Did The City Of London Kill The High Street?

I thought I’d solved the mystery of who murdered the high street. Then an article in Money Week came up with a new prime suspect.

Matthew Lynn’s view is that it’s not the government, local councils, landlords or even the slump in consumer spending. He blames the City. His reasoning certainly explains the anomaly of why Peacock should go to the wall but Primark continue to prosper, Burberrys weather the storm while La Senza goes bust.

Mr Lynn points out that although the growth of retail sales seen before the recession has stalled, spending is still showing small increases. Therefore he finds it odd that some companies are suffering as much as they clearly are. Our Poirot from the City used his little grey cells to work out that La Senza, New Look, Hawkin’s Bazaar and Peacocks and nearly all the other retailers in trouble have something in common. They are all completely or partly owned by private-equity companies.

As Lynn says, ‘The City loved retailing. It had stable cash flows and usually lots of property assets.’ So they bought retailers and ‘put a mountain of debt on them.’ This wasn’t a problem when times were good but ‘the City has stretched businesses to the point where they can no longer cope with any kind of adversity.’ In other words, a small drop in income and they can no longer pay the massive interest to the bank.

‘Businesses need to be able to survive through good times and bad,’ says Lynn and the financial markets should help them. Instead, we have a high street crisis ‘created by financial engineering’.

This makes a lot of sense to me and while it doesn’t solve the current problem, it suggests there may be hope for the future. I have been gloomy about high street shopping of late but, looked at positively, my own retail business Your Life Your Style and quite a few others are managing to get through the current economic downturn. Turnover continues to rise albeit sluggishly. Perhaps most significantly, we have no debts, except the money my wife and I loaned it.

Furthermore independents like us (and some bigger companies like John Lewis) actually want to be retailers, as opposed to managers of a financial asset. When times get better, independent shops could be well placed to fill some of the gaps left by these over-leveraged multiples.

John Lewis Show How Not To Design A Catalogue

Why does a major retailer like John Lewis ignore scientific research on how to produce a catalogue that sells? Here are a few of the rules they ignored in this year’s Christmas brochure.

Today I’m guilty of a deadly sin- Criticising John Lewis, which clearly would have been the eighth deadly sin if the shop had been around at the time. Like all shopkeepers, I admire and seek to emulate JL, but this year  was surprised that their Christmas catalogue failed to observe what I would consider some basic rules.

Even in these days of online catalogues, the printed brochure remains an important selling tool. I’m not a designer but, over the years as a marketing person, I’ve made a point of learning how to produce a catalogue that sells. When I worked at The Mayflower Theatre, the season brochure was the single biggest generator of ticket sales. Apart from my own experience, I learned a great deal from the brilliant American catalog specialist Richard S. Hodgson. I’m still happy to offer advice to companies on how to produce effective catalogues on a tight budget.

So what was wrong with John Lewis’s catalogue and why does it matter? Here are just three examples. Faces and eyes on the cover attract attention yet all JL had were a few tree decorations against a grey background. Yes, grey- the least attractive colour in the universe.

Number two. When people look at a double page spread, their eyes start at the top right, travel the middle, then go to the bottom right. In other words we barely notice the left hand page unless there is something there that grabs our attention. This is scientific research done by Professor Siegfried Vogeler using a camera to measure eye movement. I could find hardly any left hand pages in John Lewis’ brochure that had a striking image.

I could go on- choice of font, font size and, moving on to the text, the need for copy that sells benefits not features…

Third thing. More scientific studies, this time conducted by Colin Wheildon many years ago, showed that the most easy to read colour combination is black type on a white background. Did you ever read a novel that wasn’t? You might think white on black wouldn’t be much different but in fact ‘good comprehension’ goes down from 70% to 0% and ‘poor’ comprehension up from 11% to 88%. Despite this, more than half the pages in the John Lewis catalogue use white type. To be fair, it’s not always on a black background, sometimes they use white on grey or even wood grain. Wheildon doesn’t have a statistic for this latter combination- I doubt he thought anyone would try it.

Why does it matter apart from giving me the chance to show off my knowledge? Well, I think we should be concerned that there are an army of designers, who have studied at art college and who create lovely looking catalogues, yet ignore or have never been taught the scientifically researched rules of producing a brochure that actually does the job of selling the products. They’re not dissimilar to religious fundamentalists denying evolution. That’s not what we retailers and other businesses need.

Now John Lewis may feel they got exactly what they wanted out of their Christmas catalogue. I guess that in an age when scientists are wondering if there is something faster than the speed of light, anything can happen. Personally I don’t see the harm in following a few tried and tested rules. The catalogue I produced for Your Life Your Style for door-to-door and mailing was simple in style and produced on a shoestring but it did just that and the results were everything hoped for. Please take a look at my 10 Ways for A Winning Brochure.

If an architect ignored the science of constructing a building and simply made it look nice, it would fall down. It seems some catalogue designers don’t want anything as boring as selling to customers to get in the way of their art.