Optimizing to extinction

There’s a growing narrative that suggests that as e-commerce grows the obvious answer for most retailers is fewer and smaller stores.

It’s nearly taken for granted that if a brand struggles with sales then it’s time to take a whack to expenses.

And, most often, it seems as if investors value a story of efficiency rather than one of effectiveness.

It doesn’t take much creativity or inspired leadership to lay people off, close stores, prune inventory, defer capital expenditures and the like. Sadly, though not too surprisingly, it’s rare to find a company that actually becomes more customer relevant by following this path.

In fact you don’t have to look very long or hard to find scores that have tried cost-cutting their way to prosperity only to end up in the retail graveyard. You might even be able to come up with a few that are in the midst of this downward spiral.

It’s typically pretty easy to rally behind optimizing the cost side of the ledger. It’s far harder to get the revenue side right–to go from average to remarkable, me-too to intensely relevant.

All I know is if you set out to optimize something you might want to be sure you picked the right thing.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.