Reinvention is a hot topic at the moment and it’s not surprising – after the year we’ve all just lived through, who hasn’t been thinking about how to renew and refresh our approach to business to stay in the game?
History has consistently shown that businesses that fail to refresh, adapt and reinvent themselves in the face of changing circumstances do not have a future. There’s no shortage of examples to support this statement: in our sector think Gowings and more broadly there are the often cited examples of Kodak and Blockbuster.
We are bombarded with information about new consumer trends and behaviour. Australia Post says 1.3 million new households purchased online in the past year. Consumers are increasingly wanting to shop socially, interact, share with friends and engage directly with brands. Businesses are increasingly thinking about how they can better present their offering and make it more relevant for their audience. The key for us in the retail sector is to consider these trends and anticipate where the ball is going and to move there before it arrives so we’re ready to take our shot.
Klarna recently discussed the theme of reinvention with a group of reinvention experts. You can read full detail about the discussion in this White Paper, however, here are some key takeaways.
Firstly, constraints force creativity. It’s counterintuitive, but it’s true. The tight conditions we’ve been working in over the past year have forced many of us to make some big decisions quickly that can really set our businesses up for future success. We’ve seen much of the bureaucracy, planning and detailed roadmaps with multiple scenarios swept aside and watched as very large businesses just switched course and got things done. Entire teams have been freed to meet their KPIs more creatively. Best of all, when you operate like this, the learnings are immediate and can be acted on in real time.
Related to this, reinvention doesn’t need to involve long lead times, it’s actually much better to start small and learn fast. Certainly, this is how we operate and is core to our philosophy at Klarna. We are constantly testing improvements and enhancements with our customers, listening to their feedback, learning what works and iterating to improve that. Where something clearly doesn’t work, then we are able to quickly change direction. Fear of making a mistake means many great ideas never see the light of day or are even given a chance.
Critical to this approach, is truly grounding everything you do with what does my customer actually need? Now I realise this is at risk of sounding clichéd, as every retailer talks about putting the customer first. But in the post-pandemic world, this takes on even sharper meaning. Customer expectations have skyrocketed. They want to move beyond the transactional and actually build a relationship with a brand. Further, they want someone who understands them and who delivers personalisation, innovation and perks.
Finally, of course, your reinvention has to be authentic, but unfortunately, that’s not as easy as it sounds. It’s not always easy to be real in business and there can be pressure from around us to do or align with things that don’t truly resonate with us. Nonetheless, a reinvention that is not driven by who we really are and what we stand for is doomed for failure in our social media driven age.
None of this is written flippantly. Klarna has been on our own reinvention journey and we understand the challenges of this process. We are determined to be different in everything we do and have actively moved towards being a fully immersive shopping ecosystem (as opposed to just a simple payments provider). We are obsessed with building an emotional and ongoing connection with consumers – and then driving those engaged consumers to retailers. We’ve had a great response so far, but it’s not an easy journey. It takes focus, courage and perseverance at all levels of our organisation.
Likewise, I’ve been impressed by the typical strength, resilience and appetite for innovation shown by Australian retailers in the face of our recent challenges. This attitude means our industry is in great shape to respond to an increasingly dynamic and complex environment in the coming years.
Fran Ereira is country head for Klarna Australia and New Zealand.