Rocking Retail

Sears, the one-time titan of American retail, filed for bankruptcy ahead of a $134 million debt payment due Monday and announced that it will close 142 stores. The Washington Post, October 15, 2018

JCPenney could be kicked off the New York Stock Exchange because its stock is worth too little. CNN Business, August 9, 2019

Barneys is closing 15 of its 22 stores after filing for bankruptcy. Here's the full list. Business Insider, August 6, 2019

GNC could close up to 900 stores and slash its mall location count in half as the retail apocalypse roars on. Business insider, July 22, 2019

We live in the disruption era. It comes at us thick and fast. It is unrelentless and sometimes ruthless to names once etched in the hearts and minds of every household. Particularly severe to brands humanity grew up with. For incumbents, it sometimes feels even the paranoid don’t survive.

The stock market now has two $1 trillion companies: Amazon and Microsoft. CNN Business, July 11, 2019

Shopify Cracks The E-Commerce Code, And Its Billionaire CEO’s Fortune Doubles In Just Six Months. Forbes, August 20, 2019

Alibaba ramps up offline efforts. Internet giant opens first physical store of its cross-border shopping platform. China Daily, April 21, 2018

Why digitally native brands keep opening physical stores. Bloomberg News, October 22, 2018

We live in an opportunity era. Everything is possible. For those with the right mindset, the world is our playground. Growth is exponential. Winners are taking all. Life is good and only getting better. For digital natives, it sometimes feels anything and everything we touch turns into gold.

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For the uninitiated, it seems we live in the paradox era! Very difficult indeed - to decipher and appreciate the underpinnings of such stark and opposing trends. This starkness particularly accentuated when it comes to the business of Retail. On the one hand, household names are going bankrupt, fast. On the other, digitally native brands are opening offline stores by the dozen and valuations are booming.  I am no retail expert but let me offer you a response hypothesis for incumbents, as a student of ‘business in the digital era’.

My response hypothesis in the form of some #mantras below:

• For starters, to re-iterate what I might have said earlier. Business is still business. You still need to obsess about making money, optimize costs, obsess about customers, shareholders and the larger societal context.  Remove your eyes from the basics at your own peril

• What has definitely changed though, is the era we are in. Industrial has long sunset and the sun is now shining brightly over the digital era

• To survive in this era, just paranoia is not going to cut it. You need to develop a digital conscious, a digital soul, a digital genome to thrive

• Customer attention spans are depleted, and their expectations are fluid. You need to get on and develop a top-notch digital storefront. Remember a brilliant mind once said ‘design it not what it looks like or feels like, but how it works’. So, make sure your storefront design is what works for your customers, in all aspects of the digital experience. And yup, hyper-personalisation, AI, data driven, etc. etc. etc. are all table stakes now to enable a good, usable design

• You also need to be where your customers usually are, so API enable your core as a first step and get on with connecting to digital lifestyle brands around you – We Chat, What’s App et al

• You cannot just develop a bright and sparkly digital veneer but have an analogue back office and logistics underpinning it. The back office and supply chain need to be fully synchronized, in real time to meet the promise of the digital store front. Most incumbents may get carried away by the gloss of the digital customer experience and forget about or delay this important gene of the digital genome.  Synchronize the operations in real time and make it as autonomous as possible 

• And phew, if this wasn’t enough you have to in-parallel, perpetually examine the business model you are in.  Marketplaces have disrupted pipelines. The distributed business model is due to disrupt marketplaces. And who knows what is on the horizon next. Incumbents with their distribution prowess should have been first to discover the promise of ‘managed marketplaces’ and launch DNVBs – unfortunately they didn’t!

• Culture is a derived variable. You cannot impact it directly. Just get integrated teams to start working on new initiatives in new ways – agile, failure accepting, collaborative, open, knowing to learn. This new way will go viral and in due course become the new cultural norm

• You may ask. All this in one go! Can I not take a phased approach? No, you cannot. If mutating to a new organisational genome could be done with solely focusing on a singular dimension of the business, we would not have a retail apocalypse, imho!  Digital natives are already active on all these vectors. You have to transform multiple genes of the genome. and fast. Of course, you can take a sprint approach within each vector of the transformation – customer experience, operations/logistics, biz model, capabilities, culture et al. But as was said earlier, creating a digital veneer underpinned by an analogue operation is just not going to work

• And finally, as a dear fellow disrupter, Ray Wang puts it so nicely, ‘digital Darwinism is unkind to those who wait’. So, get on and move. Pace is your friend in responding to the existential threat from digital natives

Retail sometimes serves a higher purpose for humanity. For instance, Retail has therapeutic qualities. Personally, quite so often when the chips are down, a visit to a retail destination, with serendipity as my shopping guide, helps soar the spirit and gets me back into Flow. Lately during these visits, the transition of bricks and mortar retail to an experiential conscious is quite apparent.

Nurturing a digital genome deep within its soul should help incumbents with this transition to experiential.

And keep the business of retail rocking well into the sunshine of the digital era.

Note: The views and perspectives on this blog and neetanmantraas are mine and mine along