PROFILE

Neil Saunders

Managing Director, GlobalData
Neil is Managing Director of GlobalData’s retail division. In this role he oversees the development of the company’s retail proposition and its research output. He also works with clients to help them understand the retail, shopper and market landscape – advising them on how best to develop, evolve and implement business strategies. Prior to GlobalData, Neil worked at retail research firm Verdict for ten years. He latterly held the post of board director with responsibility for Consulting, Corporate Development and Planning. Before Verdict, Neil worked for the John Lewis Partnership where he was involved, among other things, in the planning and relocation of new stores, the development of the ecommerce business, and the creation of technical and information systems. Before moving to the United States, Neil served as a non-executive board director for the Great Western Railway – a role he held for just under 11 years. He currently serves as an advisory board member for the faculty of business and law at the University of Southampton, as an Honorary Lecturer at the University of New Hampshire, and as a Visiting Fellow at the University of Surrey. For more information, visit: www.globaldata.com/
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  • Posted on: 09/18/2019

    Chewy gains customers and increases sales, but will it ever be profitable?

    Like a lot of online retailers, Chewy has no problem in driving up sales and generating impressive revenue growth. However the cost of servicing those sales is high. I accept the fact that Chewy can secure a large share of wallet and that it can move into other areas, such as pharmacy. However I am not entirely convinced that these represent a sustained path to profitability - especially in a market that remains highly competitive.
  • Posted on: 09/18/2019

    Retailers approach tech’s cutting edge with caution

    Retailers are right to be cautious. There’s no point in using technology for the sake of it, it has to do something to tangibly help the business. Too many technologies are searching for a purpose rather than solving issues.
  • Posted on: 09/17/2019

    How high will the holiday retail sales ball bounce in 2019?

    There is plenty of geopolitical gloom out there, however this is not what drives most spending decisions. People's spend is largely based on their own feelings, especially with regard to their finances. On that front, the picture is solid: confidence remains high and incomes are reasonably robust. As such, there is no reason to expect this will be anything other than a fairly good holiday season. The one downside is higher gas prices which, if they persist, could take the edge off retail sales growth. Sales are one thing, margins are quite another - and I see this as being one of the main pressures for retailers this holiday season.
  • Posted on: 09/17/2019

    Have U.S. malls lost their sense of community?

    Malls are a mixed bunch. Some are still very successful and draw people in. Others are fading fast and are ultimately doomed. Most are somewhere in-between. There are quite a lot of issues for failing malls: poor design with no natural light which means they are not a nice place to hang out. Ditto for dated design. A reliance on anchors which are, themselves, failing. A lack of interesting retailers or relevant services. And so the list goes on. The cure for a lot of this is imagination and thinking beyond how to commercialize every square inch. Malls may need to invest in areas that don't drive direct returns like places for people to sit and work or areas for street markets and local vendors. It simply isn't enough to tack the word "experiential" onto offers which are fairly mundane. Even then not all malls will survive. We simply don't need the number that we once did and some are not worth the return on investment.
  • Posted on: 09/16/2019

    Will bringing the outdoors inside stores work for J.C. Penney?

    This is a step in the right direction, but it's a small step in a very long journey. As such, it will not solve all of the issues at J.C. Penney. I also worry about how this is executed in stores. Will it simply get lost in a sea of merchandise? If so, then it will all be for nothing. In short, there needs to be a more holistic approach to J.C. Penney's woes.
  • Posted on: 09/16/2019

    Macy’s elevates diversity goals

    This is very worthy and most of it should be supported. I do, however, question the sense in diversifying suppliers as a stated goal. Macy's should use suppliers that are right for its business; nothing more and nothing less. That, by common sense, might include some smaller suppliers which have interesting products or services to offer. I don't think this should be an enumerated goal. The rest of it is good. Perhaps if Macy's management better reflected their customer base or "average" Americans they might be a better retailer because of it.
  • Posted on: 09/16/2019

    How profitable is online selling?

    In general terms, online isn't as profitable. However, the math is complex: it depends on the sector, the method of fulfillment, the dynamics of the customer, and so forth. The biggest issue is that customers do not, and are not willing to, pay the full cost of fulfillment. Sometimes, online selling needs more marketing and customer acquisition support as it is more challenging to draw in traffic in a digital environment. All that said, retailers can't simply ignore online as, if they do, they lose market share and then they lose profit on the sales they make. However, those retailers where online operations simply result in the transfer of sales from stores to digital have real problems as they generally end up with lower margins and a more expensive cost base to support.
  • Posted on: 09/13/2019

    Old Navy is ready to set sail on its own

    It's madness. Utter madness!
  • Posted on: 09/13/2019

    Did Whole Foods just give conscious capitalism a swift kick to the curb?

    This is certainly a step away from the founding values of Whole Foods. It will also likely cause upset among staff who are already unhappy with some of the changes being made. I think that needs to be looked at carefully as such dissatisfaction could ultimately affect service. That said, I do see the other side of the coin. For all the lauding of good principles, the previous owners of Whole Foods did not run the business all that well and there are now significant issues that need to be addressed. I am not saying that cutting healthcare benefits is a solution to those issues, but it serves as a warning that good principles and generosity can only come from successful and profitable businesses that can afford them.
  • Posted on: 09/13/2019

    Old Navy is ready to set sail on its own

    Old Navy is a fairly solid concept, but I am not sure the U.S. needs so many more Old Navy shops. This suggests the complete absence of any real underlying strategy; it's just a case of "add more capacity and more people will come." It really doesn't work like that! I suspect these overly ambitious numbers will be pared back over time.
  • Posted on: 09/13/2019

    Why did it take At Home so long to decide to sell online?

    There are several problems with At Home. First, levels of awareness are poor -- especially in new markets; this leads to low footfall and low sales densities which is problematic for such large stores. Second, its warehouse format with massive stock levels is great for those doing large-scale home decoration projects, but it's not so good for consumers looking for the odd item of home furnishings; this limits potential customer numbers. Third, prices are OK at At Home but they are nowhere near as competitive as IKEA -- and in At Home's rather uninspiring selling environment that equates to bad value for money. For all that, the business model isn't broken, but it does need a lot of tweaking. Selling online will help to stimulate awareness and enlarge audiences. However, the focus should be on picking up in stores; delivery will likely erode margins as At Home won't be able to charge the full cost of fulfillment to the consumer while without being deeply uncompetitive.
  • Posted on: 09/12/2019

    What keeps online shoppers from creating user accounts?

    There are lots of reasons why consumers don't create accounts. Some feel they have too many accounts and can't be bothered to think of usernames and passwords. Some fear data breaches. Others don't want to get future emails from services they have accounts with. I don't think consumers have an issue creating accounts with brands they use regularly; but those they use once or only now and again are more likely to miss out.
  • Posted on: 09/12/2019

    Is Amazon Go heading for a hard stop?

    There are three main barriers to expansion. First, the cost of the set-up which is expensive. Second, the cost of the locations - which, as most of these stores are in high-profile urban areas, is also expensive. Third, the highly competitive grocery market which makes gaining sales and share difficult. When you put those three things together you get very weak return on investment. On top of this, I think Amazon has more work to do in terms of the proposition of the stores. However, I still believe that Amazon is on to something with this technology. Reducing friction at the checkout and reducing the cost and space devoted to registers is smart and over the long term something more grocers will try and move towards.
  • Posted on: 09/12/2019

    In power move, Walmart expands Delivery Unlimited

    This is a smart move that locks in loyalty from consumers. Ocado did something similar in the U.K. years ago and they found that customers on the subscription scheme spent more and were less likely to defect to other retailers. The slight downside is that the cost of the scheme does not always cover the cost of delivery for high intensity users, although this is partly balanced by greater profitability from low intensity users. There is also the problem of ensuring that enough delivery slots are available for these subscription users at peak times like Thanksgiving or Christmas; this was a major source of frustration with Ocado subscribers.
  • Posted on: 09/10/2019

    Will a loyalty program give Americans more reasons to shop at Target?

    The main benefit is the 1 percent you earn on all purchases; this can be saved and then spent on whatever you want in Target. Previously, only REDcard holders (debit or credit) received 5 percent off; other users of Cartwheel got no such benefits. There are other things too, like getting votes to direct charity donations from Target to local causes. Plus a 5 percent discount for shopping on your birthday. Maybe Target hasn't explained this well in all markets. We've had the trial in Phoenix from the start and there was a lot of radio advertising, in-store POS material, and trained associates to explain the scheme. I think this helped get the message across here.

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