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The e-tail boom

Retailers are turning multichannel and e-commerce start-ups continue to flourish, but this activity can lead to recruitment challenges. Graham Lucas, director of Michael Page Buying & Merchandising, explains.

The UK’s consumers are spending more money online; the stats speak for themselves. While e-commerce sales totalled £1.8bn in 2001, the amount had risen to £58.8bn by 2010. The predicted total of £81bn in online spending for 2011 is set to eclipse figures of previous years.

Why?

E-tail growth is a reflection of the changing consumer lifestyle. People expect to have the choice of how and where to shop for the same product, whether it’s on the high street, online or a combination of the two – and revenue figures prove they’re often favouring the e-tail option. Traditional bricks and mortar retailers have no option but to enhance their service offering to include an online channel if they want to continue to be viable. In an era where convenience is king, the retailers providing consumers with the products they want, when and how they want them, are those that are surviving.

“We see big opportunities in multichannel,” according to Nick Wharton, CEO of Dunelm. “We know that we have a customer group who want to start and end their shopping online. It’s naive to assume that there isn’t a demographic doing this,” he added.

The level of consumer confidence for e-commerce transactions has risen dramatically over the last decade. Previously, while shoppers would only shop with trusted brands online they’re now open to most e-tail sites, provided they provide the right product at the right price. Concern about security has diminished, with consumers reassured that any potential fraudulent activity can be handled by their card provider.

In addition to changing consumer behaviour, property owners on the high street have also been slow to react to economic changes, contributing to a rise in online activity. Property rental rates were set for retailers pre-recession and the continued high cost is driving businesses away as their leases come to an end. The recent announcement from Arcadia head, Sir Philip Green, of plans to shrink their high street portfolio by 250 stores is only the tip of the iceberg.

Adding to the recent e-tail boom are also technical developments and globalisation. Technology, and mobile technology in particular is far cheaper, accessible and better understood than before. Consumers and retailers are embracing this technology to shop for and source products globally, knowing that improvements in logistics will also mean that they arrive quickly and securely.

A new breed of entrepreneur

These opportunities presented by the shift in the retail market are attracting a new breed of entrepreneur. Given the increasing demand for shopping convenience, and a general disillusionment with the high street from both shoppers and retailers, there is an easier route to entry for start-ups looking to carve a niche in the new e-tail market. Upfront costs are comparatively relatively low, and once established, due to the nature of e-commerce – ease of communicating with the market, people easily identifying new businesses and products, recommendations – success can come quickly.

Many of these new entrepreneurs are from a non-retail background; financial services professionals, strategy consultants, technology experts and ‘whizz kids’ from red brick universities who spend a couple of years post-graduation with established e-tailers and then start-up independently. These ventures are an interesting proposition development, as they bring together technical insight from experts from outside the industry, with traditional retail expertise. 

Lack of skills

For both established retail businesses planning their diversification and for new start-ups, hiring and retaining the right talent is essential for future success. The challenge is the lack of individuals with the required skills available to fit seamlessly into these new e-commerce roles. The market hasn’t yet had the time to evolve to equip a sufficient number of candidates with a full e-tail track record.

Demand for candidates with a proven track record in an established, pure-play e-retailer is incredibly high, with several organisations always vying for those available on the open market, and proactive approaches made to those secure in their e-tail jobs. However, there are candidates available with the appropriate retail experience and entrepreneurial spirit to match, and who are quickly able to develop the full skill set required to make an immediate difference in a new e-tail role. 

How Michael Page can help

At Michael Page Buying & Merchandising, we know it can be a challenge to identify, attract, hire and retain the ‘perfect’ e-commerce candidate. That’s why we’ve developed close, consultative relationships with our e-tail start-up and traditional retail clients to ensure that they’re able to secure talent that’s right for their organisations, now and as they scale up and grow. We know that it’s not just about the technical skills and product exposure, but that the right cultural fit and network of contacts can really make your new hire a success. Additionally, we’re able to:

  • Help define roles: The e-tail market by its very nature is constantly evolving so the skills a business requires may not all exist in one person. We investigate short, medium and long term organisational goals to determine the essential expertise required immediately, and provide suitable candidates who possess this, and have the potential to increase their remit when required in the future.
  • Provide access to the widest range of skills: The right candidate for a role in the organisation may not come from a traditional buying or merchandising field, but have supply chain or marketing experience for example. As part of the Michael Page Group, we’re able to combine our local knowledge, global experience and multi-disciplined approach to offer access to the right candidate for the job, regardless of job title or role function.
  • Adopt a proactive approach: We know that the best e-tail candidates are in short supply, and most are secure in well-rewarded jobs with great development prospects. We continuously identify, and network with key players in the e-tail market to build long-term relationships to understand the right opportunities and organisations that they’d consider making a move for.

It’s clear that e-tail is flying, and with the predicted continued growth comes countless areas of opportunity for established and new organisations looking to develop into the space. However, the lack of appropriate skills available could potentially create barriers to success. To find out more about how our track record could benefit your e-tail hiring process, and to help you get the right expertise on board please get in touch:

E: grahamlucas@michaelpage.com
M: 07810 820 735

Read the full interview with Dunelm’s CEO, Nick Wharton, here.

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