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BHS is thought of as one of the UK’s retail treasures, but some consumers have the attitude of “another one bites the dust” towards the recent announcement that the organisation has gone into administration. However, we must be more sympathetic and learn from this situation not only because the brand has been around since 1928, but because of the 11,000 employees that could be affected.
In a recent blog about John Lewis and the IoT we concluded that the future was very much in the hands of organisations like John Lewis who are adapting to consumers.
“Delivering smart products and smart experiences is vital for the future of retail, otherwise organisations risk falling short and suffering the consequences of a reactive business model, including the likes of one of the nations oldest retailers BHS.“
Jon Copestake, Chief Retail and Consumer Goods Analyst (Economist Intelligence Unit), recently said that BHS had "simply stopped being relevant". Over the last 10 years we have seen the emergence of online organisations from Amazon to ASOS who have brought an increased amount of competition within the retail space.
Nick Hood, Business Risk Adviser (Opus Insolvency Practitioners), told the Today programme: “Retail these days is all about heavy investment in staying up with the trend, online offerings, mobile offerings. None of this has happened at BHS.”
Though BHS have struggled to adapt to today’s consumerism this is not the only problem they have experienced. Looking at the bigger picture, yes online retailers have dominated the market in recent years but what have the pre-digital generation of retailers done to combat this? The likes of M&S and BHS have struggled to respond, particularly within their fashion departments. The fashion retail market has become hugely diluted, so the likelihood of organisations loosing out to trendier rivals has increased over the years.
Catering for the mature audience, the pre-digital corporates have not responded quickly enough to the trend-driven consumers, making it harder to communicate with their audience. The lack of digital branding and digital investment has ultimately resulted in BHS not providing their consumers with a 360 experience.
As a result, BHS now joins a growing list of retailers that have fallen into administration, joining the likes of Woolworths, Jane Norman, JJB sports, HMV and Phones4U. In contrast, Phillip Green has had great success with Topshop (though he sold BHS in 2015), especially with the likes of such celebrity endorsements including Beyonce’s new gym range.
"The great thing about great retailing is reimagining your business in new landscapes. We have never had such changeable times. British Homes Stores was not reimagined, and that is its problem."
However, why was the same investment not made into BHS to connect the brand to its audience? Attempts were made in 2015 to reinvigorate BHS’ advertising with the hire of retail agency Vivid Brans which included a tie-up with Holly Willoughby as brand ambassador. This signalled their intention to ramp up its efforts but seemed to have little positive impact upon their sales.
So the question is, can anything be done to save BHS? If the company has luck on its side, then there is a lot of work internally and externally that will need to be done to push BHS into the right direction. One thing we can say we have learnt from the BHS case study, is that department stores can no longer continue to run off their traditional business models. Unfortunately, it may be too late for BHS.