Stop the retail train, it’s time to get off! When times have been challenging for so long, it’s not surprising that you might want to escape the industry altogether. We are not only dealing with a local challenge. This is a global train moving fast in one direction. It’s hurtling into the future at a pace faster than what you can keep up with.
The tracks don’t just need mending, they need a completely new build in a new direction. Retailers have exhausted all possible traditional strategies. Price reductions and promotions are no longer working like they used to, customer habits have changed along with their expectations, employees are demotivated affecting service levels, there’s too much choice and too much competition and customers are not spending any more. This train is now accelerating and the driver has lost control of his brakes!
You cannot protect yourself from what’s coming. The only way to understand the future is to be part of creating it. Here’s five ways you start building your new tracks.
- Get back to basics. Here’s the reality check on value creation. If you are losing market share then customers are not choosing you because the value you are offering is not good enough. They can find a faster better, cheaper, more convenient solution elsewhere. What you define as your competition may not be the same as what they are spending on instead of you. Retail formats outdate as product types do. Remember when indoor canals in malls were the big thing?
- Digital is not a goal. So many retailers are desperate to incorporate something techy without a tangible benefit to improving the customer experience. Investment in technology needs to facilitate a real emotional or functional need. Most companies bring digital in as a gimmick, customers are wise to this. When implemented properly, technology shouldn’t even be a thing, it should just work and work better!
- People need people. Believe it or not, how technology is often used is driving a trend for human interaction. It’s a basic human need to relate and belong. Unless there’s an efficiency benefit, for most, the idea of talking to a robot is a deterrent not a benefit. There is still nothing in the world of technology that beats a real person who understands the customer and delivers an empathetic solution. There is also nothing more frustrating than not being able to connect with a human when you have a human problem.
- Bring in the new. Markets are made up of people who are continuously exposed to new outside stimulus all the time. Businesses, however, find something that works then insist on doing things in the same way again and again. Most senior managers see something new and want to copy it rather than innovate. Allocate a test budget and starting testing new things. Refuse to accept the same old processes and start make micro changes that keep you aligned with your customers.
- Calculate. Activate. Evaluate. Repeat. Get past the discussion stage quickly and just do it! Consider the risk of not acting as well as the risk of trying something new. The human brain learns through experience, not academic theory. Hence the old saying, a wrong decision is always better than no decision.
With the Middle East market built on franchise brands, it puts the local industry on a high alert to international economic sensitivities. Change your tracks, do it quickly and get your train moving in a new direction.