Retail therapy

Posted on Jun 30 2017 - 10:10am by Editorial Content
RATING

Technology Reseller talks to Carl Oxley, managing director of Westcoast Retail, about how the company’s merchandising team can help UK retailers improve efficiency and maximise sales

Carl Oxley, Managing Director, Westcoast Retail.

Carl Oxley, Managing Director, Westcoast Retail

Westcoast Retail is part of Westcoast, one of the UK’s leading distributors. With annual sales of approximately £500 million, it is responsible for about 25% of Westcoast’s total UK sales of £2 billion.

Westcoast Retail was originally an HP house specialising in hardware, but it now supplies many other major brands including Apple, Samsung, Microsoft and Toshiba and has diversified its offering to include much more than laptops and printers.

Since 2005, when it acquired IT consumables specialist Orion Media Marketing, Westcoast Retail has been supplying printer consumables. More recently, it has taken on accessories for major brands. So, as well as supplying Apple iPhones, it can provide a full range of accessories including cases, cables and chargers.

The aim, according to Westcoast Retail managing director Carl Oxley, is to help retail customers become more of a ‘one-stop-shop’, while also generating additional business for Westcoast.

“I believe we’re number one in retail.We are still growing year-on-year and there’s plenty of opportunity with new products, new ranges and new customer opportunities,” he said.

Added value

Westcoast Retail’s growth is not purely the result of its expanding product range. For Oxley, it is also testament to the added value that the company and its 26-person merchandising team can bring to retailers.

“Most people can move a box from location A to location B. It’s what else we can do that makes all the difference,” he said.

“To do the value add, a retailer has to want to work in partnership with you. Some do, some don’t. For those that do, value add means working with them collaboratively in terms of stock, sales, forecasting, rate of sale, store breadth, distribution, quantity of products on peg. How do we improve the sales density of that product on that shelf? How do we take stock out of the supply chain while not affecting availability?

“We work with major retailers to make sure the in-store theatre is as good as it possibly can be for the consumer. When they go into a particular store, for a particular product, is it on shelf and, if it’s an electronic item, is it powered on and showing demo content? Does it have the pricing ticket? Does it have the technology spec? Does it have any POS around it? Does it have the box to take to till? Is the stock available? Are there the accessories to go with it?

“If you haven’t got all that right and instead have half a dozen tablets or laptops, not powered on, so that they are black boxes that all look identical, just with different price points, it doesn’t help the consumer. It makes for a more difficult and complex shopping experience and all that happens is the consumer goes away confused and doesn’t make the purchase.”

The model Oxley aspires to is the Apple Store. “If you go into an Apple store, it’s beautifully merchandised, very well laid out; there are plenty of staff, all very knowledgeable and you can always get help and assistance. It’s a great environment because all the products are working; you can demo them; you can try them. It’s a nice in-store shopping experience. Our merchandising team works with the retailer to create an experience as close to that as we possibly can,” he said.

The last 50 feet

Most people can move a box from location A to location B. It's what else we can do that makes all the difference

Most people can move a box from location A to location B. It’s what else we can do that makes all the difference

A key part of improving the shopping experience is ensuring that the product is on the shelf and not stuck in a back room. Oxley calls this ‘the last 50 feet’ and says that in retail on-shelf product availability is often only 90%, not because it is not in stock, but simply because it has not made it onto the shop floor. That, he says, results in about £4 billion in lost sales every year.

To help retailers improve their sales, Westcoast Retail has a number of funded heads or implants – Westcoast employees who work for a particular retailer and liaise with Westcoast Retail on forecasting and stock replenishment to ensure the right stock goes to the right stores at the right time.

“Sometimes stores have different systems that may not talk together properly or may not have the right communication with the promotional team, so you could end up with stock going to the wrong stores, which would mean there’s not enough to replenish the better selling stores. We work collaboratively to make sure we get the right amount of stock to the stores that have the best chance of selling it,” he said.

Gaining control of stock distribution brings a number of additional benefits to retailers. For example, if Westcoast Retail can reduce the amount of stock in the supply chain, without affecting inventory, it could help a retailer’s working capital and cash flow position.

“It’s about working with retailers to understand their order frequency from us, to understand what they are doing, why they are doing it and how they are doing it and seeing if we can help them improve that cycle,” explained Oxley.

“Rather than ordering a large quantity, then ordering nothing, then a large quantity, then nothing, which can also put pressure on their own resources, e.g. the amount of trucks they would need to book it into their DC, collect it and then ship it out, we create a better equilibrium. Instead of spikes in the order process, retailers end up with better availability on-shelf, in-store, which leads to an automatic increase in the rate of sale.”

Stock counts

Oxley adds that the management of stock levels can also be improved through store visits and stock counts by Westcoast Retail’s merchandising team.

“One of the issues any retailer may face is what we call ghost stock. If the system says you’ve got five units, but you’ve sold none and you truly are out of stock you’ll never get your stock replaced, because the system says you’ve still got some. These differences can occur if items are stolen, misbooked or just miscounted. By zeroing the system or bringing it back to the true stock position, it will automatically replenish and give you a chance to sell your product,” he said.

Maximising sales opportunities and removing unnecessary expense is essential at a time of rising prices caused by the weak pound, which has seen a laptop that used to cost £329 rise in price to £379.

Consumer demand is soft, and that leads t pockets of inventory. You have to order the next range of stock before you've even sold this one, or know how it's going to sell

Consumer demand is soft, and that leads to pockets of inventory. You have to order the next range of stock before you’ve even sold this one, or know how it’s going to sell

“Consumer demand is soft, and that leads to pockets of inventory. You have to order the next range of stock before you’ve even sold this one, or know how it’s going to sell. Getting that balance right between what we believe the new forecast might be for Q3, when Q2 is soft and you still have Q2 volumes to go through, is one of the greatest short-term challenges facing manufacturers and retailers,” Oxley explained.

New growth areas

One way to counter weak demand is to target high growth areas. Traditionally, Westcoast Retail has gone ‘narrow and deep’ with its favoured brands, supplying the cheapest HP mouse and the most expensive HP server and everything in between. Moving forward, there is a clear strategy to expand into new product categories and product areas.

“One exciting new area is the Internet of Things, something like an Alexa, which now becomes a usable hub. There’s speculation that Apple will be bringing out its own version as well. People who are in the Apple ecosystem of products know that when you get the product out of the box and turn it on it works, so that product, if the rumours are right, could be quite successful.

“This is an exciting area, but what does automation in the home actually mean and what will most people be prepared to adopt? Will home automation extend to the doorbell? Will people buy an iKettle? Or light bulbs that change colour by remote? Out of all the home automation that potentially could come, how much are people really going to use to automate their home? A big unknown today is how big this market could be in the future.”

Arguably, this uncertainty and unpredictability is all the more reason why a retailer might want to take advantage of the value add that Westcoast Retail can provide. Not only to make the buying experience as simple and straightforward as possible for the consumer, but also to ensure that the retailer has products on the shelf and in its stores where demand is highest.

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