Retail is entering neither a golden age, nor is it in the toilet, even though successive gloomy headlines suggest the latter is true. Talk though – at either extreme – isn’t helping anyone understand what is really going on.
The fact is, retailers need to change, as this week’s BRC 2020 conference made abundantly clear. Retailers know this of course but they probably don’t realise that time may already have run out for some of them. Even if they do accept the need to move, change is hard to do. The analogy of the oil tanker needing time to slow or change direction does not apply here; that suggests that time is the only variable.
It is not. Culture which has retailers working in silos, united only in their commitment to managing supply rather than planning for known demand, requires a rethink that few retailers of any size can contemplate, even if they were run by an enlightened CEO who thought this way. This is why start-ups are stealing a march on established competitors; they combine youth (in most cases) which brings an unstoppable mix of energy, courage, impatience, naïveté and persistence, with a lack of ingrained ways of doing business. Not all of course; some start-ups are dinosaurs the moment they clear second round funding.
So what next for retailers who want to survive?
This tells me then there is no simple formula for change. Every business will have to go through its own dark night of soul searching and create a plan unique to them. Which is why a raft of recent retail events are so important; retailers will not find all the answers inside their business so spending time with other retailers and, increasingly, people from outside the sector, is more important than ever.
Reformulating yourself around the rock of Amazon is not the answer; this is defensive and therefore not sustainable.
So, here is how retailers can create their own golden age and consider some of the changes that they need to make, based on my recent interviews with retailers in New York, London, Copenhagen, Johannesburg, Dublin, Berlin and Paris.
While it’s an easy way to give away margin, it’s also the easiest way to grow outside home territory.
Theatre, cinema, showroom, experience centre, call it what you will, but they will not work if they are judged on sales per square foot. They must be built around understanding what the customer wants.
If retailers don’t know where the data is, if they are not sharing it and if they are not providing a single view of customers, stock and orders, then they can’t give customers what they want.
They are the most important people in the business and largely forgotten until quite recently. They will work hard if they understand what the retailer’s mission in life is, if they are able to tell the retailer what to do, and if they are empowered to look after customers.
IT is not the business plan but its enabler. IT that keeps the lights on will hold the plan back. A good technical architect bridges the gap between technology and execution. Given more power, there is nothing they cannot achieve.
Keep an eye out for some of the interviews from BRC 2020 which will soon be available on Retail Connections www.retailconnections.co.uk
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