I love retail because datat can measure success. In Why hypotheses Beat Goals, Jeanne Ross from MIT’s Centre for Information System Reseach, illustrates doing hypotheses right. Each week, Seven-Eleven Japan counselors visited the stores and asked salesclerks three questions:
- What did you hypothesize this week? (That is, what did you order?)
- How did you do? (That is, did you sell what you ordered?)
- How will you do better next week? (That is, how will you incorporate the learning?)
With empowered, agile teams (see my post on cross-functional journey-based teams), the role of leaders is to quiz teams about their hypotheses and challenge their logic if those hypotheses appear to lack support.
The 2010s were about the death of retail: the past decade has been a period of significant disruption in the retail landscape as Amazon and online shopping ascended. RadioShack, Toys R Us and Sears went bankrupt, and other retailers shuttered locations — or opened smaller stores — to cut costs. The halo effect behind omnichannel was finally validated by facts with a study from International Council of Shopping Centers: bricks-and-mortar stores clearly offer a boost to online sales, and vice versa.
The 5 retail marketing trends that defined 2019 were around Sephora’s members-only social platform; Nike Live members-only store concept; giving shoppers more reason to join, more compelling benefits than usual rewards points. Like 50m fashion concept store in London: the community-based concept allows designers the rare opportunity to meet customers F2F, encourage circular economy. Some pieces on online store strictly made to order nurturing collaboration between designer & audience.
The 3 digital consumer trends were:
- Unmanned stores will open up new business models,
- Voice command to gain even more traction,
- Consumers are resisting the always-on mentality
Amazon launched a new Sample sampling programme where brands pay to send free samples to consumers based on what they’re likely to buy.
Nike ended sales on Amazon US, but doubled down on Tmall to “tackle third party problems,” “access Tmall data” for personalization and “effectively integrate online and offline experiences.”
JD.com strategy exec Chenkai Ling believes retail will evolve into a “boundless” sector as new shopping channels emerge and combine (commerce was offline, then online and going into integrated shopping moments (with inventory & consumers’ data): conversational, social, AI-based commerce:
The value of product will decrease while the value of content & service will increase.
Retail Dive shared the 10 retail trends to watch in 2020. As we head into the 2020s, it is interesting to read HBR and How Retail Changes When Algorithms Curate Everything We Buy
Independent curating engines (think Expedia for travel) could trigger the next wave of disruption in retail. The refined technologies would tailor recommendations and these agnostic digital retail curators would then scour the internet and could direct consumers to the retailer offering the best deals — or advise them to delay a purchase when a promotion is likely.
When this happens, we expect that retail curators will become an industry on their own, changing the structure of the retail sector and capturing a significant share of retail sales.
… in a similar way to Expedia, Booking Holdings, and C-Trip accounted for nearly 20 percent of the global travel market’s $1.3 trillion in sales in 2017.
The 3 types of digital curating engines would be:
- Market mappers (think Skyscanner, Kayak)
- Digital personal shoppers (think learning algorithms like Netflix)
- Review aggregators
It was refreshing to hear Zeynep Ton, a Professor of Operations Management at the MIT Sloan School of Management, on Eat Sleep Work Repeat podcast.
The good jobs strategy, also on HBR, makes the case that good jobs —with decent wages, predictable hours, sufficient training, and opportunities for growth — are good for retailers.
In her 15 years researching retail, she found that a new operating system designed to better serve customers’ needs and increase workers’ productivity, motivation, and overall contributions achieves competitiveness and better results (Eg. Quik Trips profit is double the retail average) because the culture they create results in better service.
The most important lesson I’ve learned is that the GJS [Good Jobs Strategy] is a system and all the parts must work together. The system consists of
(1) investment in people in terms of hiring, training, compensation, high performance standards, and meaningful career paths, and
(2) four operational choices you must make:
- focus and simplify,
- standardize and empower,
- cross-train, and
- operate with slack (with spare capacity).