The secret a successful retail expansion is not what you think
The Real Reason Retail Expansion Fails (Hint: It’s Not Strategy)
If this blog is reaching its correct audience (thank you SEO), let me introduce you to a new concept that I, just now, created. I call it the ‘holy trinity’ of retail expansion, which is:
- When’s the soonest we can open?
- For how many geographies are we planning?
- What’s the growth looking like?
These are essentially the three questions, or should I say pillars, that the conversation revolves around in a boardroom. Afterall, all of the above three questions are directly related to the bottom line of the business, and you’re the one who is supposed to have all the answers.
But what if I tell you that there’s another pillar, or shall I say foundation, upon which the ‘holy trinity’ lies, which is certainty.
Let’s take the case of two brands who have a mandate of opening the same number of stores in the same locations. Both of these brands’ experience can range between the polar opposites of a spectrum, the ends being anxiety and confidence, depending on the foundation of their expansion programme.
And that foundation is certainty.
The hidden reality of a retail expansion
As humans, we have a tendency to sway towards linearity, and there’s a term for it, called linearity bias. It is essentially a cognitive shortcut where we assume that a cause-effect relation follows a straight (read linear) line. It is the easiest way to plan things, with retail expansion being one of them.
But retail expansion is anything but linear. There are a million different friction points in a retail rollout:
- Differences in regional interpretation
- Challenges in coordinating with vendors
- Last minute changes that affect the tasks planned downstream
It is easy to look at them, call them ‘part of the process’, scrub them under the table and move on. But what we’re doing is essentially normalising unpredictability in the form of a loosely planned execution.
Unpredictability is the hidden tax on growth
The impact that unpredictability has isn’t just visible in timelines and budget, but it also leaches on to other, more subtle, scenarios where it’s hard to quantify, but easy to feel. The leadership gets sceptical about their team’s ability to oversee a large-scale retail rollout, and the regional team starts to second guess everything that central leadership plans.
Here, unpredictability isn’t just affecting retail execution, but also the way teams collaborate with each other. This is the tipping point where unpredictability becomes a strategic concern.
Redefining predictability in retail terms
Predictability in operations has been the toughest foundation to set. It isn’t the challenge to develop predictability per se, but rather, the misunderstanding between what actually to work on to develop it vs what the best approach really is.
Central leadership generally tackles unpredictability by tightening their claws into the project. While it works to an extent, it promotes micro-management which is counter intuitive to predictability, as it results in poor conversation quality between teams.
Instead of focusing on rigid control, they should rather work on removing variability, and it majorly requires a good look at the following four things:
- Communications between teams
- The motive with which the budget is utilized
- Conscious design
- Anticipation of changes
Post a relook, a brand that has variability under control finishes faster than a brand with a more aggressive expansion plan. It’s easy to understand why, as they don’t have to pause to troubleshoot a problem.
Anmol Dham is a Content Strategist at D’Art Design, where he crafts meaningful narratives that elevate brand experiences and spotlight design thinking.
Known for his curious mindset and a keen eye for detail, he delves into topics others often overlook, and brings fresh perspectives that are backed with solid strategy and analytics.
and new opportunities in the retail world.