Rethinking the relationship between HQ and frontline.
Old hierarchies of command and control now weigh down big retailers, and mean they're slow and overwhelmed by their own scale. What are the...
With nearly 16 million people working in retail in the US today despite the rapid decline in brick and mortar locations, the need for great retail management leadership has become more important than ever.
At every level of management it is vital to ensure a clear understanding of goals and objectives, what success looks like, and the role each function and person has in achieving it.
KPIs and rewards must be aligned with communication about priorities, decisions, progress, and ideas. And above all, there must be a positive approach.
And as the pace of change in this industry accelerates – encompassing customer expectations, employee requirements, real-time reporting and measurement, and the way that decisions are made and implemented – the real trick is not getting left behind.
Customer expectations have increased rapidly. What was once considered a killer service – rapid ordering, payment, delivery, and problem resolution – is now a basic expectation.
As well as having a greater breadth of products and channels to choose from, customers now find it much easier to quickly compare and make purchase decisions. Increasingly these decisions are also based on ethical and environmental considerations.
Aside from the convenience of the shopping mission, they often seek experiences and inspiration. So the caliber and maintenance of the store environment has become exponentially more critical. Poor presentation, lack of floor availability and unclear pricing or promotions are amongst the issues currently causing retail stores to leak 5% of their revenue each week.
Maintaining trust with existing customers, while gaining new customers, requires these higher expectations to be consistently met by store managers and their teams.
Employees also have greater expectations than in the past. ‘Pay and rations’ will no longer be enough to recruit or retain the right people.
They want clear career development. Support and guidance, with genuine, honest feedback, plentiful opportunities, and recognition for their successes.
Yet 81% of executives surveyed by Quorso said their companies do not systematically capture the improvement actions their teams take each week. So true employee recognition, based on actual efforts and impact, is impossible to achieve.
And then there’s the data.
There is now a vast amount available to businesses, but that can be a double-edged sword. On one hand you have real-time performance reporting. And the ability to run analyses on any chosen topic, which can in turn drive improved results.
On the other, all that data can create more work if the output is merely a pile of reports and complex charts, that then still need to be interpreted.
Not only can store managers spend, on average, half a day per week analyzing this endless data, they are also not necessarily best qualified to identify any accurate insights, or prioritize opportunities. So in addition to the laboriousness, the outcome can in fact be actions that run against business priorities.
The use of ML and AI throughout the supply chain has delivered efficiencies and freed up time for customer-facing tasks. But too often it’s used to strip out cost, reducing capacity to innovate. Meanwhile, snazzy BI software is starting to simplify the data analysis process, but converting these insights into measurable actions remains an enormous hurdle for retail stores of all sizes.
Analysis of 12,000 actions taken on Agile Performance Improvement platform, Quorso, showed only 8% of the various store execution issues identified each week, were outside of that store’s control.
The companies that thrive will be the ones that use the right tools to rise to and resolve this challenge.
Decisions on what to measure and report have to be rigorous and frequently reviewed. The accuracy of the data you use to decide actions and measure progress must be assured.
Rules and principles that colleagues and support systems (including t
hose using AI) adhere to must be clear and appropriate to each business area.
The quality of information and ability to make decisions can be altered along a spectrum. For example, if you have a proven labor planning tool that can allocate people to required tasks, do you really want a store or warehouse manager to be able to analyze in detail the wage system and make local decisions?
But if you have a solid but basic labor planning tool, you may want some local information and flexibility to make changes.
Management structures can be simplified if the actions in scope and priorities are clear. Identifying where opportunities exist, how to take action and how to measure progress doesn’t need a slow-moving hierarchy.
With a simpler management structure, managers can spend more time on effective communication, as well as on coaching and developing teams.
The functional old norm – where expertise sits in siloes and is linked together by reporting, presentations, and meetings – will continue to exist for now, despite its bad reputation.
But with improved information quality, analysis, and speed, much of this common way of working can be upended, digitalized and become infinitely more fluid and frictionless. Teams will work together, regardless of who they report to, and deliver consistent ongoing performance. Coaching, collaboration, sharing of best practices and celebration of successes suddenly become seamless, once embedded in digital tools and agile processes.
The ability for offline retail performance management to move to a more flexible and digitally-enabled approach – mirroring their online counterparts – is becoming more feasible, thanks to new software and systems available. These Agile Performance Improvement tools not only drive out executional errors, delivering revenue improvement at the frontline, they also give leadership complete visibility of all actions at all levels – mitigating the risk of them losing control or, even worse, falsely believing they are in control.
It is undeniably a new era for brick and mortar retail, but with the help of emerging new tech, 2020 has the potential to be a very exciting decade…