Main RMI Number
408-554-4960
SCU - St. Joseph's Hall
Room # 108
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Retail Management Institute Newsletter - Spring '07
Redefining Retailing: Innovating for Today's Multidimensional Consumer
by Debra Black
David Goldsmith, co-founder of the Goldsmith Organization and MetaMatrix consulting group.
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On September 28, business strategy expert David Goldsmith shared his 30,000-foot view of retailing to help managers think strategically about the future.
“Every one of you has a different dynamic of change and different challenges. Although no one can go backward to make a brand new start, anyone can start now and make a brand new ending,” he told members of the Retail Consortium for Management Education (RCME).
Goldsmith, co-founder and president of MetaMatrix Consulting Group, teaches executive management courses at NYU and speaks regularly at the Wharton School of Business. He has published over 500 articles on all areas of executive management, and has been rated by Successful Meeting magazine as one of the Hottest Speakers in 2006.
Goldsmith related two philosophies that can transform business:
Think of it as a race: You can win or lose by a nose. “I do not need to be a hundred times better than my competitor. I just have to win by a nose,” said Goldsmith. “Athletes and high-performance people always make sure they win by a nose. That little extra effort, extra mile, extra push makes all the difference. And that’s how high-performance companies work, too.”
You can lose by a nose because of something small: your customers couldn’t find the product or size they wanted, the service line was too long, or your Web site crashed. Your employees were rude, or you didn’t get the best employees because you wanted to save 5 cents per hour. Whatever those little things are, if you can fix that “nose,” what would happen to bottom line profits?
Yet if you lose by a nose…you lose the entire sale. If your timing is off, you can lose the entire line.
We’ve always heard people don’t like change. In reality, there are many things we love about change. “Who wouldn’t want a new car right now? An extra bonus in your paycheck?” asked Goldsmith. However, there are two things about change that we don’t like: change that’s unexpected, and change that affects us negatively.
When management introduces a new idea, who typically benefits? Does the staff person get any benefit from the extra work? “Unexpected change hurts people. It's management's responsibility to create positive change for people. What we forget is that they don't dislike change, they dislike the change that you haven’t thought through well enough, that you haven’t planned well enough,” the consultant said.
With a savings rate of only 13 percent, Americans are still spending more than anyone else in the world. “Retail is a great place to be,” said Goldsmith. “You’ve got great opportunities if you do things right.”
He then gave RCME members three baseline observations about the future of retailing that he discovered while researching successful companies:
1. Retail has a human capital challenge, and a branding problem. With a shrinking supply of talent available, there are big challenges, especially in attracting good talent (again, it’s “winning by a nose”). The general populace doesn’t see retail in the way in which it needs to be seen. To attract talented people, they must understand that retail is more than just the storefront. That it also includes logistics, supply chain, information technology, and global distribution management.
2. The retail industry is not leveraging technology to the degree to which it should. Basic human needs have not changed; we still need food, water, shelter, communications, entertainment, and transportation. What has changed is the technology that we apply to those basic needs. In the retail industry, logistics, timing and cross-stocking need to be integrated much better, with more connection between the front store and the back. “Retail has to change. You have to be on the cutting edge of putting systems into place that help you win by a nose, because the buyer of tomorrow is not you, it’s your children,” said Goldsmith.
3. The Multi-Dimensional Buyer is the biggest revelation of everything Goldsmith has seen. The multi-dimensional buyer doesn’t buy in only one dimension. We can now buy from our PDA, our cell phone, our car, on a boat, on a plane….we can buy from a catalog or from a Web site…or we might look online and then buy locally.
Goldsmith described purchasing a 2005 Suburban on eBay, including all paperwork and finances. “It's no longer location, location, location. The multi-dimensional buyer doesn’t care about location. It’s access, access, access,” said Goldsmith. That could mean access to information, to a mechanism to buy from, or access to live chat.
“The worst part about this is: Now you have to do everything right. The Multi-Dimensional Retailer has to be great at everything. Because remember, ‘win by a nose, lose by a nose.’ By the year 2015, there will even be more ways to buy, and you’ll need talent who will understand the multi-dimensional buyer. Access and operational efficiency will be the retailer's leverage point for tomorrow,” he said.
Goldsmith provided participants with a white paper on the Multi-Dimensional Buyer that includes the multi-dimensional retailer and supplier and what their roles are in the future.
At the end, he led participants through a process called “redefining,” which is a strategic thinking tool to make better decisions about opportunities or challenges. “Redefining is a way to always uncover a better way to address the challenges you're facing. How much better? A nose. So if I can help you become a nose better in any one of your decisions, isn't that worthwhile?” he asked. “Micro-incremental changes can make a huge impact long-term. In any challenge, there's always a solution.”
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Books Recommended by David Goldsmith
The World is Flat: A Brief History of the Twenty-First Century by Thomas L. Friedman
The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business by Clayton M. Christensen
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More information on RCME programs
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Retail Management Institute - Santa Clara University
rmi.scu.edu
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