Retail is a H2H Business
This article appears in the Mar/Apr 2016 issue of Business Franchise Australia & New Zealand
Retail is detail, retail is a brand game, retail is about the numbers. Heard it all before? Well so have I and I have actually said these very catch cries more than once in my career. Well here’s a confession: they are all true and paradoxically are actually, in many cases, the undoing of many retail strategists work, because above all else, we are in the business of people – a human to human business (H2H). Our type, style, behaviour, motivation, bias, the conditionality upon which we accept or reject, the messages we hear as distinct from what we are told... all these elements contribute to forming our uniqueness.
Put another way, more than we give it credit for, strategy is simply about understanding people. To elaborate on this point consider the old multi-channel strategies that focus purely on product, or location. With some exception, we have seen so many of these ‘product push’ strategies invariably fail and often because they are so easily replicated and copied.
The Art of War by Sun Tzu is, in my mind, mandatory reading for ‘Fit’ strategy and amongst the sage advice it simply says that to win a war, we must have a great army. Again, how many strategies have we witnessed that fill in the people piece as they go along? As we enter 2016, let us take a closer look at five business fitness™ steps to ensure we are effectively utilising the people within our strategies.
The first people fitness piece is to understand in great detail the capability and preparedness of the team as a vital input to the strategic implementation. Forecasting future needs in up-skilling, deployment and succession planning is critically important in the planning rather than implementation phase. Omni channel deployment is a case in point: what are the influences to the team and their deployment with the introduction of adjunct methods of distribution. Look to the boards and senior team that have senior HR capability with strong influence and you will see that they “get this piece”.
Leading on from this comes fitness step number two, consider the power of your in-store team. The fit retailer understands one of the most powerful weapons in its arsenal is its staff. By investing in increased service levels and staff training, fit retailers generate more motivated and confident employees who in turn generate motivated customers. By measuring your service levels and rewarding excellence, you create a culture of customer service fitness in your retail business, allowing you to trade on the front foot strategically rather than tactically. The third fitness step concerns the ‘good old customer’ and aren’t they lucky to have us retailing to them?
I’m not sure how many retailers test their strategic implementation with their desired or actual customers. What I can tell you is that this is a significant ‘fitness’ step to ensuring that the desired market provides much needed feedback in the gestation stage of retail strategy. Better to learn in the dress rehearsal than on opening night. There is very strong evidence to show that up to 50 per cent of strategy is rolled out by the CEO and team, endorsed by the board with little or no customer involvement. Creating assumptive ‘product push’ methodology that presumes too understand the customer? Saved some money in R&D, and then spend an awful lot more if they have it wrong at the coal face (and some do). The fourth fitness step is to deeply understand who our customers are with more research and definition than ever before. To be ‘fit for business™’, retailers must think strategically when it comes to connecting with consumers and the key to becoming smarter and fitter as a retailer is how you listen and connect with your shoppers. You need to inspire, lead and manage them in new ways.
Have we understood who our market is and ‘who’ our customer is? What, why and how do we have permission to consider that we actually have this understanding? It’s also equally apparent that the definition of market and consumer is rapidly changing such that last season’s product strategy may no longer be relevant to that fast moving and elusive core customer. Demographics are increasingly becoming superseded by ‘customer behaviour motivation sets’. Where we live is becoming increasingly secondary to who we are and our preferences.
To test this point I recently purchased product from a London based retailer online. These products were delivered to our home in Sydney from London within seven days. I am now on the database of that English retailer - importantly, where we live is increasingly secondary to our customer motivations. A classic demographic slice would never pick that up. Whilst data capture is an evolving conversation amongst retailers on top of this, have you considered that 95 per cent of consumer decision making happens in the subconscious limbic mind? So whilst you may capture their demographic location and understand which products they buy regularly, do you know why? Today we have access to new technology that allows you to go deeper into your consumer’s subconscious drivers. Are they influenced by others or perhaps by your marketing? Are they a thrill seeker or perhaps prefer efficient clean shopping processes?
We apply our proprietary Limbic® methodology – The limbic insights model used by our subsidiary company RDG Insights which is based on the latest findings from consumer neuroscience, psychology, sociology and neurobiology and has been built into a model that is applicable for the marketing practice and allows our ‘fit’ retailers to base decisions on genuine shopper and marketplace insights. If you put all the tools in place to listen and analyse what your shoppers want, need or have to say, you have enormous intelligence in understanding what motivates and influences them to purchase. Furthermore, you have the ability to personalise their experiences, whether it’s online or in the physical store space, thus adding value and allowing you to be strategic about how you may decide to get tactical.
The fifth fitness step is simply about communication and the alignment of strategy, branding, messaging through to the internal language of our business on the shop floor. The more complex the messaging, the less clarity in understanding, the greater the risk of breakdown in communicating. Simply testing understanding in communication helps the process of clarity significantly. (It’s not rocket science is it?) Walk into a highly ‘fit’ retailer and you will see clarity in communication, alignment of purpose, articulated expectations, staff feedback and above all else a culture of performance, mutual respect and winning. These five fitness steps all have one glaring commonality and that is the engagement of all stakeholders as vital fitness inputs to a successfully aligned strategy and operational implementation. Happy ‘Fit’ retailing.
Brian Walker is Founder and CEO of Retail Doctor Group. Brian specialises in the implementation of insights driven strategy to build Business Fitness™. Contact Retail Doctor Group and quote ‘Business Franchise Australia’ to receive a complementary discussion on building your business’s retail fitness in 2016.
T: 02 9460 2882