How to survive disruption in retail

“To survive disruption, you must think long term and invest in tomorrow” Martin Newman

 

In the history of commerce, never has the sector undergone such rapid change as in the last 30 years. We’ve seen catalogues boom and bust, the DVD and CD industry crash out in the wake of online downloads and music apps, and online outlets like Boohoo and Amazon transform the way we shop.

The way technology and service innovation has disrupted consumer-facing industries in such a short amount of time proves more than ever that brands need to be agile, quick to transform, and thinking about the long-term future of their business, rather than appeasing short-term wins for stockholders.

As many CEOs are relatively short lived in terms of entering and departing a major brand – often as little as three years – it can be a survival method to immediately concern themselves with short term wins for their stockholders and investors. This means that long-term sustainability becomes an afterthought, and necessary risks are not taken as a result. In a changing and often volatile market, safe decisions can create long-term decline.

As a leader, you must also be an innovator. If that means investing in new technology or service techniques, then you must pursue and embrace change and remain on the front foot at all times – and that means developing the ability to take a leap into the unknown.

“If you wait until you’re 100% sure, you’re 100% too late.”

I actually have a sign on my desk: “If you wait until you’re 100% sure, you’re 100% too late.” Safe decisions mean that you aren’t working as a disruptor, allowing companies that are prepared to invest in transformation to win over your share of the market. Companies such as Uber moved sharply to offer innovations such as tracker options for concerned customers, along with travel time predictions, leaving slower competitor taxi firms in the dust. It is now almost impossible to play catch up and overtake that level of innovation, which is almost entirely down to that fact that ‘safe’ sells well to stockholders.

Rather than the goal being that yearly bonus, it should be the sustainability and agility of your business. We’ve seen previously successful brands and chain stores go bust in the space of a quarter due to brave new innovation from competitor firms.

“Never play catch up and never play too safe.”

Never play catch up and never play too safe. That’s not to say anyone should be reckless; if your data and experience tells you that a new investment in tech, products or outlets is necessary, the time is always now. Success or expansion doesn’t equal doing a well-worn route of more stores or more staff. Look into how you want to grow and what you want to position yourself as both as a business and as an innovator.

“…no business proposal or change ever comes with zero risk, and often the most transformative products (such as the iPod, for example) don’t come without serious uncertainty about whether the market will embrace something totally knew.”

Managing concerned stockholders over your business proposals will not, of course, always be easy. But no business proposal or change ever comes with zero risk, and often the most transformative products (such as the iPod, for example) don’t come without serious uncertainty about whether the market will embrace something totally knew. But by taking those transformative, disruptive decisions, Apple managed to radically alter the whole sector, making tapes and CD stores in serious peril.

The only certainty from total inaction is failure, so caution comes at a high price. The landscape has changed, and will continue to change, and brands with the confidence to evolve will always prevail.

 

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