Profitability isn't a buzzword. It's a big decision.

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If any theme came out of Retail Fest this month, it was that you know you are getting old when you prioritise morning beach walks over nightclubs. It was also... profitability.?

As if we had finally discovered the golden secret to successful business, profitability was mentioned in every panel, presentation and pitch. The train has left the growth station and chugged onto profitability. Surely, cash flow is the next stop.?

There was just one problem. While there was lots of talk about the need to be profitable and how to measure profitability, there was less talk about how to be profitable. That part is a bit harder.

But it's not just SMEs struggling with profitability. We are also seeing big businesses change their long-term strategy to focus on profit.?

Some approach it by making big people and team decisions. Myer just made the difficult decision to cut 13 roles across ecommerce and operations. (I know many of the team there - they are superstars if you are after new team members).?

Others, like Kogan are changing their inventory model. According to their results this week, gross sales were down 6% but profit was up 14%. Why? A focus on non-tangible goods such as marketplace transactions, travel sales and membership subscriptions.?

Or it might be technology. Earlier this month, Amazon announced that it is pulling back on the rollout of their 'Just Wak Out' technology in grocery stores. It's a big move after ten years and a very public ambition.?

These are all big strategic decisions, not 1% incremental improvements in profitability. Given we've had over 12 months of retail environment softness, it's likely that you've squeezed many of the 1%'ers already. And with no sign of it ending any time soon - who brought up interest rates again this week ?? - your path to profitability may lie in the big strategic decisions. Don't be afraid to make them.?

Cheers?

Bushy

PS. The most interesting 'profitability tip' I heard at Retail Fest was to enter your tech stack into a GDP and ask it to spit out an optimised version. Don't make big strategic decisions for this but please share for a giggle. That's a good Friday afternoon activity.?

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?? Bank-to-bank payment specialist Waave has released the ability to make bank transfers using their Waave wallet and biometric identifiers such as facial recognition and fingerprint detection. This is apparently a first for Australia. To say I understand biometric identifiers is like saying I understand Open Banking protocols. But it sounds impressive.?

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PICK YOUR BRAIN SESSIONS

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Nathan Bush is an Australian ecommerce coach and strategic advisor for Australian retail brands. You can 'Pick His Brains' here.