Founded in 1920s on a similar model to Woolworths, with capped pricing at 1 shilling. Though the cap was soon raised and later removed altogether, BHS has never abandoned its roots at the price sensitive end of the retail market.
But in recent years the rest of the high street chains have been focussing hard on refining their offering for the 21st Century and developing a clear strategy that is fundamental to the company’s decisions and is communicated through every marketing activity to their customers. Thus we know that M&S is strong middle market retailer with a reputation for product leadership in its clothing (trialling new fabrics etc) and food (with innovative ready meals and flavours) alongside a reliable product base (what woman doesn’t buy her underwear there?).
When you are looking for cheap fashion we all know where to go: Primark, TK Maxx, New Look amongst others. These guys know how to get the lowest priced clothes onto the shelves and still turn a profit.
And as for customer service: The Which? “2015 High Street shopper survey” comments in its report that “Although independent stores vary widely in the type of products they stock as well as in their atmosphere, they seem to have one thing in common – good or outstanding customer service”.
But where was BHS in all this? Known for competitive prices – it has been undercut by Primark et al. Good middle market shopping – it hasn’t innovated in the same way as M&S. Known for lighting – it has been swamped by competition from the DIY chains. And it’s not small enough to be good at that personalised customer experience that the small independents do so well.
So perhaps there has been poor ownership (and who knows what’s been going on with the pension fund) but fundamentally BHS has had a problem for years with a lack of clear strategic direction.
That’s the real damage that the ownership has done. With a clear strategy it might have survived some of its recent crises, but unfortunately now it seems to be too late.
If you are interested in developing a clear strategy you may be interested to join our Strategic Thinking and Decision Making course.
