Is being 80 per cent ‘fit for business’ enough in today’s competitive world?
When I was learning the required retail skills in the 70’s, 80’s and 90’s, they were quite different from today. If stock was 80 per cent correct and balanced, 80 per cent of locations were in the right place, 80 per cent of your customers were satisfied, this was the pass mark. Your business was respected and profitable.
But what about now? Is 80 per cent good enough?
Can we as retailers settle for that level of business fitness…it seems not. We all know that the profit within a retail business lies in the last 20 per cent of sales. There are very few retail businesses that can afford to lose 20 per cent off the topline and survive.
What would happen to your bottom line if that occurred to your business?
With the increased level of sophisticated businesses, including world class internationals surrounding us and lifting retail standards, being 80 per cent ‘good’ means you are always coming second, or worse.
Add to that, the arrival of online competitors such as Amazon, being connected to us 24/7 and knowing our every like, dislike and likely next purchase. How can we survive as B&M retailers if we are not close to 100 per cent right and efficient all the time?
After all, we are trying to satisfy the most knowledgeable, and possibly the most discerning consumer, the world has ever known!
So if that is correct, how do we raise our game to compete with the best?
It seems to me that the only real solution is to select one or two areas that you CAN be the best at. It might be service, or the focus and localisation of your range, or the ‘experience’ felt by the customer, or the ‘connectivity’ you enjoy with your customers.
But unless you are a large and highly focused retailer, you cannot fight on price, breadth of offer or access (number of locations, subscribers, millions on database) and expect to win!
If you choose to be the very best at service, experience or connection to customers, you CAN be better than most of the big competitors. These areas they find difficult to excel in and by the very nature of the industry, should never be as nimble.
So the question is, how do you achieve something outstanding?
Many business owners don’t even know what peak performance in their category is…never mind how to get there. In this retail world that is changing faster than ever before, we need to pick our fights carefully, and pick ones we can win. So many small and medium sized retailers are faced with the challenge of becoming 100 per cent fit, and being the best of the best.
It is time to reassess what you do and how you do it. Even the best sportsmen and women have coaches to keep them at peak performance.
Being average in today’s world means you will not be chosen by enough customers to survive. No one responds to average, unless its cheap…is that where you want to be?
Peter Sheppard is a senior consultant of retail consulting company, Retail Doctor Group. He specialises in the development and implementation of retail and franchise strategies. Peter can be contacted on (02) 9460 2882 or firstname.lastname@example.org.
First published InsideRetail on September 29, 2017