Keeping Customers at the Core of Your Retail Growth Plan
Is your growth strategy keeping pace with the speed of business?
The accelerating rate of change in our world is stressing retailers’ ability to design, validate and launch strategies to stay relevant in the marketplace.
Typically, companies develop their strategies by analyzing their past strategies, using correlation analyses to determine which variables—price, product, etc.—they should focus on to unlock additional growth. This analysis of historical data used to be sufficient to chart a growth path. But in today’s rapidly changing environment, companies need more than correlation; they need to understand causation.
Many retailers remain overly focused on analyzing the past, while some leaders are beginning to incorporate human-centered perspectives into their planning. Developing growth strategies often still feels like a quantitative, time-consuming analytical process delivered via Excel spreadsheets and massive slide decks that some companies liken to “boiling the ocean.”
Meanwhile, executives are noticing the disconnect between what they need now and what they’re getting. The traditional rhythm for updating growth strategies takes too long and fails to meet the challenges of accelerating change. Unfortunately, growth strategy is considered the end-product and is seldom validated in the real world. Even in the hyper-focused growth world of Venture Capital, 65% of investments lose money¹. Executives are weary of wasting months and millions on strategies that don’t pan out.
No wonder leading retail organizations have begun adopting a more human-centered approach to their growth strategies. It arms them with insights into why customers are making purchase decisions, so they can craft a strategy based on where the market is moving—not just where the market has been. The faster things change, the more this approach to growth matters.
We help companies pursue growth from a different point of view: that of the customer. In fact, this is where we begin with growth strategy—with a human-centered focus on our customers’ customers.
Anchor Strategy in Deeper Customer Insight
We believe that using customer insight to drive strategy is essential to better understanding where the market is moving and where new opportunities exist. Across all industries, we see a growing demand for methods that will deepen customer insights, along with a growing recognition of the strategic value those insights bring.
Quantitative work has its place. But we encourage companies to begin with qualitative research to gain a deeper understanding of why customers are choosing them and buying their offerings. Find ways to meet customers where they are. Conduct observational studies. Create pilots. Ask questions and listen closely to the answers. Let one “why?” lead to another, going beyond initial responses to understand what truly drives purchasing decisions. For example, one global retail company we work with had learned that “connection” was key to their customers. But only by following up and digging deeper were we able to discover what this really meant to customers—and why it mattered so much. That was the foundation of a winning strategy.
Go Farther, Faster with Co-Creation
With human-centered insights about customer needs in hand, we help leadership create a vision for growth that answers and aligns on a few key questions. What is their #1 goal? What do their customers care about most? What are their choices for moving forward? We ask these questions in formats that are quick and easy for leaders to do. Their input gives us a top-line set of options. We get a strategic vision on paper, then validate or pressure-test it on the back end as needed.
This co-creative process is completely different from the typical approach. It changes the order of events: Begin with the answer. Then put it to the test. Does the strategy make sense to customers? Let’s ask. Is there money in the strategy? Let’s crunch the numbers. Let qualitative insights drive your quantitative work.
Using this approach, we helped a client refresh its strategy in record time—during the pandemic. We emailed a MadLib-style exercise to 20 senior executives. Within 15-20 minutes, we had valuable input on their areas of focus, what they aspire to do for their customers and their timeframe. After discussing their responses in a one-hour interactive working session we drafted a strategic vision—a milestone that, in the past, had eluded them after eight months of effort.
Our customers’ marketplaces, and their competition, are not sitting still. Leadership can’t afford to wait for a grand growth strategy reveal. Instead, we gather input, discuss it, and get a growth strategy on paper. Within weeks, it’s ready to be tested in the real world.
Take a Test-and-Learn Approach
As you might imagine, a human-centered approach leads to thinking differently about growth. It doesn’t focus so much on delivering the “right” strategy; it focuses on getting a customer-centric strategy on paper and then testing and learning into the growth strategy. This approach gives stakeholders a path forward in which they continue to learn about the strategy, gaining confidence and ownership as they go. It’s a shift in mindset that resonates with leaders who realize that many elements of a new growth trajectory will require learning, such as how to incorporate AI to improve customer acquisition and retention. It engages employees to think about strategic issues and come up with solutions. This creative, test-and-learn mindset is core to growth strategies that put people first.
When your leaders have been engaged in co-creating your growth strategy, it ensures their buy-in from the start. Now you can build that alignment on key strategic issues that integrate quantitative trends with qualitative customer insights to identify new opportunities. For example, on which current offerings will you prioritize going forward? How does this focus align with addressing your most important customer needs? What new offerings should be considered to realize your future state? We recently helped a customer brand to align around where to invest now—including new software-as-service business models.
Human-Centered Growth Requires a New Approach
For decades, creating strategy has been seen and sold as a financial-first exercise. But more and more, leading companies are relying on human-centered insights to develop compelling growth strategies because they realize that understanding “why” customers buy their offerings is more important than “what” customers bought in the past. It’s time to shift focus from the rear-view mirror to the customers alongside you now—and give even more people compelling reasons to join you moving forward.
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