Imagine a gaggle of staff standing around all day, every day, sometimes not getting even one sale. And on a ‘good’ day maybe getting a dozen.
Imagine prime ground floor retail space all around the world given to merchandise with a comparatively low margin.
Imagine a stockturn nowhere near as good as it should be because you are constantly being coerced to buy the new seasons colours and you still have heaps of last season’s which you are not allowed to put on sale.
Wrap all these imaginations into one package and ask yourself: “Why am I doing this to myself”?
You have arrived. Enter the wonderful world of Cosmetics.
Confronted with this dilemma as CEO of a large department store group in Singapore where ground floor retail space is amongst the highest in the world, I set about to find a solution.
Having been in department stores for many years, I knew that the moment one takes Cosmetics off the ground floor, you can kiss sales goodbye. You need a throng of cosmetic sales people to attack anyone entering the store, spray them even if they don’t want to be sprayed, cajole them into getting close to your counter and extort as many dollars from them as you possibly can.
This is the cosmetic consultant’s charter. In fact this is their job description.
At that time in Singapore there was a parallel importer called Brown & Noel (B&N). They caused considerable disruption to us ‘normal’ retailers by discounting well known brands of cosmetics and designer clothing. This led to a group of powerful retailers joining together and putting pressure on the newspapers to decline B&N’s advertising.
Not to be outdone B&N in a master move, took effective ownership of advertising on buses. Hardly a bus is Singapore was not plastered with B&N advertising. But worse was to come. Galeries Lafayette had a store in Orchard Rd and B&N subleased the cosmetic department. They did a kind of Sephora job with their own sales folk, they carried all the famous brands, plus their own brand at a high margin. Sales consultants were heavily incentivised to sell the home brand and it sold very nicely.
Add to this discounting including French fragrances and you will picture telephone conversations between suppliers and Galeries Lafayette in Paris!
Enter Yeoh, who ran B&N. I called him and said I wanted to have coffee. He said he would take over our cosmetic department and offer the same return but he only needed a fraction of the space.
Of course it never happened, one reason being that I simply did not know what to do with the excess space!!
Fashion accessory departments were occupying a fair slice of the ground floor. Taking them off the ground floor would have been the kiss of death. Put ladies fashion on the ground floor? Or Mens? Kitchenware? – definitely not and so we went through every possible permutation.
So today the saga continues. Conduct your own survey. Go into David Jones say mid morning or afternoon. Count the staff. Then count the customers. If staff do not outnumber customers by at least three to one, I undertake to eat my hat.
Stuart Bennie is a retail consultant at Impact Retailing. Email Stuart.
