When was the last time you visited a Littlewoods store? Think about it……..been a while? Well it would have been at least 8 years ago to be precise. It is all too easy to forget that this icon of British retailing disappeared from our high streets in the mid noughties. Unlike recent retail casualties though, it was not forced into submission. Its vanishing act was deliberate – it was an intentional act by its leadership to ensure the sustainability of its brand – and that is the big reason why I think we should all admire Littlewoods.
We will never know whether the conversations that were had by the board of directors resulted in pure genius, or if they were just plain lucky. The decision they made though was to completely re-invent their business. To understand this a little better, let us have a quick look at the history of Littlewoods. Littlewoods was started in Liverpool in 1923 as a football pools business by John Moores and two partners, all of them then full-time employees of a telegraph company in that city. John Moores entered retailing in 1932 with a mail-order business and in 1937 opened the first Littlewoods chain store.
Littlewoods became a powerhouse of home shopping. Many of us can recall our Mothers or Grandmothers having a Littlewoods catalogue on the coffee table – often alongside the Kays Catalogue. Littlewoods has been a British brand for so long, it even turned up during the filming of Turn Back Time: the Family – a living history programme I was lucky enough to have been part of last year. In one scene, I was asked to read a newspaper – during wartime. This advert was on the back page of the paper (an original)!!
If you are into your nostalgia, the Shop Direct Group website (the company that now owns Littlewoods) has a wonderful video of the history of Littlewoods – it was produced for their 75th birthday celebrations. I wonder if you know anyone in the video! http://www.shopdirect.com/littlewoods-catalogue/videos/littlewoods-75th-anniversary
Although all this reminiscing is lovely, we must not forget why I am writing this blog – re-invention. Littlewoods is a brand that has been around for so long, it was inevitable that it would have to change and re-invent. It is a brand that in reality has potentially changed more than any other. I have already mentioned the Littlewoods Pools – It was sold in the year 2000. Littlewoods wanted to focus its efforts on retailing. Do you remember Index? The Littlewoods competitor to Argos in the high street? The loss making catalogue stores were closed in 2005.
Also in 2005, Littlewoods made the historic decision to close its entire estate of high street stores – all 126 of them. The decision was historic, because it meant for the first time since the 1950’s, Littlewoods would no longer be on the high street. All of these decisions were made for strategic reasons. The closures were deemed essential to ensure the sustainability of the Littlewoods brand – so let us explore this a little more.
By 2004, internet shopping was becoming more and more popular. The Littlewoods board had recognised that whilst their high street business was starting to decline, their ‘home shopping’ business was booming. By 2005, 30% of their ‘catalogue’ sales were being transacted online. Why keep expensive to run ‘bricks and mortar’ retail outlets, when ‘making it easier for customers to buy what they wanted online’ seemed to be a growing trend? As business rates were on the rise, maybe getting out of the high street would be a smart move.
And what a smart move it has proven to be. The Littlewoods leadership decided to completely change their strategy. They wanted to be the best ‘home shopping’ business in the land. By ‘getting rid’ of potentially loss making bits of the business, they could focus all their energies on becoming the best. Although this change of strategy came at a human cost – with many people losing their jobs – things could have been far worse if the business had failed altogether. Instead the changes made have ensured that the Littlewoods brand still thrives today.
Today, Littlewoods still does what it always did – it is a family brand that helps its customers to buy the brands they aspire to have. The official Littlewoods mantra is as follows:
Littlewoods is the hero who makes it possible for families to have all the great new things they want straightaway. This is because they can pay in bite-size amounts each week, which provides its customers with a real sense of empowerment – knowing they don’t have to wait, save up or blow the budget!
The 1930’s Littlewoods customer would be proud. The Littlewoods brand is still doing today what it was created to do 80 years ago. However, it is down to a succession of forward thinking leaders that have made it happen. From John Moores to Mark Newton Jones, Littlewoods has been led by retail experts who were not afraid to take a risk. They understood their customers and their business. They knew that if something did not work, you had to change it.
Today, more than 70% of Littlewoods customers transact online – via desktop computers, tablets, or smart phones. They still send out thousands of catalogues as well – and some customers still like to pick up the phone to place their order. I guess it is inevitable that at some point in the future, that may change as well. For now, though, one thing is for certain – Littlewoods is not going anywhere. Whilst many brands have failed to re-invent themselves, Littlewoods have become a shining example of how to do it. We are sometimes too quick to criticise organisations that instigate fundamental change – but if we take time to reflect, we can clearly see that changes are often necessary to guarantee the future.
As always, I welcome your comments on this or any of my blogs.
[…] All organisations and all industries are having to continuously adapt to the ever-changing environment. As quickly as new technology is invented, it is usurped by something even better. Some organisations have been able to adapt to change better than others. I used to work for Shop Direct Group (now known as Shop Direct), the owners of Littlewoods. In 2004, Littlewoods had over 200 high street stores. Today they do not have any. Shop Direct transformed their retail brands into modern, innovative, technology based distance shopping power houses. Along the way, the organisation reduced significantly in size. As well as store closures, contact centres disappeared, warehouses were shut, and even roles in head office re-structured. Shop Direct did what was necessary to adapt to the changing climate. If they had done nothing, they would not exist today. Woolworths, HMV, Habitat among others did not change quickly enough – they did not transform – and we all know what happened to them. You can read more about the Littlewoods re-invention here https://ijgolding.com/2013/02/04/re-invention-and-innovation-why-we-should-all-admire-littlewoods/ […]
[…] but in its sustainability. I actually wrote an article about Littlewoods in 2013 – entitled ‘re-invention and innovation’, it serves as the perfect case study of effective business […]
Littlewoods already had a well established mail order service. Littlewoods also owned a delivery company which meant that they could deliver at wholesale cost while charging other companies to deliver their parcels.
I have run online retail for over 15 years and physical stores for 10 years. A problem with internet businesses which gets looked over is the fact that you need to either pay millions of pounds in advertising or pay ebay and/or Amazon a percentage of the sale where as being on a high street you get people passing the stores and they go in to have a look and buy something. There are also many things which Littlewoods as an online only business they can’t sell because it would cost so much to deliver that people wouldn’t pay the extra for the delivery. Some online clothing shops get 80% of their orders returned where as in a physical shop they can see the item better and not need to return it.