The 3 Ps for the New Retail Organization: People, Process, Platforms

Today’s retailers are faced with a multitude of challenges and transformative initiatives throughout their organizations. Finding the right talent, establishing the right workflow and investing in the right technology are of equal importance in creating the new retail organization. To better define what a successful retail org looks like, we asked three of Columbus Consulting’s partners three questions on the topic. Specifically:

1. What exactly is the new retail organization and how does it differ from those traditionally in place?
2. How have your clients been addressing the evolution of their workforce, both people and process?
3. Comment on the role of technology/systems in facilitating the new retail organization.

Here's what they said.

QUESTION: What is the new retail organization and how is it different today?

ANSWER: Elizabeth Elliott, Partner, expert in change management and business process.

Retail organizations, at all levels, are more collaborative and integrated across all functions more than ever before. Teams today have a stronger unified operational goal of focusing on the customer, creating great assortments, and optimizing inventory. There's an enhanced detailed cross-functional understanding across the product lifecycle calendar versus simply when a hand-off is due and what it’s used for. It's taking place from a brand’s growth plan all the way through to product sell-thru. That said, it's a continuous work in progress requiring leadership support, changes in behavior and process discipline. The catalyst for this change, though always needed, was the forceful push from COVID plus corresponding headcount reductions, supply chain challenges, and new remote working dynamics. The combination has propelled legacy organizations out of their silos and comfort zones, and into more effective cross-functional partnerships.

Regarding the evolution of the retail organization, there has been a greater focus on the generations that are currently in the workforce, what their characteristics are, and how they can be successful and effective as a team. There are four generations in the workforce now: Baby Boomers (on the younger end of the boomer spectrum), Generation X, Millennials, and Generation Z. In many companies, the mix of generations have created a diverse set of dynamics that require different strategies for talent recruitment and retention. What is critical for one generation, is not as important to another generation. Companies are utilizing specialized consulting firms to help navigate and understand the generational shifts and differences to help support effective organizations. In organizations that make inclusiveness a priority, the generational differences tend to compliment a team versus creating an organization of opposites. Effectively embracing and managing the generational diversification results not only in higher production, but also contributes to customer relationship.

QUESTION: How is the industry addressing the new workforce/place?

ANSWER: Richard Pedott, Partner, expert in business transformation, planning, allocation, sourcing and supply chain.

Retailers are required to address the new workforce/place across the organization, from recruitment to location and time zone management, to redefining process collaboration, talent assessment and re-establishing new leadership skills.

To start, recruitment in the new workforce era has changed. Old limitations of where to recruit talent from and relocation requirements have obviously changed, but businesses are still navigating through this. A key challenge to recruitment today is the need to get clear on which roles can be performed remotely and which roles can’t. One of the businesses with whom I have been working, for example, has had some missteps where they hired a role as remote with limited expected travel only to discover that the role could not be successfully performed working remotely.

With a distributed workforce, learning to manage time differences can become a challenge. One of my clients has a situation where the senior vice president over the e-commerce engineering team is based in LA, the development team is based in Boston with a third-party group of developers based in Dublin, Ireland, and an item information team based in Bangalore, India — all designed to better manage labor cost challenges. They've had to work out a new business cadence and merchandising launch calendar that works across these multiple time zones.

Coordination of onsite collaborations has become a challenge as well, both in terms of logistics and budgeting. Many businesses are still working toward understanding how travel budgets need to change and be managed as well as determining where in-person collaborations add value and make sense.

With respect to talent assessment and recruitment, the ability to manage external service providers or organizational extensions is going beyond the old boundaries and surfacing in functional areas where the need hasn’t been present before. As a result, this will need to become a core competency for more roles in the organization.

For management roles, the ability to build and drive associate engagement with a remote work force will need to become more of a core competency, as will be the need to develop more objective and tangible ways of measuring performance. The ability to develop a strong performance and measurement model has always been an important skillset for leaders, but now it has more of a premium attached to it. One potential positive is that more objectivity gets introduced into the performance appraisal process over time as organizations continue to wrestle with how to manage a more distributed workforce. Creating accountability forums and effectively enforcing accountability is part and partial of this core competency of managing performance.

At the entry level or for any new hire, the HR function is going to have to both rethink onboarding programs as well as assess a candidate’s strength in building a personal network in a remote environment. How well do they make use of various communications platforms and social media networks? I haven’t seen a lot of innovation yet in this space and onboarding of new associates seems to still be a big challenge at all of my current accounts, except the one that has brought everyone back into the pre-Covid work model.

QUESTION: What is the role of technology in the new retail organization?

ANSWER: Brian Greene, Partner, expert in merchandising planning, allocation and assortment planning.

Technology has always been a means to an end, enabling retailers to deliver against corporate goals. Investing in technology today, particularly within the new retail organization, now requires an assessment of not only how to be more efficient, but how to be customer centric and support the new post pandemic norms. There are several critical drivers for technology that include: driving more profitable growth with both topline revenue optimization and lower expense, staying competitive with new baselines being established by tech giants like Amazon, the enablement of AI across business functions and the shift to cloud-based solutions.

There has never been a more complex time for retailers to operate not only profitably, but with agility to predict and respond to external variables. Having visibility to the supply chain, embracing digital transformation and establishing remote access to systems throughout the organization are all top of mind. In addition to developing speed and accuracy within an organization, executive level revenue discussions often come with expense cutting initiatives and tend to be the catalyst for staff reductions leading to shifts toward more technology. Historically, however, we have not seen this to be the case. More likely, technology requires different talent needs, not necessarily less (other than employee automated solutions like chat vs. call center and self-checkout vs. cashiers). Technology is driving recruitment needs and the demand for more data-driven professionals and analytical thinkers.

Another driver for technology in the new retail organization is the need to stay competitive with innovative leaders like Amazon who have re-invented the industry, fundamentally enabling an endless assortment with near immediate delivery. E-commerce was the first ingredient to the mix, but the modern marketplace with direct and third-party fulfillment is forcing retailers to rethink their own business models and better differentiate their brands, products and services. In addition, the race toward AI/ML is creating a new measured approach to building core technology portfolios and adopting the ability to keep up with the speed that automated algorithms can provide.

Finally, since technologies have dramatically shifted to cloud-based solutions, many retailers are upgrading platforms and systems away from mainframes. The benefit has been delivering a lower upfront cost and allowing for faster and less expensive upgrades and patches.

As with every industry, the need to change and stay relevant is a never-ending process of assessing and adapting. Unlike other times, however, retail in the post-pandemic landscape and in the digital age has driven layers of speed and complexity to organizations. Remote teams, diverse talent and leaner, more collaborative structures are requiring new ways to recruit, manage, lead and onboard teams. The new retail organization is also contenting with digital transformation across functions. The role of technology to enable growth, speed, efficiency and accuracy layers on another level for retailers as they seek to attract and retain talent that have the skills necessary to leverage data, action upon exception-based findings, and utilize end-to-end process visibility and AI-driven predictions.

So where does the industry go from here? Wherever we take it. As long as we have the right people, process and platforms in place.

Elizabeth Elliott, Richard Pedott and Brian Greene are partners at Columbus Consulting, a boutique retail consulting company of retail experts.