By Paula Rosenblum, Managing Partner
11/6/2007
As we frequently draw out in our research, times have changed. More and more workers are going virtual (including our entire company). And, of course, retail has changed too. The other day, I received an e-mail from a University of Miami student whose part time job is selling mattresses over the internet: we’re going to get together to “talk retail.” Other companies are busily experimenting with selling products and divining customer tastes through virtual worlds like “Second Life.” In fact, anyone wanting to get a sense of just how quickly things have changed should watch the video “Shift Happens”….available on YouTube.
Of course, in this age, most retailers know can no longer succeed by just selling the best “stuff.” And we all know that low price is now just table stakes – it certainly doesn’t build customer loyalty, nor does it even guarantee the first sale. Today’s retailers have to sell what customers want to buy, in the place, time or channel of the customer’s choosing (I’m still not quite sure Second Life is one of those places, but we’re experimenting).
Smart retailers know these truths, and no matter their size they outperform their competitors. This success has everything to do with technology, but technology has to be put into the context of the business problem. And, perhaps as importantly, it is critical to understand internal challenges within the retail enterprise that might inhibit effective use of technology as well.
To help the industry understand and contextualize enabling technologies, and identify retailers who have the best chance to succeed in using them, RSR uses something called the BOOT methodology. Just the other day, I realized I designed this model sitting in the very chair I’m in now – staring out the window at the Caribbean and a pure white sand beach, working from a virtual office in St Croix. Some shifts are very cool. In any case, it seemed appropriate to explain the BOOT for our occasional and interested readers.
The “BOOT” methodology is designed to reveal and prioritize the following:
· Business Challenges – Retailers of all shapes and sizes face significant external challenges. These issues provide a business context for the subject being discussed and drive decision-making across the enterprise.
· Opportunities – Every challenge brings with it a set of opportunities, or ways to change and overcome that challenge. The ways retailers turn business challenges into opportunities often define the difference between Winners and “also-rans.” Within the BOOT, we can also identify opportunities missed – and describe leading edge models we believe drive success.
· Organizational Inhibitors – Even as enterprises find opportunities to overcome their external challenges, they may find internal organizational inhibitors that keep them from executing on their vision. Opportunities can be found to overcome these inhibitors as well. Winning retailers understand their organizational inhibitors and find creative, effective ways to overcome them.
· Technology Enablers – If a company can overcome its organizational inhibitors it can use technology as an enabler to take advantage of the opportunities it identifies. Retail Winners are most adept at judiciously and effectively using these enablers, often far earlier than their peers.
A graphical depiction of the BOOT follows:
The Bottom Line – Shifts Happen
Retail enterprises move from winners to average, to laggards and back again. Ten years ago, almost no one would have predicted Bombay Stores would be out of business. And certainly in the 1990’s no one could have predicted the resurgence of small and mid-sized retailers in the face of Wal-Mart marching across the landscape. Retailing shifts happen, and in the 21st century, technology is an imperative to keeping up with those shifts. You can’t “manage” those shifts. You just have to ride with them. |
