It often takes very little overall sales pressure to push a business to the point where the return on incremental capital investments in stores becomes negative, and further spending only serves to destroy value. This is an uncomfortable truth, particularly in the case of bricks-and-mortar retail. There are tactical opportunities to improve the capabilities underpinning success, however. We offer our thoughts on these opportunities and how retailers can take advantage of them.
The Journal is a collection of the publications, interviews, and studies we have published over the course of the year. As always, our focus is two-fold. We write regarding improving on the evergreen topics of tactics, capabilities, cost, and efficiency. But we also seek to address the most challenging and pressing issues facing retail companies now and in future.
1What is the overall theme of this year’s Retail Journal?
The story of retail is the story of the rise and fall of new ideas, new concepts, and new formats. New models appear, new competitors enter the market and challenge the incumbents, the market adjusts, and a new retail landscape results. So, the story of retail is the story of upheaval. Therefore, we’ve chosen to focus on the sources of upheaval: where it is going to come from and how it can be turned into a competitive advantage.
2What are the biggest challenges retailers face today?
The first challenge is vulnerability. This year, the cover of the Retail Journal features a wolf. That picture is well-chosen, because wolves are smart, have a strategy, identify the weak, and then make their kill. We see the wolves gathering and edging closer: in the UK, the hard discounting wolf has been there for some time, but has become bold and has changed the market. The online wolf hasn’t been there for so long, but has become very dangerous and is going after the weak. The second challenge is complacency. A hunted animal sees the danger and reacts, but many companies don’t, and they will pay.
3What can we learn from reading the Retail Journal this year?
You could say “how to deal with wolves”. But since guns are not allowed in business, you have to find a different way. That means finding strategies and tactics, as well as learning from people who have dealt successfully with wolves in the past. And it’s all in the fourth volume of our Retail Journal.