The UK Retail industry is in the middle of a situation never experienced before. Firstly, we are in the midst of the worst economic crisis or over seventy years. This is bad (Although I did overhear someone in a chip shop saying the "green shoots" are here!), but recessions have happened before and managing costs; sticking to the knitting has seen most retail businesses ride the previous recessions ok. However, when mixed up with the second factor, this tried and tested approach will no longer work. The second major dynamic is how the Internet has evolved (specifically the social web, social media and online conversation) allowing consumers to hold a much higher level of influence and power than ever before. Consumers online, especially in groups are beginning to call the shots and are no longer receptive to "push" marketing approaches, such as advertising.
So retailers, from the very largest to the smallest, need to reconsider their business models in order to sustain and accelerate growth for when the recession starts to ease. Should they automatically re-open another store? Should they continue with the same distribution channels? or should they look at more innovative and forward thinking measures online? I'd promote exploring the latter.
Formulating and implementing a brand engagement strategy online, targeted at helping your specific group of consumers needs to be considered. Rather than just focussing on the sale; place a much higher emphasis on providing good and helpful information and truly reflecting your own and employee's personalities, as well as that of your brand. This will become viral, much more personable and you will be in a much better position to create advocates...even if they have never purchased from you.
This combined dynamic of economic downturn and Internet evolution also means the smaller and medium sized retailers can challenge the bigger players for market share. Smaller retailers can be more agile; reflect their personality easily; and achieve the same level of visibility online as held by the major retailers, or an even higher profile if done well. Change can be executed at a much faster pace as long as the desire is there to do so. This has to come from the very top of the business accompanied by the willingness to take a few calculated risks and "get involved."
An example of such an organisation is
Wallace Sacks and their CEO
Stephen Sacks. Stephen presented and took part in the Institute of Leadership & Management's "Delivering in the Downturn" event on 21st April 2009, exclusively for ILM members. Stephen outlined the "nagging feeling" he had had for sometime and came to the realisation that he needed to change the engagement and business model for the benefit of his customers, and for his business. In fact, to put in place a strategy that would allow Wallace Sacks to deal direct and extend their consumer reach. The social web plays a major role in this approach.
To draw an analogy, the UK retail sector could be seen as a massive, never ending, boat race where everything from cruise ships to inflatable dinghies are taking part. All having the aim of not only staying afloat, but to stay ahead of the competition and take on board more paying passengers as they progress. The combination of the afore mentioned dynamics means the race has reached a tricky part of the course where there are a number of sharp turns to navigate through; in stormy seas, all with ports where paying passengers need to be picked up. The smaller boats, captained well, will find these passengers faster and learn to cater for their needs; the larger ships will find it challenging as it will take longer to "turn" the ship. The vast majority will take it very slowly coming out of it ok, but losing out on the extra passengers. Some will sink.
Which ship/boat are you on?
