

In mid-August, ASDA, the UK’s third largest food retailer by sales, announced its worst ever sales results. Like-for-like sales in stores open for more than one year (a standard industry measure) fell by 7.5% for the three months to the end of June. That was even worse than the 5.7% decline reported for the previous quarter and the 5.8% decline for the quarter before that. In fact, ASDA is now in a period of 8 consecutive quarters of declining like-for-like store sales. For a food retailer, sales declines of these levels are calamitous. Profit margins are very slender at the best of times (and these are most definitely not the best of times for the major grocery retailers in the UK) and big losses of sales volumes get strongly magnified in terms of their impact on profitability. And yet on exactly the same day that ASDA was confirming just how bad its sales position is, Amazon announced that it would open in early 2017 another fulfilment centre – its thirteenth – in the UK. Part—but only part—of the reason why Amazon needs more capacity is due to the initial success of its Amazon Fresh food delivery business which launched in the UK in July 2016.

“ASDA KX57OLO 110110”, by EDDIE. CC BY-ND 2.0 via Flickr. - See more at: http://blog.oup.com/2016/08/food-retailing-challenge/#sthash.4BYl9Tdh.dpuf
ASDA truck, by EDDIE via Flickr

 

So what’s going on? Is ASDA’s trading difficulties and Amazon’s continued expansion an illustration in a nutshell of a transformation from the store-based world of ‘old’ retailing to the online world of ‘new’ retailing? Well, yes and no.

For ASDA the conundrum is that, as arguably the most consistently price focused of the major UK grocers, the business ought to be trading better than it is in the face of strong competition from the aggressive price-led grocery discounters, Aldi and Lidl. The fact that it isn’t points to big structural challenges. Price deflation is a structural feature of the UK grocery retailing marketplace. It is almost impossible to increase prices to shoppers who have a growing range of shopping options, including online. And when you can’t – structurally – increase prices you have to have an offer and a brand that truly engages with shoppers in order to add sales volume, and you have to have a very, very efficient cost base. ASDA doesn’t appear to have the first and perhaps not the second either. At the same time as it’s trying to ‘fix the basics’ of its existing business, ASDA is also challenged to radically reconfigure its business to better fit with the very changed expectations of a lot of shoppers. What this means in practice is a very strong online ordering and fulfilment business as well as smaller stores in more convenient locations that work for busy shoppers wanting to buy smaller amounts of food more frequently and closer to the point of need. ASDA doesn’t have either.

For Amazon there is a sense of a business which continues to invest ahead of the curve in that the infrastructure is being built while the business works simultaneously to add more shoppers and more sales volume. Jeff Bezos has spent the entire history of Amazon preaching the same message to his sometimes impatient investors: stick with us and sustained profits will come as volumes grow. That’s looking much closer today than it did even a few years ago. In this sense Amazon’s challenge is the exact opposite of ASDAs. While ASDA is challenged by declining sales and loss of customer engagement, Amazon is dealing with the challenge of absorbing strong sales growth and more customer acquisition across multiple categories, including now grocery

Where will this end? It’s clear that there’s too much capacity in UK food retailing and the challenges are getting worse as the discounters grow and the online operators advance further. More large stores will close and more price competition seems inevitable which will further strain already marginal profitability and the patience of investors. Indeed, investor patience may be so tested that ownership changes will happen. Shoppers have more choice and retailers have more opportunities to realise them, but the transitional challenges are tremendous.

Alan Treadgold is the author, together with Jonathan Reynolds (CDRC), of Navigating the New Retail Landscape: A Guide for Business Leaders (OUP 2016).

Navigating the New Retail Landscape
Navigating the New Retail Landscape

CDRC Researcher named as UKDS Data Impact Fellow

CDRC PhD Student Rachel Oldroyd has been named as one of five UKDS Data Impact Fellows.

The programme is designed to support the use of UK Data Service data and resources by new generations of scholars through the research partnerships they develop and the students they teach. The quality of applications was high and it was a difficult choice for the judges who additionally awarded two runners-up prizes.

The Fellows will now begin new activities to extend the impact of their research and will write for the UKDS Data Impact Blog about their progress and develop case studies as they go on to share the outcomes of their role as UK Data Service Data Impact Fellows.

Rachel Oldroyd is a quantitative human geographer based at the Consumer Data Research Centre (CDRC) within the Leeds Institute for Data Analytics (LIDA) at the University of Leeds. She commented: “I’m delighted to be named as one of five UK Data Impact Fellows. I’m a huge advocate of the UK Data Service so I’m looking forward to promoting their data and resources through my research and teaching activities. It’s also a great opportunity to increase the impact of my research in food safety.”

Rachel started a part-time ESRC White Rose Studentship in October 2015 and her PhD is centred on spatial data analytics for food safety, with particular focus on foodborne illness. Her research investigates the incidence of foodborne illness in the UK through innovatively combining data sources such as the UK census, online restaurant reviews, socio-economic data and food establishment hygiene scores to identify populations at risk; construct spatial-temporal models of food safety at varying geographies; and explore the utility of these models as a means to target scarce resources.

Find out more about the UKDS Data Impact Fellow 2016 programme.

CDRC Director presents at ODI Futures Meeting

CDRC Director, Paul Longley gave a talk at the ODI Futures meeting held in partnership with dunnhumby on the 21st September. The theme of the meeting was ‘Show me the Future of Data in Retail’. Paul reviewed the service structure of the CDRC and discussed the forthcoming CDRC/Office for National Statistics Names Classification tool.

CDRC welcomes new MSc Students

CDRC Director, Professor Mark Birkin, welcomed 50 new students to the Consumer Data Research Centre today.  The students, who visited the Centre for the first time, are studying on our new MSc Consumer Analytics and Marketing Strategy course.

Taught by leading academics from the University of Leeds, the course explores a range of analytical techniques including applied Geographic Information Systems (GIS) and retail modelling, consumer and predictive analytics and data visualisation.

Throughout the course the students will also focus on developing the softer skills to use the results of these analyses to inform decisions about marketing strategy.

The academic team leading the course – Prof Matthew Robson, Dr Andy Newing & Dr Yeyi Liu – highlighted some of the key opportunities for students in the coming year:

Delivering a fresh and exciting MSc

Prof Matthew Robson: “There are no other postgraduate programmes currently combining consumer science with marketing strategy. Our new MSc is fresh and exciting in its combination of consumer analytics content (largely provided by the School of Geography), with marketing strategy knowledge (provided by the Marketing Division of the Business School).”

Developing relevant skills and knowledge

Dr Yeyi Liu: “Students can expect to gain relevant marketing knowledge including understanding consumer behaviour, developing marketing strategy and designing integrated marketing communications. They will gain important analytical skills, including customer data analysis, predictive analysis and effective decision making.”

Gaining ‘hands on’ experience

Dr Andy Newing:We firmly believe that it is important for our students to gain ‘hands on’ experience. They will work with examples of real consumer data and realistic business scenarios throughout the course. In Semester 2 we offer a taught module, Marketing Research Consultancy Project, which gives students the opportunity to work in small groups on a live project or problem set by our partner firms. Students can also opt to complete their summer research project (dissertation) as a consultancy project working with an external company, using skills from the course to address a practical problem for that organisation. This could include developing a marketing strategy, identifying opportunities for a company to expand its store network, or evaluating potential new markets in which to launch a new product or store.”

The full interview with the academic team and further information on the 2017 course can be found here.

From ‘conforming stores’ to digital first: the changing world of retail

Alan Treadgold is an independent consultant to retail and consumer products companies globally. He has a long background in advertising and management consulting.

Alan recently provided this guest blog.

I was in a taxi in Hong Kong several years ago, stuck in traffic in the pouring rain. I said to my Hong Kong-based colleague how notable it seemed that all the apartment buildings looked exactly the same. “Cheaper that way isn’t it?” was his response, “Just design one then put up 50. Obvious really.”

Retailing used to feel much the same as designing apartment blocks in Hong Kong. Just design one store then roll out 20, 50, 100, 1000 of them. “Conforming stores” were very much the order of the day, especially if you were in the business of ‘big box’ retailing.

But today the world of retailing looks completely different…

 

Shopping trolley by Yandle. CC-BY-2.0 via Flickr
Shopping trolley by Yandle, Flickr

 

No-one talks about conforming stores anymore. In fact, there’s plenty of people (although I’m not one of them) who would say that the future of retailing isn’t a physical store-based activity at all. Digital natives have never lived in a world without mobiles and high speed internet access so the world they have grown up in is ‘digital first, physical stores maybe’.

Whatever the end game looks like, it’s very clear that the challenges for retail enterprises and for the people tasked with leading them look very, very different today. As recently as a generation of leaders ago, coming up through the stores and having an instinctive feel for merchandise was seen as much the most important – perhaps even the only – pre-requisite to achieving success.

Today, when leaders of most retail businesses are asked what their main pre-occupations are – over and above the previous hour’s sales, obviously – you tend to hear a lot about needing to be much more competent in engaging difficult to engage digitally literate shoppers.

Here’s just a few of their concerns:

  • Having far more visibility on their shoppers and on where product is in much more complicated supply chains.
  • How to keep stores relevant and appealing to shoppers.
  • How to rebuild distribution networks so that they can cost effectively deliver huge numbers of small baskets of products to shoppers’ homes, workplaces and so on.

You’ll also tend to see a great deal of hand wringing about how so much more cost and complexity is being added into their business while, at the same time, shoppers simply won’t pay more because they know the price of everything and have almost infinite choice of where to get it anyway.

There’s a common thread to all of these very real and very widely held concerns…

The skills of individuals, the capabilities of the enterprise, and the organisation of the business all need to be very different today from what has been ‘fit for purpose’ and worked well in the past. Art Peck, CEO of Gap said it well when he said that: “We’ve been doing business the same way for 40 years, and there are very few 40-year-old business models that are successful forever.”

For many retail enterprises, this will almost certainly mean that skillsets need to become that much deeper and, well, that much more skilled.

Consider the marketing function as an example. Deep skills around digital campaign design and engagement through social media were simply not part of the marketing department skillset even a few years ago. Today they are mandatory.

In some areas – notably the logistics function for many – investment and focus needs to be very substantially ramped up. Other areas such as store development – traditionally regarded as being at the heart of a retail business – are being de-emphasised, if not absolutely then certainly relatively.

And this changes organisational structures.

It’s very easy now to imagine retail businesses with far flatter structures than they have had in the past, with the objective of making decision making faster and more joined up across an ever-proliferating set of touchpoints to the shopper. It’s also very possible to see a wide range of functions such as stores and marketing reporting into a Director of Shopper Engagement or some similar role.

As their shoppers and their businesses change, so too do the requirements of those tasked with leading retail businesses.

The days of the merchant prince are almost certainly over for many. So too are the days when CEOs had to have spent 20 years or more coming up through the stores before they were considered ready to lead the business. Too store-centric and too limited a world view will be how many now view such a progression. This means that it’s logical and helpful for many retailers to want to look outside the sector for their leaders.

The personal leadership attributes that look likely to define success today are very much around an ability to recruit and retain the best talent; to define and navigate paths of change that may leave the business looking very different to that which went before, and to create a culture that embraces risk, encourages innovation, and is tolerant of failure as the necessary price of change. Important also is the personal ability to lead effectively in environments that are necessarily defined above all else by uncertainty.

Sounds challenging? Well, yes it is. But the rewards are great and, even more to the point, the risks of thinking that this is an era of “business as usual” in retail-land are gone forever.

Alan Treadgold is the author, together with Jonathan Reynolds (CDRC), of Navigating the New Retail Landscape: A Guide for Business Leaders (OUP 2016).

Navigating the New Retail Landscape
Navigating the New Retail Landscape