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Gradually and then suddenly

Gradually and then suddenly

Jerry is the Retail lead in the Commonwealth Bank’s Business and Private Banking division where he harnesses and develops the bank’s resources for the benefit of its retail clients. He is well-known for delivering thought-leadership, insights and analysis that help retailers succeed.

In Hemmingway’s 1926 novel ‘The Sun Also Rises’, Bill asks Mike about how a particular event happened. Mike replies ‘Gradually and then suddenly’.  

I’ve heard the same said about a few things recently. Take the smartphone. I used Palm Pilots and Blackberries for years, but they never really became part of my life. They felt like they should make my life better, more efficient, more productive. But something was missing. Or rather there was too much of something – friction. These products were asking me to fit in with them, rather than the other way around.

Then 10 years ago, along came the Apple iPhone. Its intuitive setup, touchscreen technology, fully functioning web-browser and the ability to run third party apps (oh, and the phone) removed the friction.

A change that was happening gradually, happened suddenly.

There are any number of trends playing out this way in Retail. Take contactless payments. CommBank introduced contactless payments in late 2009 but it wasn’t until Woolworths and Coles enabled these payments in their stores a couple of years later that contactless payments really took off. Now, MasterCard reports, 82% of Australians use contactless payments every week[1].

Contactless payments solves a real problem for customers and for retailers. They remove friction – contactless payments take just 2-3 seconds compared with 20 seconds or more for swipe and PIN.

Some other trends are happening slowly. I’m still waiting for beacons to take off and I suspect I’ll have to wait a while for drone delivery. Both sound like they should make our lives better but, for time being at least, there’s too much friction.

So, what should a retailer do, faced with these slow-burn trends that could take off at any moment, when enough friction is removed?  I’d argue that having a curious, creative and innovative culture means you’ll be ready for that time.

CommBank research shows that innovative retailers actively look for ways to benefit from changes in the market or technology[2]. They also run small pilots and experiments, letting staff know that it’s OK to fail and to learn from that failure.

This suggests that the way to go is to actively seek out trends, to run ‘test and learn’ experiments to understand their potential and to be ready for the time when they suddenly start to move.

Remember Bill and Mike in Hemmingway’s novel? The question Bill asked was ‘How did you go bankrupt? ‘Two ways’ Mike said. ‘Gradually and then suddenly.’

Missing a trend can, in extreme cases, lead to an outcome like Mike’s. Staying actively engaged with trends on a ‘test and learn’ basis is a way to avoid his fate. That way your business is ready to act when the trend moves into the mainstream.

For more information on our Retail Insights visit commbank.com.au/retailinsights

 

Jerry Macey,

National Manager, Retail Industry

Business & Private Banking,

Commonwealth Bank of Australia

 

[1] 82% make contactless payments every week, Dylan Bushell-Embling, 15/03/17

http://www.technologydecisions.com.au/content/it-management/news/82-make-contactless-payments-every-week-544794707#axzz4vZVOHtS2

[2] CommBank Business Insights Report FY17 https://www.commbank.com.au/content/dam/commbank/assets/business/can/move-forward/commbank-business-insights-report-unlocking-everyday-innovation.pdf

Head of Retail

Jerry is the Retail lead in the Commonwealth Bank’s Business and Private Banking division where he harnesses and develops the bank’s resources for the benefit of its retail clients. He is well-known for delivering thought-leadership, insights and analysis that help retailers succeed.