Lionel Ritchie, Malcolm Gladwell, Bicycles, and Ecology all intersect in this platform is burning look at the future of retail.
Back in March, at ShopTalk 2017 in Las Vegas, the great Lionel Richie (yes, you heard me right, that Lionel Richie) opened the conference by saying, “Life begins on the edge of your comfort zone.” His words hit me like a kiss at the end of a wet fist that day.
Last week Richie’s words came roaring into my head once again. His words kept reverberating in my head, hanging in the air, like “Hello, is it me you’re looking for?” I guess Lionel just has a knack for that sort of thing.
You see last week I attended a panel discussion at a local Minneapolis innovation and design agency, Zeus Jones, here in town with some friends. To kick off the event, the panel moderator shared a few words. She relayed how she was studying ecology, and specifically ecotones, the point where two ecosystems or biomes intersect, like where a forest meets a grassy plain, for example.
Ecotones are fascinating to ecologists because they are a petri dish for adaptation. The intersection of two completely different ecosystems forces the species of each system to adapt, or else they die. The species of one system, say a forest, are completely accustomed to life in the forest, and once they find themselves in the intersection of a plain and a forest, they need to develop a whole new set of skills to survive. Species, acculturated to one climate, are in essence, within ecotones, forced to interact with species of other climates. Ecotones therefore become the locus for biological transformation. They are evolutionary ground zero.
Or, said another way, ecotones are where species are forced to coexist and flourish at the “edge of their comfort zones.” Yes! Loop of the analogy closed, let’s all now dance on the ceiling!
Rest assured there’s a madness to my methods. Lionel Ritchie? Ecotones? Adaptation? Yes, they all have something to do with retail. The commonality is that we are all now sitting within and learning to survive inside a new ecotone of retail — the omnichannel ecotone.
As you can see from the above two circle Venn diagram (sorry to short change the traditional third circle of the Venn for any of my consultant readers out there), bricks-and-mortar retail and e-commerce retail have historically occupied two almost completely isolated ecosystems. Now, mainly because of the rise of mobile technology, accompanied by major demographic shifts, these two business model ecosystems are about to press against each other. They are about to merge into something we have never seen before. Both sides will be forced to adapt and the creature of that adaptation will be something novel, and, yes, even scary.
Scary because while new species will emerge out of this omnichannel ecotone, many others will die off. This “die off” will have drastic repercussions across our national landscape, hitting specific locales and demographics hard. Want further proof — check out this article in Business Insider to get your mind going — The Death of Big Box Stores is Speeding Up Suburbia’s Slide into Poverty.
Cities and states with large-scale bricks-and-mortar headquartered operations may one day be flooded with out-of-work retail employees who once knew how to survive in the old world bricks-and-mortar ecosystem, but instead will be unequipped with the digital skills required to thrive inside the new omnichannel ecotone.
Similarly, and what’s even more scary, is what could happen to the hundreds of thousands, or nearly millions, of mainline store employees working at these same retailers in suburbs and malls throughout the country. Even if “physical shopping is here to stay” (which it is), physical shopping will look quite different within the omnichannel ecotone. The skill level required to work in a physical store will be heightened, requiring the entry-level retail employee to have more technical know-how and training than ever before. Gone are the days where the core functions of John and Jane Doe retail associate were to stock shelves and check people out behind a cash register. Soon these activities will be replaced by activities that require a working knowledge of all things digital — social media, mobile technology, messaging, etc. The blue-collar retail job and wage will in essence still be blue-collar but the entry level skill required for the job will be far greater than it is now.
Yeah, holy shit.
I will say it again. This IS scary. But there is still hope. A new model of retail can emerge, where physical locations are still pillars of importance for our communities, whether suburban or urban. A new model of retail can emerge that is powered by a different engine than we know today. A new model of retail can emerge that requires less working capital (i.e. through less inventory), that generates higher productivity (i.e. through automation and technology), and that brings traffic back to the store (i.e. through social and physically tangible experiences that cannot be simulated online). This new model of ecotone retailing can and will emerge from the intersection of the bricks-and-mortar and e-commerce ecosytems that we know today.
But the road will not be easy. If you have followed this blog since its inception, then you may have realized that its posts have been an exposition – the seminal makings of a blueprint to remain an evolutionary survivor of the ecotone. The blog has been relaying a recipe book or an Alcoholic’s Anonymous-like plan to get retailers back on the wagon:
Step 1: Admit there is a problem (Amazon and the Battle of Dien Bien Phu)
Step 2: Be humble, admit that the problem is hard and that you likely need help to solve it (Are Retail CEOs Destined to Become Murray Hamilton?)
Step 3: Open your mind to new horizons and disciplines (Retail’s Product Problem — Why We Need to Stop Thinking with Our Small P’s)
Step 4: Critically assess your strengths and weaknesses (10 Signs from an Earnings Call that a Retailer is in Trouble)
Today, however, the exposition is over. It is time to start discussing how to take action.
Step 5 is all about starting on the journey.
Step 5 is perhaps the most critical of all.
Step 5 is Practice, Practice, Practice
Step 5 is step into the ecotone and get out and practice how to ride the omnichannel bike!
For those of you that recall, the omnichannel bike is in reference to Dustin Sendin and his experiment in neuroplasticity where he reversed engineered a bicycle (see video here).
Sendin reversed the handle bars on a bike so that if you wanted to turn to the left, you had to turn the handle bars to the right. It took a roughly 40 year-old Sendin 8 months to learn how to ride his new bike, but it took his 8 year-old son only two weeks!
Learning how to live and adapt within the new ecotone of omnichannel retailing will require the same neural dexterity and mental rewiring Sendin had to put himself through to learn how to ride his new bicycle. What emerges from the ecotone will be part bricks and part clicks, but it will not be just one or the other. It will be new.
So the only way to learn how to ride this new omnichannel bike is to get out there and to learn how to ride it. There will be bumps, scrapes, and undoubtedly screams from parents and spouses along the way, but it has to get done.
It will take a hell of a long time too.
Let’s now do some math together and also bring in one of my favorite authors — Malcolm Gladwell — to illustrate just how long it will take.
In Gladwell’s book Outliers (definitely on my top 10 list of the best business books of all time), Gladwell postulates that in order to be good at something, an individual has to spend 10,000 hours practicing a given skill. Citing examples of Bill Gates and the Beatles among others, Gladwell argues that the 10,000 hours belief is “an extraordinarily consistent answer in an incredible number of fields … you need to have practiced, to have apprenticed, for 10,000 hours before you get good.”
Whether you agree with Gladwell or not, go with me here for a minute and take his premise at face value. Examine what this means numerically for retail . . .
- Assuming 40 hours worked per week, expertise is achieved in 4.8 years (10,000/40/52)
- Assuming 60 hours worked per week, expertise is achieved in 3.2 years (10,000/60/52)
- Assuming 80 hours worked per week, expertise is achieved in 2.4 years (10,000/80/52)
Essentially, for one single person within a retail company to become an expert in a new concept like omnichannel retailing, it could take between 2.4 and 4.8 years to develop that expertise. Or, more likely, at least 3.2 years to become an expert (because 80 hours per week without vacation is not sustainable over the long-haul for most people).
So, if a company starts now, gets behind R&D for the long-term, creates a tiger team of individuals to develop a new concept, and empowers that team to think differently within the new ecotone, it will take that team at least 3.2 years to become fluent in their work — meaning, we would not see a viable new retail concept, if this effort started today, until 2020!
Pragmatically the real timeline is probably even further out too. Because, even if the team honed their skills on the timeline above, it would still take additional time for the leaders to acclimate to their new concepts, and for the rest of the organization to shift their thinking as well.
So we could be talking 2022 or 2023 at least until we see something viably different from any current company in operation today.
I say this having lived this too. I have spent the past four years thinking about nothing other than what the future of omnichannel retailing can and should look like in the future. It has been a long-haul just to shift my individual mindset into this new ecotone. I have scraped my knee riding the bike, just within in my own mind, many times. Every day a new technology emerges that becomes the proverbial fork in the road for the bike rider to navigate. It is an effort that is really more like mountain biking than Tour de France road racing.
But 2022? 2023? That seems really far out. I don’t know about you, but it doesn’t feel like we have that much time. If we don’t figure it out before then, “the smart people of Silicon Valley” will, and millions of people could be displaced economically in the process.
There is no time to waste. If your company has not started to create teams whose only focus is to think about blue sky omnichannel Product (big “P”) design, it may be too late. If your company is on this track, kudos to them, but they may need to push even harder. They may need to elevate the strategic importance of these teams and give them every tool and resource at the company’s disposal so that the timeline doesn’t slip. Continuing efforts to improve the core business do not matter if the business model is fated to become unsustainable by 2023.
Wall Street, investors, if you are only focused on short-term results, you may as well just harvest the business now because the path you are taking is likely just a road to long-term degradation anyway.
The only way a company stands a chance is to put their best people on the case and to empower them to disrupt everything that made the company successful in the past — to challenge these people to build a new Product that meets the unmet needs of customers in the new ecotone of retailing.
I hate to sound Darwinian but it is either adapt or die. It is either fight now or die the slow death of complacency that comes from expecting the new ecotone to be just like the cushy confines of the environs you once new.
Be careful out there,
P.S. Please remember to like, share, retweet, or leave a comment wherever you happened to have read this post (Linkedin, Twitter, Facebook, etc.). Every like, share, etc. makes a huge difference, and I cannot thank enough all the people that liked and/or commented on last week’s post.
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Here is a post from one and a video from the other that really caught my attention recently:
(Article from The Robin Report) Algorithms “Can’t Buy Me Love”
(Video of Scott Galloway from L2) Amazon Will Be Broken Up
P.P.P.S. I referenced my Top 10 Business Book list above. Here are my favorite business books in rank order:
- Into Thin Air: A Personal Account of the Mt. Everest Disaster
- Who Moved My Cheese?: An Amazing Way to Deal with Change in Your Work and in Your Life
- Moneyball: The Art of Winning an Unfair Game
- Outliers: The Story of Success
- Influence: The Psychology of Persuasion, Revised Edition
- Delivering Happiness: A Path to Profits, Passion, and Purpose
- Creating Modern Capitalism: How Entrepreneurs, Companies, and Countries Triumphed in Three Industrial Revolutions
- Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
- The World is Flat
- Shoe Dog: A Memoir by the Creator of Nike
Chris Walton is an accomplished Senior Executive with nearly 20 years of success within the retail and retail technology industries. He is well-versed in merchandising, store operations, inventory management, product design, forecasting, e-commerce, pricing and promotions, and tech product development.
Chris was most recently a Vice President with Target, where he led the retailer’s Store of the Future project and also ran the Target’s home furnishing division for e-commerce. He previously worked for GAP, Inc., as a Distribution Analyst and Manager.
Chris holds a BA in Economics and History from Stanford University, and a MBA from Harvard Business School.
He likes to dress as Darth Vader for Halloween, and his wife also frequently asks him to ask Alexa, "to turn off the music."