I advise retailers to build teams of top talent, rather than rely on a “single genius.” (Advice on Retail Succession Planning) Along the same lines, my advice to retailers — when it comes to staying relevant and competitive in this “age of the consumer” — is to partner with experts. I am heartened to see a growing number of partnerships aimed at giving consumers the best possible experience: Wal-Mart and American Express, Tory Burch and FitBit, Shopkick and American Eagle. This wave of interdependence is one solution to the many challenges posed by the new breed of consumer. Success is no longer assured by bringing a wonderful product into a pleasing environment. Today’s consumer demands unique products, faster delivery, competitive and transparent pricing, personalized service and marketing that wows. Deep investment and expertise are required to deliver on each of those demands. Any one entity trying to do it all will be doomed to fail. My advice is to stick with what you know – and partner with the best experts and teams to turn that into a remarkable customer experience.
Even Wal-Mart, #1 on the Fortune 500 with $473 billion in sales, was not so bold as to enter the digital-platform financial services space on its own. Instead, it partnered with American Express to offer online payments for customers without credit cards with its Bluebird product. On a smaller scale, wearable technology has been garnering a lot of press. Worldwide spending on wearable technology (think smart watches and sports, activity and sleep-tracking bands) is estimated to reach $1.6 billion by 2016, according to CMO.com. How can wearable technology gain market share (grow from one in six consumers using it in 2014)? Wearable technology firms can start by making the watches and bands more fashionable. If people are expected to wear the trackers all day every day, they really ought to look more appealing. To that end, FitBit partnered with Tory Burch to bring fashion to wearables. FitBit is not expert at fashion, and Tory is not expert at fitness technology. A marriage made sense and will hopefully result in profits for both.
Even if your product is less specialized than cutting-edge technology or the scale of your problem is smaller than Wal-Mart’s (i.e. millions of potential customers frozen out of the banking products they need as online customers), you can still benefit from engaging in strategic partnerships. Smaller retailers are facing technology, distribution, supply chain and product problems that could be solved by smart partnerships. If your edge and expertise are in merchandising, find a partner to implement the technology and back-end solutions to deliver customers a winning omnichannel experience, if that is the challenge you face to growing market share. If your edge and expertise are in customer service, you may partner with data and analytics experts to help you predict what new products and customers you can continue to grow and win with. No matter what your sweet spot is, you will need to go both broader and deeper with the help of technology, analytics, social media and tangential services to remain competitive and relevant in today’s marketplace. The big guys are leading the way with smart partnerships.
Today’s visionary retail CEOs will be on the lookout for partnerships like these. They know that diluting their focus by going it alone will only help them lose whatever advantage and leadership they currently enjoy. No retail CEO can afford to just “forget about it.” Customers are not likely to become less demanding. Technology will continue to provide interesting but complex opportunities. I look forward to seeing more partnerships that let the best retailers continue to thrive in their sweet spot, while growing and evolving to compete and win with today’s demanding consumers.