Gifts Today magazine

Michael Papé installed as new chairman

Big turn-out as GA members hear how to convert their customers into fans

The GA attracted its best attendance for many years when suppliers and retailers came together at its AGM and members’ day at the association’s Birmingham headquarters on June 5.

‘Converting your customers into fans’ was the theme of the live streamed event, with one speaker stressing the importance of customer service and another telling bricks and mortar retailers that in the fast-changing world they had to “play a different game” to compete. The audience also heard how to employ an apprentice to boost their business.

The AGM saw the chairmanship of The GA pass to Ravensden’s Michael Papé for the next two years. Independent retail advisor Henri Davis was installed as vice-chairman.

Outgoing chairman Andrew Illingworth, of Widdop Bingham – who becomes deputy chairman – said that although the economy was clearly improving “costs have risen and many companies are still finding business tough as everyone is watching every penny they spend”.

“In the case of some of our smaller members our subscription goes by the wayside when it is competing with their insurance bill or other essential business expenses. Over 50% of members lost are for financial reasons. In view of this we are very pleased that we have still managed to achieve high retention rates in 2013, at 89 per cent for suppliers and 76 per cent for retailers.”

During last year and the first few months of 2014, the GA has welcomed 118 new members.

Last November – supported by i2i Events and Clarion – The GA conducted another pan-industry survey to better understand the needs of the industry and gauge awareness of the association and its services. “We are very pleased to report another high Net Promoter Score of 73.7 per cent – that’s people recommending The GA to their friends. And GA Member Satisfaction was also high at 76 per cent,” said Andrew.

Trade fair discounts, preferential payment card processing fees, free legal advice and member to member offers continue to be rated the most important GA services. Legal Protection Insurance was now included in members’ annual subscription and the British Allied Trades Federation had just negotiated a deal with E.ON to include free energy audits and free smart meters to help track/control energy usage and spending.

“The GA is doing all it can to bring its members more sales and save them money,” added Andrew. He went on to mention The GA’s member to member voucher scheme which is being extended to a wider audience to promote supplier members. Those retailers whose core business is not in gifts can now subscribe to receive information and receive these offers for free.

Andrew spoke about the success of The GA’s virtual showrooms and the new website, which has seen a 148% increase in new members joining online, with visitors staying for an average of nearly four minutes. The GA is a finalist in the website category of the Trade Association Forum’s best practice awards, which will be judged on July 10.

Categories for Gift of the Year 2015 are being reviewed. The competition will be launched at Autumn Fair in September. The entry deadline this year will be midday on Wednesday, December 17. Judges will include a senior buyer from John Lewis and Simon Woolgrove from Achica.

Three former chairmen of The GA stepped down from the GA national committee – Kate Owen, president of the Federation from June 13, and Michael Sweeney who also serves on the board, along with Michael Grant. Ian Latimer and retailer Kate Cowie also left the committee following increasing business commitments. Gifts were presented to each of them.

New members of the committee are Thierry Bourret of Asobi, Patrick Newton of Two’s Company/Mulhouse Design, Richard Stone of RJB Stone and Howard Thomas of GiftScribes Gifts. Lindsey Adam, the owner of retailer Bonkers, and Mark Jones, founder of online gift retailer Occasions Direct, were co-opted onto the committee.

Michael Papé thanked Andrew Illingworth for “being such a devoted chairman” and said that as a fellow custodian of a family business he knew the pressures he had faced. “At times you can feel pulled in all directions”. Yet he had devoted many hours to the national committee, fellow members and The GA as a whole while still managing to be involved with his local business community as well.

As a token of The GA’s appreciation for his hard work as chairman, Michael presented car enthusiast Andrew with a special Bentley-inspired weather vane.

The new chairman said that if he had to sum-up his vision for the future of The GA in a few words, they would be Community, Collaboration and Reputation.

“Essentially, by members working together and sharing knowledge, information and best practice, in the long run it can only lead to benefits for both our supplier and retailer members,

“Often we have common problems, and I can pretty much guarantee you as a company, if you are facing a problem, or need some specific advice, someone within The GA community will have been there before you and be able to assist. Within this room and The GA there is a vast breadth of experience and knowledge, so please don’t be afraid to use it.”

Michael added that it was The GA’s aim to enhance the valuable industry specific information it sent to the community and “seal our position as the leading authority within the gift and home sector”.

The audience saw David Simons present The Elkan Simons Award – in memory of his father, who founded The GA – to Parlane International managing director Mike Burgess.

Michael Papé said that for over 40 years Mike had been recognised as a leader in the industry and, along his wife and business partner Caroline, his development of Parlane as “a stand-out brand for style, quality and commercial success” was inspirational. He originally qualified as a designer and joined The GA 45 years ago as a retail buyer. Since then he has run a market stall, been a window dresser for Lewis’ in Manchester, a sales rep for large and small companies and been involved in wholesaling, importing and exporting.

He was one of the original supporters of The Summerhouse at the NEC and helped enormously to make it the success it is today. Mike became chairman of The GA in 2008 – subsequently serving on the board of the British Allied Trades Federation – and provided strong leadership to the industry during the deepest recession known to many.

Michael Papé added: “His positive approach to the challenges that have faced us over recent years has been an inspiration. That he achieved all that he did as chairman of The GA while simultaneously taking private ownership of Parlane and further growing that business into a worldwide recognised brand is quite astonishing. In spite of working crazy hours and travelling the world for many months of the year, no matter where he is he is always ready to help others towards success, particularly young companies just starting up.”

Jenny Lambie, principal consultant at The Lambie Gilchrist Consultancy and a specialist in business development, training and mystery shopping services, told the meeting that working with large organisations (including high street names) and small companies enabled her organisation to share all their best practice.

With a focus on achieving service excellence with service sector companies, Lambie Gilchrist work on the premise that “we are all looking for value and that value matters to consumers and customers.”

Because of the competitive nature of business, service – if taken seriously – was “the arena where people can not just compete but win”.

She said: “Two individuals can have a completely different experience of a company: one will rave about it and one will deem it to be very disappointing. Eighty-six per cent of customers quit doing business with a company because of a bad company experience – up from fifty-nine per cent four years ago.

“For a lot of companies, customer service is that ‘nice to have’ thing, but we see it as a business imperative and, clearly, evidence that we have collated would prove that.

“The other thing we are keen on is emphasising customer choice. Very few organisations are selling something which, forgive me, you can’t get absolutely anywhere else. And therefore, if there is a choice that means service is more important.”

The GA’s commitment – to make money, to save money – was the same as her consultancy made to customers.

“And it’s astonishing that it doesn’t sometimes go as well as we would expect. Organisations which provide excellence in customer service have better financial results. So what we do is a lot of mystery shopping.

“We find one of the most difficult things about this is delivering the feedback, particularly to those businesses that are family run, where ‘You’ve got to be joking that’s never happened’ (is sometimes the reaction). Well it did! Or small to medium sized enterprises where people are so close to the business they can’t bear for anything to be said of a constructive or negative nature. Although people pay us money to do this, not every business embraces the potential of unlocking the feedback that we present.

“When we mystery shop – for which we charge a great deal of money – we guarantee to make you more – and yet still some businesses won’t listen.”

They also offer training and development intervention that will support the actions required by businesses to realise opportunities found in a mystery shop.

Jenny cited the example of a small independent retailer which, in the first quarter following their customer service and sales training, saw a 10 per cent increase in sales. And a large multinational – where Lambie Gilchrist undertook merchandising, display, customer service and sales training – which realised a 34 per cent rise in turnover.

She enjoyed mystery shopping on Monday mornings. “That’s when there are lots of mugs of tea and a lot of chatting about how the weekend went. And I find that fascinating that I can sit and tell people who own that company – who make their living from that company, who have a mortgage for that company – what their staff are up to at the weekend and what they did. And astonishingly, that’s one of the areas of disbelief.

“But a lot happens over a cup of tea and it’s amazing how many conversations are within earshot of customers.”

Jenny said that service excellence was about “being easy to do business with” and added: “I see some small and medium sized enterprises in retailing which have signs at the till which say, ‘Credit cards accepted only for a minimum spend of £10.’ What’s that about? How about trying to get every single dime out of people? Someone is going to say, ‘Jenny, you don’t understand – we have to pay commission on credit cards.’ Yes, absolutely. So let’s not go for a £10 sale, let’s go for a £20 sale!”

She questioned whether some suppliers were driven by their marketing departments rather than their approach to consumers. “Some of the retailers that are looking to deal with suppliers see trade information that says, ‘If you would like more information, send us an email.’ They tell me that when they sent an email they were asked to log in and then required to set up an account. Small or medium sized businesses will say, ‘I just wanted some pictures or a price list. I wasn’t looking to set up an account at this point’.”

She asked: “How do your customers feel? We are in the emotions business.”

Retailers also told her that it can be “really hard” to get credit notes from suppliers. Owner/managers of small and medium sized enterprises, without accounts departments, often ‘chased’ these.

Jenny told the meeting that the delivery of service excellence “is primarily about doing what you promised and dealing with problems well”.

She went on to quote the dilemma of a start-up retailer who had only part of a carriage-paid order delivered.

The paucity from some suppliers of point of sale material, together with information received that might be “tricky” to merchandise, also posed difficulties for those without the expertise to deal with such situations.

Regarding the ‘recognition’ of customers, loyalty cards and stamps were big business, but Jenny suggested that staff greeting customers by saying things like, ‘How are you today?’ didn’t cost a thing and made people feel “slightly more special”.

And when account mangers moved on, she wondered what processes were in place for their customers. “Retailers are saying to me, ‘That company used to look after me Jenny. They were fabulous when Peter was there.’ They are sometimes feeling a bit lost when this happens.”

She said that between 37 per cent and 45 per cent of customers has a level of dissatisfaction and say nothing – an opportunity for businesses to tap into that level of dissatisfaction and identify the problems. “We are not talking major disaster – an order not arriving – but establishing what the problems are and putting in interventions to resolve them.”

Jenny added that the delivery of customer service and customer excellence was not about doing extraordinary things. “It’s about doing ordinary things really, really well.”

For every moan about customer dissatisfaction, there are another 26 people with exactly the same complaint. But many busy people are reluctant to become involved in confrontational situations.

She asked members of the audience what they had done to improve their customer service – this year/this month. “Has it worked? How do you know? My research shows that huge parts of the market still want to go on a shopping spree. Let’s hope that continues for retailers. The message from us to you is, please take service seriously. People make a difference and people can affect your bottom line.”

Simon Woolgrove, a senior buyer with members-only luxury lifestyle store – where he is responsible for the toys, garden, Christmas and stationery categories – charted the rise of private members’ clubs, which began with in France in 2002. It is still the biggest, with an estimated 10 million members.

Achica was launched in 2010 with four buyers. There are now 12. In its first year there were 780 promotions on the website: this year there are expected to be around 12,500, with 110 running at any one time. There are more than four million Achica customers and membership – which is free – is growing at the rate of 25,000 a week.

Said Simon: “We do great prices – that’s part of the reason for private members’ clubs. We have a very wide choice of good quality products. It’s a brand-led business. We have our own style magazine for members but it’s not used for selling as we only run promotions for a very short period of time. We are doing constant newness.”

Eighty-seven per cent of Achica’s membership is female – rising from 70 per cent in the first two years – with 51 per cent housewives or part-time employed. And 40 per cent of its members are “very affluent”.

“That was what we wanted to do when we started and that’s what we’ve achieved. Obviously the more members you get that percentage is going to come down.”

Simon said that clubs like Achica all operated in exactly the same way. The products on its own site are behind a ‘walled garden’. The only people that see those are its members.

“The process only works really well because we have a good connection between ourselves and our suppliers. It’s very simple: we do sell at less than recommended retail prices. That’s the nature of private sale clubs. We put the products and the quantity on the site that we agree with our suppliers for only a short period of time – between three and five days. At the end of that sale we send the supplier an order for what has been sold and they send that back as a pro forma.

“And, very importantly, we pay them straight away. It’s a fallacy that we are paid by our customers before we pay the suppliers.”

The goods are then delivered to Achica’s Oldham warehouse. Some 70,000 to 100,000 items pass through it each week.

The UK accounts for some 85% of its business, but it also has a presence in Europe where it expects to expand soon. The majority of its items are sold around the world.

Simon said that at the outset it was very important for Achica to establish itself with some of the big brands. “But some of our best sales over the last six months are from companies that are probably not big brands or household names.”

Four million emails are sent to its members every day. “Therefore, your brand is going to get instant recognition. When the information goes out people either buy for that short period of time or they don’t.”

He cited the example of Le Creuset cookware as one of the products that people would like to have. “It is very expensive but very good. If you have a piece at home you probably won’t go back to something else. We will only have it on our site for a short period of time and might only have a small selection. But if people find and see the success of that product and have it in their homes they are more likely to go back to stores and buy. We do find that actually happens and bricks and mortar retailers are being asked for products that have exposure on our site.”

Although Achica’s core business is household products – bed and bath, kitchen and dining – its categories are constantly expanding. Having been successful with art and design and food and drink, its latest area is antiques and vintage. And since opening its office across the Channel it has also been successful with French brands that are unknown in the UK.

Simon said that because suppliers are unable to provide all the products that the company wants, it will “definitely do some private label”, while it will also try “always on” price specific goods with smaller discounts “for people who don’t want to wait four to six weeks for something to appear on our site”.

Acquiring members – which was done through TV and radio advertising and social media – was “very expensive, but it has got us where we are”. The Achica magazine has a print run of nearly a quarter million, larger than many popular home and style publications.

Simon recalled his previous job as a bricks and mortar toy buyer, when he used to say: “I buy nicely coloured boxes with toys inside them.”

“Then, the packaging was everything for me. What is really important to me now, more than anything else, is not necessarily the price but the image that you can supply to me or I can take (for the Achica website). That picture can mean a thousand words. It’s another cost that we or the supplier will have to stand but it’s so very important and makes the difference whether that product does well or not”.

Asked from the audience what changes gift shop retailers needed to make in a world that was changing around them – “some are sitting there saying ‘Someone has moved my cheese’” – he said he had been a toy buyer all his life.

“Toy shops always used to complain that they never made enough money. But what have they got in their windows? They’ve got Barbie dolls. If you take all the products that all the companies in this room supply, there are millions of them. So why does everybody choose the same one to promote at the same price?

“I think the answer to the small shops is exactly the same as when I was a bricks and mortar retailer: you try and find something different so you’re not hassled on price.

“I had exactly the same problem with Achica. I don’t buy Barbie, I don’t buy Lego – I can’t compete on price. Even if I put them at RRP I wouldn’t make the margin, so the answer is you have to play a different game. That takes effort.”

Simon’s answer drew applause and having already revealed that owls might follow stags’ heads as this year’s Christmas favourite, he said that the most money is spent online with Achica at 9.15 on Tuesday mornings.

He endorsed Jenny Lambie’s comments about customer service and said that his company opened its service centre with two people and it now has 27. “We attempt to answer email queries within four hours. Service is very important but it’s expensive. It can make your business but if you’re not careful it can break it.”

Introducing Oliver Ashton, who heads up the apprenticeships’ organisation Jump! – ‘adding value to young lives, adding value to business’ – Michael Papé described apprenticeships as “flavour of the year”. The government was providing funding for companies wishing to employ them and he himself was actively looking to do so.

Oliver, a former member of The GA – having been involved with a company supplying design-led giftware to retailers across Europe – discussed “growing our own apprentice, growing your own people from the bottom up, from the grass roots – training them in the way that you do business; understanding your customers”.

He said that at Jump! – an apprenticeships and training provider – every member of the team has another member of the team, an apprentice, who works with them. “We are training them up and working with them to take the company forward.”

Offering to help anyone in the audience who was interested in taking on an apprentice – “even if we are not involved we can point you in the right direction” – he said Jump! supported young people to help them into the world of work. This involved creating partnerships with employers.

Oliver described Jump! – based in east London – as “a specialist bespoke service”.

“We get to know the business we are partnering with – understanding the sector and really working closely with young people to match the right young person to the right job, which is really important.”

Jump! recruits, screens and shortlists candidates for employers. “Staff already working in your company can also sign up to the apprenticeships’ programme – you can be any age,” said Oliver.

It was an opportunity for businesses to develop and upskill their staff, “increasing the feeling that they belong in your company”. They and other providers gave support and enabled apprentices to gain a BTEC or NVQ qualification during their 12 month employment contract.

“There is a perception that apprenticeships only apply to trades. They apply to any business,” said Oliver, listing customer service and digital media among those available.

Apprentices became paid employees like everyone else. “What if you don’t like them? It’s just the same as anyone else in your company. It doesn’t mean that you are tied together for 12 months and there is nothing you can do about it.”

Oliver said that when the government set up the Skills Funding Agency it wanted to stimulate the market. “And it’s worked. It’s a win-win for business and young people getting into the world of work.”

The minimum wage was reduced for apprentices as a “sweetener” to employers. “It’s going up from £2.68 to £2.71 an hour before October. It’s a pittance and we encourage all of our employers to pay some more money.”

He introduced two of his own apprentices, Harry Hodges, recruitment and marketing assistant, and Wale Adedeji, training and assessment assistant, who told the audience about their own journeys into the world of work.

There were 510,000 apprenticeship starts in 2012/13 and 53 per cent of apprenticeship starters were female. SMEs make up over 80 per cent of the employers. After finishing their 12 month contract, the majority of apprentices (85 per cent) will stay in employment, with nearly two-thirds (64 per cent) staying with the same employer.

Nearly a third (32 per cent) of all former apprentices had received a promotion within 12 months of finishing, and of those in work, three quarters (75 per cent) reported taking on more responsibility in their job. Eighty-one per cent of employers said apprentices generated higher overall productivity for their company; 66 per cent said that the apprenticeships’ programme made them more competitive in their industry; 92 per cent said that the programme better motivated staff and increased job satisfaction; 74 per cent reported that apprentices tended to be more loyal, remaining at their company longer than non-apprentices.

For employers who took on apprentices there was free recruiting, screening and shortlisting, as well as free training and development for their employees.

Oliver stressed: “If an apprentice leaves and doesn’t complete a qualification we (Jump!) no longer get paid. It’s a tough business to be in. It’s set up so that we are involved all the way. We look after people to ensure that it works. We get to support young people – it’s a double bottom line for us, fulfilment and getting paid. Some providers are purely financially motivated; others are from charities, and we are a social enterprise model.”

He said it was possible for things to go wrong. “If you are unclear about what you need; if the provider doesn’t understand the commercial nature of your business; if the assessors are not industry qualified, or if your expectations are too high.”

Oliver emphasised that potential employers should prepare detailed job descriptions for apprentices and interview them like any member of their staff. “Keep recruitment as local as possible as they are on a reduced wage – and understand you are not getting the finished article. Support them to learn and develop.”

And he urged: “After two or three months pay a bit more than the minimum, move them forward quickly and reward success.”

After a networking lunch, suppliers and retailers were able to take advantage of 15-minute surgeries with a selection of The GA’s service partners and national committee members. In addition there was a focus group meeting of suppliers who discussed matters of mutual interest to them including the possibility of The GA organising more Meet the Buyer events.

After live streaming the event on the day, videos of the speakers, which will include the presentations by Jenny Lambie, Simon Woolgrove and Oliver Ashton, are being produced to be accessed via The GA’s website, in due course.

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