Things Are Bonkers Out There: Now What?
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Read virtually any headline today, and the takeaway is likely some version of the world being a very different place than it was just a few years (months?) ago. Unwritten norms are challenged every single day, and as a result – the world – and the therefore the business world – isn’t as predictable as it once might have seemed. A “wash, rinse, repeat” retail business model doesn’t work very well anymore, and executive teams are learning that the organization must be designed to take quick action in the face of both unpredictable demand and uncertain supply. The purpose of our latest benchmark, Agility, Resiliency, & Sustainability As A Strategy was to uncover what retail decision makers are doing to address these everything-old-is-new-again issues in meaningful ways.
For the purposes of the report, we defined Agility as the ability to quickly adjust to changes in consumer demand), Resiliency as the ability to respond to supply side shocks, and Sustainability as the ability to support ecological, human, and economic well-being.
Some of the highlights of what we found:
- Retailers accept that they will never see a return to predictability, and that their best course forward is to move from “command and control” to “sense and respond”. Their number one concern is customer’s mobile phones (and the ability they provide to buy from competitors), and rightfully so.
- On the bright side, retailers see implementing location-aware capabilities as a way to improve virtually every aspect of the shopping experience by knowing how both shoppers – and inventory – move. They see these tools as opportunity to speed up the supply chain, to make CRM data from loyal customers more actionable – even to open new ways to sell to existing customers. All this falls under the umbrella of improving omnichannel profitability – and that is the name of the game in retail today.
- The best performers plan to spend the next 36 months steeling their businesses as much as possible to whatever the world throws their way – 80% see workforce equity and inclusion as an important way to enhance their business’ resilience; 56% will undertake climate risk analysis.
- As to roadblocks, retail respondents don’t just blame the fact that many of their systems are rooted in the past. Their #2 inhibitor is that business leadership still prefers to run by “gut feel.” For the newest generation of retail leaders, this plays every bit as old-and-in-the-way as the DOS-based point of sale systems.
- If arcane technologies are the roadblock, better data and analytics to make sense of that data will show the way around them. Our retail respondents display something of a “holy trinity” for a way forward:
- Improved data quality will enable the business to become focused on what matters most;
- Analytics to allow retailers to respond to incidents as they arise (in real time), and, ultimately;
- Business analytics will help to measure the business effects of those efforts.
The virtuous cycle of sustainability, resiliency, and agility is entirely interconnected, but at its core, it is entirely dependent on the best data and analytics available to enable real sustainable change. To call this an ecosystem would be a dramatic understatement.
As always, we also offer several in-depth and pragmatic suggestions on how retailers should proceed, and we invite everyone to read the full report. It’s free!