The essay that became CLEAR, read again in 2026 with readiness in mind.
Purpose is the foundation on which retail innovation is built. Without solid alignment on purpose, innovation will always be on shaky ground. A tip before we begin: customers and team members are motivated by a purpose that goes beyond a return to shareholders.
What is your purpose for being in a retail business? By purpose I do not mean making money, because that just gives you the right to keep going. I mean why you exist. Twenty-five years ago it was an easy question. Retail stores existed to make goods and services available to customers at a price they were willing to pay, in places they were prepared to visit. Some retailers focused on a unique range, others on more generic ranges at the best price. The internet changed all that. Amazon alone lists well over a hundred million products, and the best price is as close as the nearest search engine. The traditional reasons for retail to exist have gone, and that has left retailers with a real existential problem.
With the old problems of retail solved, the successful retailers of the last decade have sought new reasons to exist. Traditionally price-based retailers like Walmart and IKEA have added sustainability and fair trade to their purpose. IKEA's is expressed as "a better everyday life for the many people". Traditionally product-led retailers like Nike and Starbucks have focused on emotional purpose: "bring inspiration and innovation to every athlete", and "to inspire and nurture the human spirit, one person, one cup and one neighbourhood at a time". Retailers like The Body Shop, born out of social purpose, have seen their stores develop into openly political activist hubs where you can sign a petition, hear a speaker or make a donation.
A modern retail purpose that goes beyond range, price and proximity is an essential foundation for innovation. BCG published an article on why purpose matters to businesses, and I would like to relate their reasons to retail innovation in particular.
The first reason purpose matters is that it builds organisational alignment, which is essential if you are embarking on a program of innovation. If the team does not have a clear articulation of where they are headed, how can they be expected to move in the same direction? Alignment around purpose also helps when the time comes to make key innovation decisions, like which ideas to adopt and which to filter out. Part of The Body Shop's purpose is "enrich, not exploit", which shapes sourcing strategies to support communities in poorer countries. Its decision to deploy a digital media network in stores was taken, in part, to tell customers the story of products made by the African communities that purpose supports. Without alignment around purpose, the biggest risk is that sceptics get the chance to opt out and do things the way they always have, potentially killing your program before it has started.
The second reason is that purpose can, and should, be a stimulus for innovative thinking. A purpose statement should cause the team to think about the difference between how things are today and how they could be tomorrow. IKEA's ambition of a better everyday life with reduced impact has led to many changes, including trials of renting products, which lowers the acquisition cost for customers, extends product life, reduces waste and moves IKEA towards a circular model. H&M's purpose of leading the change towards a circular fashion industry set it on a similar course, with used-clothing collection in store, designers trained in circular practice and a growing share of recycled materials.
The third reason is that purpose creates resilience. Innovation is particularly hard for retailers. The things our industry values most are the ability to execute and short-term results. Innovation requires a lot of test and learn and long-term thinking, so there will inevitably be disappointments. A clear purpose reminds everybody of the big game, that this will be worth it in the end.
The final reason is that purpose creates inspiration, and for retailers this may be the most important of all, because we rely on inspired customers and team members for our existence. Both have plenty of choice about where to shop and where to work. Doug McMillon has spoken about the effect of Walmart's environmental and fair-trade purpose on customers, who expect the company to make decisions that are good for the planet and for the people in its supply chain, and about the companies that provide it better than others being the ones that win. For team members, an inspiring purpose can be the difference between joining and not joining, staying and leaving, or giving everything and giving just enough. At &pizza in the US, the purpose statement is more prominent than the menu, and the team member "tribe" is so taken with it that some have it tattooed on their arms. Wouldn't we all like team members that engaged?
If you want to inspire customers and team members, the substance of your purpose matters. Neither group is likely to be inspired by maximising shareholder value. One study found staff between seventeen and thirty-three per cent more motivated when business purpose de-prioritises corporate profit. And a final tip: developing that purpose is not a job you can contract out. It needs to come from the heart and soul of your business, not be selected to meet a marketing objective. Customers and team members will smell a rat if the purpose is at odds with how you actually behave. Worse, you are quite likely to end up on one of the purpose-parody websites.
This essay became CLEAR, the first model in the Readiness Stack, and the thing I would add now is a word about altitude. Most of the purpose statements I see are true and useless at the same time, because they live on a wall rather than at the height where decisions are made. A purpose is only doing its job when a store manager can use it on a Tuesday to choose between two reasonable options. AI has made this sharper. If you cannot say what problem the technology is for, you will aim it at whatever demos well, and the demo will be the high point. Clarify, Live, Evaluate, Align, Reinforce is our attempt to make purpose a working tool rather than a statement. The argument here is where it started.
Sources: Grice, Reeves and Fuller, "Getting uncomfortable with purpose", BCG, 2019. Ignatius, "We need people to lean into the future", Harvard Business Review, 2017. Parmar, Keevil and Wicks, "People and profits", Journal of Business Ethics, 2019.
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