Comet Crashes

[DanielThomas1]

But it doesnt require people to be employed in the numbers that other methods do. What do we do with all these people?

Same thing we did for the coal and manufacturing industry in this country - retrain and reposition them in growing markets.

If worst comes to the worst Tesco is always a safe bet - pays better than Currys/Comet too!

 

[internetspaceships]

Daniel I've got to ask and please don't take offence. How old are you mate?

We have nothing in the UK to re train these people into. We just have service industries.

 

[DanielThomas1]

No offense taken, I actually did ponder if using an example from before I was born was a good idea or not, but I flew with it. Im 26, just FYI.

Ultimately - yes, there is no where to put them now - this is why unemployment won't stop rising for a long long time, but these are market forces, and while the UK wants to compete internationally it needs to allow our market to change and diverse. What's the other suggestion? The government create jobs for the sake of jobs? Bail out the companies which are failing, not because of being badly run, but ultimately because their time in the world has just now come and the market is falling away to more innovative solutions?

I'm not sure if you're actually asking me what the solution or just posing rhetorics? If you want an answer pose it to David Cameron... last line he had on it was "The UK needs to train in specialist skills which no one else in the world can offer at British quality" (or words to that effect).

What's certain is retail is essentially doomed unless they dramatically change the game, but I just don't see how they can do it, but that's why I'm not the MD of DSGi.

 

[Esk247]

But it doesnt require people to be employed in the numbers that other methods do. What do we do with all these people?

there are a lot of other jobs involved with online retail that you don't see, the warehousing staff, the web design staff, the marketing staff etc but yes, no shop floor workers.

and as for retraining i agree, what to?

steel industry..gone
shipbuilding...gone
car manufacturing..almost gone
high street retail...dying duck
product manufacture...only small, single base companies surviving

there is still money out there but its a struggle, retail margins are daft now, it doesn't matter if you import from china because the shipping and logistics fees have shot up. Cheap per unit but import and tax doesn't make it much different to ordering from UK manufacturers only there arent many left that can deal with high quantity orders.

 

[Philip Hoyle]

But it doesnt require people to be employed in the numbers that other methods do. What do we do with all these people?

I have a couple of clients (remarkably similar set ups but different products) who are online retailers and both employ lots of staff, and not all at lower levels either. OK, most are pickers and packers from the warehouse, but they also have a few customer service advisers to take phone orders and give advice both are heavily into exceptional customer service hence their success). They employ managers, they both have book-keepers. One has an in house web designer, the other subcontractors to a local firm of web designers - they both pay substantial amounts for hosting and postage and CEO etc - i.e. staff employed by other firms!

Given their turnovers, they are employing similar numbers of people as if the buildings were factories - in fact one of them is in an industrial building that I used to go to as an auditor in a previous job 20 years ago, and they employ more in that factory today than it did 20 years ago as a factory.

Online retailers aren't all spotty kids in their bedrooms. Most decent websites will have bricks & mortar premises and employing plenty of people with varying skills. Just think how many jobs will have been created for web designers, SEO experts, software developers, etc., on the back of websites? Then you have the ISPs, the data centres, the infrastucture, all employing people, many of whom will be higher technical roles.

It wouldn't surprise me at all if online retailing is responsible for employing, directly and indirectly, a similar number of people to the B&M stores it is replacing. It's just evolution. Change happens all the time. Big store B&M has had it's day. You also have to remember that the likes of Comet would have been responsible for the demise of numerous smaller electrical retailers - there was a time when you had smaller chains (Rumbellows, Electricity showrooms, etc) on the High Street - they in turn had replaced the independent owner-managed small shops. In fact, there may be the opportunity for smaller independent firms to re-open once Comet and Currys are gone, to cater for the people who want good customer service and are willing to pay that little bit more to buy from experts rather than school kids who know nothing about the products and don't want to order from the internet.

People have to adapt. Before the industrial revolution, people lives in and around farms and villages. With the Ind Rev, those people moved to the towns and cities for better jobs. Town centres used to be where people lived and where people worked in factories, warehouses, etc - shops were incidental and just dotted around on street corners etc. Then the factories & warehouses left the towns and were replaced by High Street shopping. Then High St shopping was replaced by out of town. Now it's being replaced by the internet. It's just the way things change. You move with it rather than get stuck in the past and pine for things to go back the way they used to be.

 

[telemax]

Daniel I've got to ask and please don't take offence. How old are you mate?

We have nothing in the UK to re train these people into. We just have service industries.

A computer manufacturing factory requires millions of pounds to set up, machinery, massive factory, materials, just in time delivery etc, takes years to make it's money back all for a measly £10-20 markup per machine.

A computer service industry, requires a computer network, a bit of cheap office space in the back of beyond and they can start billing at £100 per hour immediately.

What makes more money?

 

[useitorloseit]

In fact, there may be the opportunity for smaller independent firms to re-open once Comet and Currys are gone, to cater for the people who want good customer service and are willing to pay that little bit more to buy from experts rather than school kids who know nothing about the products and don't want to order from the internet.

People have to adapt. Before the industrial revolution, people lives in and around farms and villages. With the Ind Rev, those people moved to the towns and cities for better jobs. Town centres used to be where people lived and where people worked in factories, warehouses, etc - shops were incidental and just dotted around on street corners etc. Then the factories & warehouses left the towns and were replaced by High Street shopping. Then High St shopping was replaced by out of town. Now it's being replaced by the internet. It's just the way things change. You move with it rather than get stuck in the past and pine for things to go back the way they used to be.[/quote]

This is the answer-specialist shops . where people can browse, receive quality information , good customer service, this can apply to a lot of retail areas, because people will pay for good customer services and good products and always will, throw away consumerisim is for the internet , but specialist stuff will always sell in shops, you just have to be different...not indifferent

 

[Esk247]

A computer manufacturing factory requires millions of pounds to set up, machinery, massive factory, materials, just in time delivery etc, takes years to make it's money back all for a measly £10-20 markup per machine.

A computer service industry, requires a computer network, a bit of cheap office space in the back of beyond and they can start billing at £100 per hour immediately.

What makes more money?

the computer manufacturer? exporting to the USA, Australia and Europe and producing internationally patented circuits? no?

The services industry can already be handled in india for half the cost, so what does Mr British do? apart from claim Jobseekers for the chance to work in an Indian owned steel factory or a Japanese owned car plant

We can still manufacture and export. I don't see how the services industry can get us out of national debt, how do we export it?

 

[Esk247]

This is the answer-specialist shops . where people can browse, receive quality information , good customer service, this can apply to a lot of retail areas, because people will pay for good customer services and good products and always will, throw away consumerisim is for the internet , but specialist stuff will always sell in shops, you just have to be different...not indifferent

and where do you put the 100 shop floor staff that were employed before? you don't need them for an internet business.

 

[useitorloseit]

and where do you put the 100 shop floor staff that were employed before? you don't need them for an internet business.

What 100 shop floor staff...no hand-wringing here...be diverse

 

[internetspaceships]

What 100 shop floor staff...no hand-wringing here...be diverse

I think Esk raises the point I was trying to make. Moving from retail to an internet/warehouse company still removes the need for all the shop store staff. Companies who retail still employ warehouse staff and the whole "backroom" staff that are needed for an internet business.

So that still leaves us with a whole section of the retailer's staff that don't need to be employed under the internet model.

The sheer volume of these people is staggering.

 

[DarrenTSO]

We can still manufacture and export. I don't see how the services industry can get us out of national debt, how do we export it?

We "export" massive amounts of consultancy and other services abroad. We "export" education (in terms of foreign students coming to study in the UK, it's a capital inflow). That's without considering the massive amount of "culture" we export, with the likes of BBC Worldwide, independent production companies exporting their TV programmes and formats, and music artists and so on. Last but possibly the most important are companies like ARM, based in Cambridge who do no manufacturing but have designed the processors that power in the region of 90% of smart phones and other similar devices in the world today. Pharmaceuticals again are a big contributor to the UK economy, the UK being a comparative powerhouse on the world stage, hitting well above its weight.

It's probably worth reading something like this to get an idea of what the UK does:
http://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom

 

Last but possibly the most important are companies like ARM, based in Cambridge who do no manufacturing but have designed the processors that power in the region of 90% of smart phones and other similar devices in the world today. Pharmaceuticals again are a big contributor to the UK economy, the UK being a comparative powerhouse on the world stage, hitting well above its weight.

And earning a pittance for all there ability.

Earl

 

[Philip Hoyle]

I think Esk raises the point I was trying to make. Moving from retail to an internet/warehouse company still removes the need for all the shop store staff. Companies who retail still employ warehouse staff and the whole "backroom" staff that are needed for an internet business.

So that still leaves us with a whole section of the retailer's staff that don't need to be employed under the internet model.

The sheer volume of these people is staggering.

I'd say that online retail is a lot more similar to B&M retail than you may think.

I've just compared two of my clients. One a convenience store and the other an online retailer selling food and other household goods. Both similar in that they're both B2C and both selling generally low value household goods, of an average purchase per customer visit of around £10 - £15 or so, although I appreciate that they're not identical. The shop has a turnover of £487k p.a. and overheads (excluding owners) of £55k. The online retailer had turnover of £567k p.a. and overheads (excluding owners) of £64k. So overheads are 11.3% of turnover for the shop and 11.2% of turnover for the online retailer. Within those overheads, the payroll costs are virtually the same (a few part time staff in each), rents are virtually the same (shop as opposed to small warehouse unit), and all other overheads are remarkably similar, except online retailer pays a lot more for web design, marketing, card processing, etc., whereas shop pays more for equipment rental such as fridges, counters, tills, etc.

So, surprisingly comparable in terms of overhead profile and staffing numbers for similar sizes of business selling similar values of items to customers.

Once an internet firm grows big enough to need to employ staff and rent premises (rather than do it yourself from your spare room), the overheads including staffing are a lot closer than you'd think when comparing against B&M.

 

[internetspaceships]

Yes but not when you look at the massive companies like Comet.

They employed both sets of staff.

 

[kulture]

Yes but not when you look at the massive companies like Comet.

They employed both sets of staff.

The internet retailer needs MORE warehouse staff, or call them pickers and packers. Where in a traditional B&M operation, you might get away with a small number of warehouse staff, in on online operation you need to not only accept deliveries and organise the warehouse (the traditional warehouse job) but also pick and pack orders.

 

[internetspaceships]

That logic doesn't work if you are shipping the same amount of kit mate.

Still requires the same amount of people to do it.

 

[InBetweener]

250 stores to close another big name hits the dirt.


Earl

I am in no way suprised about this In 10 years time hight streets shops wont exist anyway, especially when society has started shopping online.

It has been a few years since I visited Comet or any of its counter-parts. THe staff are useless and clueless, and the customer services is poor.

Good riddance to a poorly managed company, that employs poor staff and permits poor customer services.

They will surely be followed by companies such as HMV, Dixons, Curry's etc....

 

[Dave Kinnel]

I am in no way suprised about this In 10 years time hight streets shops wont exist anyway, especially when society has started shopping online.

Or..... internet sales nationally account for roughly 10% of all retail sales, how can the internet hope to compete with B&M retailers who make 90% of all the sales?

The High Street is far from dead. Changing yes, and for for the better at which point internet sales will plateau as customers return to the quality shops and service which the internet can never provide.

 

Or..... internet sales nationally account for roughly 10% of all retail sales, how can the internet hope to compete with B&M retailers who make 90% of all the sales?

Price,price,price.

Earl

 

[Dave Kinnel]

Price,price,price.

Earl

I wasn't asking literally Earl, just pointing out that the internet isn't the cause for all the troubles on the High Street at the moment as so many would have you believe.

Obviously certain markets have been hit - music & home entertainment come to mind. But the rest of us are relatively untouched by the web.

I can't be bothered to look at the moment, but I wonder what percentage of that 10% of internet sales is music & dvd sales? It would be interesting to take those of the equation, after all it's not the internet that has grabbed all the record sales by their own wonderful means, but the medium by which music (and more recently video) is now sold. If it wasn't for the MP3 the amount of music sold over the net would be minimal - probably!

 

[InBetweener]

Or..... internet sales nationally account for roughly 10% of all retail sales, how can the internet hope to compete with B&M retailers who make 90% of all the sales?

The High Street is far from dead. Changing yes, and for for the better at which point internet sales will plateau as customers return to the quality shops and service which the internet can never provide.

An interesting set of stats, but internet shopping is still relatively young. The 10% figure will surely rise as time passes and as our current young generation of kids grow up in a world of computers and the internet and the older generation slowly "decrease". Shops WILL become a thing of the past.

I dont know how shops have "become better" and how a click of a button will ever be replaced by getting into a vehicle on a cold day, visiting a busy high street, just to purchase a TV, when the same thing can be done in a few moments from the comfort of your own bedroom.

One example is that I recently bought a digital camera. It was over £300 on the comet website, yet it was less than £210, with delivery, online.

Lets not forget the rising cost of fuel, which will play an important role in people staying in and buying online, especially when delivery is quick, free or at worst cheaper than fuel.....

 

[Philip Hoyle]

That logic doesn't work if you are shipping the same amount of kit mate.

Still requires the same amount of people to do it.

Not at all. Maybe so for the large items that are delivered anyway, but what about the vast majority of the smaller stuff that is bought and taken away by the customer.

It takes a similar amount of warehouse time to organise a dozen phillips Mk4 toasters sent to Preston's Comet as it does to pick and pack a single toaster to Mrs Smith in Preston. It's going to take at least 12 times as long to pick and pack 12 individual toasters as it would to do a shipment of 12 to a single shop.

Same applies with cables & other peripherals and all the other smaller items that can be fitted in the family car that people wouldn't have had delivered. If all that's going to be dispatched individually it's going to take an awful lot of warehouse time and admin to organise.

Not to mention re-organising and increasing warehouse space. You change it from a distribution centre where a container comes in and is virtually immediately shipped out to individual stores, to being a warehouse where it's kept on the shelf and dispatched one by one.

The warehouses stocking the stores will be sending stuff out in multiple quantities whereas the distribution centres doing direct deliveries will be working on single item basis.

Obviously, I don't know for sure, but I'd expect the likes of Comet to have separate warehouse/distribution centres dealing with direct orders as opposed to stocking the stores. Completely different logistics.

Think about your local wholesaler for the average sweet shop. It sells boxes of Kit Kat in 48's, not singly. If it suddenly decided to retail, then it's going to take an awful lot more effort, time and reorganisation of the warehouse to be able to sell them 1 at a time rather than a box of 48.

 

[Dave Kinnel]

I dont know how shops have "become better" and how a click of a button will ever be replaced by getting into a vehicle on a cold day, visiting a busy high street, just to purchase a TV, when the same thing can be done in a few moments from the comfort of your own bedroom.

Shops will/are becoming better with the death of the large faceless chains like Comet that only want to take your money and offer no service - now doesn't that sound similar to buying from the internet?

The High Street will slowly re-invent itself with more independents, more focus on enthusiastic staff with product knowledge. It won't happen overnight, but it will happen (probably!).

And most people always have, and always will want to see the physical product before purchasing. You have to admit it's a bit of a flaff, not to mention time consuming, to have twenty tellies delivered and returned until you find the one you like!

EDIT
Scrap "re-invent itself" to "go back to what it used to be"!

 

[Esk247]

only want to take your money and offer no service - now doesn't that sound similar to buying from the internet?

no service? are you sure? a lot of internet retailers are winning awards just for Customer Service. Not all of them, but thats the same as the high street.

The only drawback to online is the faceless side but with social media, thats changing, companies are engaging with followers and staff are available directly via email, twitter or facebook.

Internet retail is changing, i'm not sure whether the high street can keep up. The big stores are on their knees, shoppers yes, but too few! Speak to any large organisation and they'll say retail is a dying duck at the moment, it's only got one leg left and thats got scabs on it.

 

[Dave Kinnel]

no service? are you sure? a lot of internet retailers are winning awards just for Customer Service. Not all of them, but thats the same as the high street.

The only drawback to online is the faceless side but with social media, thats changing, companies are engaging with followers and staff are available directly via email, twitter or facebook.

Internet retail is changing, i'm not sure whether the high street can keep up. The big stores are on their knees, shoppers yes, but too few! Speak to any large organisation and they'll say retail is a dying duck at the moment, it's only got one leg left and thats got scabs on it.

The clue there is Speak to any large organisation , as I said it's these people that will be going whilst smaller and more professional retailers take their place. When the internet has just 25% of sales it may make a difference, 10% loss of sales (must find out what percentage is music/film) isn't going to make or break a B&M retailer.

My point simply is internet sales are not the cause for the decline of the B&M retailers, it's the global downturn that it is.

Maybe another thought, with all the backbedroom dodgepot people setting up retail websites (just check this forum to find them, clueless bunch of get rich quick fools) I would be happy to predict that with these cowboys springing up everywhere the internet reputation will be destroyed within five years for most with only those we know and trust like Amazon, Play etc surviving along with a few established smaller firms.

Of course it's all speculation and opinions, must put it in my diary to bump this thread in 2016

 

[Esk247]

The clue there is Speak to any large organisation , as I said it's these people that will be going whilst smaller and more professional retailers take their place.

Well i hope they do. It would be good for us to be able to set up a retail outlet in a year or two but at the moment, retail is dead. Not just for larger retailers but for independents. Why? A great array of reasons from stupidly high rent and rates to petrol prices shooting up and people losing their jobs. I've looked in to retail premises and the figures just won't work. I'll be spending my profits on a landlords BMW, not stock and not my own nice new car. With internet retail it's hard, very very very hard to get noticed BUT when you do get noticed, it's a gold mine of opportunity and it is virtually limitless with Apps, Social Media, Forums, Product Development, Research etc etc.

I'm lucky where I live, i can actually see the town centre from my office and it takes mere minutes to go and buy some cushions or lights or car repair stuff. For others, a trek in to town is a car journey away and a lot of people don't head out until Saturday what with the shops being closed at 4.55pm.

Theres another point, why do independents shut so darn early? i dont expect them to work until 8pm but come on, many are closed all of sunday so they only give themselves a saturday to make up the weeks wages and they'll be darned if they will be open at 5 past 5 on a Wednesday, god no, straight out of the door and don't you be coming in wanting to actually buy something. (Note: Not ALL retailers are like this)