Moving on out…
Family-run independent Herbert Todd & Son chose its 81st year in business to move out of its town-centre location in York to a new purpose-built unit on an edge-of-town retail park. Chris Frankland asks partner Matthew Todd why he did it
When I last visited Herbert Todd & Son at its central York store in January 2013, they had just opened their Harrogate store and partner Matthew Todd (pictured) told me that they might open another store “in another 30 years’ time”.
Well, here we are, just four years later, and on April 24, he made his most daring move so far with a brand new custom-built superstore on the edge-of-town Monks Cross retail park, with 10,000 square feet of shopfloor space on two levels and a larger warehouse.
So what changed his mind?
Mr Todd explains that he had been thinking about a move out of town for the past six years, but what decided him on doing it now was that the two universities in York had been acquiring more and more land in the centre of the city for student accommodation, which had pushed up land and property prices.
“Developers were falling over themselves to assist us with a move,” Mr Todd tells me. “The only way they could get their hands on our piece of land in the middle of York was to find somewhere for us to go. They found us a vacant plot here on the Monks Cross Shopping Park, did a deal to buy the land and built us a new facility. It was a no-brainer. It meant we could make the move without extra finance.”
The new store is eye-catching, clad in its near-black dark grey livery that really helps the red-and-white Herbert Todd & Son signage pop.
Inside, it is light, open and modern with plenty to engage the customer. There are branded zones for Smeg, Neff, Rangemaster, AEG, Blomberg, Bosch and Liebherr.
Just past the Neff area is a full working kitchen, fitted by local bespoke specialist Peter Thompson of York. Its fully working appliances and running water make it ideal for hosting events, with home economists from the likes of Neff putting on cookery demonstrations. It is also, Mr Todd tells me, a good place to sit customers down with a coffee to discuss their requirements.
The mezzanine level is devoted to TVs and other brown goods with Samsung as the main TV presence, plus displays for Yamaha, Roberts and Sonos.
Q: Why move out from central York at all?
Matthew Todd: We are a well-known name in York and this move has given us a leg up in terms of visibility. A lot of people knew us from our newspaper and radio advertising, but I am not sure that always resulted in sales, just because we were a bit hidden away. We were surrounded on all sides by student accommodation five floors high, which meant you had to literally be in the car park before you knew we were there.
I think it’s the changing face of retail. For us, moving out here has been a success. I don’t think people go into the middle of York anymore to buy large, bulky products.
Customers are coming to us because they want something different, they want an experience, they want it demonstrated to them, and for us to deliver it and show them how to use it.
Q: Has your customer profile changed since the move?
MT: Absolutely. We are getting passing trade, which we never really got before at all. We are also getting a younger demographic, which is great, because I have always tried to seek out that customer through advertising products I thought would appeal to them, but we still got very few.
Q: And has the move paid off so far?
MT: In terms of footfall and turnover, we’re approaching 70 per cent up. This move has been massively positive.
The original crescent here was initially populated by chains such as Next, Boots, WH Smith and Debenhams, but we have now been joined by Primark, which opened just before we did, and that’s a massive draw for the younger crowd. And there is also a McDonald’s drive-thru, which brings people in at all hours of the day. I am told that the other half of the site we are on has just been sold to Taco Bell. That will be a big draw.
Q: Did you get any help from manufacturers?
MT: The new store can hold its head up as a flagship store and I think holds its own against John Lewis. We are trying to retail positively. We had a lot of help from manufacturers. They recognised what we were trying to do and saw the potential. They have all put their hands in their pockets and created some in-store areas that we can take customers to and give them a great experience.
Q: So it was really a clean slate…
MT: Absolutely. We decided to have dedicated areas for the likes of Smeg, Siemens, Neff, AEG and Blomberg. The whole ethos was to have a premium offering where it isn’t too crammed with products. I also wanted everything that was worth plugging in to be plugged in.
With developers putting more built-in appliances into new houses, we took the decision to devote one third of the floorspace to built-in products. It meant we could also have some great displays that look as good as the products do and make selling them easier. And if someone wants to learn what a meat probe does, we can show them.
We wanted the layout to make sure that wherever you looked, you had something eye-catching. We have tried to avoid having rows and rows of fridges or washing machines.
Q: And brown goods are on the mezzanine…
MT: The mezzanine was not in the original design, but it has given us extra space.
People are going up there and seeing our great Samsung display and the other products up there whether they want a TV at the time or not – just for its sheer wow factor. We also have Sonos, Yamaha and Roberts on display.
It’s as much about selling us as it is the products – setting our proposition apart from everyone else’s. We put in a couple of sofas so that we can demo surround sound systems. People can sit, relax, have a coffee, and talk over their needs. That’s vitally important.
Our product mix is now 90 per cent whites and 10 per cent browns.
Q: Are you planning to do much in the way of smart-home products?
MT: We have dabbled. We do in-ceiling speakers, some lighting control, door locks, intercom systems and smart thermostats. We are displaying in-ceiling speakers with an on-wall controller. We have wireless products on dem.
The smart home in general is not a part of the market that we have actively gone after. We have done jobs that have involved smart products, but we don’t actively seek out smart-home projects currently. We used to take out full-page ads for home-cinema installations, but it went south and I stopped. That market has changed a lot and now it’s mainly about the soundbar and the sub.
I know smart home is a massive buzzword. It’s a growing market, but manufacturers are trying to make things more user-friendly. The modern smartphone has become so powerful a tool that the days of having to program these control systems, and being able to charge for that, have gone by the wayside – unless you are dealing with customers who have a lot of money to throw at a project.
Q: Some pundits are pushing the idea of rentals for the modern generation…
MT: We have seen gradual erosion of revenues on that side. The thing that has hit it hardest is longer warranties on TVs – the mainstay or our rentals business. The key reason for people to rent was the fear of something going wrong. That kind of kills that. And prices have plummeted and there is plenty of interest-free credit. It’s quite a hard sell and you have to move the two propositions away from each other and we’ve not come up with any way to do that in-store as yet.
White-goods are only 20 per cent of our rental base, so we could probably build that.
Our website is being upgraded and the new one will have a section for rentals. Once that’s sorted, we will try a bit of online marketing and see what we can get.
Q: What do you feel about the problem of trying to make money out of brown goods?
MT: Since we have moved here, and certainly during the early days, I didn’t want people getting the idea that we were overpriced and so we have cut back our prices and stripped out services such as free delivery and installation. We now have an internet price on virtually everything.
Consumers have never had it so good as everyone is scrabbling around for a share of a smaller pot of sales.
We are working primarily with Samsung on our premium proposition, and that is where the independents are most likely to make money. You tend to make most money in the early part of a product’s lifecycle if you get it out on display quickly and people can see how much better it is than last year’s.
Euronics Agency products also really help make money.
Q: And what is next for the immediate future?
MT: Our new website needs to say more about who we are, have pictures of the staff, and we need to get across what people can expect when they come in. We have now made it transactional and it’s been live for a couple of weeks [as of early August]. We want to build on that.
We had a big advertising push for the store when we opened, and there will be another for autumn time.
Now we are here, with much more passing trade and footfall, I have a couple of weekend events planned with Neff and Rangemaster. I think we’ll get a lot of people in.
We’ll flag it up as a family day as well with a bouncy castle, or face painting. At our grand opening, we had Minster FM set up outside. We might well do that again.
Q: So what is your verdict on making the big move out of town?
MT: This move has been one of the best things we’ve ever done. Harrogate was good for us, but from a standing start, seeing the kind of sales patterns we have here, I couldn’t be happier.