Digital lessons to harness your retail team's value

Learnings from digital to harness the strategic value of your retail team

Retail teams, typically centered on cost and compliance, can significantly boost top-line growth by embracing strategies from Digital teams. Q5 provides insights on how Retail teams can improve customer experience, leverage analytics, and play a strategic role, thereby becoming key drivers of business growth.

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I recently sat down with Matt Phelan, Q5’s Head of retail to discuss the current strategies of retail teams. In-store sales account for c.80% of revenue for omnichannel brands, compared to c.20% from their eCommerce channels. Despite this, Retail teams (including Store & Retail Operations functions) are often underutilised as a means to increase sales and enhance the customer experience. Through Q5’s experience advising many national and global retailers, we have observed several key traits that Retail teams should look to replicate from their Digital colleagues, transforming how the traditional Retail team is deployed and perceived. Currently, Retail teams are focused on cost and task optimisation and compliance, however with cost and economic pressures continuing to increase, now is the time to consider how Retail teams can be repositioned as strategic value drivers to improve topline growth.

The shape of Retail teams today:

In our experience, Retail teams traditionally focus on four core pillars of activity:

1. Omnichannel projects
2. Task/cost optimisation
3. Workforce scheduling
4. Store communications

Additionally, teams may have responsibility for activities such as health and safety, property, and in-store services. Whilst these tasks are critical to drive compliance and reduce cost, they have limited impact on top-line growth.

What is often overlooked is the power that Retail teams have to harness their knowledge and experience within stores, sharing this key business intelligence with wider Head Office teams. Compared to Digital teams, whose customer insight and perspective is often used throughout the decision-making process, Retail teams are often communicated to by wider Head Office functions, rather than brought into decision-making processes and communicated with. The close proximity of these teams to store colleagues, and therefore customers and their needs, is underutilised in increasing sales, exciting customers, and accelerating the workforce.

A Retail team for the future:

At Q5 we believe there are several core capabilities that are often found in Digital teams, that Retail teams should look to develop to position themselves at the centre of strategic change and drive topline growth. These include:

• A/B testing – experiment the testing of initiatives within stores to allow for proper comparison of success and their ROI, before rolling out across the full store estate.
• Customer data and insights – capturing customer preferences and feedback regularly by tapping into the knowledge store teams have when considering marketing campaigns, new products, pricing and promotions.
• Analytics – harnessing retail analytics to identify interventions which will truly drive change, deliver topline growth, and support meaningful customer interactions.
• Customer experience –continuously reviewing and adjusting the customer journey to enhance experience and in-store conversion rates.
• Product personalisation and recommendation – regularly delivering product and sales training within store to ensure employees have the appropriate skills and knowledge to proactively engage with customers and uplift basket size by recommending products based on customers’ unique needs.
• Product Management – treating stores as ‘products’ that continuously need enhancement, leveraging the breadth of knowledge from the shopfloor to crowdsource ideas on how to more effectively conduct store operations and improve the in-store experience

Considerations for making this a success:

There are key questions that should be considered when attempting to reposition Retail teams in this way:

• Are you clear on your business strategy and how Retail will help to achieve it?
• Does your Retail team have the right structure and capabilities in place to deliver this change?
• How will your Retail team work with the wider organisation to amplify the voice of customers and store colleagues?
• How does your organisational culture support the repositioning of Retail?
• What technical and analytical skills and tools will be required?
• How will you successfully implement this change whilst building buy-in and understanding throughout the organisation?

Ensuring your organisation is set up with the right strategy, organisational design, culture, technology and supported by appropriate change management is fundamental to making this repositioning a success. At Q5 we are experts in ensuring these critical components of healthy organisations are in place to support your ambitions. By harnessing the untapped potential of Retail teams, businesses can look to accelerate their growth and increase customer value, whilst still protecting their bottom line.

As always, we’re here to help. And if this is a challenge you’re working through, we’d love to chat.

Emily Koltunicki

Principal Consultant

emily.koltunicki@q5partners.com

Matt Phelan

Head of Retail sector

matt.phelan@q5partners.com