Retail shake up

Bidding adieu to 3710, I was  a bag of mixed emotion. For the non initiated, 3710 is the number of the store at Bonnie Doon mall in Edmonton, Canada. It is one of the Target stores, part of the giant U.S retailer's expansion into Canada two years back.

All through the wind down period,  the questions came fast and furious. Yes, we knew we were not achieving some fundamental milestones, that we were facing issues especially of comparison with the U.S stores, pricing and oh so much more.  Yet, over the near two years of its existence in Canada no one ever dared bet  on such a hasty retreat.  

Ironically even the customers or guests as we called them in Target parlance, were unabashedly asking us why the company decided to leave just as Canadians were getting to know them? Telling the staff  how they love Target and how  they never wanted it to go. One of them told me, "why did they go so soon? We were just getting to know them and love them.''

Another one said, "I am sad Target is leaving. They never gave us the chance to love them. They came for too short a period of time."

In the back rooms of the store the staff echoed just one sentiment, "wish you guys had  expressed this earlier."

A lot of the discussion was always  about how they should have waited and improved  instead of winding down operations.

American companies have a history of trouncing opposition political or business.  As a journalist having covered Coke and Pepsi and Enron brow beating their way into developing markets, Target's retreat was a complete surprise. I spent many nights  anguishing about the weakening mettle of American companies. Where was all the pluck? Most of all where was all the innovative marketing, thorough understanding of competition and  the pre-launch research?  

In retrospect, Target's pluck was in daring to make a hasty retreat from Canada. It was the courage to acknowledge a mistake and make an orderly exit without succumbing to the pressure of shame in retreating as hastily as it had come. The pluck was in the forethought for its Canadian  employees - creating a fund for extended  compensation even after closure.

It was in the wisdom to  realise the danger of sinking the US operations while trying to keep the Canadian boat afloat. This especially as it coincided with a huge data breach in the US in 2013 that resulted in personal  information leaks of over a 100 million customers, eroding brand confidence built over decades of existence.

Long term low oil price prognosis for Canada reducing average middle class earning capacity and surplus income was perhaps another  indicator that an extended stay was not a guarantee to increased consumer spending.  The falling Canadian dollar would further exacerbate the price difference between Canadian and US product prices.

In my mind there was no doubt that it must have taken a lot of courage to shut down completely even though the management had deliberated  keeping at least a few  stores running. It is especially brave when you look at the sunk costs. Costs that they will never be able to recover. Many organisations though inwardly dying keep afloat far too long  hoping for future recovery  and in so doing piling up costs further. Future costs of doing business in a hypothetical scenario where they may or may not succeed!  Rapid multi dimensional changes  in external environment of any business sometimes far exceeds  human capability of risk management.

What if prospective or future costs  do not resuscitate  despite a change in business plan/model? After all any renovated / improved or radically changed business plan is just a life support that may or may not bring back to life something that failed in the first instance.  

A quick glance at a few years balance sheets of the Target U.S operations makes it apparent that even within its own geographic comfort zone, the company was facing stagnant revenue challenges and perhaps had expanded like many U.S companies, to uplift revenue growth through International expansion.

The expansion into Canada instead of turning out to be the solution, threw up a host of issues that perhaps were already plaguing the company. Changing demographics within the US  or perhaps changing retail space or perhaps changing styles of shopping all contributed to a stagnant profit margin.

It is difficult to say if the lure of brick and mortar presence, in a  barrier free electronic world  will ever lure Target to have a physical presence once again  in Canada. What is not difficult to conclude is that unwittingly Target changed the face of retail business in Canada. "Can I help you find something", its sales force mantra to break  the initial ice with guests entering its premises set a new high in customer service.

As  a regular shopper,  I must acknowledge, icy cold stares, under the breath muttering, "I do not look after this section of the store", and even a nonchalant pointing of the finger  in mid air aimed as a reply to, where I could find something was  the near universal  norm of a retail staffer  especially in big box stores. All this is changing.   

What is also changing is the alacrity with which customers are becoming the focus  of operations. The retail market has awoken to the fear of a  sure and steady change in the retail world. The fear of closure encompasses even the big and the mighty. "If Target could, so can we. Nothing is too big to fall."

Is the Target story just the tip of the retail iceberg? Is the near future going to catch Organisations and Governments napping? After all  the retail sector is a huge provider of employment.

As the retail industry braces to envelope multiple distribution channels and rethink  traditional models what about infrastructure for electronic retail?  Will it be well within the reach of smaller retailers to gain access to capital and to take on high costs of technology upgrades in an electronic market place obsessing about security and personal data protection?  And in so doing, will they continue to remain competitive? This when big box retail has decided to overhaul its business model and along with big box retail outlets  embrace urban sprawls through  a new line of small stores.

 If the Internet and electronic revolution grip the retail industry, changing its face to a human free geographic space what are the implications for employment loss?

Clearly, Canada's backbone, the  small business sector ,  needs to gear up to a challenge of a different kind. This new business model  must be seen in light of the fact that of all industries the retail sector is the largest representative of small businesses with nearly 150,000 businesses employing about 800,000 individuals. It must also be seen in  conjunction with  an Industry Canada report  titled, "Canada's changing retail market". The report says, commercial space  for retail is getting limited as Canadian municipalities allocate space in favour of industrial and office space thus reducing  the number of large shopping centres being built.

The message? The proverbial product life cycle in retail also extends to every business model...it too has an end of life tag attached to it!.

 

 

 

 

 

 

 

 

 

Citizen money

I am wondering about the mandate of International organisations that fight for human justice and overthrow of dictator regimes.

It is indeed gratifying to know that there is someone out there fighting on behalf of people who are imprisoned or tortured for their beliefs. Yet there is something that troubles me about mammoth organisations running the business of rousing human consciousness to  government injustices  in the International arena of global communities. Is this naïve or am I naïve in not believing the power of these organisations?  If the latter is true then why are we not able to solve the issue of war and refugee  rehabilitation?  Is fighting for and on behalf of millions  of refugees less important than destabilising a handful of far away governments an outcome of which is the  escalating refugee crisis the world is faced with?

My thought process got triggered by a random meeting at an Edmonton mall with a young representative of Amnesty. She was reaching out to people in this city probably to elicit membership and funds for causes they are committed to like the prisoners of conscience campaign. The meeting resulted in a follow up call eliciting membership and all I was required to do was  contribute money. Is that all? No choices in leading the agenda? No shareholder meeting to address issues at stake, priorities etc. etc.

However small my contribution, I want to know if that money will be utilised to further pressure governments in far off countries creating turmoil and throwing disturbed regions into further state of agitation and flux to  fulfill a political agenda. Who and how is it unanimously decided without a vote or a plebiscite that we the ordinary masses want billions to be utilised to create awareness of the ruthlessness of far off unpleasant regimes. ? An agenda day in and day out on the front pages of global media.

Every idiot box channel is already bombarding us with how bad these governments are and how much harm they have inflicted on their citizens and on the world? It is time to know what harm is being inflicted by those whose cause may be just but the means too narrow and conventional!
How does it help raising awareness about bad governments in far off places when all the military might of the developed nations has overthrown most of those regimes without a bit of success in changing the scenario there. Perhaps  something incomplete in the tactics there!.

The  overthrowing bit may just be the easier option, implanting democracy not that easy.  It takes years of societal evolution for democracies to take root and yet before the slow evolution has gained momentum, the developed world is  uncapping societies in flux in the hope that is the only bottleneck to the free flow of speech and human liberty.

Clearly, if nothing else, the Saddam's and Gaddafi's of the world were brutal enough to keep at bay the larger clannish vitriol that so inherently emaciates these societies. Clearly the wait for the West has to be longer.

The fear is that in the pursuit of unbolting the genie the West  is activating a future volcano.  I am thinking about the 16.7 million displaced refugees, the five million displaced Palestinians and 33.3 million internally displaced people who are still wondering why the types of Amnesty are not fighting for their cause. Wondering why the pursuit of overthrowing bad governments has not taken into account the torture, the pain, the trafficking, human harvesting and sexual assault of displaced people.  

What is of most concern is the blindfold silence over the complications and implications of some of the outcomes of the turbulence in the Middle East and Africa region.  Consider for instance that in 2013 the country hosting the largest number of refugees- around 1.6 million, remained Pakistan and for thirty three years  the largest source of this human resettlement movement  was from its neighbour Afghanistan. The future implications of this statistics is huge. Syrian refugees come a close with 2.47 million of them in Pakistan.

Is anyone working out  this scenario?

According to the UNHCR one out of every 4 refugees worldwide is Afghan with 95 per cent located in Pakistan or Iran.

The conflict in Syria has created  9 million Syrian refugee and the number of Syrian refugees is growing by 100,000 every month.
A new emerging trend is that of the Stateless refugee. These are people who are registered with no country. According to the UNHCR,  "It’s almost impossible to determine the true number of stateless people. UNHCR estimates that statelessness affected up to at least 10 million people by the end of 2013. However, data captured by governments and communicated to UNHCR were limited to 3.5 million stateless individuals in 75 countries". 

Our tenacity of belief in uprooting regimes, the latest being Syria may have to find alternative means. The crisis of confidence in the developed world and in its institutions like the UN is not without  future ramifications.  People' s faith is fatigued. In the pursuit of future security from unfriendly regimes are we creating a bigger monster?.

The fear of the enemy far away has started to take a toll on the minds and psyche of our Governments. If conflict and unrest in the MENA region continues, Saddam Hussein and Muammar Gaddafi  unfortunately may end up as heroes in the near future. Their brutality oversaw a larger calm beneath the surface.

Reverse Osmosis, is what I would say is happening now.  The conflict in the Middle East is actually testing the depth of constitutional rights in the West.  You dare not question your government about their foreign policy at least as far as these countries are concerned. Further still, the fear of these barbaric governments somehow reaching our shores has propelled democratic countries to exhibit a more than unusual  reaction to anticipated  and perceived threats even from their own citizens. Bill C-51 may just be the beginning.

Clearly Edward Snowden was a great test for western democracy.  

The choice before global citizens is clear. Funding overthrow  or utilising scant monetary resources to stem the flow of future conflict and chaos. Funding rehabilitation of refugees is clearly the priority to stop a near future catastrophe. Why then are we not spending the buck on this ?  The number of refugees has passed the 50 million mark for the first time since the World War.

8.4 billion dollars is needed to resolve just the Syria refugee crisis. This is one of the largest ever UN Led appeals and ironically as OXFAM puts it, is less  than what the UK government spent on the London Olympics, a fifth of the price of the Beijing Olympics and a sixth of the cost of Sochi Olympics. The 2015 regional refugee and resilience plan - 3RP launched jointly by UNHCR, UNDP and OCHA (The office for the Coordination of Humanitarian Affairs) has so far attracted just 6 per cent of its projected  $ 4,533,248,258 requirement.

Even if the money comes pouring in a big challenge for reaching aid to the 6.5 million Syrians internally displaced is well documented in an OXFAM report titled, "Failing Syria". Despite two UNSC resolutions 2165 and 2191 authorizing UN aid operations into Syria from neighbouring countries without requiring consent of the Syrian government, the resolutions have rung hollow. The OXFAM report states, "They have been ignored or undermined by the parties to the conflict, other UN member states, and even by members of the UNSC itself"

The report goes on to say, "12.2 million people or two thirds of the population within Syria are now in need of emergency assistance. This represents a 31 percent increase over 2013 and an 80 percent increase compared with two years ago. At the same time, countries neighbouring Syria are making it increasingly difficult for people fleeing the conflict to seek asylum. ".

The need of the hour is for organisations like Amnesty to work within the given parameters and the given parameters are allegedly  hopeless governments. Yet when they are overthrown nothing much changes. Change is never overnight!

Countries like the United States and Canada are already tackling the issue of bad governance through military intervention. Public funding of Amnesty in  raising consciousness about bad governance is  justifying the  stance of  Governments that are already rightly or wrongly involved in changing governments  in these countries.   Perhaps the U.S needs to put its mind and not its muscle to create a new model of change in the MENA region. All that muscle is only  enlarging the map of rogue states on the world map. Good Luck America!