Emerging, Submerging or just Merging?
As someone from the ‘developed’ markets of the west, speaking at conferences and working in so called ‘emerging’ economies, I sometimes wonder if commentators should, not unreasonably, refer to our ‘developed’ markets of the west as ‘submerging’ economies! The ongoing media frenzied reporting on the Eurozone problems and general indebted state of the US and the west compared to the East hardly inspires confidence.
As international consultants our ‘added value’ is that we should be able to advise fast developing economies on how to avoid and learn from our mistakes and failures as well as from best international and UK practice. It seems to me patronising terms as ‘emerging’ can be unhelpful for all parties. A bit more emphasis on ‘merging’ knowledge and approaches would be more appropriate. I am frequently told that new concepts will not work in a particular country because ‘its different here’. Frankly this is rarely the case as people’s desires and expectations are pretty similar in wanting more for less, convenience, a pleasant experience, quality, service, etc and people are willing to change the habits of a lifetime for something that is clearly ‘better’ in satisfying needs and aspirations. Certainly economies and societies that are able to adopt latest practices, technology and thinking do not merit an ‘emerging’ tag perception when directly compared to economies weighed down with the baggage of out of date investments and thinking.
For new markets, the financial crisis was a sharp lesson for the complacent and exposed unstrategic thinking and practices developed in an easy fast growth environment. The new reality served as a catalyst for the more progressive managements to take advantage of their weaker competition. Retailers and developers globally are having to face accelerated changes enabled by the internet and social media. Multi-channel and online retailing is changing the way people shop. So listening to an East European developer plan for yet another new mall in a city already well serviced by shopping centres was scary. The assumption was just more of the same for a market that could be significantly changed by the time the complex was to be completed in three years. It seems the lessons in Europe, where empty malls are being increasingly cannibalised by large regional centres are being ignored.
Centre owners and investors need to rethink how their assets can adapt to a new retail order. Centres and their tenants need to create experiences rather than simply facilitating shopping. Retail therapy is now less about product consumption and more about lifestyle, entertainment and leisure providing the key drivers to draw visitors. The implications for marketing, architecture, tenant mix, services and facilities are significant. I am concerned that some western consultants who should know better are still selling concepts that will be out of date before they are built with highly dubious sustainability credentials in the widest sense taking into account environmental, social and community issues and impacts. If future proofing credentials are based on PR about recycling ‘grey’ water it becomes simply ‘green wash’ if the development has dubious effects on the cities resources, energy consumption, environmental impact, traffic infrastructure, local traders, residents etc.
Viewing empty malls in India or the UK is a reminder whether we are emerging, submerging or just ‘floating’ economies, the basics of supply and demand apply and we can all learn lessons from each other. New markets can avoid the limited thinking that can be ingrained in traditional ways of doing things. In our experience they can accept change and move faster and more effectively when managements are open to new ideas and approaches. This brings responsibilities and problems. The shortage of local expert experience means organisations are vulnerable to management and staff poaching. We are increasingly advising our clients to address their employer brand development and proactively face the challenges of attracting and retaining the best people. Developing a positively differentiated internal brand culture needs to be synchronised with the customer facing marketing, communications and environment experience i.e. a synergy of staff and consumer centricity.
This next generation of employer brand development is an interesting test of bringing together best practice western thinking to the culture of companies in countries where the concepts of empowerment, meritocracy and supportive management are not readily embraced equally by staff or management. This is certainly an area where the lessons and experiences of ‘old’ economies can represent a valuable trade export to emerging or emerged markets to achieve better performance, efficiency and value from their operations. Every culture whichever side of the world and economic state that thinks it does not need to keep learning and take advice has surely missed the point.
Chairman, SCG London