Using Agile Principles to Re-Open and Recover Your Retail Business

Retailers across the country have started to reopen their storefronts, clearing the path for recovery from the devastating global pandemic. While the coronavirus has sparked uncertainty in retailers’ futures, it has also brought about new ways of working in retail. These new ways are largely rooted in pre-pandemic trends that have accelerated — e.g., the shift to e-commerce, doubling down on omnichannel, and investing in logistical excellence. These three trends are key pillars of any modern, successful retail enterprise.

As retailers re-open, they will only grow in importance as consumers accelerate the to shift to online purchasing. We’ve seen retailers adopt these new trends to survive — or even thrive — during the pandemic. This begs the question: Now that the new normal is here, what’s next for retail? The key words to keep in mind are agility and acceleration. Here are few examples of how retailers can continue to build on the pillars of success.

The Shift to E-Commerce

While physical stores were shut down in most cases for several months, websites were not. Companies that invested in their digital and online assets pre-pandemic were able to better withstand the shock of their brick-and-mortar stores being closed. Like squeezing toothpaste out of the tube, this cannot be undone. Customer expectations have changed, and for good reason. Shopping online and having products delivered is safer and more convenient. Consumers will continue to use online channels to get what they need. This is especially true as people return to work and face increased time pressure. An e-commerce strategy is no longer nice-to-have for retailers of all sizes; it's truly essential if they’re to thrive in the new normal.

Doubling Down on Omnichannel

Traditional retail revolves around a multichannel strategy that focuses on the assortment and merchandising. However, retailers have historically siloed these channels. For example, you couldn’t buy a product online and return it in-store. With stores closing for extended periods of time, retailers have been embracing the omnichannel strategy by focusing on the customer rather than their own internal strategic fiefdoms to create a single customer experience across their brands.

Curbside pickup is one example of an omnichannel strategy trend that accelerated during the pandemic. For those items that made more sense to pick up physically (e.g., dairy, produce, and "I need it today" items), big-box retailers that could quickly mobilize in-store operations to execute same-day pickup were clear winners. Shuttered storefronts were used for warehousing and, in some cases, last-mile distribution. This is a trend that will continue to accelerate, especially in grocery.

Investing in Logistical Excellence

While most companies were content to leave delivery to the standard offerings of logistics providers like FedEx and UPS, other companies took a more aggressive approach to logistics with offerings like same-day delivery. While online retail giants like Amazon.com have always had industry-leading logistical capabilities, other retailers are sure to continue to make investments in their ability to shorten the time from "customer order" to "at the customer’s door." Increasingly, consumers expect same- or next-day delivery, as well as affordable shipping. Retailers that lag on embracing this trend will undoubtedly lose customers to competitors that have made the investments to meet these rising expectations.

While identifying these trends is a good first step, a "state of the union" about the important functional areas for retailers is inadequate. The antidote to uncertainty is agility, because agility gives retailers the superpower to adapt to changing conditions. Applying agile strategies when re-opening will help retailers find the most cost-effective, innovative and timely approaches to ensure the transition is done smoothly. Specifically, business agility is the key discipline that will help all functional areas of retail businesses recover and thrive. Here are three aspects of business agility that should be applied to retail:

• Treat everything as a hypothesis. In the wake of coronavirus, companies in a strong enough position to make strategic investments in key aspects of their business will do so. However, we make the biggest decisions about strategic initiatives when we know the least (i.e., at the beginning). Creating hypotheses and then testing against them gives businesses a logical fact-based framework to resolve internal contradictions — and for any nontrivial initiative there will be many. Once a hypothesis is tested, and either proved or disproved, the business can move forward from an informed position.
• Customer centricity is the name of the game. A common thread that runs through all aforementioned accelerations is customer centricity. Retailers that were able to pivot to best serve customer needs were the retailers that centered themselves on the customer's need first, then worked backward to understand the organizational changes necessary to bring those customer-oriented offerings to life. They accelerated — even for large, complex initiatives with multiple stakeholders. Starting with a single customer and building out into more customer groups helps you to prioritize what, why and when.
• Build to evolve. Coronavirus caught a lot of retailers flat-footed. Still others are waiting for the "new normal" so they can make changes and get back to business as usual. It’s best to look at this situation as not a new normal, but as a series of evolutions from past to present to future. Six months ago, none of us could have predicted that a global pandemic would bring the economy to its knees. As such, think about key initiatives as long-lived products and services that will continue to evolve as customer needs and preferences evolve. Making evolution part of the strategy will save you headaches when new challenges and opportunities arise, and you need to shift strategic direction for competitive advantage.

The digital era has been pushing retailers to evolve for quite some time, and the coronavirus has only accelerated the process. Through the pandemic, retailers have overcome incredible challenges. Many have reinvented the way business is done by accelerating their online offerings, doubling down on their omnichannel strategies, and building up logistic capabilities. In order for retail businesses to re-open and recover efficiently, I recommend becoming fluent in the language, techniques and tools of business agility. This will allow retailers to adapt to new changes rapidly, test and learn what’s right for their business, and prioritize their customers. Just as mail-order catalogs are mostly a relic of the past, there may come a day when the notion of physically going to a store for anything will feel quaint. As we progress toward whatever’s next, retail will continue to evolve and, ultimately, those retailers that master business agility will set the tone for the future of the industry.

Tirrell Payton has been working in agile environments since 2006. He is a Scrum Alliance Certified Agile Coach and consultant who serves senior clients in the Retail, Bio/Pharma, and Banking industries.