Why retail leaders should look to Amazon’s pioneering chief executive as they navigate a sector transformation.
The majority of sectors have now been significantly disrupted by changing consumer needs and a exponential improvement in the agility and capability of technology to service customers.
Surprisingly, retail has largely been unaffected by this ‘root and branch’ disruption. Retail has adapted considerably but, underneath the glossy digital touchpoints, business models remain largely the same.
That is, until now.
The retail disruption
Retail is now at the brink of fundamental disruption. The new battleground will not focus on stores, ecommerce or malls, but on the transactional experience.
The way retailers service consumers and the operating models, by virtue of ‘any channel, anywhere, anytime’ purchase behaviour, will evolve. The role of the store will change, as will the ‘loyalty loop’.
“Ongoing disruption requires a long-term strategy”
Chris Heap, PA Consulting Group
Disruption will fundamentally change how businesses operate. Consumer goods brands will transact with customers direct, creating opportunities and tensions between brands and retailers.
Personalisation, customisation and connected products will enable consumers to create unique products, but force supply chains and technology to become more agile to fulfil demand.
The list could go on.
Do your leaders have a vision?
The biggest challenge isn’t the change on its way – it’s whether you have the right leadership and culture to visualise that change, plan, embrace, adapt and win.
Ongoing disruption requires a long-term strategy.
The problem is that retailers often operate on short-term financial cycles. Shareholders seek dividend returns, motivating boards to offer short-term tactical returns over long-term strategic initiatives.
Operating tactically is merely following; operating strategically requires leadership.
Think about Jeff
Amazon is leading the retail transformation agenda by investing in disruptive business models and new technologies.
“If you’re competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering”
Jeff Bezos, Amazon
It operates strategically, embracing new ideas while retaining a healthy understanding of risk. It wants to be the first to market.
It wants to win.
Why? Amazon chief executive Jeff Bezos is fundamentally invested in Amazon’s future.
For 20 years he has guided, shaped and grown the business. Not only is he invested financially, he’s invested emotionally and reputationally. He’s building his legacy.
Now think about your CEO
How many times has your chief executive changed in the past 20 years?
A recent study from consultancy firm PwC found that the average UK chief executive lasts only 4.8 years; how can retailers invest long term and create the right culture to deal with the big issues?
It’s hard to imagine a chief executive or board creating a leadership culture based on a strategic vision that extends beyond their expected tenure.
The mantra is often, disappointingly, ‘deliver the numbers and cash out’.
Genuinely innovative businesses such as Amazon are throwing out the ‘business as usual’ playbook, disrupting themselves, and examining not only how to defend, but how to capitalise and lead in what will soon be a different market.
As Bezos says: “If you’re competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.”
Are you prepared to win?
To win in a sector that is about to transform, retailers need leaders who understand what disruption means for their businesses, and are empowered to create, own and pursue cultural change above and beyond the next set of financial returns or shareholder meeting.
Perhaps your chief executive needs to be a bit more like Jeff.