Optimize, Criticize . . . But When In Doubt, Don’t Stand Out!

This seems to be the golden rule in retail these days!

SKU, brand and supplier rationalization, remodeling stores, tweaking adjacencies, and clearing clutter—all are optimization strategies that, when fully “optimized,” create an incredibly neat-looking and sanitary shopping experience. They also have led to the most boring store environments most of us have ever experienced as shoppers! 

An uncertain economy and maddeningly unpredictable customer habits have created what can be described only as “optimization mania” among major retailers. The result has been (at best) squeaky-clean stores without an ounce of what actually might pull the retail business out of the doldrums: creativity, newness and excitement. 

Many retailers have tricked themselves into thinking that optimization and creativity are one and the same. They aren’t. And the consequences of this misconception are becoming increasingly obvious to shoppers. The current debate over optimization tends to center on if it hasn't gone far enough or has gone way too far. (Couldn’t you just smell the schadenfreude among suppliers when Walmart’s numbers began to slip on the heels of its full-tilt execution of Project Impact?) Either way, these arguments miss the point completely. Although some optimization strategies move the needle and others don’t, what’s missing is the concept of creating a new and exciting experience for customers—one that goes beyond editing and extracting from what retailers already have.

Retailers try to play off optimization as simply providing what customers want: a clean, organized shopping experience. Of course, that’s something that shoppers should expect at a minimum. Early-stage optimization strategies do tend to correct errors to the benefit of shoppers; but it doesn’t take a genius to see that ongoing optimization is really all about driving efficiencies for retailers. That goes for branding too, by the way.  Can retailers stop pretending that bursting-at-the-seams private brand portfolios (another form of optimization) are driving more than their bottom lines?  Customers are not clamoring for these brands—they are adapting to them.

The consequence is that shoppers are becoming disengaged, conforming to lowered expectations, and feeling less-than-grateful to retailers for cleaning up messes (and taking away choices and dulling the shopping experience in the process).  No wonder shoppers enter into retail stores, thinking, “Is this really about me?"  Yet retailers march on with their optimization projects and barely differentiated mantras!

Until retailers acknowledge that optimization is not the same as creativity, they will be stuck in a loop of imitative strategies that ultimately set customers adrift . . . or bore them silly. To differentiate, retailers must make a move and step out of the box. We've written about retailers like Sears that have literally done just that by basically ignoring the stores altogether for the short term and instead, making out-of-store platforms the primary focus.  Like it or hate it, their approach feels fresh by comparison, and certainly more honest.  Continuing with the "work with what you have” system is not going to cut it.

I've been predicting the end of the optimization era and the ushering in of a new creativity in retail.  The only question is when this much-needed revolution will begin . . . and who will lead the charge.  Retailers such as Best Buy and Sears have thrown hints but to me, it can’t arrive fast enough!

Who do you see pushing beyond optimization?  Which retailers are laying a foundation for the new creativity?

P.S. As often happens when I start cogitating on a posting, supporting ideas began coming out of the woodwork at the same time. A posting from Seth Godin appeared the day after I began this posting. In it, he perfectly expressed my sentiments: