If you are like me you can’t help but notice the impact that the retail industry is going through.
I am always looking for the innovation and the unconventional that is disruptive. Why? Because these are the kind of things that create the future. Retailing has been rather conventional for the last 100 years. It was time for change. And it has done nothing but changed since 2007. However more is coming!
I call it the RetailVolution. If you think its about technology…think again.
I believe that there are three phases to this RetailVolution.
The Three Phases
The First Phase started with what everyone has been referring to as the Retail Apocalypse, quite simply I refer to it as The Purge Phase of weaker players.
The Second is the Evolutionary Phase and we are beginning to see some of that today.
The Third will be the Revolutionary Phase very few if any are there yet.
Many futurists and tech companies are pushing everyone to get into this phase now.
Impossible!!!! Don’t try to jump into the revolutionary phase, it will come complete with challenges, setbacks and I believe both financial and operational disaster.
RetailVolution – Purge – Phase I
Risk signals were everywhere and obvious, poor financials, lack of strategies, chasing technology or not, sale event driven and no service.
The flood gate opened in 2007 and by the way if you don’t know what happened in 2007 you need to read my new book “The Great Transition”.
And no it wasn’t the financial crash. Thousands of retailers struggled, first because no one was ready and second no one believed it could happen.
Yup, the apocalypse has begun! And while I don’t call it that, it does continue only not like a fire breathing dragon. But wait for 2019 and 2020 that noise you hear is the Purge it isn’t done yet.
Simply you have to learn to walk before you run
I have been critical of many who talk about strategies that foretell the future of retail. Just don’t believe that anyone can really predict what will happen and when.
There will be less stores, an online presence that is an extension of the physical store and in the final analysis it will come down to who serves best. However if you are buying into the George Jetson’s future of shopping I hate to disappoint, but that’s not going to happen at least not in this life time.
What has happened to retail is a good predictor of what many other industries are likely to go through as disruptive innovation plows through their way.
I have been studying leadership and innovation for years. I was standing in a parking lost about twenty years ago and told a few company leaders that both are disciplines.
In fact leaders who are very good at this are also very fast at getting to their goal. Keep that in mind!
The Customer Experience Is Wrong
I am also not sold on the pretence of a “customer experience” it is an overused term with more ideas than tangibly useable strategies.
Is it a tech experience? Human interaction experience? Service experience? Store experience? What does that mean to the customer?
Traditional retail today, offers consumers less value in service or experience, so what are they paying for? Over twenty years of declining service gave way to Phase One and the runway that online retailers needed.
I Am Biased!
When you spend your career leading premium retail brands with a strong personal service component, you become spoiled! So I am biased to buy only from those retailers that provide me with a perceived value, greater than what I pay for the product. That will be the future of the physical store!
If you are a retailer online or offline that should scare you.
Because that will be the Revolutionary Phase once all the dust and hype settles, the playing field will be level once more.
RetailVolution – Evolutionary Phase II
The Evolutionary phase is about getting prepared for that next playing field.
In this RetailVolution you need evolve into a defendable brand.
What is a defendable brand?
Being competitively intelligent both capable to lead change and adapt continuously to change.
Secondly, demonstrate again internally that you have culturally developed an unconventional level of leadership.
And no unconventional doesn’t mean thinking outside of the box.
Unconventional Is A Different Paradigm
It means being able to compete outside the box a completely different paradigm and set of skills.
You must have an organization that works much faster at making change happen.
Internal evolution of a brand is more important than the impending revolution.
Your brand will not be in phase three if you are not ready.
We forget that significant change brings on significant challenges.
The ability to identify how you can strategically adapt will be the entry to the Revolutionary phase.
Put Your House In Order
The Evolutionary Phase is basically about putting your house in such an order that everything from Culture, Talent, Strategy and Execution are intertwined.
Okay, you might ask; is that the breakthrough, being more disciplined?
You would be surprised how poorly organizations in any industry even come close to meeting this level of discipline.
And that is why Phase two is so important it is a foundation building, learning and development cycle that cannot be ignored.
Many decisions have to be made; What is the culture? How do you bring it to life? What talent does that require? What strategies need to be developed? What’s the tech play? Is it scaleable? Will it be a competitive advantage for the long-term or obsolete requiring investment you can’t repeat? How does that fit into the overall store experience? Can we execute operationally across multiple locations?
RetailVolution – Revolutionary Phase III
My version of the retail landscape is very different than most. I see a handful of flagship stores in major cities only, satellite stores with smaller foot prints and only where the market economic makes sense, with a strong connection to the online experience. At the top of the priority list is the physical store experience it needs to be far more than a greeting and a thank you. Think consistency you need to be able to deliver it across all locations. Consumers are judging your online offer by your in store service. It’s not the other way around. Don’t kid yourself.
What does revolutionary mean? Dy definition it is a complete and absolute change in the way things are done. Without a vision of what that future is going to be like it will be meaningless. This is the phase where retailers and other businesses begin to redefine themselves.
It is an opportune time to explore what options they have to craft major change and become significantly different in the market. Signature service attributes can play an important role in rebuilding and unleashing a significant customer value proposition. There is an alchemy and process to this; from a process point of view it needs to be proprietary, easy to train, deliverable and repeatable. If you buy something out of the box, someone else’s ideas. I assure you your employees and customers will know. The alchemy is all about bring it to life emotionally within the organization if you don’t feel it within the organization you will never bring it to life in any locations.
Unconventional Is In And Disruptive – Conventional Is Out
Being Unconventionally competitive, you can create a strategy of differentiation, however only people can deliver it, don’t kid yourself otherwise.
Your culture and talent must be developed and nurtured to become a competitive advantage. Without that the challenges in the Revolutionary Phase are many.
Not least being Unconventional also means brining Revolutionary service cultures to life with a high level of proprietary ownership and delivery.
Where do you look to for guidance? Take a look at the best premium and luxury chains they own their service culture, they are in a constant state of revolution to keep their brands alive.
RetailVolution Meets Unconventional Consumers
I know you are going to think that this sounds like a cheap horror or zombie movie.
The facts are that the consumer is in the driver seat.
You cannot go backwards from here.
Companies are going to spend billions in convincing consumers to stay with them versus trying to acquire new customers.
That is the reality of the unconventional world technology has given birth to.
Social media, sorry yes they are making billions in advertising dollars but few can prove that it is paying out.
So retailers are in a conundrum. You’ve spent millions or billions building a brand following and it can be lost with a few clicks.
As I mentioned above, I expect many organizations that have spent a great deal of their capital on technology and supply chain will still struggle competitively.
The biggest reason? Following the herd is never a good strategy, if all your initiatives don’t accomplish three goals:
1. Improve the experience gap between online and offline, it is the customer who will decide that you did.
2. How well is the organization keeping up with innovation. This is where I believe retailers need to be cautious.
3. Making the right investment in customer service and bringing to life in the retail environment.
4. Then there is is this what if the Revolutionary Phase also unleashes manufacturer direct to consumer?
My name is George Minakakis. I have lead retail chains in domestically and internationally, I also consult to private equity.
I have authored two business books the latest to be released in January of 2019. The Great Transition – The Emergence of Unconventional Leadership
Also available for public speaking engagements.