Digital-Shopper-400x265How Digitalisation is Affecting Retailers

At the British Retail Consortium Retail Lecture with Sir Ian Cheshire, we heard that the world of retail has not really changed that much in decades – and the change that has happened has been relatively small and slow.

But now all of a sudden the pace of change and the size of the change happening is alarming.  And we have the digital revolution to thank for that.

Retail is no longer about sitting in a store and waiting for a customer to walk in, the point of sale has completely shifted.  And retailers are being challenged more and more to move at pace, just to keep up.

Sir Ian made recommendations on what retailers can be doing in response, and we add to that list here with some suggestions for how Talent, OD and HR can support the business.

What’s the context?

Consider that smartphone and tablet purchases have jumped 83% in just two years and that smartphone browsing on retail sites is growing five times as fast as laptop/desktop browsing – so there’s a clear prompt – make sure your sites are seamless, engaging and easy to use across all media.

Because what’s to stop a customer visiting your store to view a product, only to check online who the cheapest supplier is – probably whilst still in your store?  How are our staff and our sales processes going to adapt?

There is a wealth of online data out there, and about 90% of that data has only been generated in the past two years.  A lot of that data has been generated by the customer through Facebook posts, google searches, navigation through webpages, – there are two million google searches and 700,000 Facebook posts per minute.

The bad news is that with all that data, we don’t know where to start.  So far only 1% of all that data has been meaningfully analysed.

Jelly Bean Diversity

What we can say from that early analysis is that retail firms, their HR teams and their entire workforce will need to shift too – but how?  Retailers need to make sure every touch point with the customer is positive, informative and encouraging a purchase.

How can retailers respond?

Oracle research shows 80% of customers expect companies to adopt new technology to make their shopping experience easier and in line with their other everyday uses of their smartphones and tablets.  65% also expect stock transparency – so retailers need to have seamless systems talking to each other, showing customers how many items are available and where.

Andy Street of John Lewis Partnership has often been quoted with the line, “Operations and IT are the new competitive battleground” – as it is the online experience over coming years that is likely to drive higher competitive advantage than the in-store experience.  So the suggestion is that higher investment in these areas could pay dividend in our digital future.

What can Talent/OD/HR teams do to support this shift?

This move from focusing heavily on the retail estate to looking more at operations and IT is a massive shift from certainly our experience with our clients, and many others’ stories about focusing on people in stores.  The majority of people recruitment and development spend has been on getting the right people in store, doing the right things in the right way.

Totem Lollipops

Whilst that is still of course important, we now need to make sure that we have people in operations creating and delivering systems and processes that make everything smoother – for accurate stock management, ease of transition between someone buying online from a warehouse to in-store and connecting customer service between the two.

In IT we need people doing analysis on that big data – and these are jobs that didn’t exist when the people perhaps best qualified to do them were studying; the world is changing that rapidly.  So we need to attract and retain the best talent – which comes from investing in the development and engagement of those teams.

Sir Ian shared his views on people development, highlighting that developing in-store colleagues to handle technology and offer services to support products bought online, is much easier when the good service basics are there.  So whilst this has largely been about shifting a focus to IT and operations, the fact remains that if you don’t already have great customer service, then adding the use of a tablet, or product tracking through the store, is going to be 100 times tougher.  If the service basics are not there, you have a challenge to address.  Fast.

Thinking a little more long term, how do we invest in the IT department to retain talent and attract better talent in future.  And don’t forget, that many things we’ll be recruiting for in 5 years are skill sets that don’t currently exist, like the expertise to deliver Big Data analysis and responsive IT design as the internet of things develops.

HR professionals have always had the opportunity to support and challenge the business in what its people needs are and will be, to deliver a vision and the required results.  Now is the time for HR to be pushing a renewed focus on attracting and retaining talent in IT and operations, to prepare the business to keep up with the seismic shifts occurring.