What makes successful retail?
I recently had a CEO of a retail organization ask me for my perspective on what makes great retail.
Here was my response:
At the heart of any great retail operation is a strong understanding of the customer and a zeal to build around and for that customer.
Gaining alignment on who we're targeting, what causes them pain, what are the key drivers that connect back to needs, and the occasions for which we wish to compete all serve as fuel for how we ultimately manifest in market, who we compete with, and how our product offering, service model, pricing, and promotion would need to adjust and flex in response.
This focus sets the stage for the four other elements in delivering a great retail operation.
clarity and alignment around the promise and principles,
a relevant product offering,
a consistent experience driven by operational excellence,
and a workforce that is engaged around the promise and principles.
Promise and principles.
What we uniquely offer and how we uniquely offer it. Built to be something our target can quickly and easily understand and be distinct from the other choices. These are the organizing principles we use to help shape and define product categories and the experience and by consistently delivering against this promise and principles we build equity in an idea that yields either greater volume or profits.
The next area is product/service.
Retail inherently is constantly changing and flexing to match market needs. The product offering in particular also needs to adjust based on changes in consumer demand, competitive choices, and larger marketplace forces. I've generally seen most operations either focus on driving profit through volume or through a skim strategy—both work and its more a function of the target. Personally, I am a fan of the volume approach as I think its a more stable business over time. This is a very active part of the business with a regular cadence on both the product development and product management side to understand what is the best mix of products to maximize volumes in the most efficient manner possible.
While executing at a high level is certainly the goal, I think understanding what the organization can CONSISTENTLY deliver is in some ways more important. A consistent experience sets expectations leading to trust for when and what I can use you for. This, coupled with strong merchandising creates action from the customer. An inconsistent experience erodes that trust
and ultimately leads to dissatisfied customers. This consistency is built on an understanding of the labor pool, the operating platform, and the model. From there you are either working within it or working on it to improve it to deliver at a new level. More practically: trainings, L&D tools, and standards that work at the front-line employee level all help lead to this operational excellence.
The last piece, which I think becomes even more important as you shift into the experience conversation are your employees. Do they understand the promise and principles
and has the culture been set up in a way that both enables it and is consistent with it.
To push on the principles idea a little more, here are some of the principles powering many of today’s more successful retailers:
Proactive—knowing the right moments to engage with the consumer to help move them to the next step
Automated—removing friction in places where the consumer does not see value
Seamless—tight hand-offs between different stages of the journey and moving between on and offline
Human-empowered—provides the consumer with the information and tools to better enable their decision-making by providing Relevant and Personalized information
Adaptive / Prioritizes—the ability to flex to the market and quickly reprioritize rather than just add to what is already being done
Principles like these can be one of the components that help shape a customer experience…