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Sunday Soundbite

Why the newest trend in retail is bad for your pension

Chris Field
Chris Field

Shareholders hate it when retailers talk about reinventing themselves, because they know that the rewards are going to be delayed, and may never arrive.

“Reinvention” roughly translates as “we are now finally admitting that we have a problem and this is creating an existential crisis that is forcing us to rethink the entire foundation on which our business is built, so let’s not even talk about revenue and profits.”

And that’s the sound of your pension taking a hit.

This is the trend; retailers talking about what they hope to deliver, way in advance of delivering it.

But let’s embrace this; consider just how many retailers are in trouble, but can’t or won’t talk about it. Anyone with half a brain can read between the lines when retailers talk about a strong performance in the face of headwinds and difficult times to come. The share price just about holds up, and the retailer is at least left with breathing space to perform better before the next reporting period.

Although their language is clunky, the retailers which are prepared to talk about socialising the in-store experience, engaging customers before and after the purchase, and matching demand to supply based on customer insight, are the ones which have the chance to succeed as the deadline for reinvention nears.

And when is that deadline, Chris? Nobody can say, but I know for sure that there are many retailers making changes in their business so superficially and slowly that by the time those changes are complete, the world around them will have changed again, and they will be back where they started.

What is the answer? If we return to our trend that retailers will want to shift the focus away from profit towards transformation, then we all need to get better at analysing their strategy.

And that’s not going to be easy; profits up, profits down, we can all understand. Reinvention, transformation, disruption and innovation are all aspirational words that generate lots of excitement; but, like fast food, it passes in minutes.

We want to change, but are not really sure of the destination, how long it will take or how we are going to get there. No wonder the CFO, or anyone looking for an ROI on requested investment in tech, won’t sign the PO. They want certainty that cannot be given.

We need a new set of key performance indicators in retail that are currently defined as soft benefits – things like customer experience. Anyone want to suggest what retail’s hard measures will be in the future?

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