Updated: Jul 3, 2020
“A leader can’t lead if he doesn’t know where he is going” John Locke, circa 2004, LOST
Here we are……. 2017 has arrived!
We now live in an age where:
The fastest growing retailer, #18 on the Fortune 500, owns no stores;
The fastest growing transportation company is a private firm that owns no vehicles and is valued higher than 72% of the Fortune 500;
The fastest growing hospitality company is less than 10 years old and owns no rooms!
Are Amazon, Uber and Air BNB metaphors for where things are heading? These are young gazelles that throw caution to the wind, executing strategies that turn traditional business planning on its head. Amazon, the elderly member of the group, has yet to reach 25 while the others are still infants, under 10 years old.
Let’s look at the retail industry as a microcosm of today’s global economy. Just this past week Macy’s, one of the traditional stalwarts in the retail industry, announced the closing of 68 stores and layoffs totaling 10,000 system wide. The Limited, which at one point in time had sales over $1 billion via 750 stores, has closed it’s doors. This is a company that spawned names like Victoria’s Secret, Bed, Bath and Beyond, Abercombie and Fitch, and Express. Sears just announced they will close another 150 Sears and Kmart stores following a disappointing holiday season.
Are people shopping less? Clearly not; 2016, as in years past, yielded comfortable and steady growth in consumer spending: Take a look here!
So if people are buying more products, what’s up? Well what’s up is that people are changing the way they purchase and the lens through which they decide from whom to purchase. Not only has the internet made it easier to buy virtually anything from a comfortable seat in your living room, it has also made it simpler to apply the optics of social conscientiousness into decisions regarding with whom people spend their money.
I had a mentor who once told me that if you stick in an industry long enough you will witness first hand fundamental and profound shifts like the industrial revolution, and also have the opportunity to lead change that can help that same industry evolve to a new paradigm. I believe we are experiencing that type of fundamental shift right now with economic development.
Once again using retail as our metaphor, all trend lines point to continuing double-digit increases in consumer spending on the Internet.
U.S. e-commerce sales grows 15.6% in Q3
This being the case, doesn’t it naturally follow that store closings will lead to mall and town center closings, which will lead to massive layoffs in the retail industry? Not necessarily; retail trade as a percentage of total employment is projected to drop slightly over the next decade: Check out the numbers here.
But the answer to the question is not that those jobs will disappear, but rather they will change and evolve. Look at the latest list of Top 100 Retailers and you can see that we haven’t stopped buying, we are just buying “differently”.
A decade ago I was in a meeting where the then CEO of what is now the 9th largest bank holding company in the US said “we are done building call centers”. He went on to explain that with the rapid changes in technological capabilities, “call center work can be done in the home from anywhere. We don’t need to incur the capital expense of building infrastructure when the new model comes with higher productivity and lower cost”. At the time I thought he was crazy. After all, call centers were a significant part of any economic development portfolio.
Are you still chasing call centers?
What’s the point of all of this? A statement of the obvious: profound change is upon us. Big game hunting is a tired pastime. Talent, infrastructure and quality of life are the game-changing differentiators. To be relevant, we need to be in that space.
What a long strange trip this has been! Welcome to 2017.