Retailer Digital Disruption: Why an Organizational Shift is Needed Now, Part 2
Part one of this series, Retailer Digital Disruption: Why an Organizational Shift is Needed Now, was featured in Total Retail's Fall print issue. Below is part two.
As difficult as it can be, traditional retailers must re-architect their organizations through the lens of their customer’s complete user experience, embracing a seamless cross-channel point of view and reorganizing to serve the customer, not to maintain outdated practices that are most likely hamstringing growth. They must move swiftly to first develop a long-term strategy, ideally with someone at the helm who is empowered to make tough decisions and understand the business from a holistic, digital perspective.
Next, they must gain organizationwide buy-in, starting at the top. The new road map could be painful if it entails dissolving and re-engineering merchant teams, store, warehouse and inventory management processes and breaking down silos in an effort to meet current customer expectations to breed and nurture long-term customer loyalty. It may even be determined the technology teams are working under outdated, time-draining waterfall methods, and learning and overhauling these areas to work in an agile method is required.
A road map to reimagining and building a current, digitally sustainable retail organization that will survive well into the future looks like this:
- Step back and objectively analyze what areas work effectively in today’s digitally driven retail climate.
- Identify areas that are outdated or don't function in support of profits and customers.
- Identify successful competitor approaches if known, and determine why.
- Identify current missing best practice technologies that would support final success.
- Determine what staff functions are missing. This could be leadership, mid-level managers or line staff.
- Determine if there are buy-in or attitudinal issues under the surface or outward facing.
- Identify duplicated processes or job functions.
- Identify missing processes or job functions.
- Objectively identify vendors and vendor processes that are outdated, manual, inefficient or unprofitable.
- Create a long-term, digitally driven strategy.
- Break the strategy apart into a phased approach, action plans, leadership accountability and deadlines. It won't be possible to implement overnight while keeping the business alive.
- Create as simple of a project plan as possible to monitor the progress, and insist on complete transparency when reporting.
- Determine costs and gain budget to support each phase.
- Identify and create internal change champions.
- Execute the correct organizational structural changes to support the full omnichannel strategy, beginning with the customer point of view.
Of critical importance for survival in embracing the new digital paradigm is belief in and commitment, starting with the CEO and mirrored in all leadership. Leadership must be able to articulate the unique strategy and priorities of the company. There's not a one-size-fits-all formula that can be applied. It may be determined answers to all of the above can’t be determined objectively with internal leadership, and there may be initial need for an experienced outsider to advise. There may be a need for an additional advisor or board member who has deep relevant and current experience to help guide the transformation. Most critical is defining what digital means to the company and its customers, or what it should mean for your specific retail operation.
Linda Mihalick is the senior director of the Global Digital Retailing Research Center at the University of North Texas.
Related story: Agents of Change