Making the whole chain agile
By Jon Brombley
I used to sell guitars in a shop on Tottenham Court Road. Our chain’s command-and-control way of working meant sales were lost on the front line. We needed a new way.
Many of the recent retail woes have been blamed on chains that aggressively expanded into too many stores. The thing is, this wouldn’t be a problem if those stores were optimised to their local context.
Command-and-control ways of working mean chain stores are the same anywhere you go. But agile ways of working would mean stores that can adapt to their customers on the fly.
Most of the retailers going out of business are over-committed to a large store estate—but few if any of their stores are optimised for their local context. Rather, they’re optimised for cost control. But that doesn’t drive growth. Stores that can adapt to local customers and context on the fly will make the most of their estate.
The recent bankruptcy of Gibson had me reminiscing on my former life: behind the counter in a guitar shop on Tottenham Court Road.
Tottenham Court Road is famous for its many instrument shops. Store stock was managed, however, from the headquarters branch—in Scotland. Their next nearest guitar shop was miles away.
The Scotland store saw customers who’d make a trip to the store to try what they had, get advice and shape a purchasing decision around that. Down in London, we had dozens of walk-ins every day shopping for particular models of guitar—and if we ran out of stock, they could easily buy them next door. So when Scotland sent us only limited stock, we would inevitably run out and have to turn customers away—to our competitors.
Of course, centralised ordering means controlled stock distribution and maintained profitability. But in this example, a static view of customer behaviour meant that the London store never reached its potential—and the absence of a feedback loop between front line and head office meant it never would.
We’ve seen Waterstone’s face up to Amazon by implementing a more localised store approach—each store has the freedom to somewhat localise their product set. Another of the high street’s few success stories, JD Sports, has implemented POS instant feedback loops between stores and central to track and smartly adapt customer experience, and link those interventions to sales.
The next generation of this thinking is already here. Retail startup Bodega create ‘autonomous stores’—cabinets that can be unlocked with a smartphone and placed anywhere. They’re stocked with products that fit the local context—whether that’s a gym (smoothies and fruit) or a University (stationery and snacks). The product set can adapts with local trends and what’s selling.
It sounds obvious, but stores aren’t all the same. To build a chain that is both sensitive to local context and cost-controlled, retailers need to apply agile ways of working to the way they manage stores. An organisation that can learn from and adapt to localised feedback can also get more value out of its estate.
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