High-velocity retail: winning in a high-velocity world- a search for speed and direction
Retail has been speeding up for a long time. It was in the 1990s that Inditex ripped up the traditional rules of the supply chain to cut product lead times from six months to five weeks. It was only in 2009 that Amazon introduced same-day delivery in the US.
But speed is not just an internal phenomenon. The customer is captive no more: expectations, information, choice – and therefore competition – have exploded. As a result, the barriers of entry to previously high-walled retail markets have been knocked down. For retailers, good is no longer enough: being great yields enviable success, but being average is punished hard.
Retailers recognize change is needed: 75% of retailers believe their model needs to fundamentally change to keep up with the pace of evolution in the industry. Winners are focusing on being the best at something that matters to customers and avoiding the pitfalls of trying to do everything. High velocity retailers no longer simply speed up traditional processes, but work out how to completely short-circuit elements of traditional retail to improve both speed and efficiency. They selectively deploy capital against priority areas and select partners that provide capabilities outside their heartlands.