SPRING//SUMMER 2018 73 72 SPRING//SUMMER 2018 and Ohto, which all make great gifts.” With these brands’ prices ranging from £8.50 to £165, there is a pen to suit everyone’s budget. What will 2018 hold? Unfortunately, we are likely to see more retail restructurings, redundancies and administrations in the coming months. To succeed, retailers need to focus on their specific customers and deliver on product, value, service and experience. This means ease of shopping – both a slick user experience online and well-merchandised, easily discoverable products in store. Delivering personalisation via excellent service in store and personalised products are expected to remain important. ‘CONSUMER confidence ends year on low.’ ‘Retail administrations jump by over a quarter.’ ‘Retail sector endures worst year since 2013 as shoppers took advantage of November sales.’ These are just some of the headlines that followed retailers’ reports on 2017 Christmas and full-year performance. Doom and gloom is proliferating, with further administrations announced, retailers attempting to renegotiate leases and a busy CEO merry-go-round. So what’s really going on? There are indeed numerous examples of poor performance, and Visa’s Consumer Spending Index showed year-on-year declines in spending on household goods of 2.0% in November and 3.4% in December. Even the retailers applauding their top-line growth have only achieved it via a ‘successful’ Black Friday – an interesting spin – with transactions pulled forward into November at the REBECCA SAUNDERS looks at the highs and lows of last year’s trading results, revealing how stationery retailers are adapting to the current volatile landscape THE 2017 STATIONERY MARKET WRAPPED UP GOOGLE SEARCHES FOR DIARIES GREW 11%YEAR-ON- YEAR IN Q4 2017 AND SEARCHES FOR “LEATHER NOTEBOOK”AND “PERSONALISED NOTEBOOK” BY 25% AND 64% RESPECTIVELY. world where large retailers still dominate the stationery market, millennial customers want to buy from businesses with values, which brings many opportunities for smaller retailers. Firstly, we can respond more quickly to bespoke requests, which is vital for customers who are increasingly looking for something unique and personal. Secondly, independent brands can show the people and processes behind the products, which allows us to build a relationship with our customers that ultimately inspires them to shop with us.” Pockets of success Theo Paphitis, owner of stationery specialist Ryman Group, which has more than 200 UK shops, acknowledges these challenges, stating “it really does feel like retail as we know it is creeping closer and closer towards the precipice.” However, this Christmas Ryman defied the macro environment – despite its stores’ predominantly high- street locations – delivering impressive Christmas like-for-like growth of 4.8%. WHSmith, which overall reported disappointing numbers, reported that over Christmas “stationery and seasonal ranges, including cards and wrap, performed well with good sales growth.” In fact, WHSmith has delivered positive results in stationery for several years, stating it is “an attractive category… with good economics and growth potential.” Stationery now represents half of WHSmith’s high-street revenue (which STATIONERY BIZ STATIONERY BIZ was £610m for FY16/17), and the company’s strategy is to accelerate growth through “increased focus on range development, quality and design.” Nevertheless, stationery is an attractive market, with high margins and an increasing focus on design perfect for the Instagram generation. Martha Keith adds: “customers see stationery as an extension of their personal style. They want to customise the design, colour and wording to make them reflect who they are.” In line with this phenomenon, customers are demonstrating clear interest in stationery online. Google searches for diaries grew 11% year- on-year in Q4 2017 and searches for “leather notebook” and “personalised notebook” by 25% and 64% respectively. This customer attention has generated increased competition. Retailers known originally for cards and/or gifts are developing their stationery ranges. Department stores also remain important, with John Lewis this year featuring branded ranges from Lulu Guinness, Kate Spade and Ted Baker as well as the now-ubiquitous unicorn products. Additionally, challenger brands are growing rapidly; Typo now has five stores and kikki.K has simultaneously grown both its retail and wholesale presence. Smiggle – which appears to have the children’s market cornered – now has 125 UK stores and plans to open a flagship on Oxford Street in May; astonishing given its UK launch was just five years ago. Notebooks are a particularly important sub-category; Martha Keith says: “stationery is an accessible choice as a gift – it is perfect either as a highly personal product, or even if you don’t know someone very well. Price point comes into that, as notebooks in particular are an affordable purchase, yet a personalised, beautifully designed version shows thoughtfulness.” However, it’s not just about notebooks. Islington’s premium independent stationery studio Quill saw annual growth of 96% in pen and pencil sales over Christmas – its bestselling category. Founder Lucy Edmonds (who features in The Last Word on page 82) explains further: “We tend to stock primarily design-led pens from the likes of Kaweco, ystudio We should also expect to see more pop-up shops and experiential events in existing retailers to mitigate declining high-street footfall. Lucy Edmonds finds this a successful strategy: “we like to engage with customers through demonstrations and experiences, such as modern calligraphy classes and ‘London Letters Club’ social events” – ensuring events are relevant to the products she sells. Investment in store will also be key to attracting customers. WHSmith is currently trialling “lower-cost initiatives that deliver key benefits, to additional space with new features, such as a dedicated pen shop and digital area, through to a complete store refurbishment, as we have done in Reading.” The unprecedented level of uncertainty in the consumer market means it is hard to predict where the retail market will be in a year’s time. What is clear though, is that there are opportunities despite market volatility for all types of retailers to continue to sell stationery successfully as long as they remain focused, forward thinking and fixated on their customers. expense of later full-price sales. There has also been a genuine shift in consumer behaviour, with online shopping (hitting 19.8% of spending in November) the obvious change, since it is inherently linked to reduced footfall. The BRC reported a high-street footfall reduction of 4.5% in December, the worst result since March 2013. Other negative factors at play include rising costs due to exchange rates, higher business rates and general economic uncertainty. In addition, December’s inflation at 3.0% – whilst lower than earlier in the year – concluded a year of consistent price rises not seen since 2012. The cumulative effect of this prolonged inflation, particularly in food and fuel, has significantly impacted households’ ability to spend on discretionary items. The fallout of structural industry change means that many established retailers like Marks & Spencer and Toys“R”Us are considering rationalising store estates, reducing capital expenditure and restructuring operations. This potential disruption in a competitive trading environment affords an opportunity for smaller retailers to take market share. Martha Keith, founder of personalised stationery brand Martha  Brook, notes: “although we live in a Martha Brook