Boardrooms across the country are sighing with relief as retail sales begin to recover at last. Annual like-for-like growth figures of 2.2% for July and 1.8% in August [BRC] signal green shoots for retail, but are these shoots emerging from a crumbling bedrock?
Not since the birth of the self-service supermarket have we seen such seismic change in retail. Online trade has brought new competition, while consumer behaviours and expectations are evolving quicker than ever. Price transparency, brought about by consumer technology, is changing the dynamics of competition and price promotions. At the same time, retail space is polarising: the best locations achieve record rents, while the worst are entering a spiral of declining footfall and value.
Retailers have always been the touchpoint for customers, but now suppliers are less reliant on shops to promote their brands and can quickly and cheaply get real-time feedback through social media, direct selling online or even pop-up shops.
This age of disruption challenges the role of retail. It demands quicker and more fundamental innovation - right to the core business model - and therefore deeper innovation skills and behaviours.
Instant access to customers, rich data and fast-moving operations should make retail an innovation wonderland. And yet many retailers get so immersed in the day-to-day they miss the bigger picture - HMV, Comet and Woolworths all fell into this trap.
Strategic innovation requires an intuitive understanding of changing consumer behaviours - continually getting up close and personal with customers at home and work as well as in shops. At the heart of good operational retailing is reductive thinking - analysing to make judgements and decisions. But this cannot be at the expense of expansive thinking.
Since Napoleon described us as a ‘nation of shopkeepers’, British retailing nous has been the global benchmark. We can maintain this reputation - but only by quickly embracing the age of disruption to create new business models and new retail experiences.
Matthew Cushen is a director at innovation consultancy What If!