PART 5: How to Thrive in a Digital Retail Landscape

A woman using a smart phone

Part 5 of 5: People and culture are the most important link

In our journey to e-commerce and personalization, cost, technology, and processes, which I’ve discussed throughout this series, are critical challenges that require careful planning and meaningful decisions. But by far the biggest challenges are posed by people and culture. As management guru Peter Drucker put it, “culture eats strategy for breakfast.”

Evolving roles require new skills

Let’s first talk about skills. Many of the core retailing skills will always be needed, such as customer service and category management. Some roles will need to evolve, requiring a slightly different skillset, one that the people originally hired to perform the job may not have or may need to learn.

Of course, we’ll also need entirely new skills and resources. In the new digital realm, we need new skills not only to understand and execute digital engagement itself (using email, smartphone apps, etc.), but also for more analytical functions. Some retailers have started hiring data scientists, statisticians, and operational research experts. Even if we partner with an external party to access advanced analytical capabilities, we still need these skillsets internally to hold external partners to account.

As these analytical capabilities become more central to the roles of merchants and marketers, we have to train them so they understand the vision and the tools. That’s where cultural hurdles can come into play. There are likely many long-tenured professionals who believe their personal judgment is far superior to anything generated by data and analytics. But in the e-commerce and digitally engaged world, working by gut feel does not lead to success.

Using senior leadership and proof points to gain buy-in

Overcoming this cultural resistance and getting the change management right is the key. We need broad and visible executive support to drive the successful transition, including a champion from the C-suite. A strong leader can change the whole culture of the organization to focus on understanding and satisfying customer needs in order to win against the competition—this can be a transformational rallying point.

Another rallying point should be the highly visible competitive threats in the marketplace. Exhibit A: Amazon. Simply put, Amazon is blazing the trail in e-commerce and personalization. While it is almost totally an online provider, Amazon is leveraging its data and making better decisions to create very personalized offers and deliver a very compelling online customer experience. Traditional retailers that have a strong store network could be as good as Amazon in that regard, plus they’d be great operators. That’s a lethal combination and something that leading retailers like Walmart and Kroger both publicly aspire to.

Dissatisfied shoppers can also be another powerful source of proof points to help get resistors on board. A woman is offered a coupon for dog food but owns a cat. A 70-year-old man receives a promotion for baby food. A couple with no kids receives back-to-school discounts. Customers aren’t shy about sharing these mistakes with the world, which clearly harms the retailer’s brand and reputation. These types of examples can be powerful motivators to change.

There will always be holdouts. We don’t have to have everyone on board before embarking on the journey. What we do need, however, is a roadmap, and a commitment to gathering early and consistent proof points along the way to win over hearts and minds and keep building momentum.

The importance of a cross-functional roadmap

It’s important to create cross-functional project teams that include not only marketing and merchandising but also IT, store operations, supply chain, and finance. It’s all too easy to overlook important elements if we take too narrow a viewpoint—a cross-functional team not only minimizes these risks, but it helps get the crucial buy-in from all departments. These teams will set the implementation schedules and work with any required technology partners.

Baby steps to keep the momentum going

It’s important to set attainable goals. Having a clearly defined and documented end-state will enable everyone to understand the ultimate goal of the customer-centric journey, but if the objective feels unattainable it can be demoralizing. Once the foundational building blocks are in place, it’s important to select a few areas that can bring some relatively quick wins. These wins need to be real and relevant but they also need to minimize risk. Once initial proof points have been established, we can broaden the rollout into daily operations.

Clear objectives and incentives (especially those tied to compensation) are always an important part of any process change. They need to be aligned across the organization.

Celebrate successes and retain them in the marketing and merchandising arsenal for future years. For when there are failures (and there will be!), ensure the culture allows people to fail and put a process in place for learning from the failures—determine what went wrong and either try to fix it or make sure it isn’t repeated.

These changes won’t all happen overnight. It’s not always possible to expect an individual or group to change its skillsets or its approach at all, let alone in a short space of time. But with the right transformation team in place, achievable goals, support from the top and a commitment to changing the culture, we can all play a significant part in this incredible evolution of retail.