9 minute read 16 Sep 2019
Three people training with jumping boxes

Three rules for retailers to break and make

9 minute read 16 Sep 2019

    Finding new ways of working is critical for retail, now that tried-and-tested methods have lost their edge. Rethinking collaboration, segmentation and a consumer-centric approach hold the key.

    Adapting to the future consumer now

    At the World Retail Congress, we explored the future of retail, anticipating what the consumer might become, and exploring the challenges and how retailers might prepare. The discussion resulted in three conclusions resting on behaviors that once worked well but need a rethink in today’s disrupted retail environment.

    Rules to break. Rules to make.

    1. Don’t just create value that is right for yourself, create value that is right for your customer
    2. Don’t please everyone; delight your chosen tribe
    3. Don’t just choose your partners; be the ideal partner
      boy feeding flamingo
      (Chapter breaker)

      Chapter 1

      Rule 1: Don’t just create value that is right for yourself, create value that is right for your customer.

      Creating new value

      Recognizing where value is truly created – for both themselves and their customers – is a must for retailers. Ironically, despite retailers advocating customer-centricity, many have lost sight of this.

      With consumer value generated across multiple channels, functions and interactions, the value equation has moved far beyond the point of sale and traditional metrics. Identifying all relevant customer touchpoints across the customer life cycle and managing the appropriate messaging for each are now key to creating the coherent experience that consumers expect. These touchpoints need to be factored into the value equation alongside traditional metrics to create a more representative and holistic view.

      There are many moving parts here: first, managing touchpoints is not a one-off process; second, keeping pace with customers’ changing expectations also requires active attention. If retailers are at one with their chosen tribe (see Rule 2) it is easier for them to read the cues. In this way, they can anticipate what their consumers will become and what they will value. By first identifying new value-generating opportunities that are right for the customer, retailers can choose which ones are right for their business as well.

      Key takeaway

      Focus on first identifying ways to create value that is right for customers, before adopting those that are right for their business too. Those retailers that thrive will establish a lasting relationship with their customers, that goes beyond the transactional.

      teenage girls in sweatsuits laughing
      (Chapter breaker)

      Chapter 2

      Rule 2: Don’t please everyone, delight your chosen tribe.

      Delighting your tribe

      Chasing every customer in every moment is a costly and time-consuming exercise. Those trying to please everyone will end up pleasing no one, so narrowing the field of play is crucial.

      As consumers form tribes around the lifestyles and values they admire and associate with, they will come to expect their purchase and consumption choices to embody them too. For retailers, choosing and engaging with a tribe aligned to their purpose is the “North star” to guide consumer engagement activity.

      There is a distinct mindset difference here. Segmentation by life stages and demographics creates a one-way relationship of simplicity for the retailer targeting an audience in a transactional way simply to make a sale. But consumers will increasingly want a two-way relationship — where retailers are required to become part of the tribe’s ecosystem to be accepted and favored by the tribe.

      If a retailer is to delight its chosen tribe, it’s about going beyond an online offer or an instore promotion. Identifying new ways to engage and connecting across all touchpoints to meet customer expectations is vital; for example, in store design, assortment, experience, staff knowledge and skills all need to work together to create a holistic experience that matches the tribes’ expectations. It requires a new way of operating so retailers must choose their tribes with care.

      A tribe must, therefore, be confident that a retailer’s values match their own. A brand footprint may be broad enough to appeal to multiple tribes, but too many and it may lose its attractiveness to some. It also means being prepared to lose customers that aren’t in their chosen tribe, but deepening loyalty with those that are. If it is to be credible, a retailer’s values and differentiated purpose must run right through all aspects of their business, at the heart of every decision.

      Key takeaway

      Trying to be all things to all people dilutes the value that retailers can bring to their customers. Those that thrive will establish an offering — be it a product, service or experience — that is underpinned by their purpose. Retailers will need to choose the values they want to stand for and embody them if they are to gain acceptance and respect from the tribes they want to engage with.

      Two men doing acrobatics
      (Chapter breaker)

      Chapter 3

      Rule 3: Don’t just choose your partners, be the ideal partner.

      Being the ideal partner

      Retailers fiercely compete against each other, but in such a disrupted and competitive marketplace, it is now time to find ways to collaborate across the retail ecosystem to better serve consumers. Retailers could find ways to work together to create efficiencies and reduce costs, for example, in areas deemed to derive little customer value, benefitting themselves and the industry. Going a step further, there is the potential to collaborate on growth opportunities with other partners beyond retail – these partners could be customers, staff and communities as well as businesses.

      To attract the right partner, retailers need to be able to carefully articulate the value they bring to the arrangement. It requires an understanding of where value is created that appeals to others, how much and how to maintain it. Mastering Rule 1 will inform this.

      The first step in collaboration is to identify which capabilities must be kept in house, which ones to outsource and which ones are opportunities for new partnerships. Doing everything in house is no longer always the optimal option. For instance, retailers’ warehousing may have served it well to supply stores; but as distribution models and technology changes, what’s required to deliver to individual consumers is on a different scale and level of complexity.

      Sharing common values with like-minded partners will bind the partnership. Without these values, the partnership will struggle to resonate as intended, however strong the business case is. Retailers need to be clear on what they stand for, with a strong and differentiated purpose that their ecosystem accepts too. Tomorrow’s consumer is adamant about what they will tolerate. Alignment on values will help to reduce reputational risks and build consumer trust.

      It is a two-way process — not only to choose, but also to be chosen. Retailers looking to build a collaborative ecosystem need to move quickly — first to create the right internal environment before even considering embarking on partnering with others; and second, to avoid being left with an ecosystem of “B-team” players.

      Collaborating to create efficiencies
      Tesco and Carrefour surprised the retail community by forming a long-term strategic alliance in 2018. They saw mutual benefit in working together on strategic relationships with global suppliers, the joint purchasing of own brand products and goods not for resale.¹ The alliance could result in improved product choice and quality for their customers at lower prices, thereby enhancing their competitiveness.

      Collaborating to broaden experience
      Primark is collaborating with Duck & Dry, creating hair, nail and brow stations, offering its customers an opportunity to not only buy its fashion, but also to come into the store for an additional experience.²

        Key takeaway

        Retailers often focus on who could work best with them, but collaborative relationships work both ways. Those that thrive will bring value that mutually benefits both partners, especially those that share a collective purpose. Demonstrating clear values and benefits with an internal ecosystem that will deliver against them means partners will seek you out.


        It’s never been a better time to be a great retailer; but it’s never been a worse time to be a good retailer. Being “good” is no longer “good enough.”

        New rules to stay relevant are required. They go beyond one-sided relationships, creating value for the customer as well as the business. They push the boundaries of segmentation, with consumers belonging to tribes and mutual shared values. They concentrate on collaboration, with a focus on self as well as the choice of potential partner.

        About this article