tyle="font-weight: 400;">I recently watched one of the many fantastic car reviews on YouTube. This one was on the latest editions of two competing luxury cars where the two reviewers looked in depth at the DNA of the cars, who they were aimed at and what the latest updates represented.
In a nutshell, their summary came down to a conclusion based around the notion that one of the cars had actually focused on being a better car, while the other had instead chosen to focus on a dizzying array of gimmicks – none of which actually contributed to a better driving experience.
A similar situation can clearly be seen in retail. In our hyper-anxiety fuelled, 24/7 content hungry society, an endless sea of propaganda is used to feed the unquenchable appetite of the dual-headed beast of media and professional investors – neither of who really cares about actual performance, fundamentals or long-term economic sustainability.
The by-product of feeding that beast is that many retailers today are losing the ability to differentiate between initiatives that will genuinely make their business better, and gimmicks that create a talking point that lasts a nanosecond and nothing more.
Organisational resources – time, cost, energy, capability, opportunity cost, intellectual capital – are finite and under pressure. No business leader has the luxury of unlimited exploration, development and operational resources. And every business leader has a million vendors trying to thrust their product or service at them as the latest must-have business improvement.
Truth is, 90 per cent of new business initiatives today are failing to deliver value for money.
The question every leadership team needs to ask and answer before green-lighting any new business initiative is, “how will this make the business better?”. How will it lead to sustainable increased profits, leading to a lift in enterprise value. After all, all roads must lead to Rome!
A gimmick is a sideshow that can often have disastrous longer-term impacts by sidetracking operational bandwidth, masking real issues, misdirecting capital investment or even attracting the wrong customers.
The media doesn’t get it. The professional investment community – for the most part – don’t get it. But experienced retailers who know their stuff see it in an instant. Every time a retail business changes, it takes a lot to operationalise, and that ‘cost’ has to have a return.
If you’re contemplating business improvement, innovation or change – whatever you want to call it – you have to make sure you deliver better, not gimmick. And better means sustainable profit growth.
