Change Management in Retail
Need for Change in Retail
Retail is a rapidly evolving industry and the question is no longer when to change but how to change. The combined effect of many market forces has brought this new dawn of retail. Ecommerce has spoiled customers with choice and convenience. Technology, along with its other leverages, has made retail operations quicker than ever. Businesses now emphasise more on customer experience. Omnichannel has taken competition into the cross-channel mode where every touchpoint is an opportunity for acquisition and conversion. Other generic factors like favourable demographics, rising disposable income, ease of doing business, urbanisation, etc. have provided a level playing field. In a world full of retail opportunities, every player is welcome. But every player is not welcome to stay because the industry has become extremely competitive for all. Change, innovation, improvisation, or by whatever name it is called is the only way businesses could survive and grow in this industry. The need for change in a retail business is explained with a few highlighters below.
Modernise
The retail business industry has enjoyed a stable status for a long time. Today, the cost of maintaining this stability is modernisation. There was never a need to put an edible sticker on apples or to put up a new glowing sign board. Customers anyway do not believe that stickers are edible. Nor do customers bother much about signboards if asked. But that little sticker was strong enough to make them think positively about those apples as against the ones without. They actually like that their favourite restaurant now has a new shiny and glittering signboard. Modernisation could be as simple as these small makeovers or any major internal overhauls. It helps retail businesses retain a fresh appearance and keep embracing contemporary ways of functioning.
Staying competitive
With competition coming from all sides, change helps retail businesses keep up in shape. If businesses refuse to accept the changing times and adapt themselves, it might eventually push them out of the market. Sooner or later even their loyal customers will begin to reject them. Take for example pastry shops. In every town or city, there are many small, lesser-known pastry shops that make show-stealing cakes and pastries. By just adding the online ordering facility, such shops can strengthen their hold over their customer base. Customers may not immediately start ordering online from them. But when that option is in place, the loyal customers would not have to shift to another shop if someday the need for online ordering really arises.
Enhanced operational efficiency
Increasing competition, emerging technologies, and evolving ways of management affect the efficacy of how businesses are managed. For example, if the standard home delivery timeline is 2 days and a new player comes in and starts delivering in 1 day, the existing players also begin to look into improvising their internal operations. Or the use of digital payment methods reduces the burden of cash handling activities in retail stores.
Embrace new technologies
From industrial hardware and equipment used in stores and warehouses to ERP and analytics used in the back-end, there is always a better technology and better technologies keep emerging. Embracing new technologies contribute to all the other three reasons for change discussed before – modernisation, competitiveness, and operational efficiency. Without embracing new technologies, it could and would get extremely challenging for retail businesses to make even routine operational decisions with precision. Precision in decision-making or policy/strategy formulation is important because it helps businesses perform optimally. For example, if your competitors are using analytics for greater accuracy in demand forecasting, their chances of making the right merchandising decisions and saving on inventory will be much higher than yours.
Growth and expansion: Eyes on wider possibilities
The two largest grossing companies in the world are Wal-Mart and Amazon. Both are into retailing (including eCommerce). These companies always remain in the news. They just keep innovating in one way or the other. Both the brands have relentlessly pursued growth and expansion. They acquire other companies from time to time. They never stop at developing new markets. They keep improving their services. And if you consider Amazon, the company has evolved into multiple businesses.
When we are talking about change and adaptability, defining is confining. If you keep your vision locked to only one idea, you may miss out on the business possibilities. Amazon would not have been Amazon if it kept selling books. Or what else could define Elon Musk’s interest in electric cars to taking humanity to Mars. Change, in essence, is more of an enterprising and progressive attitude than a matter of choice or far less of a compulsion.
How YRC can help
Managing change in the workplace can be a daunting task. While change in a retail business is desirable for some and necessary in many cases, this change also comes with certain standard and unique challenges. These challenges come in identifying and defining the change in terms of specific requirements, sourcing the necessary funds, securing financial preparedness for maintaining the new system, realignment or adjustments in the organisation structure and team management, redefining the workflows/processes, rebranding activities, etc.
With 10 years of experience consulting over 500+ retail and eCommerce brands and businesses, we have dealt with the ins and outs of incorporating small and big organisational changes in retail enterprises. Here’s a glimpse of YRC helps retail businesses in managing change in their organisations.
Organogram redesign
Depending on the kind of change we are talking about, varying degrees of alterations may be required in the organisation structure of the host enterprise. For example, when a new store is opened, it must be connected to the existing organisation structure. Or the existing structure might have to be modified to accommodate the new roles and positions. YRC will identify and define the new organisational requirements and redesign the organogram as per the changed business priorities.
Manpower Planning and Team Management
Change is not always about expansion. Sometimes businesses also change to lean down. For instance, instead of having five departmental stores, a retail brand may decide to have two supermarket stores. This can affect the number of employees the brand may need to retain. The team sizes might get smaller with a widened scope of responsibilities. The role of YRC is to help businesses in determining the number of employees required, carry out job analysis to define the job descriptions and specifications, and work out the structuring of the teams.
SOP Development
Change can also change how routine, operational tasks and activities are carried out in an enterprise. Even a small change within one department can affect many processes affecting the work of other departments. For example, when a retail store adds digital payment options, it creates a few new tasks for the accountant/accounts team. At the end of the day, the accounts team has the new task of reconciling the sales payments received with the sales data. How they should be doing this reconciliation must be defined. The SOP must also define what they should do if numbers do not reconcile. Being SOP experts, our team will map the change management process for the entire organisation/affected departments (as requested by clients) and redesign the functional process SOPs brought about by the changes. The goals are to envision the change in the bigger picture and ensure that workflows and processes stay aligned to the respective functional and business objectives.
Retail Training
Providing the right training is an indispensable part of any change implementation. Change may require businesses to elevate their customer services and customer experience. It is also important for the employees to have an updated understanding of the products offered and services rendered. With modernisation, retail brands cannot afford to stick to the old ways of handling customer complaints. If a new technology is introduced, employees need to be imparted the necessary skills to handle such technologies. YRC offers a holistic range of training programs intended for retail employees including team leaders and managers to help them get on board with the new changes in their organisations. We also help businesses identify the training requirements and suggest them suitable training programs.
Realigning the financial vision
Incorporating changes has financial ramifications. New forecasts and estimates are prepared for demand, sales, inventory, salaries, and other operating expenses. Some old expenses go away and new ones come in. The involvement of capital expenditure cannot be ruled out. It would be naïve to carry on business without considering these financial implications. Business plan experts from YRC help in mapping the new financial foresight and preparing the numerical roadmap. Once the financial planning is available, implementation of the changes becomes less worrisome. It becomes a part of the change management policy.
Internal Rebranding
Leadership and change management go hand in hand. A critical and foremost requirement, after the decision to change has been made, is managing the internal communication. The early communications and messages that reach out to the employees via the formal and informal routes carry a big impact on their perception of the proposed changes. The bigger the organisation, the higher the importance of this internal branding. Middle-level management plays a vital role in this process. Misconceptions lead to resistance, whether it is expressed or employees deciding to go their own ways. This internal branding is the most sensitive part of change management. The change management consultants of YRC take this issue on a serious note from the very beginning and keep it into consideration in every aspect of the planning and implementation related to change management.
About YRC
YRC is a boutique retail and eCommerce business consultancy firm. With 10+ years of experience in delivering customised and diversified business solutions, we have worked with more than 500 clients in 25+ industries. We deploy professionals and experts for service design and delivery.
For more information on our retail change management solutions, please visit our website.
FAQs
What is change management in retail and eCommerce?
Managing a change means ensuring that the transition from the existing state to the desired state takes place in a smooth and planned manner with optimum disruptions to the status quo. Specifically speaking, changes in retail and eCommerce business enterprises could emanate from:
- Shift from undefined operations to SOP-based operations
- Adoption of digital transformation and automation
- Migration to new technologies
- Business growth and expansion – new stores, new markets locations, higher business volumes, new business divisions
- Change of business plan, business model, or business/functional strategies
What kinds of changes are required in my retail business?
Change management comes into the picture when you have already decided upon the changes. For example, if you have decided to incorporate a new CX strategy, the effect must reflect on your operational planning, financial and commercial plans, organisational design, recruitment, training, IT systems, etc. You will have to incorporate and manage the new ways of functioning in these and other affected areas of your business.
Will change implementation hamper my routine business operations?
The answer to that question depends on the kind and degree of change and how you plan and execute the transition. If you are talking about any enterprise-wide change, some amount of disruption is unavoidable.
Is specialised expertise necessary to implement change management in retail and eCommerce business?
When you can foresee the implications of your actions, you will plan better. The same is true for implementing any kind of change in business. And here we are not only talking about the reactions from employees but also how different business processes will respond if the right adjustments are not made. In that sense, obtaining a third perspective from someone experienced is prudence.
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