You might be surprised at some of the real-world anecdotes senior retail executives use to describe what it’s like to be a retailer today.
This came into focus at our most recent XChange conferences in Berlin. One of the best aspects of this event are the peer-to-peer interactions. With that in mind, we gathered more than 30 retailers in an executive workshop and invited them to share their perspectives on growth strategies – based on global research of C-Level executives by the Economist Intelligence Unit.
The topic du jour was the organizational transformation required to adequately support today’s customer-centric world. According to Len Schlesinger, Baker Foundation Professor at Harvard Business School, “change must start at the top”. If it does not, well, nothing else matters.
“Fish rots from the head down,” he says.
What we learned from senior retail leaders:
One of the hardest parts of implementing organizational change is getting everybody to recognize the need for change in the first place. That’s understandable. After all, doing so would require an admission that something is broken. However, change they must, and change starts at the top. The people at the helm must set an example and lead by example. For instance, retail leaders must have a digital mind set that cascades down all levels of the organization. One retail exec at our workshop told the following story about fostering communication and collaboration: his assistant suggested he post something everyday on their internal social network, which had gone largely unused by employees. He began posting daily, sometimes mundane updates, and before long the entire company was using the service.
Put the Customer First
It’s no secret that today’s connected consumers dictate and control the terms of engagement, demanding the same shopping experience regardless of where or how they shop. That said, retailers must listen first to their customers and adopt an “outside in” approach to their strategies. Nick Wheeler, CEO of Charles Tyrwhitt, shared that they put his email address on every garment so customers always have a direct line into him.
Yes, it’s obvious – common sense, even – but to actually accomplish such a strategy, every employee must have a focus on customer success. One retailer told a story that, as a shopper, she lost an earring in a dressing room. One associate told her to check the lost and found, while another associate “was going to move mountains to help me find it.” How do you hire for such customer-centric traits? You can’t. Bottom line: Hire for attitude, train for skill.
Focus on Technology Usability
It’s true that technology is well entrenched in retail, whether it’s harnessing endless aisle capabilities, generating compelling content on social media or gleaning intelligence from data for personalization purposes. All this technology has the potential to change the game but retailers must ensure it’s intuitive, hire the right employees, and provide the requisite training and incentives.
It’s no longer about finding people with some experience in a relevant function, it’s about finding people who are as passionate about using technology at work as they are in their personal lives. Fifty-five percent of senior retailers surveyed by the Economist expect their need for technology skills to increase over the next three years.
This is particularly acute in the store. It’s becoming imperative that associates want to use technology because they fully understand the benefits that it brings not only to the organization but also to their own jobs. In-store technology promises to streamline store operations and give associates the tools they need to make more sales, which directly impacts their compensation.
Ditch Old Metrics and KPIs
Some old measures of success are no longer sufficient in the current retail landscape. For example, what is the value to a brand of a mention in a high-end fashion magazine vs. an influential blogger with 250,000 followers?
One senior executive of a luxury retailer said he used to fret over getting a mention in Vogue or getting the attention of its editor Anna Wintour. Not anymore. Now, he wonders how he can influence fashion bloggers and Instagrammers without seeming too “markety.”
In this new world, new KPIs must be developed, they must align across functions and importantly, they must be transparent. Incentives aside, new KPI’s that reflect our customer-centric reality will foster individuals across functions to work together, solve customer problems and achieve new goals.