2022 PRA Magazine Retailing Magazine 1st Quarter Edition - Page 16

COLUMN

Thriving in Uncertainty :

Agendas for Seven Key Retail Roles in 2022

From CEO to chief supply chain officer , leadership will be key to mastering continued disruptions .
By Aaron Cheris , Kanaiya Parekh , Derek Keswakaroon , and Gino Dizon
While 2021 saw tremendous growth for retail , the benefits were not evenly distributed . Some retailers began 2022 gearing up for a rebound , while others likely faced declining demand , especially in categories that exploded in the pandemic . But all will grapple with formidable , enduring changes this year .
Labor shortages have shifted power to employees . Consumers are mostly shopping with fewer retailers and expect more fulfillment options — plus a seamless , digitally enabled experience . Digital tools have made pricing and availability more transparent . Marketplaces are making broad assortments ubiquitous .
In this environment , it ’ s more important than ever to operate as a team . But since all executives will have their own priorities for the year , we want to share personalized advice for seven key roles .
Chief executive Stakeholders expect CEOs to turn unpredictability into inspiring visions . They want loyal customers , engaged employees , transformative technologies , and sustainable environments — without sacrificing profit . To balance these demands , start by asking yourself and your team : How can we turn our company into a microcosm of the world that we and our key stakeholders want ? Then begin creating a cohesive system that aligns purposes , behaviors , and mindsets . And reinforce this movement by helping all members of the top team practise purposeful leadership habits .
Chief merchant Your customers ’ priorities and behaviors have evolved over the course of the pandemic . There has been considerable demand disruption over the past two years , with seemingly overnight booms in some categories . Relying on “ last year plus 5 %” for this year ’ s ordering won ’ t cut it . Instead , invest in predictive data tools and algorithmic analyses . Let the findings influence product selection and design , while setting prices with inflationary pressures and macroeconomic uncertainty in mind .
Chief technology officer Position technology as a source of competitive advantage rather than just cost . Prioritize overcoming “ technical debt ” accumulated through underspending , while building new tech-enabled capabilities . Identify the digital tools that will most improve shopping journeys , employees ’ service journeys , and supply chain operations , then sequence development accordingly . Lead the charge toward the cloud , emphasizing software as a service and commercial solutions , while holding the line on custom builds , except where differentiation is critical .
Chief marketing officer It ’ s now more critical than ever to update your understanding of consumers ’ needs . Take advantage of your first-party data and , with the chief merchant , generate customized offerings that reflect your customers ’ values and decision-making patterns . Take a test-and-learn approach with new channels , messages , and offerings to determine which mass and personalized outreach spurs the greatest engagement . Even if you haven ’ t yet embraced trends like TikTok and livestream shopping , your Gen Z customers — and a growing share of older cohorts — are already there , engaging with your competitors .
Chief supply chain officer Your most important job — getting products into the hands of customers — is now more complicated and expensive than ever . You ’ ve been accustomed to optimizing for lowest unit cost , but total system cost is a more worthy metric . Increase data accuracy and transparency to engage all functions in solving the most critical constraints . In this short-supply environment , focus on making trade-offs that maximize overall company benefit . And as you evaluate your supplier base , look for opportunities to accelerate progress on environmental , social , and governance initiatives .
Chief human resources officer Resignations , labor shortages , and pandemic challenges have left you with quite the backlog . To attract and retain talent , you ’ ll need to go beyond increasing wages and benefits . Engage with your frontline employees to understand what drives retention and gives them purpose — whether that be investments in learning and development , schedule flexibility , or more predictable , full-time roles . Work with other functions to better understand how the organization leverages human capital and where employees have pain points . Are there opportunities to use digital solutions to automate and optimize rote or undesirable tasks ? Such solutions allow you to reassign labor hours to activities that directly influence the customer experience — creating happier , more engaged employees .
Chief financial officer Stop trying to predict the unpredictable . Instead , iterate frequently and pivot when necessary . Let older command-and-control budgeting give way to a more flexible approach . Metrics will likely need a refresh . Broaden P & L focus to embrace the balance sheet , evaluating all assets that will support the future of your business . Consider long-term total shareholder return , recognizing the implications of today ’ s trade-offs between growth and profitability . And track progress on nonfinancial metrics such as customer advocacy , loyalty engagement , employee satisfaction , and resources — financial , human , carbon , and more .
Aaron Cheris leads Bain ’ s Retail practice in the Americas and is based in San Francisco .
Derek Keswakaroon is a partner based in Bangkok .
Kanaiya Parekh is a Bain & Company expert partner based in Singapore .
Gino Dizon is an expert partner based in Manila . All are members of Bain ’ s Retail practice .
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