I was brought up on the bleeding edge of technology. Growing up in the 1970s, I had the chance to experience the latest in consumer technology. My parents were early adopters and always seemed to have the most recent electronic gadgets in the house.
The list of high-tech toys was impressive: 8-track music tapes, CB radio, quadraphonic music systems, a Betamax video play- er and laser disc movies (plastic discs the size of a vinyl record that, if you got one scratch, be- came inoperable).
You can probably see where this is going. All of these prod- ucts were touted as the “latest and greatest,” only to be quickly overshadowed by other, longer-lasting technology—VHS recorders, CDs, DVDs, surround sound and cellphones. This isn’t to say that these products were not good—in many cases, they were technologically superior to what replaced them—but they did not capture enough of the public’s interest to be a sustain- able business.
Instead, products that adequately did the same thing but at a lower cost became the dominant product (with the exception of the 8-track. That was just a dumb idea).
Trend Chasing
In retail, we are constantly being tempted by new programs and “solutions” that chase trends. Companies are installing fancy new equipment, creating spe- cialized food offerings through their new kitchens and building beautiful new stores. And, in many cases, the message is that these are the things that we need to be doing to be a successful business. As a small retailer, you are constantly living in FOMO (the fear of missing out). You read that other companies are doing these things and feel you are going to be left behind
Frankly, that is a dangerous view to have. When you are run- ning a small business, you must be very careful about the new ideas and concepts that you try. You have a limited amount of time and money that you can ex- pend, so you want to make sure that you invest in something that will work for you and earn you a return, whether that return is fi- nancial (more money!) or emo- tional (helping the community!).
Look Closer
Look at who is implementing the new ideas. Are they large chains?
As a small retailer, you are constantly living in FOMO (the fear of missing out).
Is the flashy store a newly built site? Has the program been rolled out to a sig- nificant percentage of the company’s stores or is it limited to one or two experimental sites?
Once you understand if a program is viable in general, then you need to look at the specifics. Does it fit into your current business model? Does it meet the actual needs of your customers rather than the needs the manufacturers project upon them? Once you put it into place, do you have the expertise, personnel and finances to sustain it at a high level for the next 10 years?
The EV Example
For example, I have no doubt that electric vehicles (EVs) are the wave of the future and will even- tually dominate private transpor- tation. What I’m not sure about is whether the traditional conve- nience store is suited to be in the
EV-charging business.
I recently participated in the Convenience Leaders Vision Group (CLVG) session on the vi- ability of EV charging as a busi- ness. Many of the participants in the meeting have installed EV chargers and are trialing them. None, however, are making any money in offering EV charging– even when they had not in- vested the money to install the equipment.
Most small retailers are tak- ing a “wait and see” approach to see where the market goes and what makes sense. As Annie Gauthier of St. Romain Oil said, “We do not have the scale to fail,” meaning their company cannot afford to invest in a program that is not going to succeed.
You need to research the program and be confident that you are going to get your money back, and more, when you invest in something for your business. Being a slow adopter of new ideas is a viable strategy in this fast-paced world.
Anyone want to buy some 8-track tapes?
Roy Strasburger is CEO of StrasGlobal, a privately held retail consulting, operations and management provider serving the small-format retail industry nationwide. StrasGlobal operates retail locations for companies that don’t have the desire, expertise or infrastructure to operate them.
Contact him at roy@strasglobal.com.