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What retailers can learn from the news industry’s unexpected revival

Suggesting that the news industry is now thriving would be overblown, but to carry on predicting its demise like the high street’s would be foolish.

Publisher News UK just surpassed 300,000 digital-only paid subscribers for The Times and The Sunday Times, a growth rate of 19% year-on-year.

The New York Times aims to make $800 million in digital revenue by 2020 and have 10 million subscriptions by 2025. Its digital subscriptions are growing at 18% each year.

Digital advertising generated 80% of The Guardian and The Observer's ad revenues during the last financial year with print advertising accounting for just 8% of income.

How have these news brands turned their bad fortune around, and what lessons can retailers learn from them?

Innovation isn’t a choice

News brands realised innovation was the only way to survive. A former journalist for The Guardian and founder of photography eCommerce platform Picfair, Benji Lanyado, said, “news by its very nature is neophyte – it’s interested in what is new. If you’re permanently writing about and investigating new trends, as news brands do, ignoring the rise of digital would have been counterintuitive.”

The difference between news brands and traditional retailers is that the former understands innovation isn’t something that stops. It is not a new piece of tech you buy and implement, it’s an attitudinal change.

Be more paranoid

Just as the hotel industry didn’t see Airbnb as a threat, traditional retailers didn’t see digital as a threat. They thought their reputation kept them safe.

Years back, when asked to increase spend on digital advertising, a figure at House of Fraser said to me “no one is going to buy clothes online”. Then Asos decimated the market. House of Fraser thought it could rest on its laurels and refused to innovate. Its unwillingness to change resulted in the chain going into administration.

Implement new approaches

There’s a lot of innovation going on in retail experiences. Asos lets customers return clothing via any shop offering Collect+; Amazon Prime Wardrobe allows customers to “try before you buy”; and some brands, like the Dollar Shave Club, are bypassing retailers and going direct to consumer. Yet traditional retailers are not following suit.

Consumers in the US have started using apps like mobile-first pharmacy Capsule which deliver prescriptions straight to your door, rather than trudging to the high street and queueing. It’s no surprise that Amazon has seen the value and bought pharmacy company PillPack.

If you’re a traditional retailer you cannot ignore how customer behaviour and needs are changing.

Take big risks

The Independent stopped printing and went online-only, the Evening Standard moved to a free model, and The Guardian decided that instead of having a paywall it would ask its readers to donate. Massive risks – but they worked.

Each company's business model has undergone rapid change in order to find a format that works. For the Evening Standard, offering the paper for free increased subs and advertisement costs, but it’s the last chance. Once free it’s almost impossible to reintroduce a price. If it hadn’t taken the risk, it wouldn’t still be here today – although it's not out of the woods yet.

Reengineer teams

This year started with huge layoffs at BuzzFeed, and HuffPost, amongst others. However, cutting staff won’t stave off closure.

Lanyado said, “You can lead a horse to water but you can’t make it drink without either injecting skills into your organisation by hiring already digitally savvy people, or upskilling people who already work there, and trying to take away the fear factor for them.”

While digitally native people will pick up technology faster, what they make up for in speed they cannot touch on with regards to experience and know-how. However, those without technical know-how can find the concept of reskilling daunting. This attitude change has to be encouraged from the top down.

Evolve your culture

Companies that fail to innovate have leadership who aren’t digitally savvy and fear change. You have to introduce a culture where everyone is encouraged to test new ideas quickly, learn and iterate through lean processes.

It’s harder for traditional retailers as they can be one hundred times the size of any news brand, but if you fail to create a culture that is able to cope with the speed of change you cannot survive.

Understand data

Traditional retailers have access to huge realms of data on their customer behaviour. But data is like oil – it’s the new frontier but it needs to be refined. Retailers have all the tools at their fingertips to be able to adapt to changing customer needs, but they do not currently have the skills to understand those tools and how they can work together.

As McKinsey states in its Digital Reinvention study, the core elements you must focus on changing in order to successfully embrace digital are your value proposition, people, processes and technology. For retailers, ignoring this means not surviving competition from younger, nimbler, digitally savvy competitors.

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