Here’s a shocker: I’m predicting that in the next two years the retailers who meet shoppers’ needs best will gain market share at the expense of those who lose focus. And there’s more. I believe the suppliers who best meet the needs of those retailers will have the largest share gains.
Marketplace uncertainty is here for at least two years, so we can’t easily assess the spending mood of swathes of consumer groups. Instead you can manage the ambiguity through getting basics right (GBR) and developing collaboration, interpretation and agility (CIA).
Why two years? A Brexit plan will not calm the markets because it’s simply not going to be broadcast in enough detail. Sorry Justin King, but the situation necessary for transparent negotiation has already been canned by Angela Merkel and Michel Barnier. This will be a game of brinkmanship taken to the wire. The only positions broadcast will be the bleeding obvious. Furthermore, as the EU weakens that means waiting is better for the UK. And Brexit is not the only disruption. The minimum wage will take hold, too, pressurising the whole industry. Inflation is an inevitability and suppliers that don’t have control of their cost pricing need to get it quick. Regardless of how suppliers set cost price, retailers can set their own margins. Don’t let them set yours too.
Getting basics right is not just about price. On range, a lean portfolio is a good one. Take the lead and you don’t need to drop share. Promote only with relevance to the shopper by channel.
With basics in place, look to three attributes that will be essential: collaboration, interpretation and agility. The economy is the common enemy for retailers and suppliers alike, and the mood to work together has not been higher for decades.
As for interpretation, big data has caused paralysis. The insight team in your business needs to look beneath the obvious, so let that guide recruitment.
Agility will be necessary to realise opportunities. The nimble supplier can react faster and together with collaboration retailers can capitalise too.
So hopefully GBR and CIA will give you rocket fuel in 2017/18. Happy New Year!
David Sables is CEO of Sentinel Management Consultants