When customers start spending their money with newer retail firms, they won’t bother to say goodbye to you.

Most retailers have yet to board the new technology train. Customers’ buying patterns have started to change. It is not a case of it might happen, it has already begun to happen. The critical question is: will your business be on the new train?

The problem is straightforward. Customers want to buy things that most retailers won’t be selling, and they want to buy it in a different way.

Start-ups and new technology will sort out the problem and, in the future, that is where the money will go. As demand changes, old retailers will carry on selling the same old products in the same old way.

“When the disruptors arrive, are you going to behave like the Luddites? If you are, start reading your history books”

We can’t pretend that change isn’t going to happen, so we can’t carry on making well-crafted arguments for maintaining the status quo because no one can delay the inevitable, it’s going to happen whether we like it or not.

The choice is yours. Directors can carry on thinking about what wine to drink this weekend and where to go on holiday, or they can reflect on which insolvency practitioner they might have to appoint in the future.

Don’t forget that disruptors typically come from outside an industry.

If you don’t change, you will not be able to respond to the future needs of customers. Rest assured, if you don’t respond, the market is so large that someone else will take your customers.

The bigger question is when the disruptors arrive, and the incumbents ignore them, are you going to behave like the Luddites? If you are, start reading your history books now and learn from the past.

Disruption theory

A disruptor is a new, alternative source of supply that appeals to customers in ways that the existing supplier can’t.

The disruptor’s appeal lies in its ability to provide unique value to the customer in a way or a manner that the incumbent providers have overlooked, ignored, or as often is the case, they believed to be impossible.

A disruptor typically adopts new business models profoundly different from the incumbent, one designed for the customer needs.

The disruption theory is that alternative suppliers grow market share, starting from the edges of a market of its least complex and lowest-value needs, then they work their way up and into higher-value sectors.

Then at a certain point, the established supplier collapses and the challenger becomes the new incumbent. There are many examples of this pattern from retail, the internet, mobile phones and many other industries.

“Retailers, it seems, are glass half-empty people”

You can’t afford to put off worrying about disruption for one moment longer, and it’s not about the millions you are turning over today, it’s about the rapid loss of turnover that you will experience once the disruptors arrive.

Don’t put it off any longer. Don’t carry on adjusting the window dressing when it’s the foundations that need attention.

When I talk to retailers, they always start with a little laugh and then tell me why things can’t change and how it’s not in the customers’ best interest. Retailers, it seems, are glass half-empty people.

In 2006, I told the managing director of a large firm that they’d better get ready, Amazon was coming. The response was “we’re not worried about Amazon, they don’t have a sustainable business model”. I’ve still got that email.

A retail MD’s favourite line is “Look, you just don’t understand.”

Yes, I do.