In 2022, Advantage Group added agility as a competency within the vision engagement driver of Advantage Report. Why? One of the reasons is that the last two years taught our supplier and retailer clients and other organizations worldwide that while innovation is key in adapting to market changes, so is a business’ agility.
The pandemic has ended, and many impacts have dissipated, but large retailers will continue to face challenges. There will be future economic, health, and environmental crises, whether major, minor, localized or international, that will be responsible for swiftly shifting consumer demand and disrupting the supply chain. Because of this, agility will continue to be a critical competency for major retailers worldwide.
The case for prioritizing agility in a large retailer business
According to the Harvard Business Review, agility is needed to:
- Avoid shocks through speed and flexibility
- Absorb shocks with empowerment and diversification
- Accelerate away from shocks through learning and modularity
How do large retailers develop the agility to avoid, absorb and accelerate away from shocks? Advantage recommends implementing the following elements into your organization to build agility. These are elements which don’t just promote the speed commonly associated with agility but breed flexibility, dynamism and confidence — qualities needed to quickly and cleverly navigate and respond to challenges.
Critical Elements to Improve Large Retailer Agility in a Dynamic Environment
Empowerment of employees and decentralized decision-making – Agility requires speed. Major retailers can respond swiftly to shopper needs and market changes by empowering employees and decentralizing decision-making. This approach also encourages accountability throughout the organization and allows the intelligence and specialization of employees to be harnessed, potentially improving the accuracy or effectiveness of the decision.
Cross-functional teams – Cross-functional teams can mean teams with individuals from different functions (marketing, human resources etc.) or individuals who can perform different roles. Either way, due to the nature of these teams, they are more flexible and dynamic, helping to break down silos and improve collaboration among different departments across large retail organizations. Cross-functional teams also provide learning opportunities for team members, deepening the flexibility and cross-functionality of the team.
Agile methodologies and processes – Adopting agile methods and processes across different business functions is key for keeping a retailer’s internal operations responsive and adaptable to market or shopper needs changes. They embrace change, are prepared for several variables, and prioritize responding to consumer needs. This allows businesses to adjust seamlessly according to their dynamic environment or client needs as new information emerges.
Culture of continuous improvement and innovation – Implementing a culture of continuous improvement through innovation is key to maintaining agility in the dynamic retail environment. Large retailers can continuously improve their internal processes and products by encouraging the exploration of new ideas, providing resources, and investing in new technology. This culture targets speed and empowerment by allowing them to stay on top of trends, eliminate evolving inefficiencies, and anticipate and effectively respond to market changes.
Embracement of technology – Leveraging technology such as automation can help organizations to improve efficiency and accuracy and make data-driven decisions more quickly. Technology consolidates processes, reduces human error, and accommodates rapid growth and diversification to meet consumer demands due to its scalability, allowing companies to respond internally and externally with agility. For example, retailers can incorporate technology that improves their connectedness with consumers and provides real-time inventory updates. This is key to keeping them responsive to evolving consumer needs and quickly accommodating changes in demand. Remaining resilient against industry volatility requires this approach.
Development of strategic partnerships – Forming strategic supplier partnerships is critical in ensuring that your strengths and capabilities are harnessed, and your areas of opportunity identified and targeted. Whether for increasing knowledge in a specific industry to shorten go-to-market life cycles or gaining feedback on your business relationships, strategic partnerships are an excellent avenue for reducing inefficiencies that contribute to a lack of agility in large retailers.
Your supplier partners are critical to helping you respond with agility to challenges. Advantage Report provides you with the feedback and insights to successfully pursue collaboration, strategic alignment, and joint business planning. Connect with an Engagement Advisor today to learn more.