How to transform the structure of your retail organisation for true omni-channel.
With the retail industry experiencing unprecedented change in recent times, retail CEOs need to consider and, in many cases, transform the organisational structure of their businesses for true omni-channel retail.
Many have acknowledged this, but despite significant strides made to date no single retailer can claim to be close to realising the full transformation that is required. Even the most advanced retailers are only half way through our proposed four phases of organisational transformation.
Phase 1 – Early ecommerce and multi-channel development
In the early days of ecommerce, a traditional store-based retailer typically set up a dedicated, specialist ecommerce team, led by a head of ecommerce/multi-channel.
Phase 2 – Phased multi-channel (re)integration
As ecommerce grows to account for a considerable (5%+) proportion of total sales, a retailer reintegrates individual functions from the ecommerce silo back into a central and increasingly ‘omni-channel’ team. Functions are reintegrated one by one with a retailer typically finding that some functions (e.g. IT, operations) are easier to reintegrate than others (e.g. marketing, merchandising).
The vast majority of leading retailers in the UK and the USA today find themselves somewhere along the path of this second phase of transformation. The way ahead for most, in the short-term at least, focuses on shifting internal culture and convincing hearts and minds.
The omni-channel organisational transformation process:
Phase 3 – Preparation, mobilisation and centralisation of data and insight
Phase three is a transition phase and focusses on centralisation of data and insight into a single and impartial business unit, allowing the retailer to move towards the customer-first mind-set required of any truly omni-channel business.
Phase 4 – Final re-shaping of true omni-channel organisation
Phase four involves a comprehensive restructuring of the retail board including the creation of a chief customer officer (CCO) and, for many, a chief data officer (CDO). The fallout of the final two phases will see the disappearance of the retail and digital/omni-channel director roles.
Next steps for retail CEOs
For retailers well advanced along the second phase of development, the first challenge is to understand whether the time has arrived to progress to phases 3 and 4 and hence expedite the organisational change.
Retail CEOs need to understand their own ‘state of readiness’. This means appraising and benchmarking the customer proposition and experience, organisational structure, culture, and data and systems. The most advanced retailers need to define short- and long-term structural redesign and to begin preparations and mobilisation for change.
Only if retail CEOs plan ahead today for these challenges, set out a long-term vision, and construct a clear change management programme, will they find themselves at the helm of agile, progressive and optimally aligned retail businesses in the near future.