For many the retail and natural resources sectors could not be more removed from each other. It is hard to see the fashion of Rodeo Drive on the main street of Karratha Western Australia, or Iron Ore for sale amongst the Chanel and Gucci boutiques along Orchard Road in Singapore. Based on my extensive professional experience in both sectors, it might surprise some the number of similarities between the two sectors. It typically comes down to supply chain and the need to get finite and often perishable resources from the source to the customer.
The Natural Resources sector (Oil and Gas, Mining, Distribution) historically has had an at best, arm’s length relationship with technology, particularly when the commodities market booms and investment dollars come through thick and fast. Just as Real Estate is all about Location, Location, Location, the Natural Resources sector is all about speed. Speed to bowser, speed to port, speed is what drives the market.
Technology was an afterthought for the natural resources providers. To their detriment, it still is for many. However, for leading and innovative organisations (if these two attributes are indeed divisible).
- Scarcity of new supply
- Asset utilisation optimisation
- Changes to pricing and distribution
Currently main street retail (the industry I grew up in, wrote an honours thesis on, and started my professional career researching and analysing) has too many providers potentially paying a fatal price for chronic long-term underinvestment in technology. As a consequence many legacies are well behind in the race to succeed as consumers the world over embrace the opportunity for digital or online distribution channels for goods.
This technology investment and aligned business challenge is principally driven by the following factors
- Increased pressure on cost effective supply and sourcing
- Distribution point disruption and product optimisation
The key and clear point is that in essence both the drivers are the same. One could argue that for example the Insurance industry faces the same challenges, but where Natural Resources and Retail are aligned is the reliance on distribution and supply chain. Fickle end user demand is also common across the two industries.
What does all this mean? Simply, it reminds participants in each industry to learn from each other. It proves that best practice and knowledge is equally sourced outside your industry as it is within the walls of comfort of your industry. Look for commonality, be it, supply chains, customer demographics or simple geography.
If you require further information, please contact Phil Hassey, Founder capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology in emerging markets. Phil may be contacted by email below,