We Lost The "R" Focus In Retail And Need It Back Fast!

"There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else." - Sam Walton, Founder of Walmart

This week: - Markets and the Consumer are not really in synch. - Second, what happened to the "R" in retailing? - Then Society and Politics; "By George I think I've got it this time." - The Environment: 18 Invasive plants that can damage the economy. - Technology: Your human work could be AI Generated. - At the end of the day, I suggest everyone with plans for a career in anything becomes a Street-Smart Leader

Economy: Markets and the Consumer

The numbers say a lot; if you've been in the market since the beginning of the year, you may also be doing well. However, Main Street has a very different experience from the stock market and investors. They are grappling with higher costs and a slower economy; even though it may look like a soft landing, it will only be if central bankers act fast enough! The US has signaled that it is time to lower rates, and Canada is likely on its third and perhaps fourth rate cuts this year. However, consumers in Canada are paying 20% more for mortgages, so in general, expect a small rebound from the lowering of interest rates this holiday season.

On the inflation front, Canada and the US seem to have tamed the beast, or at least they are confident they are in the right direction. Canada's retail sales were down again -0.3% in June, and the clothing and shoe sectors were up by 1.0%; however, price inflation was down by 3.0%, which reflects a lot of $ales events and signage this last two months to prove it. Albeit discounting means they also have a lot of products to move. In addition, Halloween and Christmas merchandise are already on shelves, which means a tougher fall is coming. The US economy is, by and large, healthier. Still, one has to wonder how much shopping is based on debt on both sides of the border.

On another front, oil prices are under pressure because of China's push to go greener. Ford's plans to focus on smaller EVs and Hybrids means more growth for Tesla. In the world of technology, AI is becoming more pervasive, and it will begin to impact how we compete and work, as well as the opportunities available as early as next year.

We are not out of the woods yet; interest rates still need to drop to 3.0% for consumers to rebalance their cost of living.

Personal Log: How We Lost The "R" in Retail

You should know that I am not kidding about this. So, I will not beat around the bush. We talk until we are blue in the face about retail therapy, customer experiences, personalized service, messaging, merchandising, and collections. Yes, all those things matter; however, at the end of the day, what it comes down to is that consumers may need to be more in love with your brand. The romance either never started or was damaged, just like any relationship where trust is lost or is one-sided; you believe customers love your brand.

“Love is that condition in which the happiness of another person is essential to your own.”― Robert A. Heinlein, Stranger in a Strange Land

The R in retail stands for "Romance," but as the quote suggests, a retail brand's happiness is about making the other party in the relationship happy. If this romance does not create happiness, then neither can we be friends, and most relationships break up because there is no friendship.

All of this must be earned. I walked into a retail store one day, and a man approached me to say they were busy right now, but if I waited, I would be very pleased with their fabulous service. That was a customer! All retailers need to have that same type of relationship with all their present and future customers. This person was clearly in love with this brand, which happened to be an independent retailer in Oakville.

So, how did we lose the R in retail? In a rush to strip out costs, modernize, and optimize, we traded the warmth of genuine interaction for the cold efficiency of digital engagement, and most of them not very well. They became enamored with the latest trends and gimmicks, forgetting that at the heart of every purchase is a person seeking a connection, not just a product.

Think about it: Some people are in love with a brand of chips, ice cream, shoes, airlines, computers, and furniture. If anything goes wrong in that relationship, it could be irreparable. Managing the R-Factor requires a lot of attention to detail, from manufacturing and service to selling and flawless operational execution.

So, we lost the "R" in retail when we stopped courting our customers, striving to make them feel special, and assumed that loyalty was a given rather than something that had to be continually earned. How do you get that romance back? By rekindling those activities that left a powerful emotional feeling about being in and experiencing your brand. You would be on the right track if it can lift their hopes and dreams. So many products and services are deemed aspirational or of value. Messing it up can cost millions in sales and profits.

If retailers (all businesses) are not careful, the customer will become even more distant as we integrate AI. Work harder to build and establish that romance now if you want to stay in business. Once AI comes into the picture it will get a lot harder to get close to your customers.

Society and Politics: "By George, I think I've got it."

I have concluded that a balanced societal approach is better than bitterness and hate. Unfortunately, the latter seems to be winning. Here's why.

Throughout human history, innovation and progress have had one endemic problem: they tend to leave those least prepared for change behind. Often caught off guard, not expecting the coming changes, they see them when it's too late or worse, dismiss them. The division begins with age-old human behaviors starting with blame, turning into anger, followed by hate and even dangerous actions. Politicians use a lot of this as gaslighting to win elections.

Many people are angry at their governments worldwide for the shortfalls they've experienced in life. But the question is, who is accountable for me and you? It is ourselves. I believe the government owes me nothing but a secure nation; everything else is up to me. Like you, I am smart, educated, and wise enough not to line up for the hate and divisive party. No single government can prevent financial crashes, pandemics, or war. It cannot stop an industry or organization from failing miserably because of poor strategic choices or leadership unable to adapt and compete another day. Paying attention to that light at the end of the tunnel is important. It may be another train or an opportunity.

So, by George, yes, I've got it! If I want to improve my life, I own that, and I am not counting on a change of government to improve it; that's political BS.

Environment- 18 invasive plants waiting to change our lives and the economy

A short scientific review of over 1700 foreign invasive plants in the US, 18 of which can impact us economically between 2040-2060 because of climate change. That may seem a long way off for some, but not your children and grandchildren. The agricultural industry knows climate change will affect our food supply; many have discussed it, and these plants can be destructive. That puts future food scarcity and inflation on the kitchen table. Economist Story on the awakening of harmful plants?(subscription may be required). What we should keep in mind is that with climate change, it's not just invasive plants, rising water tables, and warmer weather; there will be a great deal of human migration away from the hardest hit areas.

Technology:?Your Human Work is AI-Generated

I often use Grammarly because I am pressed for time and need someone or something to help proof my work. I don't always agree with the AI platform, but I use it. However, yesterday, I read an article by someone who is a technology expert. Their article was published in a well-known national magazine, where they are sometimes featured. I will not name them or the periodical for good reasons. I was going to use their article as a reference for you in this newsletter. But something wasn't right about the article. It was too clean, precise, and overindulgent with repetitive phrases.

I tested their text against Grammarly, which also has an application for testing for plagiarism and AI content. The writer's content tested 53% AI-written; I wondered if it was accurate, so I tested it with ZeroGpt and Quillbot in both instances. The first was 97.4%, and the other was 100% AI-written content. Now, nothing is 100% accurate.

I am so curious that I tested even this post you are reading to see if the machine is messing up. This post has zero AI content. I tested all the content here, and it is not AI-generated. I recently wrote an article for a magazine, and while checking for punctuation and clarity, it also told me that it was 20% AI-generated. It was impossible because it was all in my thoughts. Determined, I took a passage from Shakespeare's A Twelfth Night, word for word, and tested it. The website said it was 51.75% AI, but it wasn't. It was the exact way Shakespeare wrote it. So what's going on? Not all platforms are reliable and are only as good as the algorithms and data on which they are trained. But there may be something else happening as well. As we train these machines with human content, it may become more difficult to differentiate human written thoughts from AI, and we may even pick up some of its habits. What I do know is that there is a reason many in the news world are worried, as some media agencies are using AI to generate content. Interesting times!

At the end of the day, Become A Street-Smart Leader

The world continues to spin with all its social, economic, environmental, and black swan moments. Whether you work for someone, lead a company, or work for yourself, the challenge in a career is to be a street-smart leader. What does that mean?

It means you are in touch with, sensitive to change, and alert to the world around you. When I reflect on all the development I have been provided, PepsiCo's executive development program elevated my thinking, impact, and influence. It allowed me to impact my roles and improve the performance of every brand I was responsible for. I've even dedicated a chapter to "Street-Smart Leadership" in my upcoming book," Predictive Leadership": How Humans and AI Will Transform Organizations, Innovation, and Competition. Because organizational change is constant, many external factors impact our decision-making. You may want to read this LinkedIn post-Street-Smart Leadership

Thank you for reading this week's issue of "The Business Brief."

Click on the image for more information