Authors note: if you haven’t watched the excellent video of Eric Bass explaining the “Put a Ribbon on It” story I recommend you do. While this article can stand alone, the observations within are greatly enhanced by Mr. Bass’s brilliant story telling. I highly recommend watching the video.
It has been a long road back from the bottom of the worldwide recession, and the retail landscape has been altered significantly along the way. The recession meant the end for many brands, and greatly diminished the profile of countless others. As retail sales plummeted, retailers reacted with a wild combination of slashing prices to drive volume and slashing expenses to maintain margin. While I think defining this behavior as ‘knee jerk’ is unduly harsh, I do think it’s fair to say many retailers failed to bring focus to charting a long-term course out of the downturn.
Some retailers emerged from the recession more focused, more committed, more self-aware and more capable than ever before. Ultimately, Put a Ribbon on It is that story. Entwined in a simple story about offering to wrap gifts for a customer is a profound story about how retailers can focus on their customer, stay true to their brand and sustain year over year growth.
Charting a course from the bottom of a recession is no small task. Retailers who succeeded did many of the same things as those who failed. They tightened belts, they took more risk with promotions and offers to stimulate sales, and they froze spending in the short term. However, successful retailers did a little more. They focused inward on who they were and sought to redefine their brand in the face of the changing customer demands. The result of this exercise was to ensure everyone in the organization understood the brands promise to the customer and to connect employees with a sense of common purpose and identity.
Part of this inward look included more attention to process and infrastructure. Retailers are notorious for developing new processes on the fly and stretching beyond end of life many of the vital systems that make up the backbone of their operations infrastructure. A punishing global downturn caused many retailers to realize old behaviors would not work in the future. In particular, more focus was given to understanding process with an eye on efficiency and rigorous testing before new processes met the associate let alone the customer. Retailers developed better internal capabilities for evaluating internal process, borrowing heavily from successful techniques developed in other industries. Lean and Six Sigma in particular started to enter the retail lexicon. Unleashing new processes and experimenting with discerning customers would no longer do.
Reinvestment in infrastructure unlocked a well of insight and capabilities that was eye opening, bordering on mind blowing. Beyond the general efficiencies enterprise software can deliver, it also delivered data. Robust, consumable, and actionable data. The insights developed from this data invalidated some long held cultural norms, dispelled organizational myths, and most importantly, gave insight into what actions retailers could take to deliver the service and experience customers wanted.
This confluence of an organizational sense of purpose, an inward focus on process and quality, and an investment in technology to drive efficiency and cultivate meaningful data have propelled successful organizations from the trough of the recession to a place that allows them to see the peak. The profound change in thinking and understanding required to move an organization from danger to prosperity gives the organization insight into what makes their brand relevant and what will make them prosper. It allows a retailer to align their resources to customer expectations with greater nuance and accuracy. This data driven accuracy can tell a retailer the true cost of having customers wait a few more seconds to put a ribbon on their purchase.