Digital reinvention

BY Dan Mack

The Idea: Recent research by McKinsey has uncovered that only 8% of companies believe they will remain viable if digital continues at its current speed. Only 16% of companies have taken steps to exit declining businesses & invest in digital reinvention. And even more alarmingly, only 5% of companies actively seeking digital transformation report that they have met their goals. Why are so many companies failing with digital reinvention? We are not embracing fast learning or experimentation and are married to fatal perfectionism. Advantages don’t last forever.

Digital winners act differently and ask different questions. Digital and brick and mortar have become one; the very best brands and operators eliminate buying friction, which is why the price is less important to their customers. They measure digital traffic and awareness but it’s all about converting the right customers. Omni-channel customers spend 4 to 6 times more than store-only consumers.

Our most recent Digital Disruption Summit included ideas shared by Google, Facebook, IBM Watson, Bain, Kantar, One Click Retail, and L2 (Division of Gartner). I want to share 30 growth ideas from this special summit.

  • How to win today: hire “Hackers, Hipsters, and Hustlers.” Embrace outsiders.
  • Quit benchmarking brick and mortar brands; the new standard is “digitally-only” brands.
  • When you are competing against an algorithm, your advantage is “your humanity & your soul.”
  • Value is transient; we must constantly reinvent our current advantages.
  • Organizations today must embrace a “Start-up Mindset” to maintain an advantage.
  • Does your organization struggle with a “Gap in Imagination” or is it a problem with EXECUTION?
  • Move from “Business Plans” to “Roadmaps”; Be adaptable & address changes in context.
  • If you are unable to “flex,” you are operating with a competitive disadvantage.
  • Leaders must be astute at asking better questions to help their organizations get “unstuck.”
  • Does your brand tell emotional stories that inspire others to act? Facts don’t compel, stories do.
  • What new services should you be selling that support your tangible products?
  • Is your brand creating memories that last?
  • Perfection kills. Think Progress, not perfection in all aspects of your business.
  • We have an 8-second attention span. Are you grabbing other’s attention quickly enough?
  • Agility and speed are not options; they are requirements in this new world.
  • 84 percent of the world doesn’t use an iPhone. How does your brand show up on an Android?
  • Currently, 20 percent of search is activated by voice. Are you keeping up?
  • More than 80 percent of millennials EXPECT personalized offers.
  • Who are you looking to for inspiration outside of your business segment?
  • Your brand website is still your #1 brand advocate and is the most persuasive influencer.
  • Which competitors should you think about partnering with today?
  • “Search effectiveness” will drive the next group of brand winners.
  • B-to-B is still about one idea: “Can I Trust You?”
  • Winning the top 6 U.S. cities means winning the 4th largest economy in the world.
  • Build a human-centric, understanding culture. Focus on people’s internal needs, not consumers.
  • Create a learning-obsessed organization, allowing you to “out-think” and “out-listen” others.
  • Currently 79% of consumers would rather learn through video.
  • The Five P’s (Price, Product, Page, Promotion, Placement) leads to Performance (6th P).
  • The digital shelf: 90 percent of purchases begin with search; over 80 percent of clicks stay on first page, with 64 percent of the clicks on the top 3 items.
  • According to Bain, there are 36 elements to create value in the B2B world. Intangibles such as social responsibility, design, esthetics, reputational assurance, vision, reduced anxiety, flexibility, expertise and other valuable intangibles are how we win the price game.
  • Are we trying to sell them something or are we trying to listen intently to help them?

You can’t ignore the new rules. Learn to embrace the act of reimagining everything. Organizations need a wider lens, so they don’t miss new opportunities or partners. Embrace the excitement and ambiguity of the moment.

Digital Darwinism means technology & society are evolving faster than we can all adapt. Are you comfortable being uncomfortable?

To learn more about Mack Elevation’s coaching, consulting, training and leadership events visit


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Which area of the industry do you think Amazon's entry would shake up the most?

Living in retail’s digital theme park

BY David Orgel

You can see that deer-in-the-headlights look on the faces of some retail executives.

Fast-paced digital disruption is having its impact.

Amazon-Whole Foods was the highest-profile wakeup call. However, it’s far from the only alert. A range of players are battling for advantage in this space — from ecommerce to digital marketing — all powered by new technologies. These include tech players like Google and Facebook, as well as such traditional operators as Walmart, Target and Walgreens.

Fear can be paralyzing to the retail industry.

Excitement, on the other hand, is contagious.

I felt excitement in hearing recent comments by Narayan Iyengar, the senior vice president of digital and e-commerce at Albertsons. At the Shoptalk conference, he was asked point blank why he decided to leave Disney about a year ago and come to ‘oh-so-glamorous grocery?’

“I’m here because this is where action is,” he asserted during the event’s Grocerytalk track (now being reintroduced as the Groceryshop show). “In the e-commerce and digital space, the next five or so years in grocery will have tremendous change. It’s very exciting and it’s all happening here.”

That’s contagious excitement, and Albertsons has already made some impressive moves. And to be clear, the excitement isn’t just for grocery, far from it. The same can be said for all retail channels, because they are being transformed by digital developments.

The key is to look at the digital battlefront from the high ground. That means getting out of the weeds and going hundreds of feet up.

What do you see? Using a Disney analogy, I see a new kind of theme park. Retail has become a digital theme park — there’s E-commerce Land, Digital Marketing World, Artificial Intelligence Village — and so on.

OK, maybe you say this sounds fairy-tale-ish. Or you maybe you think this isn’t your version of fun. Perhaps you don’t like the rides. But this is where the action is.

Plus, there’s really no choice. There are signs that e-commerce will move faster at retail than expected. Pure-play e-commerce companies are benefitting from access to data that’s more robust than physical-world data. Mobile marketing is proving itself as a retail star. Retailers are already offering case studies on how technologies ranging from augmented reality to machine learning have provided advantages for customer experiences.

No one knows how all this will play out. There’s no guarantee of a fairytale ending.

Nevertheless, this is once-in-a-career excitement. The trick is to feel more excitement than fear.

What does it mean to move forward in all this?

  1. Experiment, test, and learn. No one has all the answers;
  2. Pick your spots. You don’t want to battle Amazon across all its businesses;
  3. Don’t forget about the physical store. Digital strategies will help advance the store; and 
  4. Keep your focus consumer-centric. It’s best to be agnostic about platforms. Let the consumers decide.

It doesn’t even matter if a retailer embraces digital for the right or wrong reasons. There are cases in which retailers decided to switch to digital advertising and marketing because it saved money over print. That’s probably not the most visionary reason to go digital, but whatever gets you there is ultimately okay.

I see some incredible new senior digital talent being added to the traditional retail ranks. They are passionate. Tap into that excitement.

The point is, engage with this new digital theme park.

You can even learn to deal with the digital roller coaster.

David Orgel is an award-winning business journalist, industry expert and speaker who was the longtime chief editor and content leader of Supermarket News. He is currently the principal of David Orgel Consulting, delivering strategic content and counsel to the food, retail and CPG industries.


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Which area of the industry do you think Amazon's entry would shake up the most?
Toys R Us

Editor’s note: Game over for Toys ‘R’ Us

Lack of investments stalled steady growth

BY Seth Mendelson

What killed Toys “R” Us?

If you think it was a combination of intense competition from other traditional retailers and online operations like Amazon, you are only half right — if that.

The rest of the load falls squarely on the private equity companies that bought Toys “R” Us over a decade ago and saddled the company with more than $5 billion in debt. That is billions with a capital B, and it was enough to prevent the chain, which was already under intense pressure from Wall Street for some previous serious missteps, to keep pace with its competition.

In case I am not totally clear here, let me put it another way. Toys “R” Us will go down in retail business history as a poster child for just how badly private equity operators can ruin a business — a venture so big that at one point some said it was simply too large to fail. By the way, that says a lot, because private equity does not have a very good record when it comes to the retail industry.

The problem with private equity money is that it comes with a very crucial string attached: make lots of money and do it quickly. The folks that got involved with Toys “R” Us and some other retailers have failed to see that retail requires constant investments in infrastructure, marketing, assortment and advertising. Starting a new venture a few billion or more in the hole caused the leadership to forgo some of these necessary investments in hopes of returning dividends to the investors. Just a wild guess here, but I do not think those investors in Toys “R” Us are very happy right about now.

Consumers noticed the lack of attention pretty quickly. I know that I did. Organized clean stores with the right assortment of products turned into a maze of junk on messy shelves, and not enough in-store help at crucial times of the year. Shoppers left in a hurry, most to chains like Walmart and Target and, of course, Amazon, which offered more basic assortments but in much neater surroundings and often at lower prices.

Many people will say that the chain had it coming to it. The bottom line is that Toys “R” Us did a great job of putting just about everyone else out of the retail toy business over the last 30-plus years. It did so at one time by using devastating firepower — a lethal mix of great prices, broad assortment and strong advertising — to make toy retailing virtually impossible to be profitable for other retailers.

The lesson, of course, is that to be successful retail needs to be run by professional merchants, those individuals who know that this is not a sprint, but a marathon. And private equity does not normally work very well with retailers. Just ask the folks at Toys “R” Us.


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Which area of the industry do you think Amazon's entry would shake up the most?