Denys Shortt explains how wholesalers and retailers can surf the wave of innovation.
Denys Shortt’s ‘Three F’s’
- FLEXIBLE – we have to listen to what customers are saying – if you want help in terms of pallet displays, open days, if you want new product at your door on the morning of the launch we will drive a car to your depot and make it happen!
- FAST – the internet is ‘instantly fast’. Younger people are used to getting details instantly. That’s the world we live in so we have to be fast.
- FLOWING – I ship about 40 articulated lorries a day. It’s tough out there but we have got to keep the stock flowing – if you don’t want to buy one washing powder today how about another one? We’re always looking at how we keep the stock flowing.
I started work in my father’s business, Shakespeare Tea and Coffee, which is where I learned to do the accounts, drive a lorry and become a salesman, selling to corner shops.
Fast forward 20 years and I am now the proud owner of DCS Group and Enable Software. The key to our business is that we need to run faster than the rest – we need to surf the wave of innovation.
There is a simple equation, creativity + design = innovation, and we aim to deliver it. Our aim is to ‘challenge and simplify’ and that’s how we create customer delight.
There has been much talk of what the launch of Amazon Fresh in the UK will mean for wholesalers. But they don’t need to be afraid of Amazon. Here’s why: category approach is important and there are basically three areas of growth, very much driven by the little device we all carry with us – the smartphone:
It’s set to grow by more than £11bn in the next five years. I don’t call it convenience, I call it convenient, with a ‘t’. We all want things conveniently. If you can make it convenient for a customer to buy, they will buy.
It’s got to be at the right price. Discount will grow by nearly £11bn, too. We supply a lot of the discounters and we can see that happening. There’s no reason why you can’t be a discounter.
Online will grow by more than £9bn in the next five years, so how do we find a way to beat the online people? There are 50,000 independent stores. All of those stores are within the ‘last mile’. The problem that Amazon has is the last mile.
DCS’ five growth accelerators
- Best-selling brands
- Consumer insight
- Creative marketing
So if we can get those 50,000 independent stores behaving like Amazon and having the core range and exactly the product at the right price and convenient to the consumer, you will tick these three boxes.
Suppliers are all trying to sell so many brands and we, the customers, are overwhelmed with products. At Shakespeare Tea and Coffee, we were constantly having deals chucked at us.
After acquiring for 10 years, this year P&G has trimmed 200 global brands to just 65. They’ve ditched Zest, Camay, Duracell, Iams and more. They said they need to focus and the same applies to our industry. That’s why we produce a core range catalogue each year to help us focus. Simplicity is really important. The 80:20 rule in that core range says we should focus on power brands – big, bold displays of the brands that deliver the huge sales numbers (see box).
We’re focused on growing the entire category. I’m firmly fixed on growing at double digits every year and next year we’re hoping to hit a turnover of £230m on 24% growth.
So how do you grow? You need to focus on the customer, and 90% of our time and focus is spent on the customer. Consumer insight is about understanding what’s going on and where. Category insight is important but channel insight is more important.
Do we understand the demographic change of how people are shopping? Everybody is using their smartphone. PCs are dead. My smartphone is now my PC. People shop differently – companies such as Argos and Shop Direct have become big players online. Primark now sells toiletries.
We are seeing some of the biggest changes in our industry happening right in front of our eyes. The likes of Aldi, Lidl, Home Bargains and Poundland have become giants
– indeed giant killers.
Consumers have changed the way they shop – we all have. I ask myself how we can join the wave and surf it faster and better than others. The answer is simple: people buy from people. Aim to deliver excellence all the time. Be nice to your customers and listen – they’ll tell you what they want.
Insightful article. We supply EpoS systems and services to 2,300 + Convenience retailers around the UK. One service we provide is to show a retailer how their own sales compare to the top-25 sellers in each category in their region of the country. Very few of them make use of this service – which puzzles me. If I were a retailer I would really like to know how the 80:20 rule applied to my business, as you have suggested.