Retailers need to reorganize like a 21st century business
Through a special arrangement, what follows is a summary of an article from WayfinD, a quarterly e-magazine filled with insights, trends and predictions from the retail and foodservice experts at WD Partners.
With the onset of the coronavirus crisis, terms that many retailers were just starting to explore — dark stores, micro fulfillment center, automation — became part of everyday conversations.
Dark stores are appealing to customers. A recent WD Partners’ survey of U.S. consumers found 47 percent open to purchasing from a dark box store, 49 percent from a dark restaurant and 40 percent from a dark grocery store.
Micro-fulfillment centers allow brands to increase margins while decreasing fulfillment costs.
Automation can counter the major labor challenges faced by the global logistics industry resulting from the current e-commerce boom. Fully automated systems are promising to reduce warehouse-related labor costs by up to 65 percent and logistics-related spatial use by up to 60 percent while increasing the maximum output capacity.
With the efficiency brought along by warehouse tech, a natural next step is a hybrid fulfillment store solution.
Yet the traditional way companies are organized doesn’t allow them to match the speed of the new customer experience. For instance, does e-com, IT or ops and design own BOPIS? When disciplines are siloed, leaders only focus on their area of expertise rather than the customer journey in total and how best to meet their needs whether in-store, online, in their car or on their phone.
Our recommendation: reorganize around the consumer. Take those key moments of distribution and consumer interaction and carry them across your traditional departments.
By adopting and integrating technology you’ll create new points of interaction and synergies for both your company and your consumers. Start by placing less emphasis on specific disciplines and more on the holistic solutions. Organize sideways and horizontally, bringing teams together to execute on innovations. Instead of pulling someone from each vertical function or silo, bring together an entire new team — one that’s empowered from the top to execute.
The acceleration of retail is real.
For now, temporary adjustments to help fulfill online orders and to serve curbside customers will help retailers maintain operational status, but future growth depends on thinking completely differently — like a 21st century business.
- How to Reorganize Like a 21st Century Business – WayfinD
- Solving Distribution Challenges During Unprecedented Demand – RIS News
- Quarterly Retail E-Commerce Sales 1st Quarter 2020 – U.S. Census Bureau
DISCUSSION QUESTIONS: How should traditional retail organizations be restructured to accommodate the many new disciplines required to tackle increased omnichannel offerings and accelerated online growth? What would you add or subtract from the organizational structure proposed in the article?