Retail and the Long-Term Future
Last week I had the opportunity to make several presentations at the headquarters of a large American retailer. I was tasked with making the case for the value of injecting longer-range thinking into the regular planning cycle and with sharing some thoughts about the future of retail on the five-ten year horizon.
My slide show to the monthly executive council is below. I wanted to make three key points:
- 1. Even in a fast changing environment, developing long-range foresight can provide a competitive advantage. By long-range I mean a decade or more ahead. The confusion that people get into is thinking the idea is to create a plan for ten years from now. That is futile. What is valuable is to identify the key driving forces that are knowable a decade hence, and then start to either learn about them, prepare for them, or even begin some activity related to them now. An example we discussed, obvious for retail, was the shape of the population in terms of its age groups, something that is perfectly predictable.
2. On the future of the economy I wanted to make one key argument, a point which I find makes most business audiences cringe. When I published my last book in 2006 I identified barriers to business in the coming decade, and one of those I called out then was the growing wealth divide. For the audience last week I zeroed in on this, attempting to make the case that a mass-retail business based on selling goods to large numbers of people in many big-box locations will not be sustainable if their customer base disappears. A society where the middle-class disappears will not be able to support such retail in the future. Interestingly this retailer opened in 1979, the very peak of the broad middle-class society in the U.S. This is an issue I do not think most business leaders are thinking about in business terms. We think it is a political issue, when it is even more fundamentally a question of what kind of economic society we want to live in.
3. Third, borrowing a phrase from my friend Gerd Leonhard I described how data is the new oil. This is not news to retail executives, but I emphasized the idea that such data is not only in the numbers and customer tracking, but in the social media space where, for example, style bloggers, are an untapped resource of intelligence and effective marketing.
Here are the slides…