Speed can kill

One of the big changes in retail over time has been the increase in speed in both decision making and the time to achieve results.

Over time and for many reasons retailers have found themselves under more and more pressure to act and get results faster and faster. This is the “do it today and see the result tomorrow” attitude.

Over time there have been significant factors that have pushed retailers to move faster or risk being passed in the race for success. Some of these influences are:

The developments in electronic media. The arrival of television meant retail news, information and promotions made their way into the homes of almost every potential consumer and all at the click of a remote control. Today it is access to the internet on laptops, cell phones, i.pads and tablets that makes retail information available 24-seven.

The impact on existing stores of new retail formats e.g. Department Stores were rocked in the 1960s with the arrival of the self service Mass Merchandising Department Stores such as K-Mart and Target, (it can be argued they have never really recovered to this day).

Today the new retail “demon” forcing fast decisions is the arrival of “on-line” selling. Some traditional retailers are opting for speedy short-term defensive actions without an awareness of what the future holds.

Technology, particularly in the area of data capture and reporting put detailed reports first on the desks of every manager in the company and then on the desktop computer and nowadays are accessible on laptops, cell phones and i.pads anywhere you can get a wifi connection.

More people with more information ask more questions and expect to see the results faster. With new data readily available 24-seven they will know whether actions have turned into results and if they haven’t, get ready for the next round of actions.

Retailers who can stay ahead of the competition gain market-share and increased customer loyalty. This is another reason for fast decisions as this seems a better alternative than risking falling further behind in the race for market-share.

Customers today are retail savvy, have higher expectations and are more demanding. Keeping customers happy is another reason why retailers make fast decisions.

The business owners and/or shareholders – the investors – are more informed than ever before and less patient when it comes to earning a return on their investment. Again this can cause a retailer to make short-term decisions to bolster the company’s results.

In this crazy world we live in we are obsessed with speed: fast cars, fast food, fast internet speed and fast results. In retail, results are expected faster today than ever before and the down side of this pressure on decision making is retailers lose focus on their bigger picture strategy.

When involved with Daimaru Department stores in Japan I was staggered when the head of the company, (then a privately owned family business that started in 1717), shared with me the 100 year plan for his beloved company. His lesson to me was simple: “First know where you want to go and then be sure each decision you make gets you safely to that destination”. He told me: “It is okay to take a detour on the path to success but always be wary of the decision made for a short-term gain because invariably it will not support long-term success.”

Maybe the greatest example of this lesson is to look at what has happened over the years with retail promotions. Gone are the days of an organised promotional calendar that included two “Big Stocktake Sales” each year. Someone at some point in time was desperate for sales and took the easy decision to run a “Save X% Off Sale” outside of the typical promotional calendar.

Competitors followed in the rush to protect their market-share and before you could blink the customer was trained to only purchase when products are on sale! Yes this was a quick fix decision to remain competitive but was it intended to be a long term strategy? Do retailers really want to constantly be in sale mode returning reduced margins? I think not!

Remember it is true that “speed can kill” and in retail quick decisions that are not part of the long-term strategy and/or are not well informed and carefully thought through although they might give a quick result that decision can easily turn into a long-term liability.

To prevent the speed of any decision being detrimental to the future business success always ask yourself these seven questions before finalising the decision or action:

  • Have all facts and information been considered before making the decision?
  • Is the decision critical right now or is there more time to be sure it is the right decision?
  • Will this decision help to achieve the overall business strategy?
  • If this is a “detour decision” is there a plan of action to get back on the ‘main road’?
  • Have you considered both the immediate and the future impacts on the business?
  • Do you know how to evaluate if the decision/action is successful?
  • Will this decision/action have a ripple effect requiring more decisions/actions to be made? 

A quick decision that is made out of panic, that is based on poor information or where the long-term business implications are not thoroughly thought through could be digging a retail grave ready for a premature death.

Inside Retail Asia columnist Darrell Wisbey has 30 years retail experience, living and working in Australia and Asia. He is based in the Philippines and a member of Impact Retailing. Email Darrell.

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