Don’t fear the future, create it
Fear in retail
Few know what to do in the US retail market. The rise of eCommerce, consolidation and continued cost pressures are filling organizations with uncertainty. We’ve all seen how uncertainty creates fear in people and as a result clear thought is rare. Where the perception of power exists, aggression becomes common – unilateral demands, punitive action, and as a result positive, value-creating relationships are rare.
Speaking with suppliers there are many reactions to this situation: what do we do? this is the new normal; it’ll settle down; carry on as we have done and hope it goes away. The biggest issue is that these are all reactions. Few if any are creating their future; some are playing the victim. Finally, after several years of this rapid change some are looking to take a little control of their situation and asking how to negotiate this new world.
No one knows. However, there are plenty of indications from other markets. I’ve spoken about the ‘Reverse Gulf Stream’ for years – the way retail trends have flowed from Europe to Canada and now the US. For those who think we’ve seen the worst of it, I’d disagree. Change will likely be the new normal, with continued fear as the trends above continue. Price pressures always accelerate when competition increases as retailers think this will solve everything (or at least keep them in the game). Some won’t survive which will see even more aggressive tactics. Partnerships will be even rarer.
Winners aren’t passive
It’s natural to resist change, or hope it passes you by. But this is passive. Winners aren’t passive, they take control and create their own future. As Lewis Carroll said “if you don’t know where you’re going any road will get you there”: perhaps you want to have more idea of your destination and the route you’ll take, so there are some decisions to be made.
The future industry winners will be those who build their future. Those who visualize it and make conscious decisions of how to reach it.
If you have a Joint Business Plan (JBP) perhaps you feel comfortable. Ask yourself how often your retail ‘partner’ has fully committed to the plan, particularly when business is tough. (Perhaps a little cynically) you may have found your retail partners less than keen to compensate you for underachieving ‘joint’ growth targets…
A new approach is required. You must decide the future you want to create and how your company is going to change to achieve it. Decide on your destination, which road you want to travel there and own it. Before you can jointly plan your business with your customer you must build your own plan.
As our definition of strategy is simply a plan to get you to a clearly defined vision, we call this a Customer Strategy. Although the word ‘strategy’ conjures up ideas of months of work and massive cost it shouldn’t be that way. We’ve been building customer strategies with some of our clients recently and our framework makes it a painless task that aligns the team behind a clear plan, reaping great rewards.
We work to three principles in our strategy work, and these apply in this situation:
Keep it simple. If you write a massive document it’s likely to sit in a drawer somewhere, so make your customer strategy focused.
Engage the team. We’re big believers that the account team usually knows the most about their customer. How you encourage them to share this, to shape a plan to succeed with the customer is the art.
Plan for change. The world changes daily, so your plan should at least allow for this. And ideally consider what is likely ahead of time so events don’t knock you out of your stride.
Sometimes it just takes someone from outside the team or organization to challenge them, to bring out what individuals have been thinking and to give them confidence they can win in tough times. We don’t usually directly solicit business in these articles, however, with the urgency required to avoid another tough year and another missed opportunity to plan the next year we would welcome a conversation. Perhaps we can even help your team get on the front foot for a change.