Why plenty of businesses must be feeling like Sisyphus, as retailer margins erode.
Sisyphus was condemned for all eternity to push a rock up a hill and his only reward was to watch it roll back down again at the end of each day. Plenty of organisations must be feeling the same as they fight for sales only to watch retailer margins eroded by spiky demand, returns, rent reviews, regulatory compliance, fickle customers and a whole raft of new competitors in the form not just of other retailers, but brands and marketplaces.
And to cap it all, things eventually get so bad that some of them are now wondering what they stand for – in what ways are they relevant to what customers? It’s a question that few want to ask, because the answer is depressing – you are not relevant, you are not distinctive, and the customers who used to buy from you have gone elsewhere.
When BAU is not enough
If the problem was simply that the retailers in question were bad retailers, that would be OK because we would all accept that anyone that manages the cash poorly, or fails to respond quickly to new competitors, or gives its customers a barely adequate service, deserves to die.
But then, what about the vast number of other retailers that are kind of doing OK, keeping their heads down and just focusing on trading through. Are they more likely to just keep bashing away or might they stop for a second and think, what the hell am I doing?
Action for change is required
Clearly, there are a handful of retailers that have had no choice but to consider the second option; battered by falling store traffic, an average online performance and collapsing retailer margins. They are having a rethink and it will be interesting to see what emerges.
What I worry is that some will simply try to reinvent themselves in their own image, and fall prey to corporate vanity that tells them that they only need makeover rather than a full lung and limb transplant, or even a complete body replacement.
Defining retail is a challenge in itself
Or possibly even a full burial. My point is this; once you put yourself where the customer is, what does it really mean to be a retailer? The word itself is becoming arcane, mysterious to the consumer, and understood only by the retailer. In a world where the customer is seeking more experiences than products, they are as happy to be fulfilled by a brand, a marketplace, a festival, a nightclub, family and friends, a holiday, and so on.
Once you view the customer through the lens of the experiences they want to have, even if that experience involves buying a hoover or a washing machine, then the definition of retail as it is currently understood (buy, move, sell) is inadequate and causes companies to adopt a set of behaviours that are not going to solve the problem.
More on this another time.