The spate of closures, consolidations and profit downgrades over the holiday season have been referred to as ‘retail’s Kodak moment’. We’ve seen this scenario many times over the past few years.
Undoubtedly retailers face significant pressures with competitive markets, cost pressures, relentlessly evolving technology, low industry confidence and the flow on-anxieties that result for employees but change is inevitable and ultimately essential for retail health. We have to develop and design leaders and businesses to cope with it.
So I thought it would be a good time to take a look at what the key challenges are for retail CEO’s and executives and how they can stay competitive by shaping ‘a next generation’ of retail leaders with acumen, agility and the ability to make complex decisions during uncertain times at speed.
That is what it is going to take to have staying power.
Make 2017 the year for –
- Clarity – be clear about your purpose, brand, leadership focus, role, customers
- Consolidation – extricate maximum value from the existing stable before adding complexity by opening new stores or markets, consolidate your strategic focus to deliver profitable growth and not just topline revenue through clever strategy, technological advances and integration
- Connection – are you connected to staff, stakeholder, customers? Does your infrastructure provide consistency between real, digital, social experiences? Customers are connections not transactions, the whole business should embody this philosophy.
Have a Purpose
Brands need to remind themselves that retail is not a transaction it’s a relationship with your team and customers that comes from being singular about your brand purpose and identity.
‘Why are we here?’
Surprisingly many CEOs can’t answer that question.
Yet purpose-driven branding is the foundation on which all else is built.
When leaders know ‘why we are here’ then teams know ‘why I am here’ which makes them feel valued and engaged. Feeling valued is motivating, empowering and you get higher discretionary effort from them. They are the Face of your Brand. And you need to motivate people to rally around your brand like there’s no tomorrow because if they don’t, there may not be one.
‘Why are we here?’
Every leader in the organization must be able to talk about the gap in the market you fill, your customer profiles and why those customers would be devastated if you fell off the retail landscape. This is not something that happens by chance it’s something you plan and execute.
Get your leaders around the table to talk brand purpose in granular detail until everyone has a shared understanding and language that can then be cascaded through the organisation.
Without it you will get splintered decision-making, duplication of effort and profit dilution.
Many brands fail because they lose their way, shortly after losing their identity.
Yes, it should be basic knowledge. No, it isn’t. Make it the sine qua non of 2017.
Culture eats strategy for breakfast
A great business culture comes from clarity and a shared sense of purpose.
Culture and relationships are as important as strategy and financial management when it comes to spending time. Weight accordingly. Strategy is only effective with the right team to execute.
In practical terms this means having a genuine touchpoint at every level of the organization – from leadership colleagues to senior stakeholders, shareholders and teams on the floor.
If you spend 90% of time on strategy and 10% on your team, or 70% on finance and 30% on strategy something’s wrong.
There’s imbalance of course during business cycles – but think broad brush. Talk-walk purpose.
For business growth you must engage teams at every level. How do you do that? Be accessible. Be visible. Be present. And when priorities mean you have to say ‘later not now’ make sure you have plenty of other ways to communicate so your people are not in an information void.
Communicate, communicate, communicate.
Informal short meetings, long town hall sessions, emails, doorstops, social media. You can’t overdo it.
Customer service is not enough you need connection
We have to stop thinking about how to “serve” customers and start thinking about how to “connect” with them.
That’s ‘hi, welcome, how are you’ and not ‘there’s 20% off this rack’.
When a brand has a clear purpose that every Executive lives and breathes it’s absorbed by teams and reflected on the floor.
We’ve all been into a store we love with great, welcoming teams and we want to go back – it’s an experience, a destination that makes the day better.
Engaged teams that love your customers, increase basket size and leave a feel-good afterglow that becomes linked to your brand. And we know emotional responses are powerful and last.
Customers come into store because they like the theatre of it. Yes, ecommerce is important and digital and real life experience should be complementary but people want to touch and feel and experience a product too, we are social beings.
Top lines sales growth cannot be priority over optimising the existing business
Technological innovation and customer expectations are moving at a pace never seen before in retail. Not only do you have to have a clear brand purpose and position but you need to continually evolve your existing business model in line with innovation.
Ensuring an efficient operating framework in current business before chasing new markets or if you do then you need to be structured and resourced to do both – ensure current business model is optimized whilst opening new markets or channels.
Often chasing top line sales growth comes at expense of margin and forces unrealistic cost efficiency to sustain, this is not a long term model as it provides diminished returns and brand erosion.
No longer is the retail business model set and forget, you have to move at disciplined pace to stay relevant whilst defining growth opportunities. Consolidate your existing business model is critical to sustained profit growth not just top line sales growth.
Reconfirm strategy with stakeholders all the time
Senior stakeholders don’t have time and certainly don’t have time to waste.
Retail executives must understand what their stakeholders need, what is really important versus what you perceive to be important, what they are they interested and what they are not. Find out. Tailor your message accordingly.
Reconfirm – strategy, strategy, strategy.
The multiple demands of complex stakeholders, teams and customers takes juggling so be clear about business versus your own personal priorities.
If there’s an important issue at stake, you can agree to come back to it although ‘not right now’. The ‘yes but not now’ rule is essential. Make it a part of team discussions so everyone knows why its’ there. Then follow through. That’s the part that creates trust.
Having said that never lose sight of the customer or team – they are your two biggest stakeholders
Over my retail journey growing brands globally, it has reinforced that what we need most is a ‘next generation’ of leaders with the business acumen, agility and the ability to make complex decisions at speed and manage ambiguity. That’s ‘why’ – The Retail Collective. My personal ‘why’? To shape that next generation of retail leaders so that the industry I love and the people who drive it thrive.