This article is the third and final in my NRF keynote preview/recap blog series covering Q&As with Peter Sheahan. He is the Founder and Group CEO of the Karrikins Group, author of the new book “Matter” and joined me onstage during last week’s NRF keynote presentation. Visit my profile page to read the two previous blog posts.
Kees Jacobs: Your research for the book covered different industries. Are there lessons from other sectors that retailers can learn from?
Peter Sheahan: Absolutely. Part of living at the edge of disruption is actually looking outside of your industry for inspiration and even answers. In the same way we are seeing bricks-and-mortar retailers having to adjust to an omni-channel world, we are seeing hardware, software, and technology companies that are responding to a cloud-based environment.
For example, Adobe did an excellent job navigating these challenges and being early in responding to the shifts, something I talk about in detail in my new book, Matter. When their entire product offering was challenged by emerging technological advancements, they decided to ask themselves, “What is the more important problem we could solve for our customers”? In their case, it wasn’t where they had come from, which to that point was content creation software. It was digital marketing, analytics, and managing increasingly diverse and fragmented media spend. So they made some very bold moves both strategically and tactically to embrace that.
Another Matter case study relates to what we discussed around environmental stewardship. Domtar, the largest integrated producer of uncoated freesheet paper in North America, has done some amazing work in the paper industry. From developing their thought leadership around sustainable paper products to transforming the entire value chain, Domtar was able to take a destructive manufacturing process and not only create a recyclable resource but in some ways actually generate a renewable one. On this journey, they went outside of their comfort zone and partnered with the World Wildlife Federation. In doing so, they were able to influence, and in some aspects neutralize, the environmental impact of the paper industry. The outcome is they transformed something most people view as a pure commodity and gave meaning to Domtar-branded paper. They partnered with an organization that until that point was kind of the enemy. That is by definition attacking a hard problem and gaining something very valuable by doing so.
Finance is another industry that can inform strategy in the retail environment. Like retail, financial services companies are increasingly being pushed either towards scale and volume, or towards defining a clear, defensible niche through a differentiated offering. The rise of Internet and mobile banking is a challenge to the branch model, and they are in this strange place where they have an older generation who wants a physical presence, and a younger one who cannot understand why they still need to carry around a wallet full of cash and credit cards, much less go to an ATM, let alone a branch.
We highlight a couple of companies in the book. What I like about financial services, as an example, is that it is so hard to differentiate in that space, yet there are companies that do it well, both small and large. I mean, a dollar is a dollar; it does not matter where you go to get it or deposit it – they are all federally insured. This is an industry whose entire value chain was villainized in the last financial crisis, yet there are companies that have successfully created a narrative and evidence of alignment with things that their communities and customers value. So, if companies want inspiration, sometimes it pays to study industries that have it tougher than they have it. Necessity is the mother of invention after all.