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Gerry Versus Russell – Who’s More In Touch?

Interesting media skirmish. The head of the Australian Retailers Association and one of Australia’s most successful retail entrepreneurs clash over the state of retail. In the blue corner, self-made billionaire Gerry Harvey and in the red corner Russel Zimmermann – defender of the average retailer. Gerry’s view – taking the liberty of paraphrasing him – is that Australian households have never been wealthier, we have close to full employment and an economy which is amongst the most robust in the world. Retail is growing and has not stopped growing so it is up to the retailer to get on and compete.

Russel’s view – taking the liberty of paraphrasing him – is that Gerry has lost touch with the average Australian retailer and the pressures that they face everyday. They are doing it tough in his view. Of course the truth is they are both right but coming from different contexts.

We are very lucky in Australia. Blessed with an abundance of assets and an economy so strong it is almost politician-proof. No matter what they do they can’t stuff it up. Well almost. Australian households are – despite how many people may feel – at their most affluent point in history. Employment is high. Income is strong. But there is emotional uncertainty and shopper fatigue. There are many retailers who are in trouble of failing; some scraping by; and some doing very well.

But what we all have to come to terms with is that we exist in a new era where all the rules are changing. Commerce is a harsh mistress. The double-edged sword of capitalism is that it rewards productivity highly and ruthlessly punishes the rest. That is why it is the most efficient economic system.

The new era is one that does not tolerate a lack of direct and recognisable customer relevance. It does not tolerate meaningless replication. It does not owe anybody any respect simply because they dared to take to the field. In this new era shoppers have money and – despite what many believe – want to spend it. Retail is a very powerful and important part of their lives. But they don’t hand over that money as easily as perhaps they once did.

We live in the era of anxiety and adrenaline. An era where the shopper’s time to be rational has evaporated leaving the reflex reaction of emotion. Where impulse overpowers context. Where our anxiety about everything is fuelled by 24/7 news channels desperate for content.

Retailers who understand that sales are made more on emotion, sub-conscious triggers and a blend of seduction and confidence building are winning big time. Those that insist on playing by the old rules and are driven by cold rational thinking are finding themselves trapped in an inescapable winter nightmare.

If you are doing it tough in the economic reality of where we are right now it is time to challenge all your beliefs and behaviours. Whingeing and lack of confidence is not attractive to customers. Re-invent and re-discover how to connect to shoppers in the new era and do it very fast. Confidence, charm and something new to say are the keys to success.