From Boardroom to Bottom Line

How does an organisation's purpose and values translate to reality? How is this measured and how are leaders held accountable, if at all?

Our purpose and values...(a real life example)

"We are a passionate and lively team, striving to make a difference. Our purpose is to unlock potential, create tomorrow. It captures our unique ability to expand what is possible from every opportunity and use that potential to deliver long‑term value for our people, customers, investors and communities.

Our culture and spirit is what differentiates us. Together, we take pride in our values: rally to achieve together and build trust through action. These values drive us to deliver greater value for our investors and customers."

Hard not to agree this is a noble, inspirational and powerful statement, but how does it translate to reality and how are those charged with meeting these lofty ambitions measured?

I will confess at the outset (for full disclosure) that I have a contractual relationship with the organisation that owns this purpose and values statement, albeit a tenuous one, as it's been an unproductive, frustrating and costly one for me. But to be fair my perspective is one of a customer and very real and I know it's shared by at least half a dozen other experienced, successful retailers. However what value the voice of a customer to an organisation if they don't understand or recognise who their customer really is? This is where every SME retailer's challenges start, because this landlord does not see me as their customer; they see my customers as their customer! This view is shared by their peers and contemporaries, one they all continue to wax lyrically about, in fact they all shout it from their roof tops with pride. I was at a recent Shopping Centres Association lunch where senior executives from our four largest retail asset mangers and owners (including this one) all spent an hour talking about the consumer as "our customer" never once mentioning the retailer. At some point they mentioned retail partners but it was always national or international brands like H&M, Sephora, Mecca Maxima, Uniqlo et al but never as their customer.

Somewhere over the past 20 years Shopping Centre owners and operators have decided that the smaller retailers and service providers who pay the rent are no longer their customer, that baton has been passed on to the consumer who is apparently now THEIR customer even though they have no commercial relationship with them beyond charging them to park when they are in their centres spending money with their tenants' for more then 2 - 3 hours! You see dear Shopping Centre Owner if the consumer was really your customer why penalise them for staying a long time to spend more money in your shopping centre, that makes no sense right?

So consumers are not OUR customer's anymore, nope they are the Shopping Centres Customers, my brand, the nail bar, hair dresser, café, barber, dress shop, jeweller, newsagent, pharmacist, florist, is now irrelevant, we are simply a transactional space of various sizes that displays and far too infrequently exchanges items or services for payment so we can pass that payment on to our landlords, staff and suppliers each month. Unless of course you are one of the handful of national or international anchor tenants who pay a rent based on a percentage of their turnover, not a fixed rent with annual increases like the little guys. Even when we offer our products through the Shopping Centre's online marketplace they take a cut in addition to our rent and charge for marketing and outgoings on top. But the marketing never mentions my name or the names of the small retailer's, it never promotes my brand and the outgoings are calculated per square meter regardless of how much or how little waste or extraction equipment, or loading dock space and time we may use.

How are we tracking against our purpose and values so far?

Whilst the little guys that make up on average about 60% of most shopping centres pay a minimum monthly rent and in the unlikely event we do really well also pay a percentage of annual sales above a certain amount... And if we do really really well the landlord thinks.... "Hey, you guys are so busy you can't be serving all OUR customers well or their is a too much demand and not enough supply so we will punish you for being successful by offering adjacent sites to your competitors at higher rents than you're paying so they can take business from you and we can increase your rents when your lease is up by more!

This makes perfect sense IF the consumer is in fact the Shopping Centre Owners Customer. The landlords don't care if there are 20 Cafes, 15 Nail Bars, 12 Barber Shops, 9 Mobile Phone Shops, 34 Food offers, why would they, it generates rent, fills space, feeds the rent machine and ensures no one retailer is ever going to be super succeful and upset the national brands they may compete with in any way

But if the consumer is the Shopping Centres customer then who is the Retailer's customer?

And how can this or any retail landlord meet their purpose and values when their is such a conflict and contradiction in customer needs between the consumer and the retailer?

The model is broken...It's not a covid thing, it's not a work from home thing, it's not a reduction in discretionary spend thing, these are all catalysts'... It's the basic business fundamental of knowing who your customer is and ensuring your purpose and values directly align, contribute and relate to their success and theirs to yours.. And until the Shopping Centre Owners realise and reconnect with the retailers, start curating their centres for retail success not maximum returns and accept that moving forward if all retailers are not on turnover rent SME retail has no future and they will never have balanced sustainable offers but a revolving door of vacancies and failures....

Thank you for the privilege of your time, if you have found this piece of some value and it has given you an insight into the challenges of todays SME retail paradox please like and share it, if you'd like to discuss further or would like support in your own retail journey please PM me and look out for my next peace on "The circular economy - Environmental Management and Retail Design"