If you’d asked me at the start of the financial crash in 2008 which UK retailers would benefit from an economic downturn, Wilko’s would have been near the top of my list. Its discount-led, no-nonsense offer seemed perfect for the impending growth in the number cash-strapped shoppers looking for a bargain.
It didn’t work out like that, though. While other discounters, including Aldi, Lidl, Poundland, Home Bargains and B&M Bargains have grown and thrived, Wilko’s collapsed into administration this week, putting 12,000 jobs at risk.
Having done some work with Wilko’s a few years ago, I have a little insight into the business. And, while not giving away any state secrets, the owner’s strategy has clearly been to try and move the brand a bit more up-market over the last 10-15 years, creating more of a design-led homewares offer, rather than sticking to its tradition of low prices and value.
Critically, that strategy seems to have been based on intuition, rather than real customer insight. It’s an approach that I see at other organisations and it rarely, if ever, works out well.
Steve Jobs is the hero of these types of intuitive business leaders and was famous for eschewing customer research into new product development, stating that “It isn’t the consumer’s job to know what they want.”
But Jobs was misunderstood. While he didn’t want focus groups to predict how they would respond to something that hadn’t yet been created, he did value customer feedback once the product existed. As early as 1990, Jobs said, “Once you’ve made that jump is a great time to go check your instincts with the marketplace and verify that you’re on the right track.”
Unfortunately for Wilko’s that ongoing check with customers doesn’t seem to have been embedded into its strategy and the lesson from Wilko’s is this: the customer may not always be right, but that’s the way to bet.
How does your organisation ensure that genuine customer insight, not management intuition, guides the delivery of your strategy and proposition?
Off The Record: Jesus, Etc. by Wilco
Jesus, don’t cry
You can rely on me, honey
You can combine anything you want
I’ll be around
You were right about the stars
Each one is a setting sun