Round about the time of the Global Financial Crisis, “stores ran out of ideas just as consumers ran out of money”, according to David Roth from WPP The Store in London. The effect? Growth came to a grinding halt. Roth was speaking at the final Westfield Breakfast Seminar in Auckland this week (sponsored by Inside Retail), after the event had traversed the continent from Perth to Sydney, and then made the trip across the Tasman.
Roth’s point was that the GFC marked the end of an era in retail; previously retailers had been focused on the back-end of their businesses, tweaking and tuning their supply chains and systems, cutting costs and optimising the way they worked. But all of a sudden, ideas were what counted and the emphasis needed to flip from back-of-house to front-of-house. If the offer itself was boring or confused, customers just weren’t buying it.
I too had been talking at the breakfasts about the number one quality of a “Star Retailer” today being a razor-sharp concept and a strong Customer Value Proposition. What is a retailer’s reason for being in the first place? Why should I value you? Why should I choose you? (To quote my friend and retail guru Martin Butler, great retail is all about “The Art of Being Chosen”.)
At their best, the Kiwis understand this better than anyone. On my trip to Auckland, I was once again buoyed by the creativity and humour evident in New Zealand retail, particularly when it comes to food concepts. I have written before about “Best Ugly”, a Montreal-style bagel factory that wins my vote for store name of the year. That concept took my eye once again along with “Scratch”, a bakery that makes its products from, well, scratch.
There is a sharpness and freshness about both Best Ugly and Scratch that is critical in a world of increasingly sophisticated consumers who are short on attention spans and long on expectations. If you have a genuinely great idea, you don’t have to bribe customers with discounts, or bombard them with advertising. Build it and they will come.
Overall, there was a palpably positive mood coming out of the Westfield breakfast events. Yes, the status quo has been disrupted. Yes, we are in uncharted territory. But ideas win. And for those retailers who stay focused and continue to innovate, 2014 should be a year to look forward to, not to fear. Indeed, maybe they’ll even shift it up a gear.