December 16, 2014

2014 Year In Review: Lack of Strategy

This question came to me from a trade journalist.

Question: Don't you think that most retailers simply fail to have a coherent strategy? In other words, retailers are struggling because they are not strategically thinking about their omnichannel future. Why aren't retailers rapidly adopting omnichannel tactics? Isn't this the only way that retailers will survive? Where is real strategy?

When folks talk about "retailers", they're usually talking about billion dollar businesses. Those businesses possess anywhere between 5,000 employees and 200,000 employees ... or 1% of the workforce in the case of Wal-Mart.

These are big businesses. Hundreds of Vice Presidents, several hundred Directors, thousands of Managers. Every single person with their own version of the future. Every single person wanting to implement their own strategy. Every single person believing that their way is best.

When I hear criticism of large companies (I worked for Lands' End, Eddie Bauer, and Nordstrom ... those are big companies), I frequently hear the complaints from individuals who work at small companies. A trade journalist doesn't work at a company with 1,000 employees, in most cases. The trade journalist might need to please six individuals, whereas the Retail Executive may have to please six thousand individuals. It's easier to have a strategy when you have to bring six people along with you. It's hard to implement a strategy when you have to bring six thousand salaried individuals with you.

Let me give you an example. When I worked at Nordstrom, my team determined which version of ten email campaigns a customer would receive. My team owned this tactic. And then, one day, I get a call from a customer - the customer wants to know why she was mailed a campaign from an employee working in a store? Well, I'm accountable for who receives email campaigns, so I feel pretty confident that nobody in the stores are sending their own email campaigns.

Boy, was I wrong.

Not only was I wrong - not only were hundreds, maybe thousands of employees sending their own campaigns, but one of my coworkers, a technology Executive, was facilitating many of these campaigns. This person was helping send the campaigns on behalf of the employees in the store.

This went against our "multichannel email strategy".

Well, it was my job to clean this up. Did I clean it up? Heck no!

Half of the Executives I worked with thought this was a catastrophe, and demanded that I stop the practice immediately.

Half of the Executives I worked with thought this was brilliant, thought it encapsulated the Nordstrom entrepreneurial spirit. Not only did they not want the program stopped - they wanted to expand the program.

The technology Executive helped me create a process to allow store employees to send their own campaigns. I'm sure a minority of employees used it.

It was not possible, not possible to align 50,000 employees along something as simple as email marketing rules.

Retailers have strategy, trust me. Retailers have too much strategy. There are enough strategy decks (Powerpoint) at retail businesses to "fill the cloud".

I work with retailers that are highly strategic, and implement strategy in a highly successful manner.

I work with retailers that are highly strategic, but are unable to implement strategy due to employee disagreements (this would have been my Eddie Bauer experience, back in the 1990s).

I work with retailers that are highly strategic, fight the wars to get the strategy pushed through, and then fail miserably when the strategies don't work. Most outsiders love beating these companies up, don't they?

I work with retailers that are not strategic, but are so tactically superior that they enjoy high levels of profitability (this is what I would have considered Nordstrom to be, back in 2007 when I left, and this is what I considered Lands' End to be, when I worked there in the 1990s).

I work with retailers that are not strategic, and are tactically inferior. This isn't good.

But most of the time, there is a strategy. How that strategy is translated to those on the outside is unclear, and results in outsiders beating big retailers up.

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