Retail Still Moves More Slowly Than Needed

RSR is preparing to roll out a new website. You’ll be hearing more about the new site in the weeks to come.In the meanwhile, as part of the implementation plan, we’ve each been charged with insuring our old newsletter articles have been correctly moved to the new site and formatted correctly.

This task has made for a fascinating walk down memory lane. Granted, we “only” are talking about newsletter articles written over the past five years: since 2011, but five years is a long time in consumer IT years.

Here are some “flashbacks” that really could be published as new articles today:

  • From 2012: We learned in our research that Retail Winners (those who over-perform in year over year comparable sales) were adding payroll into stores at a faster rate than their sales increases. In other words, they were allowing increases in their payroll to sales ratio. Not much has changed. Truly increasing payroll (that means headcount, not just base pay), makes for happier customers. Has the industry got the message yet? I think it wants to, but we are so entrenched in our 150 year old store model, that very few can figure out how to do it without irritating shareholders.
  • From 2011: I asked the question, “In a channel-less world, how many stores are enough?” That question continues to burn, even as malls continue to expand. Gap may be closing stores, but the Aventura and Sawgrass Malls, both located an annoying drive away from me, are growing by leaps and bounds. Further, Miami-Dade County will have at least three more malls within two years. What the heck are these people thinking?
  • From 2012: I wrote a piece highlighting the emergence of Millennials into their peak years of disposable income. I talked about the pressure this was going to place on solution providers and retailers alike. Millennials expect simpler user interfaces and curated assortments.How’re we doing? The vendor community has generally answered the call. Retailers are starting to open smaller footprint stores, but not really fast enough. For example, Walmart just announced its first sales drop in 35 years. It has struggled with its neighborhood markets, and its pockets are getting picked by retailers ranging from Dollar stores to Trader Joes. Big Box retailing may well have seen its day. Millennials are just coming into theirs.
  • From February 2011: I asked the question “ Are cracks Appearing in the armor?” Now, on the one hand, I was talking about customer service issues. But on the other, as much as Amazon’s retail revenue is growing, its profits just aren’t. And investors are growing weary.
  • From 2011: Nikki wrote about the unintended consequences of Workforce Management, and highlighted the pressure that cross-channel retailing was putting on stores. That pressure has only increased, both from state governments who don’t like last minute schedule changes and are mandating against them, and from customers, whose expectations for faster fulfillment have only increased.
  • From 2012: I suggested that retailers might want to consider kicking the promotions habit and even offered up a twelve step program to get there.We’re working on the 2016 pricing report and two things are becoming clear: 1) The promotional jones is greater than ever and 2) retailers have at least hit my suggested first step, recognizing that they have a problem.Stay tuned for this year’s pricing benchmark.It promises to be a barn-burner.

These are just snippets from things I’ve found. Of course there’s more. We all know that data security is a persistent and long-term problem. Heck, the TJX data breach occurred in 2007 and the US version of EMV is languishing, with most retailers waiting for certification before implementing. And I just got a notification that a debit card I haven’t used in four years will be changed because it was part of a data breach. I’m still meditating on that. Four years!

The bottom line for me is that for as much as we tout the speed of change, the industry simply isn’t keeping up. I hope we’re not saying the same thing four years hence!