Retailers deal with similar unexpected challenges all the time, albeit there is certainly no appeal in dealing with surprises, exceptions, and issues in retail. When supply chains get disrupted, inventory is slow to arrive, transportation costs rise quickly, and labor challenges arise—this is all just retail reality.
All retailers must navigate through madness at various levels. But the ability to successfully handle the exceptions and the unexpected is a huge differentiator between leaders and those that struggle.
How do retail leaders navigate through the madness?
One reason is that leading retailers already have strong capabilities to manage 70-80% of their strategic processes, namely planning, forecasting, buying, allocation, replenishment, and inventory management. These capabilities are driven by fundamental business processes and supporting tools that allow these companies to focus on exceptions and prioritize elements that need attention. As such, leaders have the time and capacity to absorb and quickly respond to the unexpected.
Most struggling retailers do not have many of these foundational components in place, or their capabilities lack the ability to help them manage effectively. These companies are already stressed, keeping up with the myriad of day-to-day needs and noise. So, when the unexpected arises, they lack the foresight and agility to react quickly and strategically.
What can struggling retailers do to prepare?
Focus on the fundamentals.
Long shots (3 pointers) and power plays (slam dunks) are great when they work, but you still need the basics (ball handling, passing, a sound defense). The benefits promised by advanced retail technologies will result in huge disappointments without a solid grasp on core merchandising and data governance business processes, policies, and supporting systems.
Capitalize on the power of the team.
Players must all understand each other’s roles and work together. It does not matter if you have the best assortment if you cannot get it to your customer. Merchandising, supply chain, stores, omnichannel, and other retail teams need to quit operating in silos and start building strong internal working relationships.
Be responsive and agile.
The game plan that succeeded in the first half may not work in the second half. Agility comes from taking a deep, objective, and honest look at your existing business processes and supporting systems and finding ways to make them more efficient, transparent, and strategic.
Prepare for the unexpected.
Teams that thrive are the ones who prepare for the unknown and can rely on having practiced those plays. Leading retailers mitigate supply chain risks by having alternate sources of supply, raw materials, and inventory in place to address disruptions.
Know your fans.
Beyond wins, leaders know what keeps fans excited and coming back. Your fans are the shoppers that buy your product and are loyal beyond the transactions. Knowing their behaviors, needs, and wants is critical to driving assortment and supply chain decisions to strengthen that loyalty and build new shopper relationships.
Whether you call them obstacles, challenges, or disruptions—if we have learned anything from the past two years, retailers must all be prepared to navigate through what seems like continual madness. And certainly, while you cannot win all the time—you can learn from every game.