Why Retailers Need a Game-Changing Talent Strategy Now Talent strategy will either lead retailers into the future or run them into the ground
By Paul Harty
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
There were 800,000 online stores in the United States vying for $256 billion in sales in 2015, with an expected uptick to $370 billion in 2017.1This surge reflects a continuing consumer shift that is challenging brick-and-mortar retailers to deeply transform how they stay profitable. The pressure is on and at the core of this change lies the talent strategy that will either lead retailers into the future or run them into the ground.
A New Breed Of Consumer
Today's consumers expect to be able to shop when and where they want – in store, online, via mobile. They juggle through these options often within the same purchase cycle – 72% of Millennials research and shop their options before they go to a store2 – and lest you think Millennials are the only ones online – two-thirds of Americans aged 50-plus buy from e-retailers3. Shoppers want options: 62% want to buy items online and make returns instore, while 44% want the ability to buy online and pick up their purchases instore4.
As digital becomes a way of life, it becomes ingrained in the way people shop. Many retailers are baffled by how to find the right mix of instore, online, and mobile presence. Brick-and-mortar sales have been on a steady decline for the last few years. While some brands have had to close stores and some have gone out of business, most retailers still agree that brick-and-mortar shopping itself is not going to die. It's going to evolve.But perhaps as baffling, is the fact that while e-retail continues to surge forward, many retailers struggle to grow online. In a survey reported in SORO 2016: Key Metrics, Business Objectives and Mobile, online sales in 2015 were flat for 17% of responding retailers, versus only 3% in the 2014 report.5
Shift Out of The Comfort Zone
The struggle to grow online reflects not only the stiff competition, but also what, I believe, is a lack of the right talent strategy. In my work with retailers, all too often I've seen them focus far too much on the mechanics of digital commerce (as if it's just another channel to add on) instead of realizing that this is part of a cultural shift that we have not experienced since the advent of the Industrial Age. Retailers need to stop focusing primarily on the "how do we technically do this" and payfar more attention to the entire buyer's journey – the "why" behind how consumers shop.
From the customer's perspective, it's all about their experience with your brand at every touchpoint. You drop the ball at any point and you risk losing them to a competitor within seconds. Mega-retailers like Amazon are setting the standard for every retailer. And they will keep pushing the bar higher and higher. Now,I realize that not every brand can afford to be Amazon. So what can you do to stay viable?
Know your customer. Customers want brands to know them as people and not just as customers, and with the plethora of customer data available, retailers have no excuse not to get close and personal with the people who purchase from them. Knowing your customer means more than an after-purchase offer to take a survey and win a monetary reward. It means you employ the digital workers who can provide meaningful, actionable intel on customer behavior.
To do all of this, to transform at the level required, means retailers must shift out of their comfort zones and become bold enough to change their talent strategy in a major way.
Retail Talent For The Digital Age
Start at the top. Cisco reported they replaced 41% of their client-facing executives over a three-year period in order to have the leadership they needed in place to run a business of the future6. Granted, they're B2C, but still, that level of replacing talent took guts and a willingness to trust new leadership. Retailers need to look at their senior executives and determine if they have the right mix of experience, wisdom and change-champions to lead the company through its transformation. You will need the courage to replace executives.
At a lower-level, retailers typically focus heavily on entry-level associates and store managers and relegate digital talent to a back-end corporate function that is more or less told: "just make the website and shopping cart work." Marketing handles demand generation campaigns via software platforms and instore associates more or less know how to operate the kiosks that offer more inventory or purchasing options. Digital is woven in, but disjointed and siloed. The digital professionals who understand the psychology behind how the new consumer behaves, the customer experience required, and the technical knowledge to engage customers via seamless omnichannel interactions are missing.
Hiring data scientists, software engineers, database developers, digital marketers and product managers, etc., is unfamiliar to retail human resources. How to source, recruit, and secure top talent in these fields feels foreign. Coupled with this is the misfortunate fact that retail has a less than attractive reputation among top digital talent. Retail is perceived as a low margin, behind-the-times industry in technology (despite the fact that mega-retailers spend billions on IT every year). So retailers have a story problem to overcome as well as a tactical one.
The good news is you can change your story. You can move to the leading edge in the digital age if you are brave enough and willing to take the risk. You can go after talent at Google and Microsoft and Amazon and bring in the people who are deep in the creation of omnichannel retail experiences. You can outsource your recruitment process to specialists who understand the challenges and the positioning needed to map out a new talent strategy and secure people who will lead you into a future of success. But you don't have time to waste. You have to act now. Outgoing Cisco CEO John Chambers predicted last year that one third of businesses will not survive the next 10 years and that 70% of businesses will attempt to go digital, but only 30% will achieve it.6 I encourage you to do what it takes and be among that 30 percent.
1https://www.internetretailer.com/2016/01/06/despite-e-retail-growth-many-retailers-struggle-grow-online
2http://www.forbes.com/sites/robinlewis/2014/04/30/millennials-double-trouble-for-retail/#f34742547245
3https://www.immersionactive.com/resources/50-consumers-online/
4http://www.prnewswire.com/news-releases/deloitte-study-digital-influences-more-than-1-trillion-in-retail-store-sales-256967501.html
5https://www.internetretailer.com/2016/01/06/despite-e-retail-growth-many-retailers-struggle-grow-online
6http://www.businessinsider.com/chambers-40-of-companies-are-dying-2015-6
