Retail’s new cobbling economy
Through a special arrangement, presented here for discussion is a summary of a current article from the Spieckerman Retail blog.
In my travels, I’ve come to realize that the generally positive spin put on Uber drivers and other workers within the so-called “gig economy” makes sense in some situations. In many others, it doesn’t describe the realities that people and retail companies are facing.
The entrepreneurial concept of gigging obscures the fact that a growing number of people and companies are cobbling together multiple opportunities just to pay the bills. The difference between gigging and cobbling isn’t just semantic and knowing their distinctions can be eye-opening. Gigging is proactive and opportunistic, whereas cobbling is reactionary and born out of necessity.
In Florida, for instance, I met a construction worker who began driving for Uber and Lyft on what he thought would be a temporary basis when his work dried up. Today, he supplements driving with handyman jobs, makes considerably less than before and lives with two roommates. He isn’t adding gigs to his repertoire — he’s cobbling multiple jobs together to keep his head above water.
Paradoxically, the proliferation of disruptive digital-based platforms is both creating the opportunity to pursue gigs and necessitating that some keep piling up jobs to make ends meet. This dynamic is alive and well in retail.
Initially, many retailers saw digital channels purely as an upside — an opportunity to add gigs in the form of online partnerships to their existing business base. However, their base shrunk faster than they thought and an urgency to diversify across multiple online platforms just to keep up has arrived for many. As Amazon and other digital commerce platforms wick sales away from traditional brick-and-mortar retailers, more retail suppliers are also finding themselves in cobbling mode, pursuing multiple digital platform partnerships and niche opportunities to replace business that once flowed in with fewer accounts.
The complexity of this more fragmented model is easy to underestimate, just as the volume potential is often blown out of proportion.
In the end, confusing gigging with cobbling can lead to enumerable problems including unrealistic or inaccurate sales projections, cannibalization of existing businesses and eventually low corporate morale as expectations are dashed and nerves frazzled.
There’s no shame in cobbling. In fact, it will be an everyday reality for most companies operating in retail. The trick is to determine which businesses are diminishing, shifting or ripe for replacement and to realistically assess what and how many opportunities will take their place. Once the foundation is set, selectively pursuing gigs can crank up the growth.
DISCUSSION QUESTIONS: Are retailers confusing gigging with cobbling in their pursuit of partnerships with digital platforms? What advice would you have for retailers around evaluating and proceeding with digital partnerships?