Why implementation is more important than innovation
“I have to admit that I only read War And Peace when I was 40. But I knew the basics before then.” – Umberto Eco
Why is the term ‘innovation’ used far more often than ‘implementation’? Why are we drawn to the idea that only innovation gives us ‘cut through’?
Last month, at an international meeting, our British business partner described it aptly when he said that, “the strategy is execution.” Does an out of stock item for days, perhaps months, on end assume less importance than the executive dialogue about ‘our innovative culture’?
Somewhere in all of our conversations about new technologies, deeper consumer understanding, metrics, big data, personalisation, customisation, empowerment and so on, the term ‘implementation’ has lost its way a little.
Four years ago, Burberry unveiled its largest and most technologically advanced store on London’s Regent Street to provide an ‘”enriching and interactive” experience for customers. The 4087sqm store, with ground-breaking interwoven technology, includes 500 speakers, 100 screens including what’s claimed to be the tallest indoor retail screen in the world. The RFID technology on products triggers bespoke multimedia content through mirrors that turn into screens. Is it a masterpiece? Yes, but at what cost?
This month, after a 10 per cent fall in profits, the British luxury brand has said it is now going to overhaul its retail operations and simplify its product range. Areas of focus will include retail basics such as customer service, availability of products and instore logistics. CEO, Christopher Bailey, said the business is firmly committed to making the changes needed to drive Burberry’s performance.
The announcement of this strategy is a reminder to all retailers that there will always be newer and shinier things to chase, but these can often be pie in the sky mirages that distract us from areas of business that will significantly impact the bottom line.
It really doesn’t matter if I am on your database or if you can digitally know my every move if you can’t successfully sell me the stuff you promise, does it? Classic disciplines such as customer service and merchandise planning are too valuable to be overlooked.
Candidly, any retailer or advisor who isn’t thoroughly conversant with every detail of retail and how to implement it is like a painter without a brush. The painting can be described and be visualised – but never painted to the detail required.
I know it’s not sexy to talk implementation, but implementation is the new black. Here are a few implementation questions posed by newly appointed Retail Doctor Group consultant, Gerard Hanna, that all retailers are encouraged to consider:
1. Point of difference
What is your unique point of difference?
Has your point of difference changed and evolved with your customer?
Does your product mix dictate your point of difference?
What is the size/format of your store and is it right for our business?
Where is your competition in relation to your location?
Does your location strategically fit your growth plans?
What are your location operating costs and how do they compare to the market?
What is your traffic flow and is it congruent with your location cost?
What are your parking amenities and do they meet your customer’s needs? Visibility? Adjacencies?
3. Merchandise management
What is your merchandise forecasting process?
What is your product mix and overall category performance?
What is your inventory turnover?
What is your gross margin?
What is your pricing strategy?
Have you considered all critical pricing factors?
Do you have competitive pricing reviews?
5. Communication mix
What traditional and new media are you using as part of your communication mix?
How are you using media to develop customer loyalty and brand image?
Are your communication channels bringing your point of difference to the market effectively?
What is your marketing plan and does it achieve this outcome?
6. Store design and display
Have you covered the critical issues in your store design?
Have you assigned the correct space to categories and merchandise?
Have you used the most effective techniques of merchandise presentation?
What standard is your store environment experience?
Are you considering the full journey to purchase and where this journey may begin?
Is your online/mobile offer relevant, competitive and a seamless transition between offline and online?
Do you have cross-channel fulfillment capabilities and are they being utilised?
Brian Walker is founder and CEO of Retail Doctor Group, Australian elected Ebeltoft member, and can be contacted on (02) 9460 2882 or [email protected].