Embracing innovation in changing times | Upfront: Insights from the Executive Director | Retail Customer Experience
Alicia Lavay is Executive Director at the ICX Association. Image provided.
What’s next? Embracing innovation in changing times
We’ve been talking about adapting to a new business climate for a while now. For many, this means new locations along with new products and services to meet changing consumer demands — to say nothing of updated technology to help us make sense of it all.
Despite everything we have been through recently, there is a light at the end of the tunnel. It’s clear that the future holds a place for our industries — including retail, restaurant, banking, hospitality and entertainment — but to be successful in the new environment, we have to accept that our industries are going to look a lot different than we may remember, along with the way we run our businesses. But consider this: isn’t it often a string of unexpected circumstances and even accidents that determine many of a company’s important decisions right now? Necessity is the mother of invention, after all! Instead of fearing change (which is inevitable), we’d save a lot of energy by taking the time to really understand it, embrace it and make it work to our advantage.
We do many things one way rather than another because we’ve “always” used that method, but more often than not, we started to use it because it was convenient — or the available resources did not give us other options. I grew up in the vending industry and recall how the street operators who pioneered automated data collection often reported that persuading their route drivers to buy into the new method was one of the hardest parts. People become accustomed to things being a certain way, whether that way is the best or not. While people tend to be wired with an instinctive fear of change (including new technology), we need to remember something the data keeps showing us: technology is adding value for everybody involved, rather than taking something away. Smart innovation isn’t a bad thing; by leaning into it, we are making things better for our businesses, our team and our customers!
This is why we need to pause periodically, look at what we are doing, and ask why we’re doing it (or why we’re doing it in that way).
What is happening in the market? How can I strengthen my position in the industry? What is my immediate plan in the coming weeks and my strategic plan for next year?
These are just a few of the questions I’ve heard asked by manufacturers, suppliers, retailers and operators alike, and it’s not surprising. The alarming economic environment magnifies the risks associated with running a business, and finding the right answers is a survival skill. Whatever the economy may be doing (and there is no disagreement that things have slowed down), perception is reality in popular economics, even more so than in marketing. The uncertainty of the future may make you more resistant to change than ever before. But if history has taught us anything, every “slump” will eventually end, and the popular consensus will eventually shift toward the view that the economy is pretty robust, after all.
In either case, you’ll want to be well-positioned for growth when that time comes. When your competitors cut back, there’s an opportunity to gain market share. While consumers’ faith in the economy is shaky, their apprehension will take its toll on their discretionary spending. Now is the time to bolster the confidence of your customers so they know you believe in long-term relationships that can survive difficult times. Trusted, high-quality brands and organizations with strong core values are especially prized during periods of uncertainty and fear. During a recession the inexperienced players tend to shake out, while many established businesses go into a holding pattern. This is the time when strategic innovation and embracing new ideas can confer a disproportionate market advantage. Studies have shown that companies that spend more on innovation during a downturn will see a greater return on their investment, when compared with those that slash spending.
What does this all mean for our industries, and what steps can we take to ensure continued success? Where should we scale back and where should we invest? What products and services can help weather a downturn?
I believe the answers have been staring us in the face for some time, but we’ve been hesitant to respond until now. Customer service, equipment reliability, route efficiency and product popularity remain vital ingredients in the formula for keeping clients and securing new ones. Since the cost of doing business has skyrocketed, addressing the needs of each specific location is paramount. Understanding individual taste preferences is more important than ever before. If you’re a restaurant, a retailer or a refreshment service provider, weaker items in your product mix will need to be reassessed and adjusted (or developed and implemented) accordingly. This is even more reason to be open to new technology and innovation, and to do whatever it takes to find out what consumers really want. Instead of cutting your market research budget, it will be worthwhile to devote additional effort to questioning customers; you’ll need to know how your consumers define value as they respond to the current challenges (whatever terms one uses for them).
If you’ve been to our educational summits, you know that the tools to take advantage of all these opportunities are available. And I’m sure you also know that prices will have to keep pace with the cost of inflation. But smart businesses will act swiftly and be savvy and economical at the same time. Let your customers know you are willing to work with them. Maintaining quality rather than cutting corners, and continuing to give good service to existing customers, will go a long way during troubled times. Especially in a recession, it is critical to remember your “internal” as well as your external customers, to show them that you understand their plight and that you care. Executives should spend more time with employees, clients and patrons. CEOs and managers can reinforce the loyalty of the survivors by assuring staff and clients alike that the company has survived difficult times before. The relevant point here is that during good times and not-so-good times, one thing always holds true: respecting your internal and external customers is foundational to a profitable long-term relationship. And, as we continue to build a new world of collaboration between humans and machines, it’s up to us to utilize that technology to improve experiences for both staff and consumers.
There’s an old parable about the oak and the willow. When the storm comes, everyone thinks the mighty oak will be the last one standing, but its very rigidity makes it shatter under the force of the storm. Meanwhile, the willow bends with the wind; its flexibility allows it to survive the storm unscathed. Be like that willow! Whatever your industry, be flexible and adaptable — learn to dance with the wind of change, don’t fight it. No matter what storms may come, you’ll find yourself weathering storms that cripple or shatter even powerful, legacy organizations that refuse to adapt!
ICX Association News & Notes
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