Partage

Some of One2Team’s largest and most successful customers are large multi-site retailers. By working closely with them, I have learned to appreciate the challenges of an industry that is undergoing a massive transformation. So it was with a lot of interest that I read a recent article published by Mckinsey role of physical stores in a changing industry landscape: “Making stores matter in a multichannel world”.

Louise Herring, Tobias Wachinger and Chris Wigley succinctly summarize some of key trends in global multi-site retail:

  • Consumers are turning to online shopping to research products and expect to be able to order online and pick up/return in store, seamlessly hopping from one channel to another.
  • Overextended retailers have significantly reduced the size of their store networks and written off significant losses against undeveloped real estate property.
  • Pure-play online behemoths like Amazon and Alibaba are achieving “virtual space” and operational efficiencies that are out of reach of traditional physical retail.

The three McKinsey principals also articulate a 5-step multichannel-focused strategic framework that traditional retailers should adopt to define the new role of the physical store and turn it into a competitive advantage — yes, advantage! Here’s the S.T.O.R.E. framework in a nutshell:

  1. Strategically redefine the role of the store based on consumers most pressing needs.
  2. Tailor categories and merchandising in different retail formats to fit consumer baskets.
  3. Optimize and diversify the store portfolio to achieve the best mix of formats and locations.
  4. Reinvent the consumer experience in the store through formats and technology.
  5. Execute implementation, renovation, format and multichannel projects with a lean approach.

Any large retailer undergoing a transition of this magnitude must address very complex issues across organizational silos. Each and every step in the store network transformation process deserves a thorough analysis and in depth discussion of possible approaches, strategies and challenges.

What I’d like to point out here is a few high-level implications for project leaders and retail executives as companies embark in any multi-channel transformation initiative. 

One size does not fit all

The retail formats, processes, layouts and consumer experience that work for Apple are unlikely to work for Walmart. The expectations that consumers have when shopping for large appliances are very different than when shopping for a new dress, and so should be their retail experiences. Retail store design, technology integrations, scope of rollout projects are going to look very different for different retail networks.

A key consequence of this is that any toolbox that a company deploys to manage store rollouts, format implementations, renovations or technology implementations must be tailored to address out-of-the-box the specific needs of the multi-site retail industry while at the same time it must be flexible and customizable enough to be used successfully in very different contexts. It must also have the capability to flexibly adapt the investment in each individual store to its cash flow.

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Experimentation and fast execution is key

A message that comes out loud and clear from the McKinsey study is that speed and experimentation should take precedence over long-term planning and massive change programs. Because of how quickly technology and consumer behavior changes, the only successful execution is one that can deliver test store concepts quickly and cheaply and implement at a furious pace.

The new retails scenario is one where multiple formats and concepts are being rolled out at the same time, the portfolio of stores includes 3 or 4 different types of stores or even brand, and new in-store technology and processes are implemented and tweaked every few months. It is a program manager’s nightmare. And it is also one of the key requirements for a successful transformation!

This complexity can only be managed with tools that are designed to enable and support rapid collaboration, to consolidate in a single repository massive amounts of project data, to deliver 100% accuracy of project status information, to quickly manage the implementation of hundreds of repetitive tasks on dozen and even hundreds of sites.

The entire organization on the same sheet of music

Retail store network transformation is not just a retail operations challenge. At a minimum, it involves the integration of the digital online channel and the physical store network. More likely, it requires intense orchestration of many organizations within the company: IT, logistics, purchasing, real estate management, marketing and even HR – especially in the pre-deployment phase.

To support a retail network transformation with a disjointed basket of project management tools would not only create enormous project management overhead to simply process and consolidate data from different source but it would potentially undermine at the core the level of information exchange and collaboration needed across the organization to succeed in a strategic initiative of this size. The right project management tool would make it a no-brainer for executive and managers in different organizations to contribute data, check progress, collaborate on issues and take timely decisions.

 

As the McKinsey article aptly puts it “To position themselves for success in a multichannel world, retailers would do well to take a disciplined approach that begins with a reassessment of the role of the physical store.” As they do so, they should also reassess what project management paradigms and tools best serve them in this transformation. 

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