3 lessons to learn from the supermarket big boys - Part II

Last week, in Part I, I briefly covered the evolution of supermarkets and showed how their business model came to be and what lessons we could take from that. Lesson #1 was about pricing and Lesson #2 was about branding.

(Read it here if you missed it.)


There are three key strategic takeaways from studying the history of supermarkets:

Firstly, standing still is certain death. The middle ground, where are you trying to be all things to all people, is not a sustainable strategic position. Any concept in between will be squeezed out towards one or the other. (Read more about the Big Squeeze here.)

Knowing where you are, where you want to be and the translating that into a business model is the essence of a strategy. That is, the ‘positioning’ you adopt dictates your strategic imperatives.

For example let’s say you can choose to be a (1) mass-market, disposable fashion segment operator, or you can choose to be (2) a high-end, high-fashion boutique operator. Depending on your choice, you will build your brand, your supply chain, and your pricing strategy based on that initial choice.

And this is the important part: If you choose option 2, you cannot simultaneously play in the low price, high volume segment. It is self-evident, but yet every day, we see the exact opposite.

Secondly, the key to driving costs down is aggressive innovation in technology. Big box retailers like supermarkets have led the way in innovative technology, from bar codes to big data and beyond. The financial, direct cost of technology is coming down, but the rate of change is adding a significant indirect cost of constant learning and re-learning, constant tweaking and changing. This is the advantage of the little guy because the investment is lower and the turnaround is quicker.

Finally, and most importantly, every supply chain will have (or attract) middlemen who want to rort the system and ‘clip’ the proverbial ticket without investing in the ownership (and risks of owning) the product. This has been so since time immemorial and it is true today. The new incarnation are SEO services, providers of marketing automation services and the like.

If history is anything to go by (and it is) you can plan for the following inevitabilities:

1. Businesses will evolve towards a more efficient supply chain with fewer middlemen. I don’t know what will replace these middlemen, but something will. Something like the Google Buy Button may well be the thing that changes the game completely.

2. The oscillation between big and small will continue. The Amazon-Alibaba-Google cohort will become the price/convenience operators and the only point of difference will be … not that. The strategic challenge is to find a competitive advantage that capitalises on your smaller size and taps into something the customer really values.

It won’t be product knowledge, because the internet killed that. Figuring out the answer is a key strategic imperative.

The good news is that customers naturally prefer to deal with the little guys, the ‘market operators’ of today, but they won’t do it any price (lesson #1).

Even better news there ARE answers, the question is simply whether you will find it.

Have fun



Ganador: Management SOLUTIONS (especially tough ones)


3 lessons to learn from the supermarket big boys - Part I

The evolution of supermarkets contain many lessons for modern retailing.

Fixed stores evolved naturally out of markets. Following that, several key changes occurred in a few decades: the introduction of self-service, growth of chains (geo-scaling) and then the explosion in size for stores (and concomitantly the increase in range.) Parallel to this was the ever-increasing focus on price.

This historical development reveals that an important driver in the evolution of the supermarket is that the distribution channel was extremely inefficient. (To understand the strategic role that the inefficiencies and friction plays, read this piece.) The low volume purchases of these small traders led to high costs and sizable mark-ups. Traders purchased their supplies from a wide range middle-men who rorted the system, adding additional costs to an already expensive distribution system.

Supermarkets dominate the one end of the barbell (convenience/price) and specialty stores dominate the other (service/depth & knowledge). Graphically it can be illustrated as below:

Lessons to be learned from the evolution of supermarkets:


Saving money is big driver of purchase behaviour. Customers generally would avoid the supermarket, but the price/convenience factor is compelling. The basic business models behind both the supermarket formats dates back many decades, and the anti-chain sentiment (in the US) of the 1930s was at least as strong as the movement against big box stores that we see today.

Focus on price will commoditise your business. Once you are commoditised, there is no escape. When you are locked into a price-based strategy, you better focus on costs relentlessly.

But price is not the only strategic competitive advantage. It feels like it is the easiest to pursue, because you can simply go to a shelf or a unit of merchandise, or log on to a computer and change the process. It feels like you have done something. And you have. But not necessarily in a good way. Once you start sliding down the slippery slope, it is very hard to climb back up.

I am not suggesting that price-differentiation is a bad strategy, just that it requires all the other parts of the business model to be aligned with it, and a specialty shop will achieve that alignment with great difficulty because of structural constraints.


Customers don’t buy brands, at best ‘brand’ is a heuristic. I cannot write it any better than the inimitable Bob Hoffman:

A lot of people have shaky jobs. And many have unstable families. Some have illnesses. All have debts.

Lots have washing machines that are broken, and cars that need a tune-up, and funny things growing on their backs, and boyfriends that are always getting high, and socks that have holes, and hair that is falling out, and toilets that are unreliable, and 10 pounds of extra stomach, and kids that are unhappy, and teeth that hurt, and rent to pay, and...

...a lot of things to care about.

One thing you can be pretty sure they don't care about is your brand. 

Yes, I know you've been told that people love brands, and want to engage with them, and co-create with them and be all social with them. But stop and think about it for a minute. Do you really believe this? Does it even pass the giggle test?

If you're a marketer and you believe people care about your brand just because they buy it, you're headed for trouble. What we blithely call "brand loyalty" is mostly just habit, convenience, mild satisfaction or easy availability. 

‘Housebrand’ is a strategy that is about channel power as much (or even more than) it is about margin, and least of all about giving the consumer value.

Customers don’t buy a ‘housebrand’ because they trust the ‘house’, it is because they want it cheap and believe that it comes from the same factory anyway.

Tabloid researchers and gurus on Today Tonight will tell you that people love the Aldi housebrands more than Coles or Woolworths. Not true. Consumers are simply more likely buy it when they don’t recognise the brand (as in Aldi) and they don’t know they are buying ‘homebrands’.

I am not suggesting that branding is not important, but rather that the role it plays in the consumer decision-making process is different to what people think.

Next week I will cover the final (strategic) lessons to be learned from studying the big boys.

Coming out as a retailer

Without exception, we can attribute success or failure of a retail business to people. Even if we blame an extraneous event, it is not the event as such, but how the people react to the event that determines the eventual outcome.

I believe that view is relatively uncontroversial.

But if it is so, and it is widely accepted, the question that immediately follows, is why the topic of ‘people’ is not at the top of the agenda? Executives and retail owners occupy themselves with a range of matters – from big data, mobile strategies, store location, margin management and a long list of topics – but spends very little time on people.

If your marketing, sucks it is because you don’t have a good marketer or an interfering executive – either way it is a people issue.

If your merchandising sucks, it is because you have poor buyers, poor recruiters, poor trainers, poor managers – pick any one, but whatever you pick, it is a people issue.

High shrinkage is a result of having disloyal or untrained staff. Or it may be a result of poor systems – which of course are designed and implemented by… you guessed it: people.

Name any aspect of retail and behind it stands a human being making decisions. Of course luck (good and bad) plays a role, but once it happens you still have to decide how to respond and counter the bad luck and capitalise on the good luck.

I have come to the conclusion that people in retail don’t focus on people as much as they logically and necessarily have to, for a number of reasons.

Firstly, the way that most people enter the retail business is by accident rather than design. The retail sector seems to be largely populated by people who left school, and without having a specific passion or interest took a job – in retail. Or some may have drifted to Uni, and then after graduation simply turned the part-time job into a full-time one. Consequently, far too few people who work in retail are dedicated to it as a profession.

Secondly, retail jobs are easy to get. Even if you are passionate about retail, the hours are relentless, the pay is pretty average, and the specific skills required are often basic (easily learned). Consequently, there is a high turnover of staff, especially at the entry level. Few people in retail had to jump through hoops to get into retail, and those who really choose to be there don’t necessarily feel a sense of accomplishment.

Thirdly, it is also easy to start a retail business. How hard is it to put a few tables and some shelving in a store and put some merchandise on it at twice the price you paid for it? (It is not easy to be good, nor is it easy to survive and be successful, but is easy to start.)

Fourthly, in the pecking order of industries, retail ranks pretty low. It is seen as large provider of jobs, but not much else. I have never heard of any other industry turning to retailing as a benchmark for anything. What great innovation was made in retailing that is adopted in other industries? (Even ‘eTailing’ was invented and is led by non-retailers, usually computer nerds.)

This leads to a confluence of two powerful, negative forces that conspires against us:

Firstly, the people who are committed, passionate and professional are in the minority, outnumbered by a large number of people who simply take up space in the retail environment. Secondly, those who have risen through the ranks to executive status or those who has the courage to strike out on their own to start a retail business spend very little time on people issues; usually only when the ‘issues’ are pressing and unavoidable such as Union issues, or recruitment and the like. Even then it is more about going through the motions, rather than proactively engaging with people with the specific goal of building a culture that underpins, and delivers on the brand.

In order to counter these negative, restraining factors, it is high time for retailers to come out of the proverbial closet. There is no shame in being a retailer. Retailing is not only an essential (and very large) part of any economy, in a modern society it is complex, challenging and worthy of our best physical and intellectual efforts.

It will probably always be true that it will be easy to get started in retail, but it is equally true that it is incredibly difficult to succeed and to be called a good retailer.

A champion athlete can complete a marathon in close to two hours, and is not offended that a Sunday jogger who clocks up a few kays on the weekend also calls himself a ‘runner’. That is probably because that is how every champion started.

So, no matter how you got your start, or how many ‘joggers’ there are in retail; the only thing that is needed for you to become a champion retailer is make the decision to come out as a retailer and to ‘own’ your profession. And then do everything within your power to focus on the people in your organisation and to continuously raise the bar with every appointment, with every interaction.

Make your people your priority. And it starts with you being proud of being what you are and who you are. Wear your ‘retailer’ label with pride.

Be more. That allows you to demand more.


Ganador: People and Performance.



30 key success factors for ecommerce retail

If you want to do e-commerce, my first piece of advice is to NOT do it, unless you have resolved a clear, unique value proposition. Just like in the ‘real’ world, a retail business stands and falls by its ‘proposition’. The worst possible reason to take on this channel is because everyone else is doing it.

But if you are going to do it, address this list of key success factors:

A: Be findable

1.       SEO & Search

2.       Build an database

3.       PPC optimization

4.       Remarketing

5.       Social Media

B : Be shoppable

6.       Accessibility

7.       Check-out process

8.       Design

9.       Good Images

10.   M-Commerce

11.   Navigation

12.   Page load time

13.   Payment options

14.   Option to save product for later

15.   Stocks availability

16.   Unique detailed descriptions

17.   User Experience (UX)

18.   Security

19.   Shipping

C: Be relatable

20.   Customer service

21.   Reviews

22.   Online Chat

23.   Personalization

24.   Quality Content

25.   Regular Updates

D: Be knowledgeable

26.   Analytics

27.   Pricing

28.   Personalization

That is only 28 tips, but the opening paragraph counts double. It is the most important piece of advice I can possibly give you. Adding a new channel is not the same as opening another store. Different business, different customer behaviours, different marketing different pricing and a different supply chain – in short: different in almost every way. The twenty eight Key Success Factors listed above is meant to convey the list of activities that will be required to successfully operate an online store. To get an idea of how different online shopping from a desktop is to online shopping on a mobile phone, read this article from McKinsey.

Should you do it? Of course!

The essence of retail is about selling what people want to buy, when and where they want to buy. And if online is where customer are, then you should be there to. (The reverse applies too as can be seen from online-only start-ups entering the bricks and mortar channel.) But customers flow seamlessly between different channels and one of the toughest challenges to address is integrating the experience seamlessly – not the least of which is the challenge of price harmonisation across channels.

In the final analysis, the observant reader will note that the essence of successful retail is still the same, no matter which channel applies: develop a compelling, different proposition and then be findable, shoppable, relatable and knowledgeable. It is just that the execution is radically different and should not be underestimated.

Ganador – Solving problems with smart solutions



Have you heard the one about Bumblebees not supposed to be able to fly?

This myth was debunked very nicely by Dr Karl; and the story goes something like this:

According to John McMasters, who back in the 'good old days' was principal engineer on the aerodynamics staff at Boeing Commercial Aeroplanes, it seems the aerodynamicist of the myth was probably an unnamed Swiss professor famous in the 1930s and 1940s for his work in supersonic gas dynamics. The aerodynamicist was having dinner with a biologist. In the idle chit-chat, the biologist noted that bees and wasps had very flimsy wings — but heavy bodies. So how could they possibly fly?

With absolutely no hard data, but a willingness to help that overcame good dinner party etiquette, the aerodynamicist made two assumptions in his back-of-envelope calculations.

The first assumption was that the bees' wings were flat plates that were mostly smooth (like aeroplane wings). The second assumption was that as air flows over an insect's wings, it would separate easily from the wing. Both of these assumptions turned out to be totally incorrect — and the origin of our myth.

The aerodynamicist's initial rough calculations 'proved' that insects could not fly. But that was not the end of the story.

Of course, being a good scientist, his sense of curiosity got him interested in this problem. Clearly, insects can fly. He then examined insect wings under a microscope and found that they had a ragged and rough surface. In other words, one of his assumptions was way off.

But by then, overzealous journalists had spread the myth he had inadvertently created. The story had flown free, even though the bumblebee supposedly couldn't.

There is a lesson in that for all of us. In fact several lessons if we really want to be honest. For instance that much of what we ‘know’ isn’t really knowledge at all. But I want to focus on one particular epistemic principle that we will be well served remembering:

Things that we know today are always overturned in the face of advancing knowledge. As time goes by, we learn things that allow us to create better explanations. But no matter how good the explanation today, there is always a better one tomorrow.

This force of advancing knowledge has a profound implication for our everyday lives and specifically for business strategy:

Everything you believe and take as fact today is changed tomorrow in the light of new evidence.

Just like we once thought the earth was flat and that the start revolved around us, we now know better. Just as Newton’s explanations were eclipsed by Einstein’s theories, everything we know today is at best found to be only partially correct tomorrow.

So how can the Truth change? Well the answer is that it hasn't. The Universe is still the same as it ever was. When a theory is said to be ``true'' it means that it agrees with all known experimental evidence. 

SIDEBAR: This is a point where both THEISTS and ATHEISTS argue their own position. Theists claim that ABSOLUTE truth exists. This is a philosophical assertion based on the notion that ‘it is just so’ – it is something we simply intuit universally. The ATHEIST must argue necessarily that everything is relative. That is, that ‘truth’ is simply that which agrees with all current experimental evidence.

Every person (consciously or not) must take a position in one of these two exclusive camps; one where TRUTH is an absolute and one where it is relative. I find it absolutely hilarious how some people can’t argue against the notion of an absolute truth, but equally firmly adopts an atheistic worldview.

But science has taught us nothing if not that there is always a better explanation around the corner. Some take great comfort from science’s commitment to constantly disprove itself as if this of itself guarantees that we are getting closer to some grand unifying theory of everything. Of course it could just as easily be just a gigantic rabbit hole down which we chase that absolute truth denied by scientists in the first place.

Whatever way you choose, when it comes to human affairs like business strategy, marketing and management and the like, clearly there are no absolutes.

What is right today is wrong tomorrow.

Whoever is best at the strategic arbitrage opportunities and can identify the shifts and changes best and soonest stands to profit most.

But more immediately and possibly more relevant to most of us mere mortals, this shifting foundation of knowledge means that we should recognise this universal truth. The more convicted you are of your opinion, the more compelling the consultant’s exposition the more certain you can be that it, whilst it may seem right now, it is bound to be proven wrong tomorrow.

If you research and study the evolution of the ‘marketing concept’ and/or the ‘evolution of retailing’ then you will notice that ‘the right way’ is always the current way of doing it – the prevailing paradigm so to speak.

Current best practice is always superseded by something better. So a healthy dose of cynicism is a prerequisite in our modern world; for the lack of it will result in us chasing down the ephemeral promises of every fad that comes along.

The bumble bee that is not supposed to fly and the frog that gets slowly cooked in the pot of boiling water are great motivating stories – but nothing more than that. The absolute truth is a bit more elusive and it takes a lifetime to pursue and, who knows, may only be discovered once we pass away.



Why people hate, and what marketers can do about it

I originally wrote this post the weekend before the Martin Place siege in December 2014. Then I decided not to post it because it may appear to be smar-ar$ed or insensitive. But then we had Paris 2015 with the Charlie Hebdo massacre and it seems it is a topic that must be addressed.

The original title was: An Application of Rigidly Defined Uncertainty 

I published a draft framework recently that is designed to help organisations think about the future. In brief, I postulate that society of the future will function very much like a Caveman Society. The technology will be different and it will eradicate the disadvantages of actually being part of a small tribe (E.g. geographic limitations, physical limitations, health risks etc.) and enhance the advantages (intimacy, safety) etc.  I argue that this is the naturally preferred state of mankind. I then proceed to explain how and why these patterns all point to that future. 

I encourage readers to go and create their own predictive frameworks for the domain of interest. To bring this home with an example I thought I might take what is currently happening on an international level regarding the economic distribution of wealth. How would this Caveman Society play out on an international level? 

I believe it will manifest as follows: 

In the past tribes increasingly grew in size until they reached adulthood of nations. What we call a ‘country’ today is the outer limit of what a tribe can be. The world can be seen as a series of silos all side by side. France is its silo, America is its own silo and so forth. The borders are (were) the walls that kept each silo separate.   

In each vertical silo, you had different layers of course. You could view the layers of society in a few different ways, but since we are talking about economics, we can highlight the different economic classes. At the top is the so-called 1% and then all the layers to the bottom where you find the destitute and homeless. 

In essence, tribes were vertically segregated, even as they had different horizontal layers of economic status within each tribe: Inter-tribal geographic separation and Intra-tribal economic separation. 

Migration on a grand scale has caused a high degree of homogenisation in all countries. There are few countries in the world where you won’t find a Mosque, an Indian restaurant or a McDonalds. This is disrupting the fabric of the traditional tribe as the culture (language, practices, ethnicity etc) are being rendered apart. 

Naturally some members of the tribe are feeling threatened and the lines of tribal boundaries are being re-drawn. The question is HOW? 

Some commentators think (and agitate for) traditional geographical borders to be made less permeable. I argue that it is too late for most countries. An exception may be made for a few countries. For example North Korea is not attractive to migrants and China is not available to most migrants. 

I argue (in Rigidly Defined Uncertainty) that formation of the Tribe is the natural state for mankind and consequently a ‘borderless world’ is not an option.  

Unless there are widespread civil wars in a great number of countries, migration won’t be stopped. If one country stops the inflow, it will simply raise the pressure somewhere else to the point of breaking, resulting in a domino effect.  

If we can’t resurrect the old physical tribal boundaries, how will we re-draw the new borders to help us revert to the Caveman State of belonging to a tribe? 

In theory, tribes can be formed by say all red-haired people or by thin people or whatever is perceived to be a common interest. But in my view there are only two candidates for providing the basis for cohesive tribes that have strong, behaviour-influencing common bonds. That is religion or economics. 

Many people think (and fear) that religious extremism is being used to define tribes, but the most viable option I see is economic tribes forming across the world at the expense of geography, language and any other commonality. It won’t matter if you are French or American, it won’t matter if you are red-haired or blond, it won’t matter if you are Christian or Catholic – what matters is your economic class.  

·  The one-percenters will stick together to defend what they have got.  

·  The destitute will wallow together, irrespective of race or creed, in the rot. 

The million dollar question is how the ‘middle’ will break up? That is, how big and how cohesive will those groups will be? 

In theory, those with the most to lose will fight the hardest; but the paradox of economic wealth is that also makes you soft; so ‘theory’ may be obliterated by a relative minority of people who have less to lose but are street smart and not bound by the conventions of civility. 

The point is that tribes are re-formed around economic interests. In effect, I am talking about the lateralisation of tribal boundaries. The new dispensation will have Inter-tribal economic separation and Intra-tribal geographic separation. Instead of vertical silos in a single geographic area, we will have lateral (horizontal) silos (along economic lines) across geographies. 

To illustrate, one could like at the link between religious extremism and economics (of the American Fundamentalist Christian Right and Muslims for instance) but that would be too contentious for this forum. Instead, consider what is happening with something called #gamergate. It started out as a debate about sexism (female discrimination) amongst the small community of (nerdy) gamers. It has exploded into something entirely different. 

On the one hand you have the so-called SJWs (Social Justice Warriors) – get used to that term and if you want to waste some time online, check out the #SJW hashtag. When I wrote the little treatise, I labelled it as vigilantism. But I bet if you dig deeper you will find the SJWs are at the Yuppie end of the economic scale and the hard-core gamers are the archetypal lonely, nerdy males who are most likely not particularly economically advantaged. 

This post is not about gamers, but it is meant to illustrate the practical application of the framework provided by Rigidly Defined Uncertainty. Gamergate transcends national boundaries and a new set of boundaries are drawn. New tribes are being created around new ideas – and this is important to understand.

We all belong to a tribe and we need to belong to a tribe. As one set of tribal allegiance are being demolished we will create others to replace those. The ongoing challenge will be define what those new boundaries will be drawn ‘with’ – and I think it is a safe bet to consider economic class first.

Another example is religious extremism. This is as much evident in the American Right as it is in the Middle East, even though the means employed to achieve their goals are different. In the American Right you have a fundamentalist Christian faith that is employed to mask a keen desire to protect the tribal interests. The Right in the USA is conservative, capitalist and non-interventionist in their approach. For instance they are opposing Obama’s attempts at introducing healthcare by labelling it socialist. The real fear is that it is going to cost them money.

It would be interesting to explore how much of the extremism we witness in the Middle East, is religious and how much of it has underlying economic causes. (Discrimination, exclusion, racism etc directed at minorities.)

That is all Social Theory. What are the implications for your business? 

In the first instance it is worth thinking about the over-arching impact that this new tribalism will have on politics of Australia and what that may look like in the near future, for as we know political decisions have a material impact on your business. Every economic class will practice their own form of vigilantism to secure the safety of their tribe. Which tribes will win? We might not have the skinheads of Europe, but that does not mean the sentiments don’t exist here. 

On a more direct, pragmatic level it has obvious implications for market segmentation. Every tribe is a potential market. That may appear cynical, but the golden rule of economic demand and supply will come into play. What is the make-up of your current users/patrons/customers?

It also has obvious practical implications about workplace health and safety and managing risk. 

It has implications for supply chain. Which countries are you sourcing product from? 

It has implications for branding and marketing communications. New taboos and new opportunities will emerge.

And finally, ideally and most importantly; what all businesses should be doing is creating tribes of their own. Seth Godin wrote about tribes a decade ago. I agree with him. The idea of ‘tribes’ are even more pervasive than Godin thinks it is, and explains more. It also has awesome predictive power.  But if you can do what Seth says and turn a target market into a tribe, you’ve got it made.

The violence we see in our society, whatever you believe the cause is, is a manifestation of the innate desire for humans to belong to tribes. One of the smartest things you can do as a retailer is to use this insight to protect and improve your business.

Are you ready for responsive retailing?

I borrow the term from (where else?) the internet. Responsive websites are sites that automatically adapt/ respond to the device upon which it is accessed. The same site on a mobile device will look and function differently to the same site being accessed on a desktop computer.

Image Kikitwou on Deviantart.

Image Kikitwou on Deviantart.

I think there will be major role to play for organisations in a retail supply chain. That role will be constantly evolving and it will require different skills. For example, great retailers must acquire curation skills and not (merely) merchandising skills. Retailers must learn the art of story telling in different mediums, not (merely) via a window display.

There are many more. In fact, I would say that most (99%) of job descriptions that exist in the retail environment today is largely outdated already, and if not will be in two years.

Not only must retailers acquire responsive retailing skills; the same requirement applies to responsive strategies, responsive systems and so forth.

To have a responsive retail business means you must design a responsive retail business. This means re-thinking everything you do.

There are three dimensions (like with any design) to Responsive Retail

First Dimension

Fundamentally retail is/was transactional. A customer exchanges money for goods or services. Success requires that you stock the right product at the right time and place and price. It is pretty simple. Your competition is clearly identified on this same dimension. As a retailer, all that is required is that you push your message out to market and convince them of the benefits.

I term all the elements of this first dimension the 'RETAIL PROPOSITION'. I have written two blog posts about it - start here. If you are seriously interested in this topic, I recommend that you get the Jump the Curve eBook.

Second Dimension

For a long time consultants and good operators have acknowledged that it is hard to sustain a competitive advantage at the transactional dimension. 'Customer Service' became the new battle ground.

With customer service I refer to things like all the add-ons (delivery, wrapping) through to pleasant human interactions (courtesy, responsiveness.)

Have you ever wondered if there was ONE SECRET to customer service? There is:Read this article on HBR.

Third Dimension

This is the new battle ground. Of course, both the first and second dimensions of retailing remain valid. It is just that a good offer and good service are now considered cost of doing business. Consumers demand/expect a great value offer accompanied by great customer service. These are givens.

But if you want to operate/compete in an environment where online is a serious option, then you have to build out the third dimension of retailing: THE EXPERIENCE.

This is more than customer service. It is a new way of shopping.

I wrote this document in Nov 1999, proposing an approach that shopping centre landlords should be approach eCommerce. The bulk of those arguments STILL hold true. I say this not to brag about how insightful I am, but to point out that many of these changes are obvious - and have been for some time.

Retail Experience is more than Retail Theatre

Jon Bird wrote up a piece on Urban Outfitters. It is what he terms retail theatre. And whilst I agree with what Jon writes about that particular retailer, I do think that it qualifies only partially as an 'experience'. This article, also by Jon Bird, describes something more akin to the notion of retail experience I want to explore.

In my mind there is a difference between 'theatre' and 'experience' - and whilst I am being arbitrary here, it is an important distinction. 'Theatre' is entertainment ('shoppertainment') - and I am after more than that. An experience INVOLVES the customer - it is interactive and engaging on an intimately personal level. Watching 'Getaway' on TV is entertaining, going on the holiday is the experience. Creating an experience is not about sexy visual merchandising.

A store that really delivers an experience is Jay Kos. Read this article and follow the link to their website. Two commentators have written interesting articles that explains how retail may play our in the future.

Doug Stephens used the phrase the 'store as media' (not sure if he coined it) but it is a phrase that resonates with what we have been saying for some time. This articleby Doug touches on many of the same points I make here.

Michael Fox runs an online business Shoes of Prey) and wrote this article in SMH depicting a future retail scenario.

Everyone has been to a family restaurant, so I thought that might be a good example.

The OLD way (two-dimensional)

You arrive a few minutes early, but they have the table ready anyway.

The waiter acknowledges you, greets you, introduces himself and takes you to your table where they hand you your menu.

The waiter comes around within a few minutes to take orders.

They even suggest a few specials and make a recommendation for the wine.

They place the order at the kitchen and return with water & crockery.

They bring the food out and serve it the proper way.

Everyone gets the meal they ordered, and it is presented well and it tastes exactly how you expected.

During the course of the meal there are a few 'table checks' and they top up the wine/ water.

They bring the desert menu, take the order and serve the desert in good time.

The waiter is alert and you catch their eye easily and you signal for the bill.

Your credit card is approved and you leave a healthy tip.

You are greeted when you depart.

The NEW way (three dimensional)

You arrive at the restaurant and you are greeted by name by the host.

He accompanies you to the foyer where other guests are mingling.

The host enquires about your last business trip and compliments your companion on her earrings.

As the host introduces you to a few other guests, the sommelier brings you a pre-dinner drink (based on knowledge of your preferences. But it is a new flavour, and they share a few titbits about the new process/grape/brand whilst serving you.

One of the hosts is telling a story to a few people gathered around her, and you join the half-circle to watch the 'performance'.

A few minutes later the door to kitchen opens and the host invites everyone in. There are long bench tables arranged around the kitchen island, which is manned by 8 chefs.

The lighting changes and the head chef introduces the crew. Each of the four long tables will be serving different range of dishes based on your recorded preference. You had indicated 'seafood' and your companion take your seat at that table.

Your seafood chef greets you by name (they had the seating plan indicated on their side of the table, and they have learned something about every customer.)

He then proceeds to run through the menu planned for the night.

As they start the preparations, they engage you in conversation, telling you what they are doing giving some tips as they go.

The courses are placed in front of you by your chef throughout the night.

When you are ready to leave, you simply get up and excuse yourself.

The chef comes around and gives you a hug and your companion a kiss on both cheeks.

They insist you take the half bottle of wine with you as you leave.

At the door, the doorman opens the door to the waiting taxi.

At the end of the month, your credit card is charged the usual monthly membership fee.

Whilst you may argue that you would not like the 'new' restaurant experience; that is not quite the point. This is just one example aimed at people who do this for the food experience. I am sure you can imagine a few other 'themes' or experiential outcomes that would suit your tastes better - and if there is a market for it, some restaurateur will cater for it.

The point of this exercise is to imagine how a 'traditional' concept might be transformed in an experience. You may think a restaurant is an easy option, but the same can be done for a travel agent, a hair dresser or a shoe shop - quite easily.

Dreaming up the experience is the easy part. Translating it into a physical experience (staff, systems, procedures etc.) is the hard part. And of course doing so at a profit is harder still.

Customer Experience is NOT what you think. There are three compelling reasons why (bricks & mortar) retailers should conquer the science and the art of delivering customer experiences. Delivering an experience is the single most important, sustainable differentiator.

Web-designers spend a lot of time on (UXD – user experience design) because they understand that if you lose the browser for a split-second it they are gone with a single click. Retailers have the opportunity and the ability to create an experience that counts (CXD) – but few do.

What is a ‘customer experience’? It is NOT customer service. A clean store, friendly and helpful staff and user-friendly return policies – for example - is customer service not customer experience.

The great unspoken assumption is that you have the base right: great products or services at the right price, presented well and great customer service that meets expectations. Customer service is not longer a differentiator, it is cost of entry.

It is NOT shoppertainment. It is not singing and dancing, it is not plasma screens and things that fall out of the roof – that is shoppertainment, not customer experience.

Customer experience comprises all of the above, but above all customer experience has an emotional dimension.

How do you create the emotional connections? This is of course quite complicated because human being are complicated – and their emotions especially so. My favourite new consumer is NewNowLo and she is not Chinese: She is the person that moved from wanting new à demanding new, now at low prices.

The world is changing and people are moving from:

Needing stuff >>> Demanding experiences

Conformity >>> Customisation

Plutocracy >>> Democracy

Self >>> Community (The Tribe)

Consider just two emotions and a few retailers that do a reasonably good job of delivering that emotional connection.


  • Abercrombie & Fitch

  • Victoria’s Secret

  • Starbucks


  • Zara

  • Daily Deals

  • Anthropologie

Delivering the customer experience is reliant on the H-Factor. That was the basis of the talk I delivered recently at the Melbourne Retail Expo and Conference.

I have previously published newsletter (ReadThinkLearnLaugh). SUBSCRIBE HERE and receive access to the latest issue which contains a series of screencasts exploring how you create and deliver a customer experience. (HINT: customer experience is NOT customer service.) I have based on the presentation mentioned above - and there is a special offer for readers ;-)

Someone who has managed to create that theatrical experience and a compelling retail story is the STORY concept in NY:

Founded by Rachel ShechtmanSTORY is a 2000 square foot (200m) store located in Manhattan’s burgeoning new retail corridor of 10th avenue. STORY is a retail space that has the point of view of a magazine, changes like a gallery and sells things like a store. Every four to eight weeks, STORY will change out all its merchandise, design, and fixtures and reinvent the store around a different story-based theme.

Watch this talk by Rachel telling the story of...STORY.

The truth is that designing and delivering a great customer experience (3D Retailing) is only part of the success. Because the reality is that you will have to keep changing the customer experience to adapt to changing consumer demands, changing technologies and changing competition.

The core skill is not designing the experience, but building the systemic ability to design and re-design the experience into your business. This is what I term Responsive Retailing.

We Are Not Yet Ready For Social Retail. You can’t have a real relationship if you view customers as traffic. Referring to people as ‘traffic’ shows a cultural ‘attitude’ that lacks (or will make it difficult to acquire) authenticity.

You can’t say you love women if you think of them as bitches – even as a ‘joke’. (And vice versa of course.)

As a centre manager I worked hard, but with limited success, to change the language in my centre. I wanted our tenants to be called retailers. I wanted ourcleaners to be called housekeeping.

I am pretty sure my team thought I was strange, but I know that if you change your language, you will change the culture. Take for instance what happened at Enron.

Amidst Enron's excesses were the unmistakable cultural cues that drove employee behaviour. "We're an aggressive culture", "Guys with Spikes", "Money is the only thing that motivates" and "Rank and Yank" are but a few of the statements heard. Is it any wonder traders thought they had the right to manipulate the market?

The CEO of one of the biggest culprits in the recent US mortgage meltdown had a vanity numberplate: FUNDEM (fund them) – with reference to their philosophy to give a loan to anyone that can, as his employees subsequently described, ‘fog a mirror’. Say no more.

I know old habits die hard. I know you think it is an ‘innocent mistake’. But it is not.

So here is evidence of the type of language that reveals an organisational culture that is not yet ready for the era of social retailing: Consumers. Target Market. Traffic. Segments. Hits. Yield.

Responsive Retailing is retailing that responds to ANY context and it is 'just right' no matter what device/platform the user has.

Are you ready for responsive retailing?

93% of businesses abandon their original plan



I wrote in 2009 that: I DON’T BELIEVE IN BUSINESS PLANNING. That got quite a few comments, some in agreement and some not.

I was told by one commentator: If you plan and never do then fail is assured.

And another said: To succeed long term though, (…) require planning, unless the plan is to react in a status-quo knee-jerk manner.

To prove my point, I followed that post up by taking a dig at the inability of all the ‘business planners’ to see the GFC coming.

Well, it seems as if a Harvard Professor agrees.

Amar Bhidé researched and wrote The Origin and Evolution of New Businesses (Oxford University Press,) and found that 93 percent of all successful companies had to abandon their original business plan — because the original plan proved not to be viable

Roy Williams (Wizard of Ads) writes on Bide’s work and concludes:

Successful companies have an ability to improvise. Unsuccessful companies blindly "stick to the plan.

The principal difference between hope and a plan is presumption about the future.

The intended plan is deliberate.
The improvised plan is emergent.

Eric Barker describes the difference between ‘deliberate’ and ‘emergent’ as follows: 

"Deliberate is what’s in the business plan, the PowerPoint deck, the list of goals. And that’s what ends up changing 93% of the time. Emergent is what you find along the way. It’s when your baby nephew ignores the gift you bought him… but LOVES the shiny wrapping paper. The heart medication research… that ends up becoming Viagra."

I called the ‘emergent plan’ the business model – that is the FRAMEWORK that describes how you intend to produce money in your business. I have written many times that our ability to change is the core capability we must acquire.

And now the professor agrees. Read that opening line again: 93% of successful businesses abandon the original plan.

Despite the poor track record and low probability of success of a business plan, WHY do organisations, banks, consultants and the like STILL insist on business planning as some sort of panacea?

I think the world is catching on and moving on. In the current internet start-up culture we even have a word for it – you ‘PIVOT’ the business.

  • GROUPON started as ThePoint.com, a site launched in November 2007 that lets you start a campaign asking people to give money or do something as a group 
  • INSTAGRAM founders started a location-based service called Burbn, most comparable to Foursquare.
  • FLCKR started a ‘Game Neverending’, a massively multiplayer online roleplaying game
  • And FACEBOOK once was Facemash, a site comparable to HotOrNot.com, putting two pictures of people next to each other and asking the user to identify which one was 'hotter.'

There is a very long list, Google the topic if you are interested.

The first flaw of every plan is that it fails to appreciate that the future is not more of the past. And even if the planners can see that future clearly, it suffers from the second flaw of all business plans; that it reflects the prejudices, the fears and the internal politics of the people writing the plan.

The solution is to develop and/or understand your business model very clearly. Then construct a business system that will help you become antifragile (not merely resilient) so that you constantly adapt (and pivot) towards success.

12 trends and ONE thing you can do about it

The following changes will materially affect your retail future:

1.      Manufacturers in retail

2.      Wearable technology

3.      Mobile phone usage

4.      Ageing workforce, ageing market

5.      Ethnic diversification

6.      Multi-channel delivery and engagement

7.      Social media communications strategies

8.      Diminishing career loyalty

9.      Price convergence online/offline

10.   Drone technology in the supply chain

11.   3D Printing

12.   Peer2Peer Transactions


Of course there are more – but you get the idea: change is relentless, overwhelming and unpredictable. You have two options to deal with this future:

A.     You can develop strategies for each one, assign resources and monitor progress in order to respond. You anticipate, you react. You constantly fight. You win some and you lose some – but you can never stop worrying.

B.     Or can you build your organisational culture to be an adaptive system. A system that is self-governing that thrives on complexity and is anti-fragile.

Which one is the hardest? Which is the most effective?

Most importantly, what do you choose?

What I said to a client before we parted company

Some months ago I submitted a proposal to a client to address four specific issues I anticipated on a project they were implementing. They never took up any of those options. This month they decided to evaluate the viability that particular project, raising four areas of concern and, you guessed it, these were exactly the concerns I raised six months ago.

The project is definitely needed and of crucial strategic importance, but as a large organisation they are struggling to be nimble and flexible and really lack the political will to persist. I was asked for some input and suggestions in preparation of that review meeting.

The following is directly redacted from the slides as the talking points of the conversation. I don’t reveal the client or the actual strategic solution because that is not relevant to anyone but the organisation. Of more universal relevance are the message and the context and the need to change.


The bad news things are not going as well as hoped for.

The good news is that all of this was perfectly predictable.

The best news is that it is easily fixed.


Be nice, hint at some issues and allude to potential fixes and leave here feeling warm & fuzzy.


Be brutally honest, cut to the chase and fix the problem, and leave here feeling pissed off.



… is hard because we are pulled back toward the status quo by our ‘baggage’ and every time we get sucked in because we think it is our ‘experience’.


Two things to happen – and whilst we are drawn to the second because it feels like we are taking action, it really is first things first...


Quite possibly the stupidest question of all time

Like the frog at the bottom of the well we can look at the world and see a slice of blue pie above us. The reality outside the well is radically different and obvious to all except to the frog at the bottom of the well!



The problem was solved in 1968

by BCG when the framed all the options in a simple matrix…


…because the same thing happens all the time.


  • That we have to change
  • Why we have to change
  • How it will painful and it will be different
  • What needs to be done



There are two requirements to implement ANY strategy successfully



  • To SEE a different future
  •  To BELIEVE that future
  • To DISCARD the old
  • To be BRAVE when facing uncertainty
  • And to COMMIT TOTALLY to it…


If XXX has X likes and X updates (on the Facebook page) in a 6 month period, the natural question is whether we are committed to making a success of the digital future?


There is always an argument to stop. There is always a reason to go back. If this happens, it is because there never really was a new mindset in the first place.



  • Consider all the OPTIONS
  • Make smart DECISIONS
  • Work like HELL

And the first step of developing a plan for the future is to understand a very simple and basic OVERLOOKED question:


You can’t articulate a credible new future if you don’t really understand what business you are in in the first instance.

The rest of the discussion is specific and confidential to that company. In the last few slides we covered:



Example 1








Cutting Edge Retail - Using Philosophy to create Strategy

Don’t run away – but I am going to talk philosophy and how that will help you make money. Specifically I want to describe to you the dialectic process or cycle and how you might use that to your advantage.

The dictionary defines the dialectic’ (process) in many ways, including as:

The Hegelian process of change in which a concept or its realization passes over into and is preserved and fulfilled by its opposite. 

The dialectic process is pattern of thinking that can work to your advantage or disadvantage.

Consider for instance this observation:

The Hegelian dialectic is the framework for guiding our thoughts and actions into conflicts that lead us to a predetermined solution. If we do not understand how the Hegelian dialectic shapes our perceptions of the world, then we do not know how we are helping to implement the vision. When we remain locked into dialectical thinking, we cannot see out of the box.

The other way of looking at it is to use the fact that things are happening ‘in the box’ to your advantage - by predicting how things will play out.

In general terms

The dialectic process is characterised by the presence of three phases:

  1. The status quo is the stage labelled the THESIS. (It is ‘THE’ ‘IS’ – that what ‘is’.)
  2. Gradually, the opposite of the thesis – the ANTITHESIS develops. The anti-thesis is the opposite of thesis and emerges because it presents the natural opportunity – the GAP in the market so to speak.
  3. The thesis and the antithesis SYNTHESISE into a new reality – which is the new status quo or the new THESIS.

In retail business terms

The textbooks (the best one is Levy & Weitz available on Amazon) typically use this graphic to explain it. I think they all copy each other because none of them ever come up with a different example, but I will do that for you.

A few weeks ago, Brian Walker wrote about the rise of fusion retailing. This has been happening for awhile; for example Deus ex Machina on Parramatta Road in Sydney created a Harley Davidson ‘lifestyle’ store probably a decade ago and added a café subsequently; but it is true that there is an increase in the number of concepts. (Some great, some desperate.)

But this trend is entirely predictable if you follow the ‘dialectical process’.

The dialectic process explains the evolution of retail concepts. (It is not the only explanation, but if you read Levy & Weitz or google the bold words, you will see a few more.)

If you have a mechanism that helps you anticipate the next big thing in retail, then you can plan to be part of that future – or even better get one step ahead of the future. You can participate in the natural evolution or you can be creating the next stage of the evolution knowing that you are on the right track.

In the examples mentioned above, you can choose to go ‘fusion’ or you can start figuring out what is the opposite of fusion. More interestingly, you can either go multi-channel or figuring out what it the opposite of multi-channel – and there are already some really interesting concept emerging.

I call this ‘artisanal’ retail.

As sure as I am alive, the opposite of today’s buzzword will become the new ‘thesis’ one day. As with all things strategy and future – the challenge is rarely the ‘what’, but when it will happen. It is a fine line between being on the cutting edge and being on the bleeding edge.

Three street fighting rules that will help you win at business


The part of Africa I grew up in was a tough place to be a boy, and surviving the schoolyard daily required cunning and courage and the willingness to fight. Much like retail nowadays. One of my more memorable schoolyard fights lasted both breaks (i.e. the whole day) with neither of us being able to land the knock-out blow.  My claim to fame is I went to school the next day (one-eyed, but I went) my opponent didn’t.

Street fight rule #1

Never grab hold of the person/ their clothing etc. When you do that you only have one hand left to fight.

Lesson for business: In business the natural tendency is reach out and grab a-hold of your competitor. In business parlance we talk about ‘competitor analysis’ – and it is the biggest waste of time. I realise that vast majority of readers will dismiss this observation as a crackpot statement and dismiss it as the ravings of someone who has lost touch with reality.

‘Competitor Analysis’ is part of consulting methodologies that sounds good, looks good and produces nice little pie charts.

The only thing that matters is what YOU do. You can’t control what they do, and if you try, you are fighting with one hand only. When you are implementing strategies ‘relative’ to what your competitor is doing, you are NOT focussed on the customer and your capabilities.


Like any good football coach, focus your game plan on your play – not their play. Unlike the football analogy you are NOT playing against your competitors – you are playing FOR your customers.

If you focus on the competition, you ultimately end up copying each other. The only strategic and competitive difference between Coles and Woolworths is the colour schemes and some legacy feelings. Instead, follow the lead of say Apple who did not try to out-Microsoft, Microsoft.

Street fight rule #2

If there is a crowd, get your back to the wall. That way they can’t surround you and you can fight what is in front of you.

Lesson for business: It sounds counter-intuitive because ‘back to the wall’ is a phrase the self-help gurus employ to indicate that you have no options left. The other way to look at that is that back to the wall means your options are clear and in front of you.

Having a ‘wall’ means there is one part of your business that you don’t have to worry about - that aspect of your business that you can trust is and will remain a core capability that is attractive to your customers.

If you don’t have a ‘wall’ at your back, build one.

Street fight rule #3

Never go down – under any circumstances. You will get kicked in the head and you will never be able to get up again.

Lesson for business: This is one of the toughest decisions a business person/ entrepreneur must make? When, if ever, is it better to throw in the proverbial towel? Seth Godin tried to answer this with his book – The Dip – and this is his response in summary during an interview:

Question: Other than hindsight, how does someone know when it’s time to quit?

Answer: It’s time to quit when you secretly realize you’ve been settling for mediocrity all along. It’s time to quit when the things you’re measuring aren’t improving, and you can’t find anything better to measure.

Seth is one of the smartest current thinkers about entrepreneurship and marketing, but in this case I still don’t get his response. And I don’t have the answer, so my response to a challenge is different.

In essence, my response is to show up every day and to put in. You may not succeed, but you haven’t failed until you have quit – so I just keep going. If a better opportunity comes along, I am happy to ‘pivot’ (a principle of in LEAN start-up culture) and jump to something else. But failing a better idea or a new opportunity – I don’t quit.

I learned that on the school ground.

One bonus dirty trick

In addition to the rules, here is my number #1 trick that my oldest brother taught me as I learned to fight on the playground:

Grab a small rock (size of a golf ball) and clench that in your fist. It turns a soft, squishy hand into a weapon that hurt a lot more than a normal fist.

Lesson for business: Harden up. Innovate. Turn a weakness into a weapon. Getting hooked on subsidies, government protection and the like is the easy and is comfortable option – but in the long run it makes you weak.


PS: Here is a short eBook on the lessons I learned – and other weekly tips and techniques provided here)


Are you a leader who makes decisions like a turkey?

People crave certainty like they crave food and water – and will go to almost any lengths to create certainty where none exists.

Harvard Business Review writes as follows:

“Of all the headwinds we face as decision-makers, the power of one overshadows all others: our need for certainty. It is typically more important for us to feel right, than to be right — a difference that didn’t matter much in the lives of our ancestors, but now matters a lot.”

And it explains it as follows:

“The lockdown of our minds serves an important purpose: Generations of our ancestors wouldn’t have survived had they constantly second-guessed their conclusions. In a harsh environment characterized by straightforward challenges that demanded quick responses, an indecisive caveman was a dead one.”

And then comes to this conclusion:

“Complex decision-making requires we defer the feeling of being right, by tolerating the tension of not knowing.”

I have warned repeatedly about embracing ‘research’ as the panacea. I have warned about fads and jumping on bandwagons such as many people with ‘Neuromarketing’ after reading one popular book.

I am not alone in thinking that people who claim to know the answer (and few are more certain than scientists) really don’t know anything:

  • NN Taleb points out that turkey will have growing confidence in his master’s desire to care well for it; until the master comes visiting with a big knife on until Christmas Eve. The point being that risk is not a linear process. (Just because spreadsheets make it easy to extend rows of numbers don’t mean they have any value.)
  • Shane Parrish wrote an interesting few observations about The Dangers of Certainty.
  • Andy Grove (ex-Intel Chairman) published his take on corporate management and strategy, putting constant paranoia on the pedestal, and that means he weaves uncertainty into the fabric of the organisational culture because ‘fear’ is nothing but uncertainty.

If you are perfectly confident in your answer, you won’t listen and you won’t hear the warning signs that you are wrong.

The HBR academics don’t address HOW we can go about fighting this basic physiological response, but this is a little mental checklist that I have learned to apply in decision making:

  • Is (what I think) true fact or disguised opinion?
  • What is the opposite of what I think and why is that not true?
  • If this is so self-evident, why isn’t everyone doing it?
  • I am simply extrapolating like a turkey?

Naturally no one will actually have mental checklist; but these types of responses in any decision situation becomes a ‘mindset’ and ‘a way of looking’ at things. Initially it may be acquired by being more conscious about the process until we become adept at distinguishing between what we know for certain and what we want to know.

I am not advocating analysis-paralysis; on the contrary, I am promoting that executives become prone to action by recognising the fuzzy comfort of perceived certainty for what it is. That is exactly why ‘movements’ like ‘lean thinking’ and ‘agile development’ came to prominence.

It is really all about fine-tuning your bullsh*t detector, and being honest enough to know that it must be aimed at our own conceptions and perceptions as much as other people’s.

You will be a better decision-maker if you do this: reject the pursuit of certainty as a noxious weed growing in your garden of innovation.

And few organisations can afford to be lead by leaders who lead as if they are completely certain about everything, because certainty is a lens through which we view a world that does not exist.

PS: This LinkedIn post elaborates a bit more chaos theory.


I don't see chaos

I wondered about what the title of this post should be  

  • Do you know what is under the hood?
  • The Ant and the System?

I cannot sing. It has been thirty years since I have sung one line even in a church where the singing isn’t even often judged and the standards mediocre. But when I open my mouth, people turn their heads for the wrong reasons.

But there is something else I can do that I value infinitely more.

Visitors to our website may be a little flummoxed when confronted by images of fractals. (The dandelions in our website header and others.)

This images reflect some of the unifying theories that constitute our worldview. These theories are amongst other things Chaos Theory – and recently one of the authors I follow (Roy Williams) publishes a weekly newsletter that I rarely fail to read. Recently, he wrote this:

Does your business have unifying principles?

Viewed in high speed at the macro level, ant behavior seems to be guided by chaos theory as their movements create a pattern too vast for the unaided mind to comprehend. But when mapped on a computer, what at first appeared to be randomness becomes a beautiful fractal image built upon the unifying principles of self-similarity.

Fractal images are maps of highly organized chaotic systems and their patterns seem to mirror the behavior of the stock exchange and population fluctuations and chemical reactions. Using chaotic math, computers today are producing images that look exactly like the beauty found in nature... ferns and clouds and snowflakes and bacteria. These maps can also resemble mountains and the human brain and the frost that forms on a windowpane.

Ant behavior goes from intoxicatingly impossible to seductively predictable when the principles that bring an ant colony into unity are reverse-engineered. Here are the ingredients of ant-magic:

1. If you find food, take some home and leave a scented trail.
2. If you find a trail, follow it and add to the scent. If that trail leads you back to the hive, turn around and follow it the other direction.
3. If you don't know where food is and you don't know where a trail is, wander.

That's what the miracle of the ant-line looks like when you reduce it down to its unifying principles.



Roy states it better than I can, and I can merely add: “What he said…”

The reason I raise this is because it lifts the hood of the Ganador engine, and you can take a peak underneath. The reason why we can make a difference through (for instance) business coaching, is because we are adept at finding those patterns: the ones that work for you as much as the ones that work against you.

And in the spirit of honesty; I must admit that I am not so great at seeing myself in the same way. I suppose the perspective and the motivation is different.

Yes we have frameworks supplemented by experience, but if truth be told; it is a bit like creativity. People have the knack or they don’t. Some skills and some experience can make ‘the knack’ more useful, but if you don’t have it, you simply don’t have it.

I cannot sing, we have established that.

But I have the knack for picking up patterns where others see chaos. And I wouldn’t trade it for the world.

Ganador Blog is about #thinkdifferent. We cover topic of business- and personal development aimed at entrepreneurial marketers. (c)Applies. Posts authored by Dr Dennis Price.

Y2K All Over: Will we ever learn?

Sometimes the wise all heads respond to the crisis of the day by referencing to the ‘last time this happened; or ‘been there done that’. That frustrates the generation because it is point of reference they don’t understand and argue that is not or cannot be ‘the same’ as before.

As usual, both generations are right.

But there is no denying that many events follow patterns and we’d be silly not to learn from those unless we are determined to let ego get in the way. An event that will be in the experience framework of the majority of managers over 30 will be that of the Y2K bug.

Just in case you don’t know or remember: traditional programming practice in early computer programming languages was to code dates with as few digits as possible, which led the practice of expressing your year as last two digits, so 1985 would be simply 85 – with a one line of code turning all date references into the proper date.

In 1999 most businesses of any substance devoted a large amount of time and resources to ensuring they survive the year 2000 calamity. (Personally I had to forfeit New Year’s Eve celebrations with my family to see Bankstown Square (as it was then) into the new millennium because we feared all the systems might shut down.

For example we worried that boom gates wouldn’t open and allow customers to enter the centre the following day because the Building Management System was somewhat archaic. I had visions of bank safes popping open and ATMs spitting money into the mall and was going to be accountable for finding and returning it all.

As you know now, nothing of any consequence happened. The airplanes did not fall from the sky.

Most anticipated crises never happen and the things we worry about most are often things that no amount of worrying would fix anyway.

There are many current calamitous claims about retail. Ironically, many of these claims are made by retailers.

The ‘INTERNET’ is the current bogeyman – the new Y2K Bug.

As we learned from the Y2K bug offer some relevant insights:

1.      Sure, we should prepare and plan.

2.      Certainly, we should change what we can.

3.      Of course we must monitor what is happening.

But the internet will change the way we do business in ways we don’t really foresee. A very short time ago it was the ‘mobile revolution’; right now it is ‘wearables’ and the ‘internet of things’.

Tomorrow – something else.

Change will happen – that we can bet on. But exactly how it will pan out, NOBODY knows. And those who claim to be the surest about it will be the most surprised by what eventually transpires.

Why we can’t KISS…

Image by after-the-party - Deviantart

Image by after-the-party - Deviantart

I write elsewhere about Y2K problem referring to traditional programming practice in early computer programming languages to code dates with as few digits as possible, which led the practice of expressing your year as last two digits, so 1985 would be simply 85 – with a one line of code turning all date references into the proper date. It is nerdish, I admit, but the code back then was so elegant – when computer disk space was at a premium – that it has become a lost art.

There is no accurate statistic on this but it is estimated that we use only 10% of the features of software, say MS Word. Because it has become easier to code programs – particularly since the introduction of Object-Orientated Programming and now with code repositories where functions can be accessed freely and literally be copied and pasted, software design has deteriorated to the extent that there it has its own Wikipedia entry.

From simple things like our houses to complex things like social structures, road networks and software – the tendency seems to be towards greater complexity.

I am fascinated by complexity.

For instance I wrote about this to share some personal experiences in a particular knack that I have. I am not sure if it is innate or whether I acquired the skill by accident; but there are always underlying patterns and I seem to see them when others don’t.

Fractal Geometry illustrates visually how a very simple mathematical equation produces very complex shapes. (Chaos Theory is really about explaining the underlying order of things and is not really about chaos and there is nothing random about it.)

We want to add features. Whether it is software (compare Windows 8 to Basic) or whether it is cars (remember when Hyundai Excel was bottom of the range, death-trap?) we keep on drifting towards the complex.

We do things that have never been done; like climb a mountain.

We do this because we can – it is part of makes us human. So we keep adding and keep making things more complex.

If ever there was an argument against evolution, then this is it because evolutionary forces would seem to demand that lean and mean and simply effective is the more desired condition. Instead we design and develop to make us lazier and more ineffective.

But with that freedom to choose between simple and complex, that ability to innovate and that desire to go on a quest for constant improvement we ignore the corollary effect – and we end up complicating things.

  • ·        In the process of making our food preserve better – we end up poisoning ourselves.
  • ·        In the process of writing computer programs, we end up with bloatware.
  • ·        In the process of building better homes, we end up with McMansions where everyone is in their own room.

The list is endless; and the obvious observation is that there is a fine line between progress and poison. Our tendency to seek comfort and make things easy has the unintended consequences of making things complex and counter-productive.

Doing simple is really hard and requires smarts.

This is illustrated no better than this quotation:

I have made this letter longer than usual, because I lack the time to make it short (Je n'ai fait celle-ci plus longue parceque je n'ai pas eu le loisir de la faire plus courte)~Blaise Pascal.


Businesses fail because they want to have their cake and eat it


I never thought I would ever write this, but business can actually learn something from Government.

It does not matter if you agree with Joe Hockey that the culture of entitlement should be replaced with a culture of opportunity. What is clear is that the Government understands (and is executing accordingly) that revenue and expenditure are functions of the prevailing CULTURE.

The government believes (rightly) that the way to fix your budget is to change the culture.

It does not matter what your views are about the processes and priorities the Government is setting, and you may even believe the budget does not need fixing. That is not important, but we should understand the implications of this approach to governance because there are important lessons for businesses to learn from this.

Organisations are just groups of people – and people always seem to want to have things both ways.

  • You can’t have a lean staff compliment and great customer service.
  • You can’t screw your supplier down and expect a great relationship with lots of support and trade marketing dollars.
  • You can’t spend no money on training and expect no mistakes.
  • You can’t not manage your risks and complain about the increased premiums.
  • You can’t complain about government red tape and ask for protection against cheap imports.
  • The community wants to experience the pride in a national carrier (Qantas) but prefer to fly the cheaper alternative.
  • You can’t ask more from your people and give less to your people.
  • You can’t want to be an innovator and avoid all risks.

From these examples the culture of entitlement seems very prevalent in the business community. Idiomatically it’s called having your cake and eating it – and every business should interrogate itself honestly about the extent to which that is part of its organisational culture.

Just like the Government is attempting to do, the task of every business is to also create the culture that is conducive to performance. Every entrepreneurial manager will and should be focussed on creating a culture of opportunity in their organisation.

The job of every real business leader is to create a culture that will serve as the vehicle to deliver on the business model.

Most leaders would express the view that they are striving to create an organisational culture of ‘opportunity’. They would say they are flexible and have equal opportunities for all; that employees are empowered and generally have the ‘opportunity’ to contribute and that all that matters is that they ‘deliver’. But are you really?

Compare your organisation against something called ROWE (results only work environment) that has been created in a few companies:

People could work from home absolutely anytime they felt like it, without needing a reason or excuse. There would be no such thing as a sick day or a vacation allotment—employees could take off as much time as they wanted, whenever they saw fit. Perhaps most provocative: All meetings would be optional. Even if your boss had invited you. Don’t think you need to be there? Don’t come.

In return for this absolute freedom, workers would need to produce. Bosses would set macro expectations (e.g., increase sales by 10 percent) and then assess the results without micromanaging (e.g., keeping tabs on who arrived at the office earliest in the morning or left latest at night). If the goal was met, there were no complaints from your boss about that Tuesday afternoon you spent at your kid’s soccer game. If the goal wasn’t met, no amount of face time around the office would substitute for the lack of results. Of course, if your job description involved opening up the store at 9 a.m., fulfilment of that goal was a must. But for knowledge workers, measuring output became entirely divorced from hours logged in the office.

How do you really compare? Is your company really about empowering people, or is mere lip service because as the leader you want to empower the people but you also want to retain control? Freedom is a scary thing.

I am not suggesting that the culture I described above is the ‘right’ culture, because every company has its own ‘right’ culture. And I not suggesting ‘work from home’ is even a relevant cultural attribute to strive for.

What I am suggesting is that:

  1. What we think our culture is, is not always what it really is.
  2. Not all leaders get the importance of culture as the primary driver of business outcomes.
  3. And those who do, don’t appreciate the extent to which the culture is undermined by conflicting messages caused by not honouring the trade-offs that are required to really build a robust culture.

The Libs are banking that the benefits of their approach will appeal to more people and that once they get the taste of it they would like it more than the alternative offered by Labor.

I am reliably informed politicians are human too, so you can bet your bottom dollar the Libs will open up the purse strings again in the budget before the next election. Just in case. (And in the process undo much of what they set out to do, but at least they get to keep their jobs and so the cycle goes – two steps forward and one back.)

Government is the ultimate monopoly, so they can take that route; but can you afford to undermine the desired outcomes in your business by failing to understand the power of culture?

The good, the bad and the 'oops' of Australian Retail

Thought I might have some fun and share my list of best-dressed/worst dressed of Australian Retail scene. Just like the Hollywood equivalent, it is completely subjective and not based in any way on any rational analysis and without any insights into actual company operations. I also excluded any of my past/current clients from any of these categories, so this is restricted to those whom I have not done any work with.


JB-HI-FI                              >>> Best All-Rounder

NO QUALIFIERS               >>> Best Customer Service

SPORTSGIRL                     >>> Best Marketing

COTTON-ON                     >>> Best Aussie International Retailer

McDONALDS                    >>> Most Successful Business Model Transformation

LOWES                               >>> Most-Underrated

NEWSLINK                         >>> Most Robust Business Model



AUSTRALIA POST            >>> Most to learn

HARVEY NORMAN           >>> Worst Customer Service (I have experienced)

CHEMISTS                        >>> Most in need of Transformation (draw with Newsagents)

APPLE                               >>>  Most Overrated


SMIGGLE                            >>> Never thought they would make it (just to confirm I am fallible)

Which brings me to the MAIN POINTS of this post.

  • It doesn't really matter what one person thinks. (Smiggle)
  • You can succeed despite your (customer service) flaws if you have the product people want (Harvey Norman)
  • Everybody has an opinion and it different and it is irrelevant. (all of the above.)
  • Knowing that you need to change is not the same as changing. (Chemists, Newsagents.)
  • It helps if the Government is your main shareholder.

A 5x5x5 Digital Strategy for Retailers

This article was originally written for and published in National Newsagent Magazine.

Whilst it was written for newsagents, it applies equally to most indie retailers seeking to embrace a digital future.

(Click through on the image for a PDF version if you want to download/ distribute it to other interested party.)

Morgan Stanley estimates that eCommerce sales will double to more than one TRILLION dollars by 2016. And it won’t stop growing either.

You can choose to be part of it, as long as you are realistic and smart about how you go about tackling the opportunity.

It really important to understand that 4500 newsagents won’t start and won’t succeed at simply creating a digital mirror-image of their existing business.

In order to tackle the opportunity we have developed a 5x5x5 strategy that covers the short- and medium term.

5 Things Newsagents should NOT do or believe

1.     Myth #1: An online business is cheap to run.

2.     Myth #2: All you need is a website and off you go.

3.     Myth #3:  My key to success is to replicate my offline business into an online version

4.     Myth #4: An online business is easy money – you make money while you sleep.

5.     Myth #5: I won’t be affected by online retail.

5 Things Newsagents can do immediately

1.     It is a constant learning process, because the technology is changing. Attend seminars, subscribe to blogs, subscribe to newsletters, engage consultants, ask your coach and buy books. However it is you learn, target these topics even if you feel uncomfortable about it now. (eReady Partners is scheduling quarterly updates that many will find useful.)

2.     Start your Twitter account. You don’t have to say anything, just listen and learn.

3.     Stake your claim on the social media sites and platforms to ensure you own your brand/ domain name as soon as possible. This includes at the very least: Facebook, Instagram, Pinterest, Vine, Tumblr, your blogging CMS and Youtube. (Here is Wikipedia’s list of top social media sites.) You can use NameChk, to see if your username/ brand name is available on most sites in a single glance. You may not use all these sites immediately, but at least you own your real estate.

4.     Get your Google house in order, including claiming ‘authorship’ on Google for your blog, your Google Analytics account and so forth. (Having a free GMAIL account is very useful around the net and I use one to subscribe to newsletters instead of my business email. Google is SUPERB at keeping spam at bay, and it is much safer to use that email for (what could be) dodgy website subscriptions.

5.     Make sure you have a simple, static website at the very least. Put your ‘SHOP’ button on it too even if you don’t have an online shop. Give customers a ‘coming soon, give me your email to be advised when we launch’, message and TRACK the number of clicks. (That is a basic way of testing interest in your offer.)

5 Things you can do in the medium term

1.     Make sure your existing business (your platform) is operating efficiently and effectively. This means that you should continue to promote your existing business, support exiting products and control your expenses.

2.     Pick the product you want to promote online. You could for instance use the GNS platform (www.yourlocalstationer.com.au) to set up in that space with a ready-made solution.

3.     Evaluate the appropriate partners and suppliers that could supply your desired product. Not all suppliers are created equal.

4.     Think about your retail mix: E.g: Pricing: What will be the effect of offering online products below the RSP in your agency? How will these prices be harmonised? E.g: Promotion: How will you do this? What expertise will you need? Address all elements of your retail mix (the 6 Ps) in your plan.

5.     Allocate resources: ensure it is properly financed and the key players know what must happen.

We stated clearly that creating a digital copy of your existing business is not the way to go for the vast majority of newsagents. Running an online business is quite different from traditional retail and new skills and new systems and new strategies must be learned if you choose to follow this path.

All that remains now, of course is to just do it.

Dennis Price

Ganador supports newsagents via News Limited’s NewsPartners program to embrace the future. (Newsagent Entrepreneurs Winning Sales – Partners.) Dennis can be reached on 0411 030 436 or dennis (at) ganador.com.au.

Forces affecting shopping centres in growth markets (presentation)

I thought I'd share the presentation I did for Property Council in WA last year (2013).

The ideas was to explore how marketing would be changing in the growth market conditions that characterised WA at the time.

Let me know what you think.

© 2014 Ganador Management Solutions (Pty) Ltd PO Box 243 Kiama, NSW, 2533 Australia Tel: (+61)2-4237 7168