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Three New Retail Strategies

The Three New Retail Strategies

Looking at traditional retailers, internet giants, startups, slow movers and fast learners, we have identified three distinct strategies to move into the New Retail paradigm. Like any other strategy, it is an exclusive choice that forces us to abandon the other two options so that the chosen one will lead us to success if implemented with grit and discipline. All three approaches are good, it is just a matter of choice.

1. Becoming New Retail

Traditional retailers can transform themselves into a New Retail company. They can do so by building the pillars of New Retail step by step. This strategy is best achieved as a succession of mid-term projects. Each project opens new possibilities for the retailers to collect and analyze more data by offering their customers more options. 

Pros of Becoming New Retail

The advantage of the Becoming New Retail strategy is that the brands keep control of its image, the relationship with its customers, and the data it collects. Another advantage is that internal organizations can evolve with the new business model when loyal and long-term employees can have the time to learn and adapt themselves.

Cons of Becoming New Retail

The Becoming New Retail strategy will be challenging to implement in a company that is too far behind the curve. 

It will take too long to just catch up. It will also be difficult to allocate resources if the brand is under attack on other fronts, failing to sustainedly finance its transformation.

2. New Retail Partner

The second strategy is to partner with a New Retail company to add the missing pieces to the business model. It can be achieved by a strong partnership with one of the major players in the area. It involves both a business deal and strong IT integration.

Pros of New Retail Partner 

Implementation of a New Retail Partnership is fast and will deliver results almost immediately. It makes for good press releases, demonstrating the willingness to evolve and to better serve your customers.

Cons of New Retail Partner

Partnering with New Retail players means that the retailer organization will not evolve dramatically. The innovation may remain on the surface, which will never truly benefit the retailer. Such partnership will also inevitably lead to the retailer's dependency on its New Retail partner.

3. New Retail Startup

The third strategy is to create a New-Retail-specific brand, developed as a Startup. It can be done via acquisition or spin-off. In this approach, the traditional brands stay the same and continue delivering traditional services, while the new brand develops its new scenarios, processes, and insights.

Pros of New Retail Startup 

The advantage of the New Retail Startup strategy is that progress will be seen faster than the Becoming New Retail strategy while retaining the retailer’s complete control of the operations. The New Retail Startup can leverage the resources of the traditional retailer while operating at the speed of a Startup.

Cons of New Retail Startup

Building a new brand means allocating additional investment to raise awareness on the new initiative. It can be mitigated by creating a new brand close enough to the original one that’s better known. To achieve full benefits of the New Retail Startup approach requires additional investment in bringing the innovation back to the brand or a plan to gradually make the initial brand fade away. In both cases, the abundance of time will be crucial for the retailer to achieve its goal.

How to choose? 

It is, of course, the most challenging question. Each brand must have a closer look at their internal capabilities, the skill-set they miss, at the investment they are willing to make into this much needed transformation of their business.

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