Most of us are drawn to the allure of the unlikely business partnership. The out-of-left-field mashup of ideas, people, or organizations. Will it work? Or fall flat on its face? Is this a game-changing match up? or fiasco in the making? We never know, at first.
But something about these odd business couplings appeals to our sense of optimism. They satisfy our can-do entrepreneurial belief that new ways of doing things can still be discovered.
Case in point: In an attempt to become an “essential” business, Designer Shoe Warehouse (DSW) is teaming up with Midwestern supermarket chain Hy-Vee to sell shoes on the supermarket’s site and in its stores. The pilot will start with pallets of DSW’s best-selling items sold at 120 Hy-Vee stores. Customers will be able to order in-stock shoes online and get them in their local Hy-Vee store, delivered with their groceries, or with curbside pickup.
We admit selling shoes in a grocery store isn’t entirely unlikely. And the store-in-store model has been around a long time, but still. A national retailer and large regional supermarket chain adapting in a time of crisis to create opportunity — that’s the stuff of a Wharton case study. Bold. Potentially risky. With a possible long-term market gain for both.
Of course, what’s particularly notable is the speed. And, according to retail trend analyst Charcy Evers, this is just the start. “Disruption has been going on in retail for a while now. This pandemic is just accelerating it.” A frightening proposition for retailers already on the ropes.
But she also sees a silver lining in how the crisis is fostering collaborations like that of Hy-Vee and DSW. “These collaborations are great,” she says. “But they have to make sense. They have to speak to who your customer is and what they need.” In other words, it can’t only be about a grab for market share.
To survive, Evers says companies need to move forward thinking of their business in terms of stakeholders rather than shareholders. Either a business brings meaning. Or it’s essential. Short of that, Evers says, they will fail.
“Mergers and acquisitions alone aren’t going to solve what ails the retail space or business in general,” she warns. “Especially not now.” Which is why she encourages companies to use the pandemic as a way to build meaningful collaborations and focus on maintaining customer loyalty.
Disruption is forcing businesses to take a hard look at whether what they offer has meaning or is essential. And that’s a good thing, Evers says. “This clears the air. It breeds creativity. A newness of product. Of people trying new things. We were moving that way already. Now, it’s fast forward 100 times.”
Which brings us back to the Hy-Vee and DSW partnership.
In their deal, Hy-vee gets a new revenue stream and a market-differentiating potential future partner. While currently “non-essential” footwear retailer DSW gets access to customers that only essential businesses like grocery stores now enjoy. It makes one wonder what other non-essential-to-essential partnerships it might spark.
There’s the rub, of course. As restrictions come and go, some may question if such workarounds should be done at all. Opinion from retail industry experts is mixed. Essential is, well, essential after all. But even that may be a matter of perspective and perhaps privilege, Evers suggests. “We may not see shoes as ‘essential’ day-to-day. But for the service worker on the front line? A new pair of shoes could be very essential.”
Ultimately, this notion of what is an essential and non-essential business will be decided by the market, not the current restrictions. What interests Evers more is how businesses bring meaning and make connections with their customers. And that suggests the importance of story, brand narrative, as well as product.
“You can’t compete with Amazon or Walmart at scale. So you have to compete on customer experience,” Evers says. “Either you are essential or you’re meaningful.” This she notes is where brand story comes in. How you connect with your customers. The community you create. And the narratives you tell around that experience.
It seems clear that unless we’re prepared to allow countless businesses to fail leaving consumers with fewer and fewer choices, then we’re going to have to allow companies to adapt. Besides, if the situation drags on for several more months, who knows, a new pair of shoes might look pretty necessary for all of us.
“In the midst of this increasingly uncertain world, we have to adapt.” Evers says. “We have to change. And the more we can learn from each challenge, the more we not just survive, but thrive.”
We couldn’t agree more.
As business leaders, if we can foster new ideas, align with new partners, and imagine new ways of doing things — all while keeping the public health and safety preserved — let’s err on the side of innovation every time.
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