Are you sleepwalking into a disastrous 2017?

2017 brings with it the promise of trouble in the UK school wear market. Will Hemming, consultant to the garment decoration industry, explains more.

We’re already feeling the effects of Brexit as the pound/dollar exchange rate affects the cost of importing garments, with a direct impact on margins.  There’s also the continuation of issues that are being caused in the move from traditional retail/direct-to-school models to online fulfilment.

In September 2015, online school wear sales hit the headlines as both SWI and Tesco were mentioned in national press due to complaints from parents.

At the time, Tesco was servicing around 4,000 schools. You might have expected this number to shrink during 2016, given the reported issues.

According to its website, the company now services more than 5,000 schools.

What’s more, no issues have been reported in this past year. In fact, research suggests Tesco has been delivering orders in around seven days, even throughout the peak back to school period of August.

This means that embroidery-on-demand is working. At scale, and during the peak demand period.

Meanwhile, reviewing social media and customer comments, it seems that other online schoolwear suppliers are still delivering 14-21 days (and beyond).

So it’s not working everywhere.

You can expect Tesco to be aggressive in its acquisition of schools, now that it has had a successful summer. It wouldn’t be surprising to see national campaigns running in either print or broadcast media. You can also expect it to go deep on stock, to make sure it doesn’t run out.

Typically, schools will add Tesco as an additional supplier, so the traditional retailer is still likely to be needed as a local stockiest and physical presence. But it’s hard to imagine there won’t be some parents attracted to the ease of ordering online, and the low prices offered by the supermarket.

It won’t be until the peak retail period that the traditional retailer will know whether it has lost sales or not. At this point, it’s too late. The retailer has already bought the stock, embroidered it, with customers opting to purchase elsewhere.

What’s the plan?

My question is: What’s the plan? How are the independent school wear retailers and suppliers going to defend themselves or even survive?

Let’s start with the retailers. If you’re a physical retailer, can we agree that you need to have an online ordering option? You’ve already got the stock, so making it available to parents without them having to physically walk through the door is essential in an economy where £60bn per year is being spent online.

Next up, the website itself. The parents buying from you online are already shopping online. Go and look at the online operations of Amazon, Argos, John Lewis, Tesco.com, Next, Wiggle, JD Sports, SportsDirect.com, Boots, Screwfix, as a starting point. Now look at your site. It doesn’t need to be the same, but your customers are going to be expecting a similar experience. At the very least:

• Your site is up-to-date with information about your business including clear contact details, and opening hours.
• Navigation is simple, it’s easy for a visitor to find what they are looking for.
• It lists the product you sell, with accurate descriptions, photographs, and indicates whether the product is in stock, or made to order.
• You give a clear indication of how/when to expect delivery.
• When you get an order, you send an email confirmation including expected dispatch date.

Any of the retailers that hold stock have a natural advantage over the make to order operators in that they have the stock ready to sell. So if you get an online order, you can pick and dispatch it within 24 hours of getting the order – or offer the customer click and collect.

If you don’t have the capability to do this can I suggest you make it your first priority of 2017? I don’t think you need to be able to do an Amazon Prime-style same day delivery but at the very least you need to be able to pick and send out on the same or next day. Today’s digital consumers aren’t going to accept anything else. This will put you ahead of the supermarket competition in terms of service and responsiveness. But if it’s not clear on your site that the item is in stock, and will be with the customer quickly, the benefit is lost.

For the online operators out there who don’t hold finished stock, it’s going to be tougher.  You’ll have to show your customers that your offering is superior to the supermarkets in terms of quality, or personal service, because you’re unlikely to be cheaper. Every schoolwear supplier I speak to tells me they’re not worried about the supermarkets because the quality of product they offer is poor, but I’m not seeing any evidence of that holding them back.

However, if your schools require products with a contrast panel, sportswear, or other non-standard items, then again you have an advantage that you must exploit with good quality photography and product descriptions.

You also need to deliver quicker – three weeks’ delivery (or longer) at peak times is not going to be a winning strategy when the biggest operator is delivering in one. But that’s a story for another article.

Please email me if you think I’m wrong – I’d love to know how and why your school wear business is going to succeed in 2017: will@lwfcompany.com