Driving Retail Growth: Top 5 Myths Dispelled

Doug McMillon, the CEO of Wal-Mart, is just 47 years old. He's using that youthful vigor to begin shaking things up at the biggest of the big boxes. My favorite story about this dynamic CEO is that he ordered every top executive at Wal-Mart to read a book about Amazon.com founder Jeff Bezos.

McMillon wants his team to focus on how Bezos, while creating Amazon, studied Wal-Mart's strategies of acting fast and experimenting often. (Get it? McMillon is reclaiming the "eye of the tiger.")

The retail sector is in flux, with established players like Wal-Mart (besides studying Bezos) vowing to open smaller, more intimate stores. At certain companies, "omnichannel" is the way of the future; at other chains, it's a four-letter-word. And still other retailers are closely watching Alibaba's ballyhooed entrance into the North American market.

What to believe? What to dispel? What retail strategies will work and what should you discard? Here, I dispel the top five retail myths so that you can spend time doing what really matters: supercharging your chain's profitable growth:

Myth No. 1: It's up to brands to analyze a shopper's behavior. Knowing when to run a promotion or create a brand extension is no longer the exclusive purview of the companies that own and market brand-name goods. Only by working with retail chains to analyze point-of-sale data can brands fully realize their potential. Technology gives both enterprises a way to understand every shopping basket before it gets filled or abandoned.

Myth No. 2: The consumer is a front-office concern. Your company has invested in state-of-the-art software platforms to get a 360-degree view of the organization, so start collaborating! Institutionalize processes and leverage technology to ensure that various parts of your company work together seamlessly. This means your entire value chain is in it to help improve productivity and satisfy consumers.

Myth No. 3: These days, technology is what delivers results. 
This is what I like to refer to as a bomb looking for a war. Your enterprise shouldn't look at a fancy software suite or a spare-no-expense big data analytics program as the end-all solution to a problem. Instead, try to frame technology in general as an integral part of your approach to tackling complex business situations. Anyone can leverage technology to finish a big project or solve a problem at hand, but the most successful retailers leverage technology to enrich business capabilities and build competitive advantage.

Myth No. 4: Privacy is the biggest of trade-offs.
 In its Engaging Digital Consumers survey, Infosys found that web-oriented consumers are actually quite comfortable with sharing some of their personal information to retailers if they know they're getting a cool deal or access to a special sale in return. There's an enormous amount of untapped consumer data out there. Retailers need to be clear about the questions they want answers to, look for the data that will provide an insight to answering those questions, and take action based on that.

Myth No. 5: You have to be an established player to be a brand/retail leader.
 We all have consumer packaged goods (CPG) brands that we will never part with — we've used certain soaps, toothpastes and shaving creams for years. But the CPGs that manage those stables of trusted brands would do well to watch out for smaller players that can sometimes run circles around them in their local markets. Want to catch a large brand off guard? First, be practical and relevant to the organizational context. You won't outsell the established players during the first week. Second, make sure you're laser focused on the consumer, have short cycle times and accelerate your path to value. Gone are the days of 18-month delivery cycles. Remember, as Wal-Mart's founder used to say: Act fast and experiment often.

Prateek Sinha is associate partner, retail, CPG and logistics, for Infosys, a provider of technology, consulting and outsourcing.