The Oliver Wyman Retail Journal Vol. 3

Firstly, retailers must recognize that the world has changed, and in a big way. Then, ask what the customers want, and find ways to give it to them. That means differentiation at a micro-level: What product for what store for what customers at what price? This requires new capabilities, decision-making skills, that work at a very granular level. And it means harnessing analytics in a pragmatic, real-world way. Done right, productively takes off and share gain results. It is not an easy ride, but for those companies with vision, it is very do-able.

Fundamentally, we develop strategies to drive companies rapidly up the “capability staircase”. We establish what capabilities they have today, where they need to “add muscle”, we agree and plan, and then we realize that plan together. Typically, this means upgrading skills in pricing, promotional management, localizing assortments, improving store operations, and aligning supply chain follow-through. Crucially, it also means bringing the organization, generally many thousands of people, along for the ride!

While most people  say  it is  the disruption brought about by digital players, we believe the real challenge is much closer to home. In more and more markets, there is hardly any volume growth, and way too many stores. There is simply no more mileage to be had from opening new stores. And that means the only viable avenue for growth in sales is growth in productivity. Every year, more and more must be squeezed out of the same space. It’s become a zero-sum game, and the winners will be the ones who make the best decisions.