This article first appeared in Real Business.
Another month and another set of retailers falling prey to the fast-changing world of business. With Toys R Us throwing the toys out of the pram and Maplin losing its spark, the debacle goes on.
There are a number of stories over the last decade that are transforming the high street. While retail remains the most visibly affected sector, others can hardly afford to be complacent. If they do, they risk a similar fate. So, what are the key learnings for other sectors from what is happening in retail?
Behaviour is shifting more swiftly than you anticipate
People are changing the way they engage with products and services. The digital age customer is more fickle with brand loyalty, fuelling the number of startups in the UK to set a new record in 2017. Businesses that relied on retaining customers forever, are finding it increasingly difficult. This changing behaviour presents opportunities for new entrants. As consumers are easy come and easy go, businesses both new or old need to continuously innovate.
The most disruptive competitor may not be the one you know
The most disruptive competitor that you are about to face may not be a known rival and in many instances, may not be from your own sector. The traditional sectoral boundaries are increasingly getting blurred. For instance, big technology giants such as Amazon are in advanced stages of moving into traditional sectors such as insurance, resulting in significant shake-up.
Technology is not just for geeks in your back office function
Technology essentially drives businesses of today. It is a core business function that has the power to transform the fortunes of an organisation. The job of the CIO is increasingly less about operations, but more about innovation. Any organisation that continues to think of IT as a back office function, and as a result designs and operates it as one, is taking a significant risk.
Digital may mean different things to people, but it is happening
Essentially, it is about designing an immersive customer experience, backed by clever data, that eventually helps to generate revenues. Bosses need to design their businesses around what technology could potentially offer to maximise the reach, customer experience and value.
For instance, new banks such as Monzo are coming up, that are built around transforming the banking experience by combining the data and providing the user meaningful information and thereby experience. Whether the disruptors succeed or not, disruption is guaranteed.
Agile is not just a methodology limited to technology function
It is evident that Toys R Us lost too much time in changing its business model and failed to react when needed. The time available to execute an idea and get it to the market is getting severely crunched and businesses cannot afford to lose time. Agile thinking is the norm, not an anomaly. Organisations like Toys R Us will increasingly require to adopt agile culture, and learn to react quickly to the market events.
Transformation is a matter of when, not if
All sectors are transformation candidates, it is just a matter of time, and all aspects of the business are up for transformation – be it product, price or eco-system. This is evident in examples such as Octopus, an energy company announcing agile pricing, thereby paying consumers to use electricity at certain periods. Or the restaurant business, learning to collaborate with takeaway portals and delivery services such as UberEats, as delivery business grows by ten per cent when compared to only one per cent growth in restaurant visits.
Given the pace of change, much of which is technology driven, it is indeed high time that the organisations take a closer look at the IT supply chain. Businesses of today cannot continue to deliver using the technology function designed for yesterday. The technology function that is business driven, focused on building and owning usable IP, nurtures the talent, utilises the partner eco-system and drives the revenue is increasingly critical for the fortunes of the organisations, irrespective of the sector they operate in.
Manish Khandelwal is an IT transformation expert at PA Consulting Group