Can the majority of retail businesses survive without a radical retail transformation? Big powerful players like Amazon are changing the industry. Can it really compete in a world where price and data analytics influence consumer choices.
My previous business experience is not from the retail industry. So what have I got to offer? None you may say, but please indulge my general observations and comparisons.
As far as I can see the retail business needs to evolve. The industry is still has one foot in the experiences of the past, while trying to figure out what to do in a digital world. It reminds me of when my previous business got stuck to old ways of offering products. At the same time new entrants built their services on the vision of the Internet.
We really couldn’t see the change and held on for too long with older ways of working. We and many others lost customers, and eventually some went out business. Other competitors embraced the new digital frontier and became highly successful. To me the same thing is happening in the retail environment.
Making data drive decisions
Today many retailers play lip service to using data to make business and pricing decisions. Other industries invest in the appropriate systems to capture data. From this data, they target new directions and start to leap frog current ways of thinking. Yes, some of the leaders in Retail are doing this and leading the pack but many still believe gut feeling is the right approach.
In my past experience, data driven decisions were always part of the process for investment, For example pricing intelligently and price monitoring decisions were based on real hard data, tracked over days and months. Pricing departments were considered a fundamental element of the retail transformation. They were staffed by dedicated personnel and had a controlling hand on the tiller. (Much to the annoyance of many Sales colleagues)
Technology change is constant
One constant that maintained its presence was the rapid change of technology, which required investment, change of processes, people and operating procedures. This made companies realise the need for transformation as a way of keeping themselves in business. Due to the combination of influences driven in part by competition, customer demands, technology changes and the requirement for new skills, many companies had to invest in strategic planning.
Retail Transformation can be painful
These strategic plans led to the delivery of transformation programmes, with teams driving difficult and painful company changes. Without these transformations many companies would not be still in business.
Some of these comparisons may not be relevant to the retail industry, however I see a lot of similarities. Companies and industries can learn from one another. For example Formula 1 learns from the Aerospace industry with carbon fibre development. The airline baggage processes was simplified with bar codes borrowed from the supermarket world. Supermarkets borrowed loyalty cards from the Airline industry. The list goes on. However change is happening fast and retailers need to have their eyes and ears open to new opportunities. Take one current trend for example. ‘The Internet of Things’ or IOT as it’s known.
New customer journeys
Retailers have a real opportunity to use this growing trend to enhance their retail experience and tap into the customer journeys in this space. The connected consumer world is embryonic but it will seep into retail in a big way, whether that is through the devices themselves or the services and data that will spin from them.
Retail is going through a challenging time and needs a transformational step to change. Those companies that combine strategic planning, with new technologies, data driven processes and a set of transformation programmes will capture the wave, while others will just barely survive or even drown.