Re-imagining Retail Challenges Using Design Thinking
By Jeff Warren, President of Barkley Consulting Group
Like many others, my career has taken me down many paths. Early on, working for the Estee Lauder Companies, I had played a prominent role in developing their EDI program. This included everything from getting bar codes on products to establishing EDI partnerships with retailers. I even had the honor of serving on the VICS Standards Maintenance Committee to represent the interests of the Cosmetics industry.
EDI was growing in leaps and bounds at the time, giving retailers and manufacturers new, faster, and easier ways to conduct business, eliminating many old, slow, paper-based processes. Goods moved faster from the manufacturer’s dock to retailer’s shelves; inventories were more precise; financial transactions moved through the system more efficiently. More and more, EDI was becoming the way of the commercial world.
There were indeed challenges. Retailers had differing information and process needs, manufacturers had to introduce system changes, and partners now had to agree on the frequency and rules for electronic communications. All parties struggled with the nuances of relating their particular needs to a standardized system. But everyone worked together to achieve a common goal.
While the initial stages of the EDI revolution showed significant progress, subsequent progress stagnated. The conversation seemed to be less about process improvement and more about particular standards or data elements. Companies pushed agendas that favored their particular position. Ultimately, the focus became more on the mechanics than on trying to solve the real problem: how to remove time and costs from the process and provide the customer with the goods they want, when and where they want them, in the most efficient way.
I had been out of the EDI area for over 15 years when I met up with Kim Zablocky two years ago. Kim and I had been friends and colleagues in the EDI space long ago and had collaborated on several things around RVCF in its initial years. I asked Kim what was new with RVCF, and with the industry as a whole. He proceeded to give me the lay of the land, and described some of the issues that retailers and manufacturers were trying to solve.
It was as if I was in a time warp – like when you used to watch a soap opera and then turned it on years later only to find that things are just like they were then. While there have been many changes and advancements in the retail industry, it was amazing how the many of the same problems existed and that they were being dealt with in the same way. That is not to suggest that these problems are easy to solve. Quite the contrary – they are complex, and many very talented people were trying to solve them. So why hadn’t they?
I mentioned to Kim how it sounded like the same approaches were being used today as were used years ago. More importantly, to someone who had been away from the industry for a while, it seemed like they were after the wrong problems. After all, the world has changed given the effects of on-line retailers, omnichannel initiatives, and direct-to-consumer, returns, etc. on the process. Was the industry really focused on the right challenges?
It seemed to me that the industry was ripe for a new approach. That is not to suggest that all of the great work that has been implemented should be thrown away. Not at all. But things need to be looked at in new ways. Data elements and standards are important, but they are only parts of a larger puzzle.
To regain the momentum found in the early years of EDI, a new approach is needed. Traditional thinking is no longer a viable option. Today’s challenges require new thinking, new tools, and new approaches. Enter Design Thinking.
What is Design Thinking?
Design Thinking is a new way of thinking that integrates empathy, creativity, and experimentation to design meaningful solutions for end-users. It provides a methodology that fuels innovative thinking. Design Thinking is a way of using insights to generate new, innovative ideas, not another process to build or organization to staff.
Design Thinking teaches companies to see things from the perspective of their customers. Too often, organizations believe they are so expert in their field that they look at things through a single lens — their own. They employ best practices, gather mounds of data, and hire people with vast experience. The danger is that they don’t take the time to see things through the eyes of their customers (whether consumers, employees, or partners) and end up force-fitting standard solutions to customers’ unique needs. As an American professor and physician, Dr. Prabhjot Singh (http://www.prabhjotsingh.org/), put it: “We spend a lot of time designing the bridge, but not enough time thinking about the people who are crossing it.”
Design Thinking awakens the creativity in all of us. As children, we were all creative. We played. We explored. We were fearless. Over time, we were taught to think in a more linear fashion, to seek the single right answer, and never fail. Design Thinking encourages insightful experimentation. It accepts failure as part of the path to success. It reignites the creativity we all once had to create meaningful solutions for organizations’ most pressing needs.
Companies can use Design Thinking to:
-- Create new products or services
-- Solve existing problems or challenges
-- Unleash creativity to discover new opportunities
-- Uncover insights regarding the unmet needs of customers
-- Develop internal talent and increase their confidence, sense of empowerment, and contribution within the organization
Design Thinking is composed of five basic steps, as illustrated in the diagram below.
Design Thinking is not an elaborate process that requires years of education, piles of manuals to read, and expensive consultants to create fancy PowerPoint decks that, in the end, don’t say anything. Design Thinking is experiential — you learn by observing, interacting, immersing. It is innovative, utilizing your right brain to develop creative solutions for your customers. It is experimental, interacting with customers to get input and reaction before designing the final solution.
Ultimately Design Thinking unlocks the creativity in all of us to design meaningful solutions for customers.
So how does this relate to the challenges being faced by the retail industry?
Design Thinking allows us to take a step back and see the challenges as they exist, not as we wish to see them. It helps us use insights gathered from end-users and employees to guide our actions. We use those insights to truly understand what the real problems are to solve, and develop innovative and creative ways to solve them. We eliminate our experiences, personal desires, or biases in developing potential solutions. And we build crude prototypes to test our solutions to ensure they meet needs before investing in implementing them.
Whether returns, drop-ship, or direct-to-consumer, or any other issue facing the industry, Design Thinking helps us find new ways of solving old problems.
We recently held a full-day Design Thinking workshop at the Fall RVCF conference in Scottsdale, Arizona. Over 28 retailers and manufacturers gathered to address a challenge around returns: “How might we use technology to reduce consumer returns?” Participants worked together in small teams through each phase of Design Thinking, with each team developing unique solutions to the challenge. The solutions were innovative, realistic, and impactful (as you might expect, none had anything to do with standards or data elements). They dealt with solving the problem from a completely different angle.
More importantly, participants were given the tools, knowledge, and experience to use Design Thinking in their jobs, with their partners, and with customers. Future workshops have been scheduled for upcoming conferences, and discussions have begun on potential opportunities for more expansive uses of Design Thinking in solving industry challenges.
So, as you can see, Design Thinking helps us move away from traditional, left-brain-oriented, immediate thinking — to a more creative, empathetic, and insightful way that results in solutions that customers want. It is genuinely human-centered design. The potential for the retail industry – to apply new thinking to solve old problems – is limitless.
As Henry Ford said: “If you always do what you did, you will always get what you got.” In a world that is constantly changing, we need to do better than that.
About the Author: Jeff Warren is the President of Barkley Consulting Group, a Management Consulting Firm that combines real-world experience with thought leadership to bring transformative solutions to organizations. Jeff has a successful track record of using creativity and innovation to unlock the potential found within people to help them think differently and design solutions that meet the unmet needs of their customers.
Jeff has over 30 years of leadership and innovation experience in the Consumer-Packaged Goods industry, with a focus on business and technology. He is a coach, guest lecturer, and speaker and works in an advisory capacity for start-ups in the technology sector.