New Retail: no magic formula for retail success
Marketing Clinic had the pleasure of hosting a retail breakfast seminar in our Helsinki offices on 4 October. We were happy to see both familiar and new faces among the participants. Mika Sutinen, the main speaker of the seminar shared his learnings from building successful retail concepts, based on his experience as the former CEO of Musti Group and as a board professional involved in several interesting ventures like the SGN Group and Jungle Juice Bar.
“There is no magic formula to successful retail. It is about creating a customer-driven concept, and a clean and crisp execution that really brings added value to the customer” – Mika Sutinen.
The winners write history
When it comes to expanding your business abroad, the times have changed and an export only mindset won’t cut it anymore. Instead, successful expansions are about going into new markets with a learning mindset. You will probably have to iterate your concept a few times before it works in the local culture. Even seemingly small differences can be game-changing, but on the other hand, you should not make an issue out of something that is actually not a big deal. In order for the concept to travel well, you need clarity, differentiation and a concept that is twice the size of your actual business, as Mika Sutinen noted.
You will also need stamina and persistence, because it usually takes quite some time to launch a new retail concept in another market. As Mika Sutinen explained: Taking a retail concept abroad is much like running a marathon. It will be painful, you will need the discipline and the time and you will have to manage your expectations. This means you should try, adjust and then try again. This is a process that maybe is not so embedded in Finnish culture.
Daniela Yrjö-Koskinen, CEO of Novita, raised the question of why so many Finnish companies have done so poorly in Sweden. There might not be a straightforward answer, but it seems that understanding the key differences among cultures (even the ones close to us) is crucial. When the distance separating cultures is great enough, the situation might appear simple. “The further the market, the bigger the margin”, is an attitude that Mika Sutinen has seen in many companies planning to expand abroad.
Get people onboard
In the end, the people you hire are the ones that really make it or break it. The seminar discussion turned towards the importance of passion. People who have passion for your business and for solving customers’ problems might be a scarce resource, but they are definitely worth looking for. Mika Sutinen argued that you can teach people a commercial mindset, but you cannot teach people passion. To get your staff as well as customers onboard, you have to be able to define and communicate the same story of customer value, over and over again. Repeating the same story and keeping it as simple as possible, even during times when you are sick and tired of your own voice, was the clear advice of Mika Sutinen.
The myth of the death of brick-and-mortar retail
The second speaker of the seminar, Johan Kaij, Senior Advisor at Marketing Clinic Sweden, talked about the myth of the death of brick-and-mortar retail.
Indeed, many more shops have opened in the past year than have closed, and online retailers have even gone offline, one example being Amazon Books. According to Johan Kaij, the retail landscape is evolving, not dying. There are many opportunities in New Retail, and the expectation for the future is that “there will be shops and there will be shops with stores”, as Mika Sutinen put it.
“Sometimes the myth of the death of brick-and-mortar is used as an excuse, while the real reason is that the concept is not working” – Johan Kaij.
Johan Kaij showed some exciting examples of different customer experiences from around the world, and the audience noted how important it is to be able to tailor the experience according to expectations of different target groups. Polarization is one thing you need to consider when designing the customer experience. There is efficiency at one end and high involvement at the other. The perfect customer experience can be fast and efficient but it can also be mind-blowing, depending on the expectations and level of involvement of the customer.
The retail seminar ended in a lively discussion among the participants, who found that the challenges in the changing retail environment are the same, both on the retailer and supplier sides. All in all, it was a very interesting discussion that provided new perspectives on the opportunities in the New Retail landscape.
This is a blog series about trends and insights in New Retail. We look into the changing needs and behaviours of shoppers, innovative technologies and the consequences for retailers from an omnichannel perspective. The previous blog piece – New Retail: where the shopper in king – can be found here.
If you want to know more, please reach out to the Marketing Clinic Retail team — we are happy to help you win in the New Retail landscape!