This week I attended an interview presentation at the UK’s Institute of Directors ( IoD ) . The interviewee was Simon Calver, the CEO of Mothercare – a 52 year old British high street retailer with over 300 stores and $1Bn in revenue, specializing in baby and toddler care products for new parents. During his talk, Simon said a number of interesting things but one quote stood out to me:
“First and foremost we will be a technology business”
He pointed out that the company already gets about 25% of its sales online with a double digit growth rate, while its store business has low single digit growth. No surprise then that he also said
“There’s no reason why we can’t think of that [online] eventually becoming over 50% – that’s an aspiration”.
Simon came to Mothercare from Lovefilm.com an online video rental company founded in 2002, which as CEO he helped sell to Amazon. But he wasn’t always a dot.com guy. His career started in marketing and business operations at Unilever and Pepsi. He also spent time at Dell. So he has a balanced view of both sides of the business world – the digital side and the traditional side.
Later in his talk he said: “Every retailer should ask themselves: ‘what would this business look like if it was over 50% online’ “.
I couldn’t agree more. If Mothercare has already reached the 25% tipping point – every company should take heed. But Simon was also careful to point out that he will
“Use the stores as competitive advantage in an omnichannel model”.
The key insight is that the stores and their staff can offer a service experience – for example measuring a mother to be for maternity bra, or fitting a baby seat into car safely.
I am absolutely convinced we will hear many more traditional business CEOs declare “we must become a technology business too” over the next 2 or 3 years – and they won’t all be retailers. The digital business revolution is well underway.