The new frontier for big business
My wife got really mad at me the other day. Normally its because I didn’t do the dishes or flip the laundry, but today it was about a development at work. My wife works for a large single brand retail chain that is not high or low end, really middle to upper middle price points. They are trying to figure out what to do in the modern retail world. My wife told me about a thing they are trying and I didn’t take it well. I saw what I saw and had a bad response, like I do with most large business solutions to modern problems.
I have a few points to make before I get into the technical issues with the thing the want to roll out. The 1st is how we respond to new things. I look at everything from a pop music perspective. If you like Beyonce, and she comes out with a new song, you don’t like it at 1st, you will keep listening until you figure out how to like it. If you hear a random track from somebody you have no feeling for, you will dismiss them from your mind the minute you don’t like it. This is how we deal with info from on high when we want things to work at our business. We figure out how to like what the boss came up with no matter what it is, because our need for things to work. When we hate our job, we are much more critical. Hence, my wife likes her job and really wants her company to do well.
Now onto the company. Retail in 2017 is in a weird space. Big companies have massive investments made in real estate. It is not cheap to have a store in every mall in America. Now you have this online thing you are trying to figure out. No rent, no utility bills, no army of people in multiple locations… there are quite a bit of people involved in online business but it is much different. Now you have sales being made at much cheaper labor cost than brick and mortar. What do you do? You have all this money with huge overhead in brick and mortar, and this online thing making money with so much lss overhead. How do you balance the numbers to make them both work together?
Above is the challenge of the modern retailer. How do you create a structure where the investments pull returns that justify the ways in which business is done?
My wife’s company is rolling out a customer engagement app that allows for stores to directly interact with their locations customers better. It is a nice idea that brings new tech into the stores and utilizes modern tools on paper. But the reality is that volume is the key in Mall based retail. Individual outreach is good but does not have the economic impact needed to justify the time spent. This is one of those programs that makes a middle manager somewhere feel like they did something but will not have a big impact on profits. Something had to be done, they did something, now they will play cover your ass as the initiative fails to reach the targeted goals.
Big companies do not have the ability to make practical moves quickly. They have lots of locations, thousands of people, and millions of customers. Speed lacks practicality for the big company.
To survive in a very fast moving market, you have to understand your base customer and forecast future behavior. Rolling out an app to engage people is nice but, understanding where things are going and how do you get ahead of that is the key to long term success. The online plus brick and mortar retailers have to invest profits between the 2 platforms for sales t maximize the effectiveness of both. Employees need to have incentives for growth in the overall company, not just the single entity they operate in. The internet made every big company very small because they have 1 portal that the consumer can do everything, if they choose.
One thing corporations get removed from in thought is the trust built between consumer and a brand thru interaction at the store level. A customer can receive amazing service at a store which creates a brand loyalty that they will use when shopping online. They may never go back to a store but the store is responsible for the continued participation online. This creates a space where the corporations need to stop being greedy and share the online results with the brick and mortar stores.
The balance between online and off will be waged forever. This is the new frontier for business in the new economy.