As we emerge from COVID-19 restrictions in Europe and the Americas, we are once again able to travel and spend quality time in person with our friends and colleagues. While Zoom, Teams, and similar technologies have proven invaluable—and are clearly here to stay—nothing beats the richness of interaction in face-to-face contact.
A recent evening in London, in which AlixPartners convened a dinner conversation with several of our clients and friends within the UK and European retail industry, very vividly brought this home to me.
As many people know, as a firm we both study and help our clients respond to disruption, a phenomenon which we contend is now the world’s primary economic driver. There is a compelling argument to suggest that there is no sector which has experienced the phenomenon more than retail.
As our opening speaker Keith Weed, the former CMO of Unilever and now an advisor to AlixPartners, said, “Few industries have been buffeted quite as hard by the Darwinian gales of change.” Keith continued by providing his perspectives on the top 10 factors underpinning change in a post-COVID world, which I would encourage you to read. They make for fascinating insights, and I suspect that, like me, you will recognise yourself and those around you in many, if not all.
Keith was followed as a speaker by my partner and co-lead of our global retail practice Joel Bines. Joel took advantage of the COVID-imposed travel hiatus to combine his 30-plus years of working in retail and his deep passion for the industry to write a book: The Metail Economy: 6 Strategies for transforming your business to thrive in the me-centric consumer revolution. The six strategies in question are:
- Cost – Give Me a bargain
- Convenience – Make it easy for Me
- Category expertise – Show Me what you know
- Customization – I want that made for Me feeling
- Curation – I want that chosen for Me feeling
- Community – Make Me feel at home
Again, just as with Keith’s overview, I have little doubt you will recognise yourself and others here. Clearly, Joel’s perspectives have struck a chord as I’m delighted to say The Metail Economy is now an officially recognised best seller. I heartily recommend it to anyone with an interest in retail and rapidly changing consumer behaviours.
Keith and Joel’s opening remarks prefaced a fascinating and candid discussion as our guests, senior business leaders from clothing, grocery, wholesale, technology, and restaurants (amongst other areas), shared their perspectives on the future and learnings from the past. By common consensus, it was agreed that the industry has a long, albeit Darwinian, history of adaptation and that the pandemic had shown many retailers at their best. Some drew on a history of change and others acquired new levels of agility. On a less optimistic note, it was also agreed that the next 24 months are likely to be tougher for consumers, and therefore those that serve them, because of recent disruptions, such as the invasion of Ukraine, inflation, rising input costs, and energy supplies. Indeed, in some quarters it was strongly suggested that after decades of price deflation, we are on the cusp of a medium- to long-term correction in pricing rather than a short-term blip. When one overlays these impacts on changing consumer behaviours and the sheer pace of disruption, the challenges appear daunting.
So how will the successful industry players respond? Certain factors are largely out of their control. Geopolitics, raw material costs, supply chain disruptions, and energy will need to be managed and mitigated through careful process, planning, and the ability to respond rapidly to variability. These will be significant contributors to the fortunes of retailers everywhere, but addressed appropriately, none will determine any single business’s long-term place in the world. Instead, those areas which are squarely within a retail business’ sphere of immediate influence will do this.
As our conversation over the evening continued, I was struck by the passion and intensity with which our guests spoke about the need to engage with the “Me” factor. We talked at length about the need to continually hone the offering and to invest in staff to provide the best possible experience in the workplace. By doing so, this extends to customer service. Retailers must make that last yard—in store or online—something consumers remember for all the right reasons. Finally, retailers must make swift and relevant use of data rather than harvest data for data’s sake. This is where retailers can and must take control to shape their futures.
For centuries, retail has largely been an art, an experience based on fulfilment of needs and the creation of emotion. Science is a relatively new variable and, as our guests alluded to, is not in and of itself the panacea some suggest. Meeting the demands of a world full of “Me’s” requires the leadership, vision, and agility to continually exploit the benefits of science in pursuit of honing one’s art—constantly listening, learning, and adapting. Rising to that significant challenge is how retailers will become Metailers and where futures will be cast.