Guest Slot - Analysis Insider - Sarah Wilson

Collaboration should be at the heart of a retailer’s competitive advantage these days.  I was interested to hear a delegate at a recent event who had been away from the retail industry for a decade - taking a career break – say that little had changed in terms of her role within HR and training for a major retailer. 

This is rather worrying when you consider that within this same 10-year timeframe Amazon has eaten her employers – and many others retailers’ – lunches and is gradually working towards consuming their dinners too.

By stealth the online behemoth is taking business away from a growing number of retailers – without them really noticing – as it broadens its reach to such an extent that it is difficult to even categorise the business any more. It is certainly a very long way from its starting point of simply flogging books online.

The question for many retailers is whether it is a friend or an enemy – or a ‘frenemy’ as it has been dubbed? The difficulty for traditional retailers is that competing is in their blood so even considering collaborating with the likes of Amazon – by selling goods on its marketplace platform or buying some of its server capacity etcetera – is a tough call.

Retailers must learn to collaborate without losing their competitive edge but to create this new world they need to adapt their models, and quickly, because new players are coming up – borne out of the online world – and they are proving a lot more adaptable to collaborating.

Aside from the competitive streak running through the blood of every retailer, there are two other factors which hinder collaboration. Firstly the often complex operating models and organisation structures of traditional retailers fail to adapt quickly to change. 

To collaborate successfully with others you need to blend teams, share ideas, share a common vision, understand each other’s strengths and weaknesses and be prepared to adapt and change.  This is easier said than done especially when running large, people intensive businesses.

But are they?

The second factor hindering collaboration is one of mindset and it’s one that potentially splits your organisation into two. Whilst it would be a crass generalisation to say that Generation Y are more open to collaboration than others, it is fair to say that they have been more exposed to collaboration than some of their older, possibly more senior, colleagues.

The world of social media, open source, crowd-sourcing and internet transparency is a natural habitat for Generation Y and it is a habitat that fosters collaboration.  Is the mindset of your senior managers and your Board one that mirrors this or is it one that is entrenched in operating silos?

There is a generation of people in retail who have massive potential and the big retailers should be looking at how to unleash them. These younger people have been brought up to think it is completely normal to share, swap and borrow.

I’m not sure traditional retailers can make the necessary step to get into this world of different thinking unless they truly embrace the young and fearless and make the bold move of giving them some control.

Such a move clearly does work as you only have to look at the likes of Asos, which is run by people immersed in a collaborative world who use that to their advantage to create huge competitive advantage.

What we need to see is a fundamental change in the leadership model that will make a difference to the way retailers are run. We need to see a distribution of leadership around retail businesses by empowering more people and enabling them to make decisions, to drive strategy and dictate policy. Give them the bandwidth to explore new avenues.

Start with collaboration in-house and then see where it takes you.  The alternative is to sit back and watch the likes of Amazon tuck into your dinners.

Sponsored column by Sarah Wilson, retail specialist at consultancy Egremont Group