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Oliver Banks of OB&Co

Retail Transformation Briefing – 24th January

Published about 1 month ago • 5 min read


Hi Reader,

This week's headlines see several initiatives which seem to focus on simplification and streamlining.

Focus seems to be the overarching theme here from Walmart, Diageo and Sainsbury's. Focusing on the initiatives that matter now. Focusing on the most important and profitable customers. Focusing on the core business.

In turn, intentionally concentrating means you ignore distractions or alternative work - and that's great news. As a company, the organisation must be aligned and focus helps with this enormously!

We are moving into more areas of contradiction, however. Bain research shows that a significant portion of future retail profits will be delivered by new business models. And these new business models require diversification. They seem to go directly against the idea of focus.

So, how do you know what's right? Focused and fixed? Diversified and distracted?

The answer is, of course, "it depends" as there are so many factors. At an organisational level, it's crucial to have a clear North Star or a vision which helps align the organisation and may include both core and new business models - all at the same time. There are loads of further considerations - talents, goals, metrics, priorities and the list goes on! Ultimately, what's most crucial here is strategic intention and finding the right change to match the organisation's appetite for transformation. Essentially, knowing what and how you'll change and transform - and exactly why you're doing that, too.

If you need help defining or refining your strategy or approach for transformation, email or message me and let's talk about how we can work together to find meaningful results and align your organisation.


Retail transformation news headlines

💡 Walmart are closing their innovation division, Store No 8. Instead, CFO John David Rainey suggested that the role of innovation will now be shared across the company. The initiative was started in 2017 to help incubate and develop new technologies which will impact the market in the 5-10 year timeframe. Some individuals will be moving into other roles at Walmart whilst some will leave the company. Meanwhile, Target-owned ecommerce distributor Shipt are just starting their innovation lab.

⛔ Diageo are streamlining their wholesale order and distribution model by requiring customer companies to place orders worth £2m per year. By cutting off a number of smaller suppliers, or forcing them to go through distributors, they will have fewer but larger customers and simpler ways of working across their operating model. It also reminds me of the moves that Nike started a few years ago, where they looked to streamline the retail outlets stocking their products ahead of their DTC push. Whilst I don't foresee a massive DTC push on Smirnoff, Guinness and their other brands, they will become more exclusive, with smaller retailers starting to stock other brands as a result. It could be an interesting time to shop local.

🏦 Sainsbury's are looking to wind down their core banking propositions. This business division started back in 1997 in collaboration with the Bank of Scotland. In a similar route to Tesco, Sainsbury's are looking to focus on their core food offerings rather than financial services. There is no timeline on how they will sell or close their Bank or what will happen to their banking customers.

📆 Morrisons are shifting up their head office working patterns, moving away from their 4-day week. The supermarket was among the first major companies to offer a condensed "5 days in 4" working pattern, allowing colleagues to work longer but fewer days per week. One of the conditions was that occasional Saturday work was required, and it seems this is the contentious point. The company are now moving head office staff to a "5 days in 4.5" model without the need for the weekend work. Meanwhile, Wickes and Asda are introducing 4 day weeks for their store managers.

🧑‍🦽 Primark have started using a range of disabled models on social media and introduced a range of adaptive clothing. Models with disabilities, such as colostomy bags, artificial limbs or Cerebral Palsy, feature in the campaign. The adaptive underwear products feature additions to help make it easy to get on and off and are designed in an inclusive manner, with aspects like lace and are similar to more "mainstream" products.

⏪ In Canada, supermarket group Loblaw has made a dramatic U-turn on their approach to discounting end-of-life products. Initially, they announced that products near their code life would now be sold at a 30% discount rather than 50%. However, following significant customer complaints, calls for boycotting the company and even a potential political investigation, they reversed the decision within a week.

🤖 Cranfield University in the UK will be deploying PeykBots autonomous delivery pods which will be available for grocery stores and cafes to make deliveries to students. The robots will also be able to collect and deliver library books as well as be hired by students for peer-to-peer deliveries. We've seen multiple US universities deploy similar robots and there is a plan to learn from Cranfield ahead of deploying to other UK universities. Universities offer a relatively closed environment and initiatives like this will also be setting expectations for future consumers.


New podcast episode: Short term gains, long term pains (part 1) - #274

Confront the retail strategist’s dilemma: seizing the day without compromising tomorrow. In tough trading conditions, we chase short-term targets with a tempting path of quick fixes and instant rewards. But do we pause to consider the long-term game? Like a game of chess, every move counts and victory is not achieved in a single turn. In this episode, learn the tactics that ensure today’s wins don’t become tomorrow’s losses through a series of considerations, thought-provoking questions and key activities.

This is part 1 and the discussion will conclude in next week's episode.

Take a listen to episode 274 of the Retail Transformation Show podcast and you'll hear

  • How humanity is almost destined to chase the short term at the expense of long term goals.
  • Learn how to use strategic decision making to balance immediate business needs with sustainable growth.
  • Which crucial considerations must you factor in as you deliver near-term targets and preserve future opportunities.
  • Why we must learn from the chess grandmasters.

Also check out these recent episodes too:

#273: Blending labour savings and service levels

#272: Retail trends and themes for 2024

#271: Taking the driver’s seat in 2024


Driving Retail Transformation: Book spotlight

One of the elements that I've loved in writing a book is being able to explore big and small ideas and be able to link together my experiences, learnings and research. This helped me clarify aspects that are often missed.

One of those elements is the idea of the "transformation appetite". This is an extract from the chapter on finding the ideal transformation.

"A crucial first step is to understand the actual appetite for transformation in your organization (remembering that it’s easy and quick to sign up for the 'idea' of transforming)."

The organisation's appetite for transformation is complex to understand and is based on multiple elements including the culture, the capabilities, the current challenges in the business and more. But the appetite is an aspect that's easy to overlook and miss. As such, we often don't discover the true appetite for transformation and we can't pair it with a suitable change programme. In turn, we might have a great idea that will never take off. Or we might only be making small tweaks around the edges and ignoring the critical issue at the heart of the business.

"Defining the type of transformation that’s right for you and your organization is essential so that you can approach the initiative in the right way and set the right expectations around the business"

Driving Retail Transformation: How to navigate disruption and change is out on 5th March and available for pre-order now in all good bookstores.


And finally, if you'd like to ignite transformation in your own organisation or in your partner's organisations, reach out and we can discuss how my new workshops can help you to drive retail transformation.

Keep transforming better,

Oliver

Oliver Banks of OB&Co

Oliver helps retailers to change and transform their operating models. He's the host of the Retail Transformation Show podcast and founder of the RetailTransformation.Live virtual event

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