Sunday, 16 December 2012

Evolve or Die?

This week I have had to encounter one of my least favourite days of the year. As part of my contribution to the family Christmas preparations I always have a day Christmas shopping with Mrs C. It’s never much fun and I would far rather be at work!
However I can always find an angle. What I was interested in this year was how retailers were fairing in a changing market. Retail has been hard hit. Not only has it had to cope with a downturn it has had to adapt to new shopping habits. The internet has had a huge impact on the high street.

I was looking out for retailers who were trying hard and innovating. My first shop of note was Lush. A soap shop! It was new and energetic and the staff were all individual covered in tattoos and piercing. Really current.
Then there was “sweat shop” selling everything for the runner. A strong brand and a great environment. A real commitment to customer service.

Curry’s is a long standing business on the high street. However rather than standing still like Comet it has reconsidered its offer and completely redesigned the retail environment. No longer rows of TVs and HI fi.

We were in the metro centre and the Marks and Spencer store there is fantastic. I know they are struggling to maintain market share but they are certainly trying hard and are innovating. They produce good products are and they are not standing still. I’m sure they will be ok.

Then you look at those not doing so well. HMV for instance.  Still trying to sell CDs and DVD. They have made an effort to sell gadgets but I feels too little too late. I don’t believe it is a complete strategic rethink rather a desperate last throw of the dice. I think their live music strategy was far better! They are getting support from their suppliers as they also want to supply product and want to allow access to back catalogue on the high street. This is not a long term model however and is more nice market and cannot support the store sizes or location.
I believe for retailers to survive they can’t be generalist. They must find a specialist area and excel at it. If they are to be more general they must align this with a complimentary on line strategy.

When I look at the construction industry there are subtle parallels. Construction has been fortunate in that it hasn’t needed to develop or invest for the last few decades. There has been plenty work to allow a whole generation to just keep doing the same things. Shareholders have made millions during this time.
Now however we need talent in the industry and investment. Fortunately there is talent in the industry and we are seeing the younger generations pushing their way through. Investment levels are still woefully low because the models is project based.

The professions are also struggling with leadership and direction.
I believe for example the architectural profession needs to change. At present architects are trained as general practitioners. The high street equivalent of a general dealer. There is a market for this but it is generally regional and for projects p to a value of £2million.

The rest of the market requires specialists. This may be delivered in one organisation but I believe the profession should become more specialist.

For example the UK has some of the best design talent in the world. There is the potential for an executive architect function to specialise in the technical delivery of these buildings. New buildings are becoming increasing technically complex with growing legislation and energy targets.

There is a stigma to the role of the executive in the industry but for me this is an essential role. Not everyone can achieve the heights of Lord Foster earning millions per year but there are opportunities for unsung heroes.

We also have the growth of BIM and the potential this brings in relation to the coordination of the design and delivery process. There is the opportunity for lifecycle experts who can accurately demonstrate how clients can maximise the value of their investment.

What I do know is we are in the middle of a revolution and there is no going back. We are seeing many companies going out of business.

Obviously the market conditions are partly driving this but we can’t just keep doing what we have always done and wait for the market to return. It won’t. We need to respond to the market as an industry and adapt. If we don’t evolve we will die!

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