To win in today’s competitive world, co-ops must provide the unexpected to their customers, says Howard Brodsky, co-founder and co-chief executive CCA Global Partners.
At the Co-operative Retail Conference, he outlined the key steps co-operatives can take to achieve this. “There is an enormous opportunity to take it to a new level,” he told delegates at the Co-operatives UK event, held in Stratford on 5 March.
He gave the example of Zappos, a US shoe company aiming to provide fast online services. In 2015 the e-retailer sent 1,900 boxes with Zappos accessories and winter goodies to people in the town of Hanover, New Hampshire. The initiative was documented on film to remind customers that the business sold more than just shoes, drawing 100,000 views on YouTube.
Smaller companies have more scope to deliver the unexpected, said Mr Brodsky. “World-class service is delivering the expected; unexpected service is delivered with creativity,” he added.
To encourage this, co-ops should give people on the frontline the authority to do “something unexpected” and surprise customers, he said.
Similarly, co-ops should offer the unexpected to their employees, leading to a higher staff retention levels. “Employees expect good wage and pensions,” he said. “So at CCA Global we take our people to movies – we rent an entire movie theatre. We do all kind of things that are unexpected and they cherish that.
“If somebody does something unbelievable once every three weeks, in social media today, that’s your brand. We are not going to beat companies by investing more money in publicity. You need to outsmart them.”
Dating back to 1985, CCA Global Partners is a purchasing co-operative comprising 13 affiliated companies with aggregated sales of over USD $10bn. Its businesses are active in the carpet industry, as childcare, sport retail and interior design.
It success showed how co-operatives should work together to achieve scale, he said. “Individually, we can do great things but together we can do unbelievable things.”
Co-ops could also save between 15% and 20% by buying together, he said – and co-ops could work together at different levels: local, national and international.
At local level retail, co-ops could share IT resources, warehouses or management and provide joint offers to customers, said Mr Brodsky. On a national and international scale, they could collaborate on solutions for common challenges such as how to attract millennials or share technology to drive innovation.
“Individually it is difficult to put enough resources towards innovation but, if combined globally, resources could be enormous so that we could be ahead of the game, not catching up,” he added.
“At CCA we were able to bring a lot of services we would never be able to have otherwise. We built up a lot of internal resources, training groups, real estate groups, insurance groups.
“Growing in scale is not just about getting larger numbers but scaling up and having the services that our members need to stay competitive and be profitable. Our diversity of companies has brought services to us and management talent.”
Along with the International Co-operative Alliance, CCA Global is exploring the possibility of an online buying portal where customers can buy exclusively from co-ops.
A platform co-op eco system already exists in the USA and is looking to grow web-based marketplaces that are collectively owned and democratically governed.
Another area to work on, he said, is ensuring employees and members understand the co-operative model so they can spread the message. Mr Brodsky founded a non-profit, CBW, with a mission to raise awareness of the co-operative business model through education and inspiration. This organisation is working with the Alliance on the Co-operatives for a Better World campaign, a global marketing campaign to promote co-operative identity launched in November 2015.
For the campaign, CBW produced the first What If videos telling stories of co-operatives in different countries. Since the launch of the first video, 14 countries have produced their own customised versions of the film.
Asked about the next stage of the campaign, Mr Brodsky said the natural extension of “What if” would be “Why?” – with co-ops telling their individual story of why they operate as a co-op, what they stand for and what it means to them.
“People are inspired by great stories, we need to gather and share those stories,” he said.
But he said it was also crucial for co-ops to take risks if they want to succeed. In 2015, CCA Global launched a new guaranteed waterproof, stain-resistant carpet, which stops spills soaking through.
“We come out with the first guaranteed stain proof carpet– no one else had done that in the industry,” he said. We did it because we felt it was important to do. It was a risk.
“With successful companies the greatest risk is not to risk. You have to risk smartly but you have to risk.”