Differentiate or Die… The High Street’s Wounds are Self Inflicted
11.12.18   by Allan Freed

It hasn’t been a great year for national retailers on the UK high street. On an almost daily basis we’re exposed to headlines and stories of profit warnings, bankruptcies, rescues, takeovers and declining sales figures.  No one disputes that the transition to online shopping continues to have significant disruptive impact but, let’s be honest, the internet isn’t exactly new and it isn’t as if the national retailers haven’t had time to learn how to compete effectively in the digital space… so how long can retailers use this as a valid excuse for what is ultimately poor leadership? The wounds that are killing high street retailers in 2018 are self-inflicted. 

As we’ve observed the demise of BHS, House of Fraser, Toys ‘R’ Us, Homebase and Maplin, and the struggles experienced by New Look, Mothercare, Carphone Warehouse, Debenhams, Marks & Spencer’s, Argos and Claire’s Accessories we’ve identified three key lessons that can be adapted by others who may face similar challenges in the months ahead.

1.    Senior Leaders are Primarily Stewards of Identity

Senior leaders in national retail chains are primarily stewards of identity.  Their number one job is to breathe life into a firm personality that resonates with targeted customers.  If you don’t stand out to your selected consumer group, if your leaders haven’t established the right type of personality, then you’re not losing market share because of a transition to online shopping, you’re losing because you’re bland and increasingly irrelevant to your target audience. Differentiation and the creation of a unique identity is ultimately a leadership problem. 

Q1. Do we have a unique and differentiated identity that resonates with a targeted audience?

2.    Differentiated Experiences Flow From Unique Identities

Try to remember the last time you had a positive, differentiated service experience at one of the national retailers. Come to think of it try to remember the last time you bought a truly differentiated product! If a high street store is going to compete in a digital world it must do the very things that the internet can’t do – breathe personality and uniqueness into the shopping experience. The likes of Lush and Apple have figured out how to do this beautifully and their financial results are proof that it is an effective formula. They’ve created an instore experience around the sale of very different product lines. In both cases, the key investment is in aligning staff to behave in ways that are consistent with the identity of the firm. When employee behaviour consistently reinforces a brand’s identity and a clear value proposition for customers, all stakeholders have reason for optimism.

Q2. Do we serve customers in a way that creates an experience that is tied to our personality and value proposition? Do we adequately invest in staff who behave in differentiated ways as well as in product and infrastructure?

3.    Treat ‘Best Practice’ with Caution

Surprisingly, the leaders of most of our struggling national retailers don’t appear to be accentuating their company’s uniqueness.  Instead they’ve searched for safety in best practice. While that may sound like a very sensible thing to do in a tough economic environment it may actually be harmful and accelerate rather than reverse the decline.  In isolation, industry best practices may in fact be a perfect waste of time, money and energy if they only lead you to mimic others and do nothing to reinforce your unique identity to your targeted customer group and your value proposition.  If best practice means you start to look and feel like everybody else and by definition lose your unique personality then surely they are things the retailers might want to avoid rather than chase in a space that is crying out for differentiated experience. 

Q3. Are we interested in best practice for the sake of best practice or are we interested in operating in ways that reinforce our unique personality and identity to our targeted customers?

Often, start-up companies are heavily influenced by founders who have a genuine sense of passion for the personality of the business. These firms have a real sense of identity and that’s what customers love about them.  Leaders at larger firms often have a more difficult role in making the brand’s personality real to customers in consistent and authentic ways. They become too far removed from influencing the behaviour of employees in store and forget that aligning identity and experience is critical to the creation of value. 

The national retailers have to differentiate or they will die. Their death isn’t adequately explained by a sudden transition to online sales channels. It’s more accurately explained by the failure of leadership teams to inspire and create differentiated retailing experiences connected to a clear identity and value proposition that resonates with targeted customers.

At The RBL Group (www.rbl.net) we partner with our clients to ensure the work they do in talent, leadership and organisation reinforces a unique identity. We love differentiation and we love results – two things many of the retailers on the high street are desperately searching for.