Today I embark on the fifth year of my retail business. I am an entrepreneur in the fashion industry. I created ZÖE in 2016 with a big idea to create a place that would not just sell, but represent the work of artists and designers. This big idea came to life from a special place: it was inspired by my daughter, an emerging designer and an entrepreneur. Together we built the business model and vision. I now represent her and other artists and entrepreneurs who are carving out their vision and attempting to make a living in a mass-produced-sold-on-Amazon-shipped-to-your-door market place. And as I am an independent with independent means, I too know personally how difficult it is to be seen and heard in a world where no one can hear you unless the algorithm deems it so.
As one who has built a career in board rooms facilitating planning sessions and building plans, 2020 was the marker for the future. And here we are. We are there. From the perspective of a retail business owner I have an interesting vantage point on the world. Retail is a mirror image of how the economy, technology and policy affects human activity. It tells a story of who we are now, and provides insight as to where we will be standing in the future.
There is a lot of drama in the media about the world of retail. I recently read that they called off the retail apocalypse, a phrase which began gaining widespread usage by the media in 2017 following multiple announcements from many major retailers of plans to either discontinue or greatly scale back a retail presence. Some economists and business experts maintain that the recent high profile store closings are simply a market correction.
With the growth of e-commerce and an over supply of shopping malls, the surge in popularity of Amazon, and other e-commerce companies, many economists point to a shift in consumer spending patterns after the Great Recession, a label used by journalists and economists to describe a severe, prolonged, economic downtown, as well as advances in mobile technology.
Buzz words make a good story. But the reasons are the same now was they have ever been, every time a business changes, evolves, expands, contracts, converges and / or closes, it is in response to the reality that the business model no longer serves the vision. It is news now because the giants are affected, and giants have shareholders who have low risk appetites. And there are jobs being lost and ghosts of buildings standing empty.
Footprints in the sand
I like to look for the sleeping giants when I am standing in the future and trying to imagine the possibilities, because after all, nobody knows the future. But if we look, we can see the footprints.
The power of the Internet was a sleeping giant at one time. I observed this in 1996 when I was a policy analyst preparing a scan of the financial services industry - just when Internet banking was but a gleam in the eye of the industry, as online banking was in its infancy. I observed it again time and time again in the early 2000's as a facilitator and planner, helping credit unions manage mergers and closures. Technology literally changed the landscape of the banking and credit union systems. And then it walked into the way we communicate, listen to music, watch a movie, shop, manage our finances, manage our health . . . changing the way we live each and every moment of our lives.
The bottom line is letting go is hard to do
As a facilitator in those boardrooms, I heard a myriad of reasons cited that led to the outcome of these once viable treasures now being placed "on the chopping block" as it was called many times in those meetings - from migration of people from towns to cities, changing values of the community, aging of the members, competition and technology. It wasn't for lack of planning, or lack of action that led to this moment of letting go, it was a question of capacity - leadership, financial, technical and operational. They were no longer viable in their current state. The cost of doing business exceeded the revenue.
Letting go of their autonomy - their independence to self govern and to serve their communities, their way - was the hardest part. The greater good of member service and the viability of the credit union system helped them find their way forward, optimizing resources allowing them to be competitive in order the serve the present and future member. According the SaskCentral, today 40 credit unions serve more than 481,000 members across 235 service outlets across the province of Saskatchewan. (Source: www.saskcu.com)
In the world of retail, something very similar is happening on a global and local level. Hence the "retail apocalypse" language. The difference is there is no central thinking source that is trying to find the way forward, except maybe Amazon, which has a net worth of $160.47 Billion.
It's a question of values, and value.
Is retail dying? We say no. We say it is changing. We say that people are looking for experiences, which is the new buzzword in big retail, except small retail created and continues to create experience, because people create experiences. Founders create experiences, not boards of directors and shareholders, argues the independent.
Some people say that small retail will cease to exist. Others say that small and local mercantilism will grow as people emerge from the rubble of a crumbled economy. The answers are in the questions.
One of my CEO's used to say, "I don't have answers. I have questions." I have learned that the questions we are not asking are the ones that come back to bite us. These questions go unasked because we are afraid that they reveal insecurity, we haven't thought of them, or we don't know how to react to the answer. Sometimes we don't know the question exists which is the scariest scenario of all.
Either way the truth is in front of us at all times. It is in the metrics that drive decisions and whether we have the capacity and the desire to change.
In the short term, business of all sizes ask the question, how much time and money are they willing to risk to make enough money worthy of their time. The giants will continue to divest themselves of business streams that cost them too much to operate, which means, small centres will have less brick and mortar and be pushed to more Amazon shopping.
Small businesses, like credit unions, need to find ways to share costs, and build strength through sharing talent, while maintaining their brand autonomy. We need to find ways to connect with our communities far and near below the radar of the algorithm to connect with those who value what we offer, and who share our values. And who will support and talk about our businesses. Because word of mouth is still the most powerful method of communication.
In the long term, however, the question is much more sobering - and that is what happens if the artists, the visionaries and the entrepreneurs disappear from the landscape? And how much time do we have to find out?