Scaling your retail business is an exciting — but also challenging — endeavor. While growing and expanding your operations can yield tremendous rewards, you could also do harm to your brand if you don’t do it right.
To help you navigate the challenges of scaling, we caught up with Oliver Banks, Director and Consultant at OB&Co, a firm that helps retailers transform their operations and their operating models so they can stay relevant for customers and stay in business
Oliver also hosts the Retail Transformation Show, a podcast that offers “the insight, the ideas, and the inspiration to transform your retail business.” The Retail Transformation podcast has a mix of solo episodes as well as interviews with top industry experts including, Nisa Retail’s Sales Director, Steve Leach and Tim Mason, the former deputy CEO at Tesco, who is now the CEO of Eagle Eye.
We had a lively conversation with Oliver in which he talks about the current retail landscape and how merchants can navigate it. He also discusses the key challenges that come with scaling a retail business and what you should do to overcome them.
Check out our conversation below!
Retail is at a crossroads
Oliver describes the retail industry being at a crossroads where retailers have a choice between adapting to the new world or stay static (and dying). “It sounds harsh, but it’s the reality, and we’ve seen certainly a number of big companies as well as countless numbers of smaller companies that have taken the wrong route and are no longer with us,” he says.
The key to survival, according to Oliver, is to change with the times.
Finding the right opportunities
Here’s the good news: independent retailers have plenty of opportunities to thrive in this day and age.
“We’re in a place now where there are more routes to market than ever before, more channels to engage customers than ever before, and frankly they’re all very low barriers to entry,” explains Oliver.
“You can get set up and going on different social platforms, different marketplaces relatively at the click of a finger. We’re no longer in the world of having to do TV adverts, for example, that you’d have to shell out thousands or millions on marketing campaigns. You can have the very same toolkit that the big retailers are using and you can adjust it accordingly.”
The challenge, though, lies in navigating the increasingly competitive landscape.
“We’ve got big and small companies all fighting for limited customer spend. We’ve got overseas companies, particularly in the UK, that are now making big inroads. I’m thinking companies like Lidl and ALDI in the grocery scene who have been around for a while, but they’re grabbing market share now. We’ve got online players and marketplaces. Amazon is the big obvious 600-pound gorilla in the room.”
There are new channels, things like Instagram, which we wouldn’t have thought about 12 or 24 months ago. But also we’ve got cottage industry players that are just deciding to crop up. So the competition is coming from all angles in ways that we’ve never seen before.”
How to grow and succeed in today’s retail landscape
These are undoubtedly interesting times for retailers. On the one hand, the landscape is rich with opportunities you could capitalize on. But the level of competition is fierce, and it’s easy to get overwhelmed with all your options.
So, how can you successfully navigate the landscape? According to Oliver, growing and succeeding in today’s retail world requires you to do 4 key things:
1. Find your company’s essence and DNA
“The first big challenge is really understanding the purpose behind your business,” says Oliver. “What is the point of your business? Here’s a clue: is it’s not to sell stuff. That is not the purpose of your business.”
According to him, determining your purpose boils down to finding the essence of your company. To do that, he advises retailers to ask questions like:
- Why did you set up your store in the first place?
- What are you passionate about?
- Why did you choose to do it?
- What is the reason behind your business?
“You need to really get in and unpack that. Because the heart of your business — your essence is incredibly important. That’s the reason that customers will fall in love with you and stay in love with you.”
“What is the point of your business? Here’s a clue: is it’s not to sell stuff. That is not the purpose of your business.”
– Oliver Banks
“And if it sounds a bit cheesy and corny, fine, but it’s what every single retail company is striving for. Passion from customers, loyalty from customers. You’ve got to find that essence, that DNA, and you’ve got to be able to bring it to life through your operation. So don’t just say it, you’ve got to really live it. Make sure it is visible in everything that you do.”
Part of making your DNA visible means getting your team on board. Oliver says you need to embed your core purpose into your team. See to it that your employees know your business purpose and ensure they’re living and breathing it.
2. Deliver consistency
This point is critical for if you’re looking to scale your business and grow your stores, says Oliver.
“You’ve got to be able to deliver consistency and deliver it through other people that are not yourself,” he says.
“You need to start thinking about having an operating model, which sounds a bit boring, but it’s how you build up a consistent business. Create a set of processes and procedures to run the store the way you want it run. If you suddenly start to lose control and you have different stores operating in different ways, you’re going to get different standards. A customer walks into store #1 and then store #10, and it’s going to be wildly different.”
To successfully set up your operating model and deliver consistency, Oliver recommends taking steps like:
- Using photos and visual documents to help share about what is expected of your teams.
- Standardizing and documenting your processes and procedures.
- Spending time and effort to onboarding all of your team membersinto your culture.
3. Use data wisely
“The third item is data, which is perhaps one of the hot topics around all of retail right now, whatever size company,” continues Oliver.
Oliver stresses the importance of understanding your data and putting it to good use. He brought up the quote by Clive Humby, who said: “data is the new oil.” He agrees with the statement — to an extent. He also challenges it by saying that data, like oil, is extremely valuable; but unlike oil, people don’t always know what to do when they mine data.
“With oil, when we dig it out of the ground, we know what to do with it. We know how good it is, we know how to process it, how to ship it, how to sell it, wherever you dig it up in the whole wide world. But with data, it’s not hard to find it. There’s data all around us and there’s even more to harvest as well. But when you have it, you don’t necessarily know what to do with it. Is it valuable data? Is it not? I have no idea.”
Oliver’s recommendation is to be more strategic with your data efforts. To do that, he recommends completing the question “I wish I knew…”
“Just complete that sentence,” he says.
“For example, ‘I wish I knew… if I had a customer that comes in every single week.’ Okay, if that’s your wish, you can put steps into place to find that out. And then once you understand that you can do something about it. I can make sure I recognize that customer every single week and say hello.”
“Asking the question ‘I wish I knew’ is a brilliant quick tip to get started with data in a meaningful way rather than for the sake of it.”
– Oliver Banks
4. Create a winning customer experience
With the multitude of channels and routes to market, creating a well-rounded customer experience is, as Oliver puts it, “tough work.”
“There’s a lot to do. You can get into social networks, you can think about account management, loyalty, personalization, all these hot buzz topics. They will take a lot of work frankly, and you’ll that to-do list is just going to get longer and longer and longer.”
So, how can you narrow down your to-do list and focus on the actions the count? Oliver recommends listing everything you could possibly do to engage your customers and then rank all the items based on benefit versus effort or cost.
In other words, do a cost-benefit analysis for all your items and then prioritize the items that would yield the most benefit for the lowest effort or cost.
“It sounds obvious, but time and time again, this isn’t done. And instead, you just create the long list and start working at the top. You’ve got to be sensible with your investment in time and money into how you serve your customers.”
He adds, “ brainstorming and using a benefit versus effort/cost ratio will help you be strategic with your time and your money and have the best bang for your buck.”
Bonus tip: learn from the hospitality field
As a final point, Oliver recommends looking at hospitality establishments like hotels and restaurants to gain customer experience insights.
“Choose a series of cafes, restaurants, hotels, where you can understand how they’re hosting you as a guest.”
He continues, “When someone goes over, above and beyond to make sure that you have an excellent stay at a hotel. How does that feel? What does it make you think of the company? Because exactly the same will happen in your store.”
According to Oliver, shifting how you see shoppers — i.e, seeing them as “guests” versus “customers” — can change your perspective, and enable you to come up with ways to treat shoppers better.
“People have a different expectation going into a store versus a restaurant, for example, in terms of how they’re going to be served. But doing that as a retailer will help you get in touch with that customer perspective, that hidden customer perspective, a little bit easier than doing store visits to find out that that customer experience.”
Connect with Oliver Banks
Oliver has shared a ton of valuable insights — and there’s plenty more where that came from. Connect with Oliver on Twitter and LinkedIn, and be sure to listen to his podcast, the Retail Transformation Show, for regular doses of retail knowledge.
About Francesca Nicasio
Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.