I was listening to Radio Four’s PM programme on my way to my local FSB networking session last night when a comment by someone describing themselves as a ‘retail analyst’ almost made me drive through a red light.  Their comment related to the demise of British Home Stores and was as follows: “I fear for other retailers located near to BHS stores as BHS was a footfall generator”.  I do not think I have heard a more ludicrous statement since Alex Salmond promised a second oil boom in an independent Scotland.

BHS was many things during its slow and inevitable decline but never a footfall generator.  Take the example of my local BHS store.  It is located in a large shopping centre which also contains a Debenhams, A Marks and Spencer and a House of Fraser store.  The centre also includes all the usual fashion stores, such as Next and Top Shop, as well as a significant number of local retailers.

The shopping centre is busy; it is the main retail centre for a large town and its surrounding region.  Whilst most stores see steady trade, and some are extremely busy, BHS was noticeably empty.  Rather than generating footfall for others, the presence of a BHS store seemed to act as a deterrent; like a very bad smell.

So how did BHS get into such a state.  Some blame, it could be argued, lies with its owners, who seemed to use the business as a personal piggy bank: Some blame lies with the groups massive pension fund deficit: but probably the biggest cause of the company’s collapse is that its marketing strategy failed to adapt to meet the demands of its customers.  British Home Stores marketing mix simply was not fit for the 21st century.

BHS was one of four stores which began life as a penny bazaar.  The only survivor of this class of retailer is now Marks and Spencer.  Woolworths went bust a few years ago and C & A withdrew from the UK market in the 1990s.  As for M & S, there has been acres of newsprint reporting its struggle to maintain its position on the high street.

BHS’s other main competitor, Littlewoods, closed its stores and moved over to catalogue and internet sales rather than having high street stores.

It is absolutely clear that the management of BHS failed to heed the warnings, particularly of Woolworths collapse, and they failed to incrementally change their offer over time so that they offered an experience more aligned with modern customer demand.  Using the seven P’s of the marketing mix, the issues with BHS’s marketing strategy can be exposed.

1. PRODUCT – BHS completely failed to respond to changing customer tastes.  Where high fashion brands like H & M thrived, BHS continued to make the same old products for an increasingly ageing (and dwindling customer base).  For all their issues, at least M & S have attempted to compete with these fashion brands by introducing lines such a Per Una.  BHS failed to see that even though the UK population is ageing, people simply do not want to dress like their parents did at a similar age.  We may be older but we now still retain a fashion sense.

2.  PRICE – Increasingly, stores are deciding on a price point.  They are either becoming ‘discount’ stores or high cost fashion brands.  M & S have tried to counter this by introducing designer label ranges and discount staple brands (similar to own brands in Supermarkets).  BHS retained a mid market price point which made their stock seem over-priced to many consumers.  BHS did not offer a compelling value offer to consumers.  BHS certainly wasn’t a discount brand but it wasn’t a high priced quality brand either.  In terms of price BHS was stuck in no mans land.

3.  PROMOTION – When did you last see a BHS advertisement on television?  Or an internet pop up? Or BHS  products being discussed in fashion magazines or on television programmes?  It seems that BHS’s sole promotional strategy was their prominent location on the high street.  In the highly competitive retail market, particularly in the area of clothing, this was simply not enough.

4.  PLACE – BHS retained large town centre stores.  They completely ignored the move by many retailers to out of town shopping centres.  It took them years to develop a website and they seemed completely unprepared for the internet shopping revolution.  Other retailers and internet only stores such as Amazon and ASOS stole a march on BHS.

5.  PEOPLE – 11,000 people are to lose their jobs as part of BHS’s collapse.  Many have been with the company for decades.  However, a visit to my local store gives the distinct impression of it being understaffed.  Staff wore uniforms which were last in vogue in the 1980’s.  This gave BHS the image of a latter episode of Are You Being Served.  A retail store’s staff should mirror its intended customer base.  The impression given by BHS’s representatives was middle-aged, stale and BORING.

6.  PROCESS – Despite their size, BHS stores appeared under stocked.  There is a fine balance to be made when stocking stores.  Many small retailers over-stock.  Stores are stuffed with product and have the appearance of a jumble sale.  BHS had the opposite problem, large stores with few rails.  A high fashion retailer or an art gallery may get away with a sparse and minimalist store; a major high street retailer cannot.

7.  PHYSICAL EVIDENCE – The BHS logo, the store layout, its window displays and till areas gave an old fashioned and staid impression of the business.  It did not give the impression of a thriving and exciting store.  These physical attributes only gave further evidence to consumers of a business in its death throws.

BHS died by a thousand cuts.  In my last blog I talked about how various military terms could be used to describe the tactics used in marketing.  BHS was being attacked head on by other large retailers and department stores and tried to defend this attack head on.  It was clear BHS simply did not have the level of resources to survive this attrition tactic.  At the same time others attacked segments where BHS appeared weak.

BHS was known for its in store cafes.  This segment was attacked by the likes of Starbucks.  BHS was known for selling soft furnishings and lighting.  This segment was picked off by the likes of Dunelm Mill and Ikea.  The discount fashion market segment was attacked by H & M, Primark and TK Maxx.  Like Woolworths, BHS was left selling an odd mix of products to an ever diminishing customer base.

Possibly the worst thing about BHS’s marketing strategy was that it stuck to rigid principles and failed to adapt itself to changing customer tastes. Marketing plans are fluid.  It is not a static process.  You have to be fleet of foot and BHS was not.

Perhaps if BHS had not continued its long out of date marketing strategy; perhaps if it had amended its mix to better meet modern consumer demands; perhaps if it had decided to focus on specific market segments rather than trying to satisfy all consumers, it would not be in the process of liquidation.  What is clear is that the demise of BHS is of no surprise.  The inability to modernise the company’s marketing made its demise inevitable.