“When you think about it, if the fittest always won, all forests should be completely homogeneous. One species should supplant all others as the most superior competitor. But it doesn’t happen that way. Nor does it happen that way in the marketplace.”
– Joel A. Barker
Imagine this: You were once a prime athlete, sharp, lean, focused, agile, fast and very fit.
Then you matured, put on a few kilos, spread out a bit, possibly got a little lazier, found excuses to avoid getting fit, became easily distracted and generally slowed down.
Then you realised that some of your peers actually stayed fit, lean, sharp and fast and you were left behind.
Now transpose that scenario to today’s business sector in retail where some businesses have actually got unfit, dare I say lazier, with their CEOs /boards not quite recognising the impact that the race to the customer’s heart and mind is actually even more challenging than it was a year or so ago.
Cycles in business are exactly that – cycles including:
– Cash rates
– Export earnings
– Positive and continuous GDP
– Exchange rate /dollar value
– Consumer sentiment
– Businesses buying and selling for astonishing EBITDA multiples
– Optimism abounding where even a very average retail offer survived
So the times always change in a general sense, as one indices increases another decreases and that is consistent in commercial markets and always been.
So, how do retailers become unfit in these changing conditions?
– Went off strategy and played in markets that were “not their sandpit”
– Underinvested or invested inappropriately
– Didn’t read the tea leaves of change within their sector – e.g. omni-channel preparedness
– Broadened their core offer and range (Be all things to all people)
– Lost the essence of their unique point of difference
– Didn’t continually improve and set themselves smart goals
– Lost the art of cultural alignment with their people
– Misplaced the effective people framework
– Increased their debt levels
– Expanded their networks (some opening stores despite declining sales)
– Fostered a culture of true non-performance
– Carried too much of the wrong product
– Replaced the art and science of retailing with the bravado of invincibility
– Misread the market including our competitors and consumer movement
– Lost focus on the skill required to successfully implement their strategy
– Missed the understanding of the detail required to truly run a great business
Take a look at the businesses that have fallen over in the last six to 12 months and you will see a commonality of “unfitness” surfacing as the pervading market conditions took hold with many of the above characteristics being evident.
We have many “fitness” tips to help retailers and here are a few of the front line tips to assist in getting retailers ‘fit for business”:
– Invest in understanding your customers in a profound way – less about where they live – more about who they are
– Ask how do I build my community of followers and advocates to my brand is more the mantra than the singular channel thinking?
– Have a board or advisory board, take in mentors – just make sure they understand retail and the business in a pragmatic experienced way
– Think globally, retail locally – you have the tools now to be an offer 24/7 – be bold, and global in offer – online gives you permission – attitude accepts the invitation
– Worry about little in your point of difference other than the point of difference itself and then live it in every brand and product decision
– Metrics and analytics are where the money is made – “retail is detail” has never gone away and fit retailers know this
– The adage about the right people on the bus – driving a bus without the best engine of people might ultimately get us to the finish line , although it’s a lot slower and harder
– The CEO that can walk the talk is always at a large advantage to those that can’t
– Invest in understanding where your sales are made, where and to whom. The relationship of sales to stock and location mix can be easily misunderstood
And finally, as a wise retail sage said to me “it’s all about people, those we attract, those we retain, and those we care for” that’s true of our staff and our customers and those that wish to be.
Happy “fit” retailing.
Brian Walker is founder and CEO of retail consulting company, Retail Doctor Group. He specialises in the development and implementation of retail and franchise strategies.
Published on SmartCompany on the 4th of November 2015