Future of retail is not about learning new rules, but this...

I constantly contemplate the future of commerce.

Many futurists are charlatans and frauds, but strategy requires forward thinking, so we dabble in the future by necessity.

I have made some bold predictions in the past:

  1. Six years ago I published this list of 8 items – picking winners in the very long term. So far, I am happy to stick by 8 from 8 on that list.
  2. Five years ago (Mar 2007) I published this list of 18 items from a presentation that I gave. Upon review I give myself 18 out 18.
  3. Almost 3 years ago I predicted the failure of Apple. Whilst the jury is still out – I did say 5 years – the share price graph favours me.

What follows is not so much bold predictions, but stating the bleeding obvious – but please read on:

  1. Pending Doom: I have been predicting since 2007 the inevitability of a major internet. It is only a matter of time. Governments are not talking about it much and few people who are in the know talk about. This is not conspiracy theory stuff, but simple logic: as societies become increasingly reliant on the internet backbone, it will be become an increasingly attractive target for disruption – for whatever cause.
  2. Middlemen go poof! Just like there is computerised share trading (based on algorithms that will scare the pants off you) there will eventually be eCommerce sites that are created and optimised by algorithms – and fully maintained – including social media profiles and ‘authentic’ interactions with the community. This will become an easy option for any/all suppliers or manufacturers to bypass the entire retail network (including traditional and 3rd party online retailers) and to reach out to the consumer directly – at a lower cost than ever before. (Why would you accept drop ship orders if you can create hundreds of sites in different languages for your own products by buying a piece of software?)
  3. On a short chain: The suppliers/manufacturers might not enjoy their newfound powers for long because it seems that a new force will disintermediate the only remaining member of the retail supply chain. The development of 3D printing is something I had never foreseen – but it is happening and it may be possible that the entire supply chain will exist only in buying the raw materials to ‘print’ – since presumably the 3D printer itself will eventually be printed?
  4. Zeros and ones everywhere: Just as physical goods become entirely disintermediated, services will increasingly also be offered via the internet. Holograms, VR and such technologies only point to the beginning of what is possible in that space. I can imagine a future where a digital hairdresser virtualises in your bedroom and based on a 3D view of your head executes the perfect haircut. She might even chat to you – who knows? When you press ‘enter’ she disappears again. (Or is Ctrl F9 shuts her up.)
A few tangential points in summary:
  • The economic system is unstable, in transition and vulnerable.
  • The supply and purchase of goods and services is influenced by the balance of power in the retail supply chain.
  • Technology is empowering the consumer, and this means no organisation will have the power (for long) to dictate an outcome. As powerful as Amazon is right now, it only takes a small tweak in technology to connect the writer directly with the reader and Amazon is history…
  • Social media is teaching brands that they have diminishing power and that they in fact don’t really own the brand. (They never did, it was always what the customer thought the brand was anyway – but it is now becoming evident.)
  • Winners won’t be easy to pick and their success may be fleeting as it depends on the fickle goodwill of the consumer. (It always has, but consumers now have direct, swift and powerful recourse because they can activate the Social Mob.)
The key point I want to make is this:

Everything is changing – but few are designing their business for success.

Everyone already knows the points I have made above, but seem to prefer not to think about it and certainly seem to be hoping the status quo lasts long enough to sell the business or build up a large enough super before the s&*t hits the fan, right?

Right now, in almost every business I come across (and I know this is a biased sample) I observe:

  • Systems are redundant
  • Technologies are obsolete
  • Training is ineffective and old-school
  • Strategies are superseded by reality
  • Pursuing market knowledge via traditional research, which is redundant
  • The traditional channels of communication are fracturing

So, how do you design your business for success?

Most executives think (and advisors will tell you) the rules are changing which makes it a different game. You simply have to re-learn the new rules. (I use that metaphor myself because people are familiar with it, but it is not really helpful.)

The new game is an ever-changing game. It’s not as if it used be Aussie Rules that evolved into Rugby League. It is more like while you are playing cricket it becomes croquet and you are competing against a pole vaulter and it is all happening in a pool.

It is not about learning new rules; it is about learning how to relearn constantly and responding to it.

Quick example:

Even though Facebook is an inappropriate marketing tactic for many businesses, I have helped some clients go down that path. NOT because Facebook is important – on the contrary – but the process of learning about the new platform and developing a strategy around it is important.

Quick action:

Establish a project team to write/re-write your job descriptions. The process of doing so will force you to rethink who is doing what and why. For larger organisations this is actually imperative, not because job descriptions are important, but because the process of designing the jobs forces you to consider and evaluate the roles and requirements in the context of the changing landscape. If you are too busy dealing with the present, ask someone to help.

The key to success is to build a business that is capable of systematically responding to changes.

Have fun


GANADOR: Architects of high-performance retail environments.

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PS: This started out as a blog post and over the Easter weekend it became a 38pp treatise. And I am not done yet. It will probably become an eBook at some stage. Subscribe to get fair notice if you are interested in this sort of thing and I will let you know when I am done with the pretty version with links and videos and images and loads of practical examples.

Franchisors, here is your operations manual solution

How we are programming our own demise

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