Retailers: It’s time to move beyond outdated business models – Retail Dive

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Retailers: It’s time to move beyond outdated business models – Retail Dive

Editor's note: The following is a guest post by N.K. "Trip" Tripathy, leader of Kaufman Rossin's CEO, Board & Shareholder B

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Editor’s note: The following is a guest post by N.K. “Trip” Tripathy, leader of Kaufman Rossin’s CEO, Board & Shareholder Business Advisory Services practice. Before Kaufman Rossin, Trip served as vice president and CFO of The Limited, president and COO of Macy’s Florida and executive vice president and CFO of TJX Companies. Views are the author’s own.

Retail was undergoing a transformation even before the COVID-19 pandemic, and the events of the past year have only accelerated this trend, increasing pressure on business leaders to shift their strategic focus to the future.

Most retailers are excellent at forecasting consumer trends. But few have successfully applied the same forward-looking expertise to the rest of their business. This needs to change.

Business leaders who are not focusing their strategic work on evolving their operations and business model to meet the demands both of current and future customers are already falling behind. And those who fail to adapt may not survive.

To survive and thrive, retailers need new business models, new operational models, and possibly even new revenue streams.

The following are five areas of your business to reexamine now.

1. Consumer delivery model

The retail industry’s biggest challenge has typically been figuring out when a particular consumer delivery model is changing, but recent data shows more consumers are shopping and buying online while brick and mortar continues to be an important part of the customer journey for many brands. Omnichannel is here to stay.

With that in mind, you must figure out what’s coming next in delivery for your sector, your brand and your customer. Consider questions such as:

  • How and where will consumers want to shop for and purchase the products we sell?
  • How much and what type of information and assistance will consumers want during the shopping process?
  • Where will consumers want to actually receive their products?

2. Shipping and delivery to consumers

Knowing that purchases are increasingly likely to be delivered directly to consumers, you should consider shipping and delivery part of your customers’ experience. Consider questions such as:

  • Should we invest in our own shipping and/or delivery systems, rather than using third parties?
  • How can we rethink our delivery and shipping model to improve the customer experience and cost effectiveness?

3. Supply chain

You have probably worked hard to make your supply chain as efficient as possible for today’s shopping preferences, and have also likely weathered disruptions from COVID-19 and trade disputes in recent years. But this is an area of your business that likely also needs reinvention. Consider questions such as:

  • How must our supply chain change to get products to customers when they expect them?
  • How might future global events affect our supply chain, and how can we minimize potential disruptions?
  • How will “conscious consumerism” movements change the information consumers want about our products?

4. Brick-and-mortar store experience

Although you can expect far more buying and shopping to take place online, brick-and-mortar locations will still play an important role in the retail industry. However, physical locations will likely look and function very differently in the coming years. You may already be experimenting with evolving the in-person experience for your brand. Consider questions such as:

  • If we need brick-and-mortar locations, just how many will we need in the future?
  • What type of unique experiences can we offer in our stores to make them must-visit destinations?
  • Should our stores become order-fulfillment centers or retail/order-fulfillment hybrids?

5. Management and executive talent

Retailers tend to hire management and executive talent from within the retail industry, but new business models may demand a different set of skills, experience and competencies. It’s time to expand your view of what you’re looking for in senior talent.

And, if you have a board of directors or advisors, it may be time to revisit the board competencies your company will need in a post-pandemic world.

Focus on the future

For most retailers, today’s business model is a dying one, and today’s revenue streams will not sustain your business into the future. Success requires focusing on transforming your business now.

If you’re not sure where to go from here – or if you know where to go but not how to get there – consider engaging a qualified consultant with retail industry experience who can help you evaluate and evolve your retail business model, operations and strategy to meet the demands of consumers today and in the years ahead.

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