Practicology is now Pattern

By Jeremy Wilson | Chief Commercial Officer

Our private equity clients regularly seek advice on what they should ask the boards of their retail portfolio companies to drive EBITDA.

It is standard practise for boards to study in depth the core financial metrics, such as sales, profit and EBITDA. However, at Practicology, we find it is rare for retail portfolio companies' decision-makers to be challenged on the underlying business drivers influencing their top and bottomline metrics.

It is imperative to ask the right questions to ensure they’re influencing, prioritising and trading key areas with an agile and fail-fast approach.

Here are a few thoughts on some fundamental questions that you should be asking your boards.

Are you still relevant to your customers? 

It is essential that retailers ask themselves this question, to ensure they constantly evolve while staying true to their core customer proposition. Businesses need to be self-disruptive.

It’s very easy to continue to do ‘what we’ve always done’; this is why so many businesses are challenged with growth and ultimately failure.

Successful businesses constantly track their audience and consumer trends and adapt to meet the demands of consumers. Questions which should be asked at board level include:

  • Who are we currently selling to; are they who we think we are selling to? 
  • Who should we be selling to? 
  • Are we speaking to our audience in the right way? 
  • How are consumer and customer trends impacting our strategy and range? 
  • Are we selling the right product to the right people in the right way?
  • If our business didn’t exist now would anyone invent us? If the answer is no, you need to work out how you evolve to survive.

Maplin is an example of a retailer that failed to adapt to change and struggled with a weak customer proposition including poor pricing, poor customer service and a narrow range that could be easily and conveniently acquired via Amazon.

Are we making it easy for our customers to find us and buy from us?

Websites, online and omnichannel services need to be mobile-first, it can't be an afterthought. 72% of shoppers research items on their smartphones before making a purchase, according to Nielsen research. Mobile needs to be the starting point in how you drive your omnichannel experience and accessible across every touch point in the customer journey.

However, omnichannel isn’t easy; ask your board what are the core omnichannel initiatives that drive the highest customer and business benefit.

Toys R Us is another example of a retailer that failed to innovate its business model, incorporate technology, or adapt to changing consumer behaviour. Its website and in-store experience were poor. It went from category killer to roadkill by not reacting quickly enough to Amazon, and not making it convenient for customers to find and buy.

By understanding your customer better, you can set up your omnichannel customer proposition to ensure you’re where your customers can easily find you and buy from you, regardless of channel.

Are we measuring the right things to put this into effect?

It’s now possible to measure almost everything and anything; but because you can, should you? What are the KPIs that really deliver EBITDA to your business? All too often, businesses measure what they’ve always measured and are not focused on other metrics such as customer satisfaction and engagement.

Even worse, KPIs aren’t aligned at board level, pulling the business in different directions. It is important to measure the balancing of engagement vs acquisition.

Here at Practicology, we help our clients to answer these key questions - both private equity investors and the c-suite teams of their retail portfolio companies - to drive the bottom line and ensure that they remain relevant with today’s fickle consumers and changing economy.

For more information on how we support the investor community and their retail portfolio companies please see our Private Equity industry page or if you’d like to chat, contact us at