August 2, 2016
One of the retail industry gurus I enjoy following and listening to is Deborah Weinswig, Head of Fung Global Retail & Technology, so I rarely miss her sessions at events I may be attending and I, of course, subscribe to her daily feed. So, why do I bring up Deborah and Li & Fung? (Global Supply Chain Managers).
Well, I have been on a jag here recently talking about change and, more specifically, the ‘speedofchange’ that is required for retailers to remain competitive in this day and age. First we talked about the technology requirements to Support the ‘ Always On’ Shopper which led to the Business Strategy Changes required to get there.
Now it’ s time to get tactical and this is where Deborah Weinswig comes in. I was recently reading a post from her about the Fung Group and how they are reacting to this pace of change. She noted several innovations and investments that were specific to Li & Fung but the key take-away for me was their endeavor into ‘ rapid prototyping’ whereby ideas are trialed swiftly rather than perfectly.
In September 2015, The Fung Group launched the Explorium in Shanghai. The Explorium is a ‘ retail lab’ that allows retailers to test new store formats and new technologies. Now this venture has very specific goals related to their business but it is the concept that intrigued me. Their purpose is to allow retailers who are targeting the Asian market to set up shop in a mall setting with a subscribed consumer base in order to test products, concepts, approaches, and market reaction before taking the step of setting up shop in Asia.
The Fung Group provides research on sourcing and retail across Asia so this puts them in the ideal position to offer this type of ‘ lab.’ However, retailers everywhere are in the hot seat to understand retailing to the 21stcentury consumer, the fast evolving and emerging technology and the intersection of these both – to achieve success. Smart retailers understand that they must rebuild to thrive in such a fast changing world.
I had the privilege of attending a presentation by the Explorium leadership team and my notes read: ‘ Gone are the days of in-store campaigns planned out and perfectly executed. Now its launch, involve, test iterate. The Wholesale disruption of retail at the speed of change. Retail must take on a ‘ fail fast mentality.’
There is a great line by Bezos that Amazon is a “culture of failure.” He said that “innovation and disruption require testing a lot of ideas. The more rapidly concepts can be tested, the quicker you can find one that works. Most retailers simply aren’ t testing enough ideas quickly enough.”
Word on the street is, there may be many good ideas but some 45% of them do not prove profitable. So retailers, it’s time to get back to the drawing board and into the mindset of ‘perpetual beta.’