Two weeks ago, I had the pleasure of attending and speaking at Inside Retail Live in Melbourne. It was a great opportunity to see what some of the more recent trends and challenges are for the retail industry.
The event confirmed for me just how competitive and challenging the retail space is at the moment. This is an area that is being disrupted by a lot of factors. Technological advances are continually shaping the industry.
Innovation in the retail industry
There were a lot of ideas presented at Inside Retail Live. A few that caught my attention are the robot from Seattle that makes amazing coffee and the company in China that is pioneering the idea of deliveries via drones. These are just some of the examples of how retail is evolving to service customers better.
The change is good for customer experience but it can pose several challenges to the businesses who have been in retail for quite some time. The statistics were interesting. Throughout the past year, there have been more shops closing, as a percentage, than in any time in the past. At the same time, there have also been more shops opening. This gives a clear picture of just how tough the industry is.
The companies that are thriving in this competitive environment are those who either have a strong brand with a very clear brand promise or who are creative and innovative enough to create a different retail experience for their customers. These companies are able to stand out from the rest because their actions are well supported by their corporate culture.
Role of corporate culture
Culture plays a big role in the retail industry. I can’t imagine how a company can survive in this environment if they haven’t defined and implemented a great culture. It’s clear from the presentations that companies with a clear brand purpose and promise are out performing their competitors. To deliver on their brand promise those companies will need a strong corporate culture.
For example, I’m willing to bet that some of the most creative ideas in retail started out from small ideas from 1 or 2 team members. Their culture allowed for that small idea to flourish and be adapted and implemented by the whole company. Getting the culture right and aligning it with the business goals is critical for success.
Defining Culture for Retail
I always ask my clients to pick just one word to describe the culture they want to have in their business. When you can define your culture in one word it’s simple enough for your leaders to have a conversation with their people. In this instance simple is powerful.
Everybody assumes that a retail culture will be customer focused but the reality is that it depends on your purpose, strategy, and brand promise. A business needs to think about how they will deliver their brand promise. They may find a different culture is needed.
For example I worked with a retail client many years ago. They had stores in fast moving environments like train stations or airports. They sold magazines, newspapers, and other “convenience” items. Their customers were always on the go and just wanted a small item for their trip. Their customers were always in a rush so they chose to build a responsive culture. Their customers didn’t want a great customer experience, they wanted efficiency and responsiveness and by choosing one word their store managers were able to talk to their staff about how to be more responsive. It because a simple, but very important, conversation.
As time went on their aligned other strategies with responsiveness. Since then the company has grown dramatically and is now operating as a much larger business.
To sum it all up, the retail environment is very challenging and to survive companies will need to align their culture with their Strategy and Brand Promise. While “customer-focus” seems like the obvious choice as a retail culture, it’s not always the case. The business needs to think about their purpose, strategy and brand promise before in order to define their culture.
Retail businesses will have a higher chance of success if they pick and implement the right culture.