There’s an open letter trending on business social media from Steve Collinge at Insight Retail Group to the acquirers of Homebase. It’s a stark warning and a heartfelt plea to the new owners not to screw up, and offers advice based on his extensive experience and understanding of the economic, cultural and technology shifts all businesses are having to navigate. Read the letter
Steve also quotes from a report from Goldman Sachs:
“One of the largest generations in history is about to move into its prime spending years. They are poised to reshape the economy; their unique experiences will change the way we buy and sell, forcing companies to examine how they do business for decades to come” Full report here
What the letter underlines is the urgency for transformation, especially poignant in retail, an industry dominating the news with, sadly, not good reading. Every day there’s another gloomy report on another brand like House of Fraser, Marks & Spencer, Maplin and Mothercare, the list goes on! Many retailers have either gone completely or is going through turmoil, so it would be a shame to at least not learn from their struggles rather than thank our lucky stars it’s not us!
Actually, retail is the perfect example for what’s working and what’s not and a great lighthouse to guide all businesses in how and what to transform.
The “Amazon effect” or retailers’ inability to innovate is cited as the reason for their failure, but retail is surely at the forefront of innovation and digital and invention:
eCommerce, home delivery, apps, click and collect, self-serve tills, interactive displays, iBeacons, SMS and mobile campaigns, personalization, barcode scanning, loyalty cards, coupons, AR, VR, smart shelves, interactive mirrors, talking hangers.
With all this innovation why is retail in such turmoil?
Perhaps that’s not the question, perhaps the question is:
Does technology on its own drive transformation? or put another way does adding a smart mirror or an app with VR to help a shopper navigate a store or virtually try out stuff equate to change?
What certainly seems to be missing however, is HOW innovation across the whole business and not just the technology is delivered – the people, the processes and the financial models.
Nike and Under Armour provide great case-studies of businesses that have innovated across the organization to effect transformation. They have completely changed their operating models using technology as part of a business-wide transformation strategy.
Using sensors and IOT in their trainers (and other products) Nike and Under Armour allow customers to track their performance and statistics, share activity, routes, and how they feel through a connected community. They have fundamentally transformed their businesses from selling sports goods to becoming an end to end health and fitness service provider.
It’s allowed them to harness Millennial’s openness to sharing data in return for convenience and their desire to stay fit and healthy.
It is clear that transformation requires wholesale change across a business – from its customer facing front end – to its organizational and technology back ends. It also demands a deep, strategic renewal process that includes a company-wide shift in mind-set. This is where the people part of the transformation journey comes in.
Transformation requires entrepreneurial leadership energizing and empowering people to act and drive forward a new and revolutionary mission to exploit unseen opportunities.
The big question for executives and teams in every department is –
“Are we thinking radically enough?”
It’s not good enough to look to IT teams or even external technology providers and expect them to solve the challenges of transformation. Thinking radically and boldly is the start point.
The possibilities that an almost limitless technology capability, coupled with the largest and most enlightened buying population in our history, presents unprecedented opportunity.
It’s the people behind the ideas and the execution that will make the difference. Even after successful transformation they will be key to iterating the model to stay competitive and relevant.
The Silicon Valley adage of “Fail Fast, Fail Often” somehow has to be woven into the fabric of the business culture – not easy when shareholders, investors and probably Homebase’s new owners’ main motivation is just making money.