“Retail is always changing, as it always has.…”
I was reminded of this reality during a presentation by retail industry leader Michael LeBlanc at an executive breakfast session on retail innovation and omni-channel strategies that Purolator recently hosted in Toronto. Along with LeBlanc, our event brought together a remarkable group of speakers with a wide range of experience to explore how the retail industry is undergoing significant disruption and transformation – and what this means for omni-channel success.
Understanding this phenomenon is important. It reminds us that as much as something seems an ever-present reality, nothing ever stays the same in the retail world. This constant change and evolution is ultimately what makes retail a leader among industry sectors; it’s usually the first to transform – forcing others to quickly adapt. The latest disruptor, Amazon, as LeBlanc pointed out, is often described as a powerful, unstoppable force. In fact, it now has more than 100 million Prime members – almost triple the population of Canada! Yet consider that A&P was once the largest global retailer – until 1965, and Sears until 1988 – hard to believe in today’s current landscape. As LeBlanc pointed out, the “Retail Apocalypse” has existed for quite some time now.
To be clear, Amazon is having an enormous impact on the retail industry – and absolutely will for the foreseeable future. In fact, as guest panellist Ted Starkman of Stream Commerce discussed with LeBlanc, not having an Amazon strategy today is just not acceptable, given that 55 per cent of consumer searches online begin there and it’s estimated that 44 per cent of all e-commerce came from Amazon alone last year.
As I wrote earlier this year, e-commerce has fundamentally changed the retail landscape and is rapidly altering consumer expectations. Of course, this isn’t a new revelation. Business trends constantly ebb and flow; this is the nature of our environment. However, we do find ourselves in uncharted territory. With the advent of smart technology and vastly efficient supply chains, this particular evolution feels different because the speed of change is faster than it’s ever been. Adapting to these disruptive forces requires a different way of thinking and innovating, as pointed out by our keynote speaker and renowned author, consultant and teacher at MIT Sloan School of Management, David Robertson. Discussion of this conundrum dominated much of the session, and our speakers certainly had some interesting thoughts on the subject, with a wide range of ideas for creating a lasting culture of innovation. Here are my top five takeaways, which shape tips to survive the current Retail Apocalypse:
- Innovate around the box. Robertson told the story of how LEGO came back from the brink of bankruptcy by innovating “around the box” instead of outside of it. The company reined in a period of “binge innovation” and put the focus back on their core product and customer to determine how to make the play experience more compelling. Often, we think innovation has to be about major change – but, rather, the focus should remain on what you already do well and building around that strength. Sherwin Williams and Guinness were cited as examples of other brands that are getting this right.
- Think in multiple horizons. CEO and founder of Hello Fresh, Ian Brooks, encouraged thinking beyond the visible horizon to multiple horizons ahead. In other words, it’s important to do well in your core business, but it’s crucial to always plan for what’s coming next. Change comes at us faster than we think. By the time we realize something isn’t working, it likely hasn’t been working for a while. It’s crucial to leverage customer feedback and data to understand what your business is doing and continually learn about new opportunities you may be overlooking; it’s important to keep a steady pulse on the industry landscape. As Ian noted, “you’re really going to struggle if you’re not a learning organization.”
- ‘Date’ your customer. Robertson likened innovation to dating: when you meet someone special, you expend a lot of effort trying to learn more about that person and finding ways to become a bigger part of his or her life. The same should be true with customers. The product is only the beginning – you need to look for ways to make your product compelling. Think about what your customers are trying to accomplish with your product and what gets in their way. By removing barriers and continuously improving, we inch closer toward being the ideal partner for our customers.
- Hire people who can solve tomorrow’s problems. Businesses rely on building trust through reliability and competency, but it’s people who bring these values to life. As Brooks noted, it’s essential to be relentless in finding, developing and keeping talent. Moreover, he recommends hiring people with ability over experience: it’s important to find people who can solve tomorrow’s problems, rather than yesterday’s.
- Understand that many more winters are coming.“Winter is coming” is often used to describe Amazon’s significant impact on the retail sector, yet as panelist Franco Schiavone, Director of E-Commerce and Digital Marketing for Town Shoes Limited, said, there will be other winters yet to come. It’s important to be flexible and prepared to pivot because, again, the only constant within retail is change. There’s no single strategy that will last now and forever. So as Brooks also pointed out, think in horizons to ensure you’re prepared for the next “winter.”
Overall, it was an incredible session with wonderful insights. It was a good reminder that regardless of the industry or sector, the one variable that ties everything together is the customer. While there will always be uncertainty in the market, knowing your customers and staying focused on their experience is key. As Schiavone said, if you make your decisions through the eyes of the customer, you’ll always make the right decision.