Sir Stuart Rose: I'm going mobile

Sir Stuart Rose: non-executive chairman of Mobile Money Network (picture credit: Malcolm Griffiths)
Sir Stuart Rose: non-executive chairman of Mobile Money Network (picture credit: Malcolm Griffiths)

Former M&S chief executive Sir Stuart Rose tells Andrew McCormick why he is banking on mobile.

It may seem odd that having been lauded for years as one of Britain's most successful businessmen, Sir Stuart Rose still describes himself as a shopkeeper.

As non-executive chairman of Mobile Money Network (MMN) and an investor in The Hut Group, which houses online retailer Zavvi, Rose has recognised that as his shop has got bigger, the shopfront has changed. MMN is a company attempting to crack the market for mobile retail.

The IMRG estimates that mobile retail was worth just £10m in the UK in 2011, representing evidence that it has not yet taken off, but that there could be an opportunity to exploit.

The company's first product, SimplyTap, enables consumers to point their phone at codes in brochures, in-store and on ads and go direct to check-out. Carphone Warehouse, run by fellow MMN executive Charles Dunstone, is one of the first retailers to use the technology.

Twelve months on from exiting Marks & Spencer, Rose is as enthusiastic about new opportunities as he was about turning around Britain's most famous retailer.

While Rose is MMN's guiding force, it's down to chief executive and erstwhile Rose protégé John Milliken to negotiate the deals and develop the company beyond SimplyTap.

Why are you 'going mobile'?

First of all, I knew the people at Mobile Money Network and they asked me. We recognise there's an opportunity to give consumers new ways of doing things. And since we're in the business of doing what consumers want, I was quite interested in it.

I met John, I met the team and who knows where it's going to end up? I have a sneaky suspicion that it's not going to end up where we thought it would, but that's life.

Which retailers have signed-up to Mobile Money Network?

We're starting on a slowly-slowly basis with people we know. Effectively we're starting in-house with Carphone Warehouse because there are undoubtedly going to be some teething problems.

It's not as if every big retailer is going to sign up straight away. We need to find out what happens after the initial launch. The hard conversations are going on with the next tier, which will be full on. The likelihood now is that we won't sign anyone else before Christmas.

The key thing now is to get the platform working so when the consumers press the button they get something delivered.

There's no doubt that there will be scepticism from some retailers, who will ask: what is the added value? What is the opportunity? Is there a possibility of cannibalism?

This is the only established, functioning mobile payments platform in the UK. A lot of people are talking a lot about mobile, saying blah blah blah. It has taken us a year to get something from an idea into a working platform.

How are you going to get people using SimplyTap?

I suspect it will be consumer-led demand. I think it will be people saying they like this because they only have to tap once and don't have to go on all the different websites.

Hopefully it will be peer pressure, from one retailer to another, from the consumer saying "well hang on I can buy X through this, why can't I buy Y?". There is also an element of 'finger in the air'. I have no idea what the take-up will be.

Why the move to mobile and why now?

I'm a shopkeeper. It's never exclusively high-street or online. Those people who have gone new channel or multi-channel are those that are surviving.

Those that have given consumers what they want, where they want it, when they want it will survive. If you haven't got multi-channel capability, if you haven't got innovation, if you haven't got a product people want to buy, you're in deep trouble.

There will obviously be online retailers only, whether it's Asos or someone else. It's interesting that some of those online retailers are now looking to have a high-street presence.

Probably what will happen is that bricks and mortar will still be required, but the major growth will come online – if you don't have both, you'll be a loser.

Property companies, retailers and marketing specialists will all like to know the answer. It's going to change fundamentally in terms of how we shop, where we shop and when we shop between now and 2020.

Which retailers impress you in terms of going multi-channel?

The food retailers have grasped it. Tesco has grasped it. Marks & Spencer has gone from having no online capability seven or eight years ago to having a substantial business.

There are the Asos's of this world that have done a pretty damn good job.

Particularly what we see with Amazon in the past five years, people have thought: goodness gracious, this has gone faster than I thought it would and I have to do something.

Other ones are having a tough time at the moment – those that haven't got to grips with online capability.

Why have retailers not made money through mobile as yet?

Nobody's really doing it. This is ground-breaking stuff. On the one hand it gives you first-mover opportunities, on the other hand you're slightly moving in the dark, not knowing where you're going to end up, but that's life.

Does online success have to be at the cost of the high street?

If you're not completely multi-channel, you'll be a loser. It doesn't necessarily mean that if you have all functionality you'll get more business, but you'll get less business if you don't. So you can't afford not to be there.

It's a bit like the online food-delivery business. Consumers want food delivered. Ocado has been battling to do that for years, but that's what consumers want.

So it's up to us, those that are pedalling these technologies, to deliver to people when and how they want, and make it profitable.

What do you think of the government's attempts to re-establish the nation's high streets?

We all want a nice high street with everyone having a great time. First of all we need to look at how people's behaviour changes over time.

Looking back to when I started 40 years ago, there really was the butcher, the baker, the candlestick-maker and hundreds of thousands of shops like greengrocers. Life has changed.

In those days, Sainsbury's was king of the supermarkets, but supermarkets are different now to how they were then. In those days, department stores were king of the clothes retailers.

In those days, Marks & Spencer was king of the castle and actually still is. But others have disappeared, like C&A, and others have shrunk, like BHS. Nobody then had contemplated the internet, convenience stores, out-of-town stores, retail parks, outlet shops.

Do we really think we're all going to be living and shopping in the same way as we do now in 40 years? That's like saying we'll be walking around with nice little steam trains going to the butcher shops on a Saturday morning.

If you're in a tertiary and secondary bricks-and-mortar location, you're going to have a tough time.

I think the big stores will get bigger and that people will always want to go into stores to touch and feel and look and see. But they want to go online first to find out what's in store. Afterwards, they may well go home, sit on the sofa and order online. Our job is to make these things happen for them.

With all the negatives of the recession at the moment, it is Darwinian. It is unfortunate when a business goes under, but in a funny sort of way, they've accelerated their demise and have created a little bit more space in the retail market for others to thrive.

Does that mean you welcome weak companies going bust?

As a businessman I don't welcome businesses going bust, but trust me – other businesses will go bust in the next six months. Equally, there will be other innovative ideas that will come out.

Why is now the right time for mobile?

I'm optimistic about what we're trying to do. I'm under no illusions. First of all there will be luddites out there who don't get it. Secondly there will be people out there saying 'do I need to do this now?'. But if you're a shopkeeper and you don't realise that you have to do this now, you'll end up a loser.

If you're half a step ahead of the consumer, you're a winner. If you're in step with them, you're a bit behind the curve. If you're half a step behind the consumer, you're a loser.

You've got to anticipate what they want and when they want it. If you take any brand or retailer over the past 50 years, they've always told the consumer that they didn't know they wanted it but that they do want it.

That was Steve Jobs' greatest genius – anticipating what people want before they knew they wanted it.

Sir Stuart Rose: key dates

1972: Rose joins Marks & Spencer as a management trainee

1984: He is offered a position in Paris after a dispute with management. He turns it down but moves to Paris later on

1989: Joins Burton Group as chief executive

1997: Joins Argos as chief executive

2000: Arcadia Group hires Rose as chief executive

2004: Rose rejoins Marks & Spencer, as chief executive

2008: Rose is knighted

2011: He invests in The Hut Group; becomes non-executive chairman of Mobile Money Network

Inside view: John Milliken, chief executive, Mobile Money Network

We're one year in and the technology has just gone live. It's a long-term infrastructure play that we're trying to put in place here. There are two aspects to Mobile Money Network at the moment. One is the SimplyTap consumer proposition, which we will continue to develop and bring retailers in.

There's also the broader network, and that's about how you get multiple businesses in the UK from various sectors to get the most out of mobile.

Once we've got a big consumer base, and banks, retailers and media companies on board, what can we do to get the best out of mobile for everyone's mutual benefit?

My board won't appreciate me throwing money at a huge consumer launch. We're more about testing and learning.

We'll be doing outdoor, TV, newspapers, magazines, Facebook, Twitter. Some of that will be in partnership with retailers. It gives us a good range of demographic groups. We'll then come back to base and review where we're at and review how it works.

If we can work together in an emerging space, share learnings and share risk, then we can get the best out of it.

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