Articles

It’s Not All About The Customer!

About the most naive statement you’ll ever hear in retail is “It’s all about the customer”. In the words of Gerry Harvey “What a load of old cobblers.” If it was all about the customer then it would be a hell of a lot simpler and faster to go broke. The reality is altogether more complicated and – dare I say it – detailed.

Great retailers are fundamentally great jugglers.

They balance the competing needs of a wide and disparate group of stakeholders in a commercially astute and pragmatic way that achieves an economic outcome. Ask any CEO of a top 200 listed retail business and they will tell you just how many shades of grey they have to deal with during the average week.

Shareholders. Bankers. The stock exchange. Government at all levels. Staff. Suppliers. Media. Landlords. Strategic partners. The legal fraternity. Advisors. Their family. And the list goes on.

While at the end of the day, how much the customer spends with you, how often the customer spends with you and how many customers spend with you determines the sales line, there are a long list of other people in the mix who will determine how profitable you are.

Any retail business worth it’s salt knows that it must have a highly magnetic and differentiated customer value proposition to succeed. One that it continually invests in to ensure the business stays relevant. But to over-balance in favour of any single stakeholder group is to create a retail business that is unstable and vulnerable.

Without the buy-in and support of all stakeholders a retail business is not sustainable. Add to that the fact that Proctor and Gamble research (amongst many others) has time and time again proven that more than 70% of consumer purchase decisions are made at the point of sale and at the time of purchase and you understand that the skill of great retailers is often what happens before (and after) they actually confront the customer at all.

Customers are demanding and must be satisfied to enjoy a healthy ongoing franchise.

But not in isolation. Nor to the detriment of other stakeholders.

If your skill lies solely or predominantly in the customer facing areas of the business you will need to surround yourself with people who can complement your skills and balance out the needs of other stakeholders. You’ll also need to build a competency for decision making which allows you to trade off the competing needs of the different groups that will have a stake in your success or failure.

Nothing in life exists in one dimension and that goes double for retail.

Great retailers – like great jugglers – manage not only to keep all the balls in the air, but to make it effortless to keep them moving in perfect rhythm.