Augustín held lots of assumptions in his strategy shift in pricing model and strong (personal) beliefs in those assumptions that are unsupported by data. Based on his conversation with María, we can observe that Augustín visioned to change Emilia from a retailer that is highly reliant on a bargain-hunting and appealing to sensible moms to one more transparent on pricing and appealing to youth cultures. However, he was too trapped in his own visions and projected those onto his customers without asking whether that is even what they want. In fact, he was not even receptive of suggestions/ideas from his friend María. If he could have prototyped and tested his assumptions, he would not have to lose 211 million euros in revenue. For instance, Augustín targeted at the younger generation and he thought young people consider physical stores to be important because of the touch-and-feel experience they offered. In addition, young people will use social media to spread good words about Emilia is a fun place to meet and socialize. There were so many assumptions he made without testing right here. First, young people preferred physical stores to online experiences. Second, the reason why they would enjoy physical stores is the touch-and-feel experience. Third, young people who indeed preferred physical stores would also use social media to spread words around. Fourth, the way he renovated Emilia actually made it a good place for young people to socialize.
If I recently consulted to advise Augustín, I would not start with anything radical again because of all the renovation Augustín had already put in. It might be better, or at least more practical, if Augustín start to test some assumptions that are cheaper and faster. For instance, I might suggest him to test the assumption that young people who indeed preferred physical stores would also use social media to spread words around. He can have employees go into the store to interview young people there since they are already the ones who are willing to come into the physical store instead of shopping online. They might ask them directly whether they are willing to share them shopping experience on social media and the reason behind it. They can also try to gather more data on traits of young people who are only willing to come to the store but not post on social media vs. young people who are willing to do both to gather more insights about next-step strategies.
