The world of retail has undergone a massive disruption in the last few years. In the fast-changing and challenging environment that the pandemic created, retail companies have had to react to the changing dynamics of customer behavior, evolving market forces, a non-traditional workforce, and above all systemic change brought about by new technologies, startup disruption, and a huge infusion of funds to invest in the latest that technology has to offer. While most retailers were quick to embrace new technologies, and change their strategy and business models, many of them were slow to revamp their operating models. 

To make a transformation successful, organizations need to align their strategies with business realities that call for changes in operating models. This article explores the core components of an agile, resilient, and future-ready technology operating model for retail.

Continuous Improvement

The retail and CPG sector traditionally have employed a reactive execution strategy that might have worked well in the brick-and-mortar business model. However, the acceleration of online shopping marked a challenging time for retailers, with technology driving conventional shopping experiences into new areas. In a post-pandemic world, retailers have been pushed to use a proactive strategy that’s rooted in a cycle of continuous improvement. The new operating model not only requires continuous improvement of internal systems, procedures, and processes, but also the business’s ability to understand, create, communicate, and deliver value to the customer. Customer expectations are constantly on the rise, but by spending time analyzing and catering to their needs, retailers can create an exceptional omnichannel customer experience, both now and in the future.

Iterative Development - Fail Fast, Learn Fast, Improve Fast

Many of today’s best organizations have cultures that embrace ‘failing fast’ as the most effective path to learning. In the face of a crisis, organizations need to make quick decisions based on the best available data and deliver the most effective response possible with the resources available. Unavoidably, mistakes will be made but these mistakes need to be identified, rectified, and learned from. Failing is critical in every innovative process, regardless of how established the business is. If a business is not experimenting – learning while taking missteps, it would suggest that the cultural attributes of experimentation, feedback loops of learning, and incentivization of risk-taking (within boundaries) to achieve breakthrough innovation cycles are not being over-indexed on.

Empower and Trust

People are at the heart of every successful operating model transformation. To drive more engagement and ownership in the team, a culture of continuous learning was inculcated.

The most important thing about the operating model transformation is accountability. The product management team and the core tech/engineering team still have accountability for what gets shipped, to what's broken. That strategic shift in the ways of working completely transformed how the team responds to new features, and how they respond to tech debt  -  forcing product teams to have complete ownership and accountability across the technology spectrum.

Nurturing a culture of empowerment and trust in retail also means listening to internal store associates, taking in their views on changes in buyer behavior, then informing the product teams with a roster of priorities that they need to execute to improve customer experiences.

Servant Leadership 

Servant leaders don’t assign work - they coach, mentor, and remove distractions and roadblocks. These leaders constantly move beyond the role of supervision and instead try to align the employee's sense of purpose and belonging with the organizational mission. Such leaders possess a serve-first mindset, and they are focused on empowering, developing, and engaging their people. They are serving instead of demanding and showing humility instead of wielding authority. Servant leadership not only generates trust in the employees, but also inspires them to strive, excel, and flourish in their career paths. 

Customer-first Mindset

The very essence of retail is meeting the customers’ needs in a timely, efficient, and pleasant way. Retailers often promise, and strive to put customers first. However, studies have shown that more than half of customers would switch to a competitor after just one bad experience, so it’s important to hold them as the guiding force behind everything the retailer does. With the kind of customer data available today, retailers no longer have to guess what the customers want or decide for them, instead, they can simply look to the trends. But a customer-first approach does not use data blindly but combines it with empathy. This is particularly important in the post-pandemic world where online shopping has significantly removed the human-to-human aspect of customer interaction. 

Quantitative data is incredibly valuable, but companies should make a real emotional connection with customers through qualitative data gathered through various processes, including interviews, live chat, and recorded calls. For brands to succeed in these unpredictable times, they should empathize with their customers and provide simple, easy-to-navigate experiences throughout the journey – and that is only possible by having the right people as well as the right technology in place to deliver a holistic customer experience.

By focusing on building a sustainable culture, a well-thought-out digital transformation can lead to a better employee experience. And this strategy will benefit organizations going forward: as they become more dispersed through the hybrid workplace, they seek to become more competitive in their market, and as they navigate the recovery process, post-COVID.