What is retail excellence
Retail Excellence is a concept that refers to excellence in the management and execution of retail activities. In practice, it means achieving the highest operational and customer experience standards in a store or chain of stores.
But how to build an operating model that can bring companies to this milestone?
Let’s look together at the path that led us to structure, for a client in the fashion industry, an organizational model that is efficient, flexible and able to support the professional development of key resources in the organization.
Challenges to achieve high standards of retail excellence
In more detail, the challenges that were to be answered were aimed at achieving:
- A flexible model that can adapt to the evolution of the network in terms of size (number of stores) and type of store (flagship store, outlet store, mall store, downtown store)
- A model that can enhance and enable the professional growth of key resources (career path for retail resources)
- A cost-effective and headcount-efficient model.
The stages of the project
The project approach involved the Retail Operations, Organizational Development and HR Business Partner functions working together.
Two phases were conducted, a Co-design phase of the organizational model, and a subsequent Skill Gap Analysis and People Match phase.
As part of the co-design sessions of the organizational model, the following were defined:
- The “task-based” and consequently “skill-based” organizational model (which we will explain in a moment) and the consequent association of existing stores with the proposed types of organizational model by Store type
- The coordination mechanism with back-end processes (commercial planning, logistics and procurement, returns management, …)
- The skill assessment & career development model for retail resources.
Next, in the Skill Gap Analysis and People Match phase were:
- Map the skills held by people
- Verified skill gap between skills held and expected for the role
- Addressed skill development actions with respect to the most significant gaps and/or on key Store figures.
Building an effective retail excellence model: the stages of the project
We now come to describe some of the peculiar aspects of the organizational design and skill mapping methodology.
- The organizational design
The organizational design has “broken down” the main in-store activities (and the skills it takes to perform these activities), considering:
- front end activities (sales/customer service/cashier),
- back end activities (orders, procurement, invoicing, returns management, …),
- The activities related to visual (window displays, merchandise arrangement, …)
- management activities (business planning, resource/shift planning, absence/replacement management, cost monitoring, safety management, search and selection, team motivation and performance management …)
Depending on the type of store (in terms of size and strategic positioning), organizational “models” were then defined with more or less generalist/specialist roles, thus going on to re-allocate activities (and skills) and thus build more rounded (more skills, less specialization) or more vertical role profiles.
Thus, for example, larger or more visible/strategic stores are therefore characterized more by specialized figures, while in smaller stores front end and back end activities may be carried out by the same people, or again in outlets the figures of Store Assistant and Visual are not expected.
This model also makes it possible to direct paths of growth, starting with the skills already gained and expanding them through more generalist and/or more specialized steps.
Transitions from Store to Headquarters roles also follow skill specialization, so a person with specialized expertise in Back End processes might move into a Store Planning Headquarters role, or a person with Visual skills might move into Visual Merchandising Planning Headquarters processes.
Opening new outlets or changing the “destination” of existing outlets thus finds in this model an immediately available framework both in terms of organizational model and sizing.
And such an approach also enables internal benchmarking logic and best practice sharing among stores, comparing homogeneous stores.
- The methodology of Skill Assessment
Included in the scope of skills being assessed were:
- Behavioral skills, assessed within the performance cycle for all employees, and whose assessment was therefore already available
- The Technical skills related to the role thus defined, which were evaluated by Store Managers (for the first time involved in this activity), flanked by Area Managers, the latter “guarantors” of the logic of fairness/balance in the evaluations made among the different Store Managers of the same Area.
The assessed competencies were compared with the expected competencies for each person in relation to the role held, and the “skill gap analysis” was finalized to highlight:
- Significant skill gaps that were targeted for high-priority skill development plans because they would potentially generate impact on store performance
- Less significant skill gaps, to be returned to the person as an individual improvement plan through coaching and on-the-job activities
- Overskill in some people, who were evaluated to go into roles where the skills held could be put to good use.
Finally, a correlation analysis between people’s skills and store performance was conducted as a food for thought to target a correlation algorithm that could consider some key variables.
The project hit the mark with respect to all the challenges that had been posed, and with a Data Driven approach enabled the implementation of an organizational model that was efficient, flexible and able to support the professional development of key resources in the organization.
It also laid the foundation for building a Skill to Performance correlation algorithm in fashion retail.
The Skills-Based Evolution of Organizational Models.
According to an interesting study recently published by researchers at Mercer, “Accelerating Change,” the demands for organizational agility, the automation of work and the emergence of alternative ways of working are revealing that the “traditional work operating system,” based on organizational roles (jobs) , is definitely unsuitable for the future.
It may therefore be necessary to redefine the organizational design in the direction of a more future-proof model, adopting a skills-based approach.
Until now, organizational structures have relied exclusively on the construct of roles (jobs), understood as containers of responsibilities, skills and competencies, occupying a given box on the corporate organizational chart, to organize work.
Such an approach, however, worked well when organizations acted in a mostly stable and predictable environment, and when competition was based more on scalable efficiency than on speed, innovation and agility of organizational structure.
In its most radical form, adopting a “skill-based” approach requires the “deconstruction” and “reconstruction” of work, a key emerging capability for organizations:
- Deconstruction of work means reconsidering roles (jobs) to analyze their components (tasks), considering employees in terms of skills and competencies
- Reconstruction means reassembling tasks differently, in new and more effective combinations.
In other words, according to Mercer researchers, the future of work will increasingly (and only) rely on the granular elements of occupations (tasks, projects) and workers (skills).
The infographic shows the transition we are witnessing: from jobs as the only construct for organizing work, to the need for a process of deconstructing jobs into tasks, and the following reconfiguration of jobs into new combinations (SHRM. “Beyond the Job: Skills-Based Organizations and the Future of Work” SHRM Executive Network. November 2023, .)
The adoption of a skills-based organizational model requires comprehensive and up-to-date skills mapping, and can be said to be the final stage in a much broader continuum of skills-based organizational solutions, which can start from a bounded intervention to a few key processes, to assessing the impacts of such a change on a specific organizational area.