Multichannel Success Podcast Season 4 Episode 2 - Transcript

The Power of Buying - with Anna Berry

Mark[00:00:05 - 00:00:31]

Hello, and welcome to this episode in Season 4 of the Multi-Channel Success Podcast. Hello, I'm Mark Pinkerton, and welcome to this episode of the Multi- Channel Success Podcast. And I'm very pleased to say that today we have with us Anna Berry, who has many years of experience as a buyer from John Lewis, and welcome, Anna.

And also, as usual, I have my normal co-host, David Worby, who actually has a hidden merchandising past. Yeah, maybe not going to be hidden for much longer. Frightening. Okay, so welcome. Today we're going to talk about how buying should change within retailers and we thought Anna was the perfect person to have this conversation with because of your history. Why don't you tell us a little bit about your background?

Mark Pinkerton [00:01:04 - 00:01:51]

Thank you very much Mark. So I spent 33 years at John Lewis. Within that time I bought, I did 22 different roles so I actually won't tell you all of them but I was bought up as a graduate trainee so started on the shop floor which was very useful to get into buying and then started off buying menswear, bought jewellery, bought sports, bought fashion, bought beauty and then became head of buying for home where I bought all of gifts, home, stationery, cook and dine. So having worked with John Lewis, big big retailer, learned loads about how the buying mechanics were changing and we bought an internet company in just before 2000 and that's where the e-commerce journey started for me at John Lewis but as head of buying I ran a buying and merchandising team so those two teams were under my remit.

Mark[00:01:53 - 00:01:59]

Perfect. And David, what is your secret merchandising past? Well, I don't think I...

Anna Berry [00:01:59 - 00:02:23]

I guess I can lean on my merchandising past, but in a former life, alongside a young Mr. Peter Ruess, I was a graduate trainee at Marks & Spencer back in the day, looking at the wonderful world of men's underwear, whilst he was looking after men's socks, a much bigger job than mine. So I spent about two years training to be a merchandiser,

David Worby [00:02:19 - 00:02:20]

So I spend about.

Anna Berry [00:02:23 - 00:02:29]

and then spent five years being a merchandise manager at Marks & Spencer. But that was a long time ago.

Mark[00:02:28 - 00:02:54]

You But those disciplines I don't think ever will leave you, because they've been ingrained in your psyche by now. So, the first question I want to ask is, where does buying stop and merchandising begin? Because I've never been a retailer, I mean, I've worked as a sort of e-com director for a retailer, but it's one of those sort of slightly nebulous areas from outside, I think, in terms of where the division is.

Mark Pinkerton [00:02:54 - 00:04:07]

Absolutely, sure. So we always said in John Lewis, the magic is when you had a great buyer and merchandiser working together in a team. So the buyer is the creative, analytical product person who will go out and source the product and put the newness in and drive the product category forward. The merchandiser will do the financial process that makes that product successful. I used to always say that the buyer was the optimist and the merchandiser was the pessimist. And when you got them working brilliantly together, that healthy tension of the buyer who wanted 400 SKUs and the merchandiser saying, no, you can have 300, because that's what the maximum should be. So there was always a very useful push and pull between a really great buyer and merchandiser. And great merchandisers are creative as well, but they financially will look after the planning to ensure the assortment the buyer is putting together is going to be profitable. And as I said, the magic happens when those two people work in tandem. And as head of buying, we would do assortment reviews and we would review what the strategic plan was. So the buyer would set the strategy on the product part and the merchandiser would support on the financial strategy. And that's where I felt that blend really gave those teams a really powerful, powerful assortment that was going to be profitable.

Anna Berry [00:04:07 - 00:04:35]

I think that's the most perfect explanation I've ever heard of that. I remember being a junior merchandiser in the day, trying desperately to understand what my job was. I think if I'd heard that I'd have been a bit better at it than I was. But I think I agree with you and in the past we kind of rephrased jobs. Buyers sometimes became selectors and then certain businesses tried amalgamating buying and merchandising into the same job.

Mark[00:04:36 - 00:04:41]

Well, you hear B&M; used as a sort of colloquial term for the combination, don't you?

Anna Berry [00:04:41 - 00:05:16]

For the combination, but I think there were some businesses, and I was in one at the time, when they actually thought it was a good idea to make one role that was both buying and merchandising. And as Anna, I think, has very expertly defined, the characteristics are very different. So the beast that could become both buyer and merchandiser simultaneously is probably quite a rare beast. And I think most people have repealed it anyway. But I think when those people work together, the numbers and the product and the creative, that's when it's really powerful, I agree with you. And sometimes it worked. I can think of buyers I worked really, really well with.

Mark[00:05:16 - 00:05:58]

others I didn't. So yeah so that will come down to the people and the individuals. So but it also strikes me is actually that description is not that wildly different from the product teams that many organizations try and build themselves up around today. I mean I'm thinking of the sort of fast-food people and various other more modern startup based organizations where they have product teams which effectively bring some data and analytics in but actually brings all of those sort of core disciplines in terms of the buying and merchandising that you very eloquently described into it. I think that's

Mark Pinkerton [00:05:58 - 00:05:59]

I think that's absolutely true.

Mark[00:05:58 - 00:06:01]

absolutely true I think

Mark Pinkerton [00:05:59 - 00:06:58]

I think what I would say about the buying team at, well, any big retailer, but what I experience is you have to be customer obsessed wherever you are, and the buyer tends to have to look forward because when you're doing a lot of data and analysis, which is really critical and my merchandiser always said, Anna, data is your friend, I was quite happy for him to build the pivot tables and do it, but I did get excited about how many of that new range I bought in last week, how many we sold and at what price, and that's why you're in retail, but it is really important that you understand that as a buyer, you need to look forward. And when I was in supplier management, which was the commercial side of the business in one of my roles, what they had was a lack of passion for product. So if you don't have that passion for product and that forward looking building of a profit in a strategic way that represents your business, because the strategic direction will come down for the director or the head of buying, and you need to make sure that you're supporting that strategy that supports your customer strategy, whatever that will be, because you can't randomly go out and just buy products that you like.

Anna Berry [00:06:57 - 00:07:01]

clearly have to think about the customer. I remember that tension, I'm sure you

Mark Pinkerton [00:06:58 - 00:06:59]

You clearly have to think about...

Anna Berry [00:07:01 - 00:07:35]

experienced this a lot, where the merchandiser would say but we need four percent yellow. Yes. And the buyer would say it's not about yellow next year, it's about orange. We said yeah but last year we sold four percent yellow so we need four percent yellow because that's what that cost. No, next year it's all about orange. These fights or tensions were good because it brought to the surface conscious decisions. You didn't just do something by accident, you did it because the combination of the numbers said this, the data said that, but the interpretation of the trend and the future projection said something needed to be different.

Mark[00:07:35 - 00:07:46]

And now finally, we do actually have tools that will help in that discipline. I'm thinking of edited and tools like that, which have never really been available until the last five years probably.

Mark Pinkerton [00:07:47 - 00:08:11]

I think the merchandiser really helps you manage risk so if you're going to put the lime green in that's absolutely fine but you're not going to buy as many lime green socks for example which is where I started as well as you are black and sadly that's where the money is it's in the core so you need someone to balance and question decisions we're not saying you can't try the new latest fashion color but you need to manage that risk how many do you think you're going to sell because you're still going to sell 80% black but you need the pop

David Worby [00:08:10 - 00:08:11]

Yeah.

Mark Pinkerton [00:08:11 - 00:08:16]

of color if it's orange or lime green or pink or whatever it is.

Anna Berry [00:08:13 - 00:08:52]

Yes, and the other thing I think in that context the merchandiser added to the equation was the ability to range stuff in certain stores. So there was this idea that you bought a range, which you did, but actually you had to put some of it in the big stores, some of it in the middle stores, some of it in the really small stores and lots of it online obviously. And where did the relative start and stop line occur? Because certain stores only sold black socks, certain stores probably sold lots of lime green, orange and yellow socks. Yes. And the ability of the merchandiser to detect that and range, i.e. categorise certain stores into certain groups, was also...

Mark[00:08:50 - 00:09:00]

key facet of success. So it's the merchandiser's role to determine that a big range or a small range of products is going into that store.

Mark Pinkerton [00:08:59 - 00:09:38]

And they'll work together with the buyer. So for example, John Lewis is a really good example. The customer in Reading was quite classic and much older than the average John Lewis customer. So around the edges they would buy different things, whereas the customer in Stratford was all about brand and all about labels. So when I was buying watches, for example, we had ice watches which were bright luminous coloured watches. They didn't sell in Reading at all, but they flew in somewhere like Stratford. So around the edges you need to manage with your merchandiser who gets what stock and the big shops might get everything, but if you're in Peter Jones, you're going to get a different disorder than you're going to get in Nottingham or you're going to get in Scotland, for example. And when that stock goes in is critical because school holidays in Scotland are different.

Mark[00:09:38 - 00:09:46]

So that's a good example of actually tailoring the range of the product to the audience that you know is going to be represented in that store.

Mark Pinkerton [00:09:38 - 00:09:39]

So that's a good example.

Mark[00:09:46 - 00:09:50]

Okay, so what's the core of the buying discipline then?

Mark Pinkerton [00:09:51 - 00:11:10]

So the core of the buying discipline is creativity and passion for product linked with strategic agility. And I always say that great buyers, it's a blend of science and art mix. Because the example of the lime green buyer who would buy loads of lime green when it was great, you know, but we were never going to sell what she bought. So there's no point in having a creative eye if you don't have the numbers behind it and strategic agility to work with it. So buyers, it's all about having vision and strategy, being creative, having strategic agility, which I think now is more important than it has ever been, because the pace has got much faster. So in my 33 years at John Lewis, there was many more core ranges than there are now. There's still a core if you're in a cook and dine category, but you have to be fashionable in home now, in the same way that you're fashion in fashion. So you have to react quicker, the market moves quicker, you need to have a great march merchandiser who can manage your exit strategy when you get it wrong. But as a buyer, you absolutely need to know what's going on in the world. So you need lots of sources of information. So the internet is great in that you can look at lots of different retail very quickly on your on your computer, whereas you have to walk up and down Oxford Street before you can also use trends and look at what's coming. So the trick is the buyer is you catch the trend on it's going up, and you get rid of it before it goes down, to put it very, very simply. Yeah, so what you're saying now is that actually you've got to be prepared to effectively ditch

Anna Berry [00:11:23 - 00:11:50]

brands and bring new brands in at a faster pace than you've ever been doing before. Absolutely. I think at the core of that is understanding who your customer is. John Lewis, correct me if I'm wrong, because I've never worked with John Lewis, but I suspect there's a fairly good sense of who the customer is and the different profiles of customers. And the different profiles of customers by shop, because obviously, as you just said, no two stores are probably the same. So having an understanding of that and melting that with that trend, that futuristic view of how things are going to change, that's a real art.

David Worby [00:11:50 - 00:11:51]

It's real art.

Anna Berry [00:11:50 - 00:12:04]

Because it's okay to know where we are, that's facts, that's data. But then to be able to blend it with an intuitive view of how the business moves forward, I can see why it's not easy.

Mark Pinkerton [00:11:51 - 00:12:03]

You know, because it's okay to know where we are. I can see why.

Mark[00:12:02 - 00:12:03]

I could see-

Mark Pinkerton [00:12:04 - 00:12:08]

And you have to be brave. I think you're right and customer centricity is

Anna Berry [00:12:04 - 00:12:07]

And you have to be brave, I think you're right.

Mark Pinkerton [00:12:08 - 00:12:13]

absolutely the thing. If you have great data, John Lewis, you can use that well.

Mark[00:12:12 - 00:12:37]

So I've got one question related to that but I'm going to ask another question first, which is that when you say the strategy comes down to the buyer, what does strategy for homeware or strategy actually overall from a buying perspective actually means? What does it mean? Are we actually going to buy less homeware or is it at that sort of level? What does it actually mean?

Mark Pinkerton [00:12:35 - 00:13:38]

So from a director point of view that that can happen. So we pivoted into home when I was in Homewares which was great. So John Lewis is a really interesting business because it's a third fashion, a third home and a third tech. So those buying directors are always fighting who gets the biggest part of the pie and the money for the resources and the money to you know revamp the shops. But actually we pivoted into home and we knew who the customer was and the customer in home and who they were. I bought Beauty for a long time and the customer in Beauty is younger than the customer in home because in Beauty you have brands. It's all about brand dynamics and if you bring in a Charlotte Tilbury and a Mac you're bringing in a younger demographic. And in terms of tech, tech had a younger demographic again. John Lewis was very big on tech and early adopters went into John Lewis. We also knew the customers who had money. We had lots of homemakers. We knew who our customers were and what we wanted to do was get customers from the cradle to the grave. So categories like children's shoes, school wear, nursery are really important because John Lewis is not going to appeal to teenagers as I wrote. Part of them may be a bit in Beauty. You lose them for that.

Mark[00:13:36 - 00:13:40]

You lose them for that. Yeah, you lose them so often. And we capture them back when they're...

Mark Pinkerton [00:13:38 - 00:13:50]

We capture them back when they're starting to get to home. So that's what the strategy would be. How are we going to form home and what is our strategy for home in terms of how people live. So looking at

David Worby [00:13:49 - 00:13:50]

Okay.

Mark Pinkerton [00:13:50 - 00:13:54]

scenario planning, looking strategically very long term but also having to look

Mark Pinkerton [00:13:54 - 00:13:58]

quite short term because the world moves so quickly now. You do a five-year

Mark[00:13:56 - 00:13:58]

Yeah, you'll get what you're looking for.

Mark Pinkerton [00:13:58 - 00:14:28]

strategy and you have to revisit it all of the time. So looking at how people are living, the importance of sustainability, urbanisation, how people's age profile is changing in this country. It's quite an old population. It's an older growing population. What does that older customer want from John Lewis? And John Lewis are not going to be targeting the teens as I've said but they are going to say how do I get more of the wallet from the older customers. And we have very good data that tells us when they leave us and go and shop elsewhere because we have a partnership card.

Mark[00:14:26 - 00:14:56]

So going back to the data point I wanted to make was how good have you seen, how well have retailers generally, not just John Does, but generally been at taking the wealth of digital data you get, you know, you've got sales by postcode so you actually, are you allocating those online sales to the store and then blending that with your store sales to actually understand your full profile of your store, for example.

Mark Pinkerton [00:14:54 - 00:15:25]

I don't think they were particularly wonderful at it. I think they've got better. I think we were very lucky. We had very good data. We had over a million and a half account customers ten years ago and we knew what they were buying in John Lewis, what age profile they were and where else they were shopping. We also knew, we also had and shared the data with Waitrose which I think is another big win because the customer is the same. If they're shopping in Waitrose, they're probably going to shop in John Lewis and if they're not, why not? So I think retailers are getting better and there is better data but it's how you use that data to interpret what your strategy should be.

David Worby [00:15:27 - 00:15:55]

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Mark[00:15:58 - 00:16:09]

So what makes a good buying team? I mean those people, how do you determine whether or not somebody has that combination of creativity and strategy and general commercial awareness?

Mark Pinkerton [00:16:10 - 00:16:13]

Generally pretty much have you made more money this year than last year and you're only as good

David Worby [00:16:12 - 00:16:14]

You're only as good as you.

Mark Pinkerton [00:16:13 - 00:17:01]

as your last buy but actually it is all about you can see as a head of buying I could see that the buyer I would want would be the buyer I had to tug back rather than the buyer I had to push forward because you want buyers to be absolutely driven and passionate about their product you want them to make money you want to give them the headroom to go and build that assortment and as a head of buying you didn't tell the buyer what to buy you might tilt the tiller and say have you thought about this or objectively you might have too many of the duplicated brands but you were there just to manage them but the great buyers had the skill sets of the creativity and the analytical skills you also have to be quite resilient as a buyer you get really tough seasons you have to stand up behind your buy and that's where your magic merchandiser can come in and manage your exit strategy for you and say we need to clear this quickly we need to get on to it.

Mark[00:17:01 - 00:17:05]

And if something goes wrong, how quickly do you know that it's gone wrong?

Mark Pinkerton [00:17:05 - 00:17:24]

Pretty soon. Depending on the category, it depends on seasonality, but I kind of think within three or four weeks, if something hasn't moved, you know it's not good. And it might be that it needed marketing, or the timing was wrong, or we didn't get the price right, but pretty early on when you get a range in, you can look at it and say, actually this is an issue, and it's what you do with it at that point.

Anna Berry [00:17:24 - 00:17:57]

I remember, I'm sure you had something similar to this at M&S;, you had this notion of trial stores, which sounds a bit dated, but the concept of trial stores was that the trial stores were defined and never changed, and the rate of sale in the trial stores, and there was one from the top category, one from the middle, one from the middle, those stores never changed, and you measured at finite detail the rate of sale of every product in those trial stores, and you knew, by extrapolation therefore, what the chain was capable of doing. So they're not actually trial stores, they're just reference stores?

Mark[00:17:57 - 00:18:00]

No, they were just called trial stores.

Anna Berry [00:17:57 - 00:18:01]

No, they were just called... Right, but they're actually...

Mark[00:18:00 - 00:18:04]

But they're actually a complete cast iron reference.

Anna Berry [00:18:03 - 00:18:55]

Yes, they were absolutely nailed on, and you knew if your rate of sale per week in those stores was 0.7, you knew the chain would deliver X. Right. Now, when the chain didn't deliver X, you then were able to say, where's the deficiencies? The deficiency in seaside shops, in town centre stores, in big stores, in small stores, and then you'd go after those to improve the rate of sale. But the ultimate exit strategy is whatever the rate of sale is, if it's behind the plan. Something defined by the trial store's rate of sale, which was only about six or eight stores from memory. Peter may correct me, but six or eight stores. Then you took the markdown pen, and you kind of got out the price discounting, and that's the way you cleared it. And the policy was always to clear in season, never to wait till the end and then have a god almighty sale. It was, let's just fiddle with the price right now to get the rate of sale where it needs to be.

Mark Pinkerton [00:18:55 - 00:19:46]

The other key thing you had is that when I was first buying at John Lewis, you visited all the stores twice a year. That was 50 stores twice a year. So you would go to a store and the reason the product might not be moving is that it's on the bottom shelf and no one has looked at it. But you also used the relationship thing was really important. I had relationships with all the good department managers we had in those days. And I would say, why is this not working? And they'd say, A, and a competitor has opened up down the road or we're too expensive. We've got this pricing wrong. It's not that the product's wrong, or they'll tell you very quickly, the product's no good. And then you'd get rid of it quickly and you'd use your relationship with your supplier. If it wasn't working quickly, you'd say to the supplier, what's going on? Why are we not getting this right? And you tell them early, so you didn't end up with all the commitments of stocks. You'd say, we need to fix this quickly. Can we lose this quickly? And if you had long-term relationships with your supplier, you could mitigate the poor sellers. And you'd share the cost, which I didn't

Anna Berry [00:19:43 - 00:20:14]

And you share the cost, which I don't think today happens. It's a much more transactional relationship today and I suspect some do do it but in the old days that's exactly what we did. In fact that was one of the first calls we used to make on a Monday. You know, certain supplier A's, six lines out of twelve weren't selling. We had to take the red pen to it and there's a shared cost there and suppliers would support that shared cost because it was all part of the relationship. It was not in their interest to have it sat in their warehouse, they want it pulled off and put into stores.

Mark Pinkerton [00:20:12 - 00:20:22]

They also know if they've got other ranges with you. If you've got cash tied up in this stock, you aren't going to buy anything else for them. So you'd have that conversation, look I can't release my open to buy because I'm stuck with this. conversation.

Mark Pinkerton [00:20:22 - 00:20:37]

Can you help me and we can swap it out and can you lose it elsewhere? So that relationship and that agility I think is more important now than ever. It's also thinking about time because sometimes you're too early with a product. You might be too late also but if you're too early sometimes it takes a while for people to know it.

David Worby [00:20:33 - 00:20:35]

You might be too late also, but if you're too early...

Mark Pinkerton [00:20:37 - 00:20:44]

Or you may then talk to your marketing team or your PR team and say look we think this is great. Can you support it? If you get marketing and PR behind it, then it can turn it.

Mark[00:20:45 - 00:21:02]

Okay, so moving on to the sort of e-commerce world and how that has changed, have buyers needed to evolve their skill set for dealing with online? Or have they just got more data that they have to try and assimilate? What's changed?

Anna Berry [00:21:01 - 00:21:26]

I guess simplicity, one end of the spectrum, it's just another store, which is way... Well, that's how it started out, yes. I suspect some still see it that way. It's a store that gets everything, and it has a supply based upon its demand. Through to the others, the other end of the spectrum, that say it's more than just one store. In fact, it could well be the only store for lots of businesses, and managed accordingly.

David Worby [00:21:22 - 00:21:24]

I'll be there.

Anna Berry [00:21:26 - 00:21:31]

I don't know whether it's changed the department store world, because I'm a long way away from that now.

Mark Pinkerton [00:21:32 - 00:22:14]

It's the most important store, it's your shop window. So in John Lewis it was 50% of the sales, it was close to it. Not in all categories, so it's really category specific. So if you're in tech, it's very heavily online. If you're on Big Ticket, it's heavily online. But you have that omni-channel piece where furniture is a really good example of an omni-channel assortment where the customer will go in and sit on the sofa, lie on the bed. They then will click at home, so it looks like it's been bought online but actually the customer has to go in the store. We were always amused by the fact that people wanted to see the TV and the quality of the picture before they bought it but clicked at home. Or they wanted to open the fridge door when they went down to the department. So there was definitely that omni thing but close to 50% of the sales will go online.

Anna Berry [00:22:14 - 00:22:17]

So I guess that's probably the biggest difference in a world where...

Mark[00:22:16 - 00:22:20]

But how does that change the buyer? Yeah, so I was going to say...

Anna Berry [00:22:18 - 00:22:55]

Yeah, so I was going to say, I guess that leads to a debate about what else can we do? Because if that's 50% of our business and we've got rich data sets now for that 50% of our business that's probably greater than the other 50% of our business, what decisions does that allow us to make as buyers? So we can sell, just to use this as an example, we can sell these TVs in our stores, but actually in our virtual store we can sell more TVs because we've got elastic walls and we can do more stuff and our supply network allows us to do that seamlessly. So opportunity I think presents itself for buyers when it comes to looking at the digital estate rather than just the physical estate.

Mark[00:22:55 - 00:23:04]

So the endless aisle and being able to justify having a picture of something without necessarily having stock enabling you to sell it through.

Mark Pinkerton [00:23:03 - 00:23:25]

Hmm. DTC, so direct to customer was a huge thing online and exactly that so online would get stretched out. What you have to be quite careful because these marketplaces have gone so wide now you've just got far too much product and what John Lewis is very keen to do although it is expanding marketplace is that it's the right product for the John Lewis customer and that the service proposition is there to support it.

Anna Berry [00:23:23 - 00:23:34]

But I think the point Anna's making is that we're headed to a world where 6,000 marketplaces all sell the same TV, and that's not going to create what feels like proliferation, which

Mark Pinkerton [00:23:31 - 00:23:33]

But that's not going to create...

Anna Berry [00:23:34 - 00:23:49]

isn't proliferation, it's just that it's the same product, it's just on everybody's marketplace. Whereas I think John Lewis's approach is much more professional, which is who are our customers and what do they need, and let's do that job, and do that job brilliantly, rather than just trying to move the walls out of the way.

Mark[00:23:48 - 00:23:52]

Then that's about making sure that you're as you say your buyers are

Mark Pinkerton [00:23:49 - 00:23:54]

We'll be right back.

Mark[00:23:52 - 00:24:02]

aligned with your customers and making sure they can make effectively range decisions on behalf of the customer.

Mark Pinkerton [00:24:00 - 00:24:17]

That's where one of the key strategies was to differentiate on product, so not to be the same as everybody else. So could you get a brand that no one else had or get it in early or that's where own brand, the blend of own brand and branded becomes really important because your own brand is very important to you because you can only buy it at John Lush.

Mark[00:24:16 - 00:24:35]

Presumably you can also get a range from a well-known supplier who supplies elsewhere but you could get a specific range for John Lewis. Absolutely, yeah. So with all the data that's coming in, what's the impact of AI? What have you seen out there?

Anna Berry [00:24:38 - 00:25:03]

Well, in buying, I think the notion of being able to take a whole data set and produce insights is probably more advanced now than we ever had it when I was doing it. But as an interpretive machine, I still think retail is very much open to expert eyes and opinions like Anna's, rather than leaving that to some kind of prophetic machine to determine that next season is orange.

Mark Pinkerton [00:25:03 - 00:25:27]

So if I keep looking at the same kind of thing they know what I'm in the market for and they can do something called smart push, where they'll push products to me that they know I'm interested in. So it kind of can know the customer and tailor through everything they've looked at and say, we think you've been looking at this, we think you're interested. You will then possibly be offered a discount on that because we know you're in the market for it. So it will be able to personalise the journey and that's what a number of retailers are looking at from AI now.

Mark[00:25:29 - 00:25:34]

morphed into into the merchandising world from an AI perspective? That is coming.

Mark Pinkerton [00:25:33 - 00:25:56]

That is coming, I mean it was coming, it's at the start, I don't think it's as far down the line but I think it is supporting the merchandising journey because you're absolutely right you can't analyse all this data and it's analysing the data and how you can use it because otherwise you get paralysis by analysis and I knew we had so many systems that they were all trying to fight each other it was like spaghetti junction but there's absolutely a desire that AI can do that for you.

Anna Berry [00:25:55 - 00:26:00]

And I think in the world of content generation, customer service, there's lots of AI advantages.

Mark[00:25:59 - 00:26:01]

Oh, yeah.

Anna Berry [00:26:00 - 00:26:08]

But I think if there's anybody out there listening to this podcast who's got great examples of how AI is improving the buying process, then we'd love to hear about it. So let us know.

Mark[00:26:09 - 00:26:17]

You normally share your buying data or your trend analysis or whatever data that you had that you're making your decisions with, with your suppliers.

Mark Pinkerton [00:26:17 - 00:26:56]

We would with key strategic suppliers. We would set up what was called a joint business plan and we'd say, okay, how do we build this business together? Because you will always do better if you build the right partnership and the right relationship. And that's why I'm a really strong believer. Some categories you're gonna go dipping in and out of new suppliers, particularly if it's fashion. But if you're in a big core category, you want to have a long-term relationship with those suppliers and those partnerships. And it's in their interest and your interest that you grow together. So when you're negotiating, clearly everybody wants a good deal. But I used to always say to my team, because I'd come out of supplier management, if it's a poor negotiation for the supplier, it's poor for us in the long run. You need to win-win. And if you build partnership, it's bigger pie for everyone.

Anna Berry [00:26:57 - 00:28:21]

I can see one trend that may have an impact on buying, and it's this observation of mine that great buyers and buying managers like Anna have not only been able in the past to predict trends and buy into those trends, they've also been able to create trends. Because if you buy with conviction, with a team around you of marketeers and merchandisers who can really deliver that, you can create a trend. So that's Nirvana, because you're now not reliant upon the big wide world to determine it's orange, you've created a market for orange. That's brilliant. So the trend I see is combining that concept with the fact that now buyers have so much more data. You know, in the old days there was no online store, so the data was whatever you got we got on a Monday morning from our stores or our conversations. Now I think what you said is in John Lewis' world, 50% of it is immediate data about customers who you never knew you had before. Now when that becomes 50, 60, 70%, it's now becoming ultra-powerful. So how do you create trends for people you know quite a lot about? That becomes quite exciting, and I think that changes maybe the balance between an art and a science a little bit, but it means you're creating experiences and personal things for small cohorts of people using that strong network of suppliers to do it. And I think that's quite exciting, because now you're in a world of...

Mark[00:28:18 - 00:28:37]

And I think that's quite exciting because now... And as social media is changing, you're getting live shopping going, so you're getting immediate data. And I guess effectively you're getting into smaller and smaller batch sizes of product for more and more tailored audiences. So true personalisation.

Mark Pinkerton [00:28:37 - 00:28:43]

Totally agree on that, I think that's absolutely the way forward, and being agile, more than ever, being really agile.

Mark[00:28:45 - 00:28:54]

Okay, and at that point I'm going to say thank you very much. Thank you for listening and thank you very much to Anna. Pleasure, thank you. And thank you to David.

David Worby [00:28:53 - 00:28:53]

Thank you today.

Mark[00:28:54 - 00:28:58]

Thank you. And we will see you on the next one.

David Worby [00:29:01 - 00:29:11]

Thanks to our sponsor Shopline, trusted by over 600,000 merchants worldwide to unlock the power of modern commerce. Find out more at shopline.com

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