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Seth Godin to Retailers: Here’s How You Stay Relevant

In a market where products and services can’t be distinguished, why wouldn’t consumers suss out the cheapest?

Renowned author and public speaker Seth Godin posed the pointed question to an eager audience at the Americas Apparel Producers’ Network (AAPN) annual meeting in Miami earlier this month, in a talk designed to challenge companies to change, redefine and innovate.

Godin opened with a nod to industrialization, noting that as mass production became more efficient, it led to mass distribution and mass merchandising, which fed mass advertising—which all meant more of the same.

When novel concepts or new technology enter the fray, according to Godin, our instinct is to think ‘How does this change help us do what we do?’ instead of looking to the future for what could come next.

“The entire model we grew up with is based on industrialization (not capitalism, which is based on taking risks), which meant refining the supply chain,” but, Godin asked, “At what point in the supply chain did your job get pushed to be a replaceable cog in the system that doesn’t want you to be different?”

But now, different is the new black.

“The normal distribution is melting,” Godin said. “Bit by bit, day by day, there are more people outside of normal. The weird are who’s paying attention, the normal are ignoring you—they just want business as usual, they just want to order from the catalog. The only way we’re going to grow is by seeking out the weird.”

Facebook, Zipcar, Ted Talks, Spanx, Warby Parker, Task Rabbit? “They all cater to the weird,” Godin said.

What a company is really selling is its supply chain, its information, its trust and its network—not a product that’s 3 percent cheaper than the competitors’.

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The industrial system is going away, Godin said, and the connection economy is taking its place. “It is not based on how efficient your machine is, but who trusts you, who is connected to you, who cares about what you are going to do next,” he explained.

“Industrialists want us to fly low, they want us to feel like we are pawns in the system,” he said. “But the pilot doesn’t say ‘We are dangerously off course, we’re going to fly back to Dallas and start over.’ She adjusts.”

Godin added, “Steve Jobs did not design stuff or write code. He had the grit to say no, to walk away. That’s how we go forward in the new economy. By telling a story, a true story. The cost of mistakes keeps going down because the Internet gives you alternatives and information. Today, you innovate by adjusting.”

There are four things that create value, according to Godin: coordination, trust, permission (the privilege to deliver anticipated, personal and relevant messages) and exchange of ideas (all of us are smarter than any of us).

“These four things are the things the market values now,” he said.

The connected economy is based on abundance. Whereas the old mindset said: ‘I can’t give you what’s inside this box, because then I won’t have it.’ The new one says: ‘If I give you what’s inside this box, then we’ll both have it.” The people who share do better, according to Godin.

“If you want to give away your secrets, give away your secrets because it turns out the people who give away their secrets, the people who share the most, the people who introduce each other, the people who join groups like this one [AAPN] come out ahead because there are no industry secrets,” he said.

Consumers are a tribe of sorts that a company can feed, be part of and ultimately lead.

“Your job is to connect the chain, build a culture within and without, communicate to the tribe, connect to where they are going,” Godin said.

So what does it take to initiate change and lead the tribe? Be indispensable.

And while the notion may be a simple one, fear of failure has kept companies from taking the risks that could render them just that.

“Change has a sister and her name is tension,” Godin said. “There is no change without tension.”

An artist, for example, shows up and says, ‘I made this,’ and a plumber comes in asking what you need him to do.

“Tension is what we must seek out. It is a part of art, that it might not work, that we might get blamed. You want to be told what to do, you want a list, a checklist, a map. But if you had one, you’d be a plumber, not an artist,” Godin said. “We want to be competent, but competent is no longer scarce. If I can write down the specs of what I need from you, I can find someone cheaper than you to do it.”

Take Kellogg’s. The established cereal brand won’t give tours of its Corn Flakes factory because it is afraid someone will discover its secret. But that’s not its problem, Godin said. “Their problem is that no one cares about Corn Flakes because it doesn’t touch us, there’s no growth, no innovation.”

Innovation might be intimidating, costly even. But innovation is failing over and over again. And it’s always going to seem too soon, Godin said. When Karl Benz invented the car, it was illegal to drive one. When Gutenberg pioneered the printing press, illiteracy was rampant. The man who invented the ship also invented the shipwreck.

“If failure is not an option, then neither is success,” Godin said.