In the midst of the ugliest political campaign in US history, watching the news and staying informed has become nothing short of depressing lately. Small comfort? Staying up on our industry has been both a welcome distraction and a bevy of some uplifting findings.

For example, as our recent Store Report discovered, it seems as though stores are finally poised for significant transformation. One of the most encouraging findings? Retailers are no longer in the dark about what needs to be done to make stores a relevant part of the modern shopping experience. Apart from some lingering concerns about consumer price sensitively (despite the relatively sparse data that supports some retailers’ fears), our retail respondents overwhelmingly told us that they are focused on an improved version of the current in-store employee as a way of competing with online channels’ increasing popularity. That’s YUGE!

But as ever, when we look at the same data by how retailers perform by sales, we find some telling differences.

Retail Winners have a completely different view of the external pressures put upon them in the current market. They are more likely to say competition from online sources (such as Amazon) is stealing sales away from their stores, more likely to blame their own lack of integration between selling channels, and more likely to cite competitive price transparency across these myriad channels – both their own and their competitors’ – as real problems they must face.

By comparison, their underperforming peers are more content to blame rising minimum wage pressures, an inability to separate their own stores from their competitors’, and most tellingly: consumer price sensitivity. Let’s examine each of this points in more detail:

• There is virtually no data to support the notion that consumers have grown any more price sensitive than they’ve always been. With the rare exclusion of some luxury markets, price has always been – and will always be – a top-tier concern for consumers. Why do non-Winners believe it has increased in any way? They waste valuable effort and attention that could be spent on what really matters: understanding that price is a valuable, but not solitary, component to the purchase decision. By this token, they are telling us is they who are most likely to drop prices at the first sign of trouble, effectively conceding the game of “markdown chicken ” to consumers, and ultimately accelerating a race to the bottom. This is a tactic that simply cannot sustain a business, particularly in a world where both Walmart and Amazon operate at scale.
• The fact that these same retailers continue to lose market share to Winners is no surprise: in what has become a telltale indicator of lagging performance, non-winners are far more prone to blame external factors. In this case – the impending rise of minimum wage rates for retail employees. All retailers face this issue in the coming years – a wage hike that history would tell us is long overdue. But average and underperformers lay blame here at a disproportionate level. They’d do better to focus on the things within their own control (such as disparities within their own channels), rather than blame external factors.
• By the same token, average and underperformers’ fallback on their inability to differentiate from their competitors only underlines their unwillingness to accept responsibility for their outcome. Winners also face competition from all kinds of new sources, but rather than bemoan the changing industry, they focus on what they can do about it (namely improve the store experience). Average and underperformers keep putting these challenges off. It is one of the clearest indicators available of why Winners win. When presented with a problem, they don’t point the finger: they point the thumb. They are constantly looking for ways to improve their own practices in the face of adversity.

As ever, it is also worth noting that knowing what needs to happen in the face of challenges is one thing: the question of how those needs are met is an entirely different story, and one we examine in the Opportunities section of that report, which is available to everyone free of charge.

We hope you read it – there’s some good news throughout the entire thing!