Retail is undergoing its biggest evolution to date. Consumer expectations are on the rise, and a generation of younger shoppers is changing the way brands think about engagement, loyalty and the customer experience. With so much change, it’s inevitable that there will be winners and losers when the dust settles.
In fact, we’re already seeing evidence of it. At one end of the spectrum, sporting goods retailers are struggling to stay afloat, with brands like Sports Authority and Vestis Retail Group (parent company of Eastern Mountain Sports, Sport Chalet) shuttering stores and filing for bankruptcy. At the other end, home improvement stores continue to rise above, with brands like Home Depot regularly beating quarterly numbers.
So what gives? Why are some retailers flourishing and some flatlining? We recently teamed with WBR Research to better answer that question, and the resulting insights from more than 1,050 store managers from across the country highlighted the key factors separating today’s retail winners and losers.
Information to Empower Action
Success in retail today relies on agility and the ability to quickly react to trends and changes, and make necessary adjustments to drive improvements. Where e-commerce brands have excelled in this area, physical retailers have struggled to enable easy information sharing and fast action, and those who don’t are quickly falling behind.
Eighty-nine percent of home improvement store managers said they feel empowered to make decisions and act quickly, compared to only 63 percent in sporting goods. That ability to act quickly is directly correlated to access to information across the organization. Where 50 percent of home improvement store managers said they have access to information across stores and online, only 37 percent of sporting goods retailers said the same. The unsurprising result? Only 16 percent of sporting goods managers feel their brand provides a consistent online/offline experience, compared to nearly 60 percent in home improvement.
Today’s consumers expect a seamless omnichannel shopping experience, with options like the ability to get store inventory information online or at other locations, or to buy online and pick up in-store. To deliver on these expectations, retailers have to unify their information sources, providing organization-wide visibility of online and offline data to enable greater agility.
Technology, Tools and Training
Imagine you’re an investor and you have the opportunity to back a large retail brand. Then, you find out it's relying on outdated and error-prone tools to manage some of the most critical components of its business. Is that a company you would want to invest in?
Major gaps in technology, tools and training are a key culprit in much of today’s retail failures. A mere 37 percent of sporting goods managers cite having the tools and training needed to succeed, compared to 65 percent within home improvement. And that investment analogy? It rings a little too true when it comes to some segments in retail. In fact, 34 percent of sporting goods managers said they still rely on pen, paper and spreadsheets for financial reporting, with one quarter relying on the same outdated tools for sales reporting and corporate communications. Conversely, home improvement managers cited use of more sophisticated tools and technology.
While many retailers have been quick to invest in customer-facing technology and initiatives, it’s time to invest in more effective tools and training for the teams on the front lines who bring your brand to life every day. Ready to commit? Look for tools that align with the way all teams work. For example, software that works on mobile and syncs across all devices works for on-the-go district managers and store managers who jump between the back office and sales floor, and helps reduce transcription errors that often lead to inaccurate data.
Connecting the Company Dots
Keeping employees connected and marching towards the same goals is hard for any company, but can be particularly challenging for retail brands with corporate offices and physical locations spread around the world and multiple levels within the company hierarchy.
However, organization-wide alignment continues to be one of the most critical factors in retail success. Take home improvement, for example. Seventy-seven percent of home improvement store managers said they feel aligned to corporate initiatives, and 35 percent feel that corporate provides them with the information needed to succeed, compared to sporting goods, where only one quarter of the stores cited having adequate information from corporate.
And it’s not just top down and bottom up. Lateral communication is key for not only understanding individual store success in broader context, it’s also crucial for helping lower performers find ways to improve. Far fewer sporting goods managers cited sharing best practices across stores, at 53 percent compared to the 66 percent average.
Across many organizations, different teams rely on different data and communications tools. Instead, retailers should implement one comprehensive solution that can be used across the organization, but gives each team the ability to customize their dashboards. Providing transparency around key company goals and priorities instills trust and ensures that all team members, from the corporate office to the storefront, are working together to enable long-term success.
Chris Taylor is founder and CEO of Square Root, a SaaS company whose store relationship management (SRM) platform, CoEFFICIENT, helps leading retail and automotive enterprises turn data into action to align their organizations, increase transparency, encourage collaboration and improve store performance.
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