This week, Parker Avery sent out our quarterly newsletter – Retail Advisor – which features industry news, events and resources. Below you will find an excerpt of the newsletter, a note from our leadership. We encourage you to sign-up for the newsletter by emailing us at: firstname.lastname@example.org
A few days ago a recent RIS News article, titled “The Most Successful Retailer You’ve Never Heard Of” caught my attention. The author, Editor-in-Chief Joe Skorupa, talks about what he calls the “disruptive success” of a fairly new retailer, Xcel Brands. Founded roughly six years ago, the company’s vision is “to reimagine shopping, entertainment, and social as one.” In the midst of one of the most challenging and precarious retail environments we’ve ever seen, this $500M company has managed to achieve tremendous success within a relatively short timeframe through exceptionally innovative strategies, both on the consumer facing side through social media and by leveraging diverse marketing channels and distribution methods, as well as behind the scenes in merchandising, product development, analytics, and a variety of partnerships.
However, for many other retailers, the challenge to win consumers’ wallet share continues to mount, particularly for those who historically were sales and margin leaders. Every day we read about leading brands shuttering low performing stores in droves, while many mainstay retailers are filing or preparing to file for bankruptcy protection. Yet new brands like Xcel are enjoying tremendous success, and we continue to see retailers in the discount world winning the new day—brands like TJX, Ross, Dollar General and Dollar Tree are all on impressive growth trajectories.
One discounter was recently cited as having not just size and scale, but also a very effective buying and merchandising operation that provides major advantages in acquiring effective assortments as well as ensuring efficient store distribution. While traditional department stores and other retailers may still have some advantage in assortment creation and buying, today’s savvy and value conscience consumers have seen that even discount apparel retailer assortments have evolved, and there is less distinction between the availability of brands and selection.
What are some keys to the success of these retailers? Obviously marketing and channel execution are essential, so mobile, digital and unified commerce all come into play. But behind the scenes, we believe enduring success hinges on focused improvements to create efficient and effective processes across planning, buying, allocation, and price management—essentially, retail basics, but reimagined. Retailers must no longer “pave the cowpath,” but take advantage of how the world has changed and forge new ways of operating.
While many retail solution vendors tout that their systems will be the panacea for retail woes, we hold strong to the fact that, while exceptional solutions do exist, these must be implemented with transformational business process design to incorporate new ways of thinking and robust change management programs to effectively instill and embrace new processes, organizations and tools. Optimizing business processes and institutionalizing them through professional change management leadership is how we can and do ensure our clients’ technology and transformation investments bear fruit.
We also highly recommend that retailers intensify efforts in their data and analytics strategies. Analytics, buoyed by artificial intelligence / machine learning can further optimize investments in retail solutions by helping companies gain a deeper understanding of what consumers want, find price elasticities to maximize profits, optimize assortments, and more.
Many retailers’ traditional cowpaths were useful and effective for a long time. But the world has indeed changed, and we don’t see the pace of retail change slowing any time soon.
If you have any questions about retail challenges your company is facing or would just like to toss around some new ideas, please do not hesitate to contact me.