GA’s pledge to members: we will help you handle Brexit pressures

The Giftware Association (GA) has promised to help gift and home industry suppliers and retailers handle the pressures and grasp the opportunities presented by leaving the EU, according to new GA chairman Henri Davis.

Speaking at The Great Northern Retail Forum that was held during The Home & Gift Buyers’ Festival in Harrogate this week, she said trade associations remained as relevant as ever and The GA team and national committee members would be “keeping on top” of Brexit developments as they materialised.

“We will research the issues and use of all our various areas of expertise to – where appropriate – lobby government and make sure our members’ issues are put across and understood. All the information we gather will be pooled and become a rich resource for anyone within The GA,” she said.

Henri added that the impact of the vote to leave the EU could already be felt through exchange rates. “Unless you already had orders placed, it has had an immediate effect for anyone buying product from Europe, America or the Far East,” she said.  

“Walking around the Home & Gift Buyers’ Festival, some people are already putting up their prices, while others are saying that because orders had already been placed, they are going to hold them. But the reality is that what we will be buying for January is almost certainly going to be more expensive.”

Regarding the effect of the Brexit vote on shoppers’ buying habits – and the impact it may have on sales volumes – Henri believes it will make little difference until the UK’s future trading position becomes known.

“In the recession of 2008, the luxury end of the market was almost unaffected. People just kept spending. Who knows if that will be the case this time? But we did survive and we are still running our businesses, so there’s nothing to say we won’t be able to cope well with this – once we know the framework in which we’re being asked to trade.

“But there won’t be any clarity for a long time regarding the levies and so on that there may be for importing and exporting from and to European countries. There may be none at all. It’s a complete guessing game at the moment.

“I don’t have a crystal ball, but as we work our way through this period of change, it’s going to be critical that each of us evaluates our business to make sure we understand the implications and make informed decisions about what we need to do next.”

Moving onto trends, Henri said that people often thought these related only to design and colour – which, along with inspiration- are critical in the design-led gift and home industry.

“But I would suggest we also need to understand the social, economic and business trends all around us – and then decide how we’re going to make the most of the opportunities they’re going to present, or indeed how to manage the risks.”

The key is to stay competitive and watch out for changes, she said. “What’s critical is that you consider them, and identify the ones that are relevant to you, your business and your customers. And if you don’t act upon them, I can absolutely guarantee that your competitors will – and that will put them one step ahead.”

Henri said recent figures showing a 3% footfall drop in June could not entirely be attributed to the referendum result which happened in the last week of the month. “The reality is that this only built on a trend, which was that people were spending less money.”

She doesn’t believe the trends of recent years will change much in the short term and thinks people will continue to shop more frequently – while watching their purse strings. “And, of course, there can be some real advantages to that – as long as they’re spending with you!”

Uncomplicated loyalty schemes and the introduction of add-on products such as wrapping paper, tags, tissue, adhesive tape and stamps with cards could all boost sales, Henri suggested.

She added that retailers should also have enough staff at busy times to cope with transactions, and should introduce fresh new products regularly, phasing in orders from trade shows over a number of weeks. Windows and displays should also be refreshed regularly.

“Healthy competition helps us to up our game,” Henri continued. She cited the example of [cut-price Danish retailer] Tiger “whose low pricing strategy challenged many retailers while at the same time driving fantastic footfall along those pavements”.

“How are you going to take advantage of that – to make sure you get some of that spend and footfall?” Henri asked. “Keep an eagle eye on what they’re doing and make sure you go into their stores frequently to understand the product mix they’ve got, the type of items they’re offering and, most of all, the price points: because that’s where they seem to be hurting us most.”

She also advised retailers to look at the suppliers of their competitors and consider alternative products to stock. Pricing, promotions and offers can all help retailers differentiate themselves, she said.

Henri noted that a selling opportunity such as Easter enables retailers to alter their colour palette to stimulate a step-change – “even some opticians make their windows look more exciting” – and this year the Rio Olympics offers the chance to use the colours and imagery of the event.

She pointed out that occasions such as Valentine’s Day should also be on retailers’ promotional calendars, but said they have to decide if they can afford to get involved, by assessing the sales uplift that would be needed to make an impact on their businesses.

This also applies to Black Friday promotions, which many high street retailers are now running for up to a week. “To do it for just one or two days isn’t viable. You need to know that you can afford to mark down particular products and that consumers are going to buy enough of them to still make the event profitable. My hunch is that Black Friday will be very different this year,” she said.

Henri suggested that Small Business Saturday in December is a more viable initiative for retailers to get involved with, particularly if there is local financial support. “That’s much more relevant to your customers than some of these bigger national events,” she said.

After mentioning the closure of BHS, Austin Reed and My Local, she reiterated the importance of “being relevant, understanding trends and understanding what our customers want from us”.

Henri, who hopes that her two-year tenure as chairman “will make a real difference to retailers’ perceptions of The Giftware Association”, went on to stress that while web portals are becoming increasingly vital for suppliers, they are also being developed to give smaller retailers a share of online sales both locally and nationally.

And although transactional websites are not practical or appropriate for all businesses, retailers can still have a ‘landing page’ that gives them a visible presence on the internet to show new products and discuss upcoming events and promotions.

She also covered a raft of changes to legislation – from carrier bag charges and apprenticeships, to business rates, pensions and the National Living Wage – and emphasised: “If you do nothing else, look on the government website and check out the staging date that you are expected to offer pensions to your employees. By that date you need to be ready. The government, she concluded, “are getting very hot on this and a lot of small businesses are being caught out. The fines are punitive.”

Henri is chairman of the GA and an independent retail advisor to businesses in the stationery, card, gift and heritage industries. She has 30 years of retail experience and has worked at Habitat, Next, WH Smith and the National Trust. She now works with many small and medium-sized businesses, including multi-site retailers, national and international manufacturers and suppliers

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