The consumer must recognise the value

Redwood Comment
Published:  20 May, 2020

Amazon was never about books alone
Then came the Internet and another channel opened up. Amazon arrived and the world thought “books”; but the Amazon plan was never books alone, it was retail domination. And it was not about creaming off the most popular items the way supermarkets do. Rather, it was about anticipating and serving the highly specific needs of each one of us as individuals. Year after year, shareholders kept faith with the reinvestment of cash in doing this better, in more product categories, in more regions of the world. We said clothing and footwear would not sell this way, and then Zappos turned up; in 2009 Amazon paid a $1 billion for it. Traditional retailers looked on, but seemed unwilling to challenge or compete.

Internet retailers can play games to avoid sales tax and other business taxes. They were allowed a head start and the old retailers, already too fragmented and with too many malls and stores, were slow to move. Multichannel retail was discussed, but rarely seriously attempted. During this, to everyone's astonishment, private equity bought many high street stores and ignored the problems of 2008, which demonstrated the need to keep a strong balance sheet. Perhaps their early dividends and refinancing methods retrieved their costs early. When COVID-19 turned up and the economy closed, we have too many retailers with no reserves who do not pay suppliers and will not reopen, ever.

Regardless, consumers will start buying again; we need them to be considered consumers. To reject this sort of consumerism. They will be younger, more Asian and more African. Europe and the U.S. are more damaged, will recover more slowly; many consumers will be more cautious. They have been leaving the cities that have been exciting social places of culture and innovation. They have become death traps. Globally connected, densely populated, dangerous.

Do we know this new consumer? Value for them is not about price. Connoisseurship, individuality, self-reward become more important than status. People buy products that they think say something about who they are. Can we persuade them of the value of leather in this scenario? The value of the artisan, of longevity, of products with character, that come from nature and display its beauty, its functionality.

Much retail will now remain online. Yet, new retail will emerge. It is a chance to renew suburban and smaller high streets, and liveable communities within cities. Amongst the cafes and the bars to be, let us have some tannery stores or pop-ups, explaining leather and educating consumers with hands on experiences and some real facts about our raw material, process and material qualities.

The post Covid-19 consumer world will be different. The past is not attractive. The boomers have fouled it up. It is time to move on. If leather is to fit in, we have to adapt and evolve; quickly.

Only if we do can every craft worker, engineer and employee in the chain be sure to receive that decent wage - and a decent wage for everyone is an essential pillar of sustainability.

Mike Redwood

Mike Redwood
May 20, 2020

Follow Dr Mike Redwood on twitter: @michaelredwood

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