Retail brands have seen dramatic shifts as the COVID-19 pandemic has swept the world. When consumer lifestyle and behavior changed, so did company strategies, goal-setting, and processes, from investment in ever-evolving social shopping features on Facebook, Instagram and Snapchat to decision points about how to keep in-store shopping safe.
2020 and 2021 have been an opportunity for retailers to rewrite the rules of the industry. As the Delta variant takes hold, additional shifts in the market are likely. No matter what comes, retail organizations can navigate the murky waters of market change by reforming internal ways of conducting business, listening closely to their buyers (and even closer to the data), and building company cultures that will sustain them going forward. But how?
More than half of the population we surveyed for our 2021 Goal Management Report said the pandemic forced them to work from home.
With this shift in working comes a shift in spending.
Those producing goods and marketing materials that align to this new work lifestyle—remote and/or hybrid—stand to benefit. When Mckinsey analyzed the state of work going forward, they predicted that while less money will be “spent on transportation, lunch, and wardrobes suitable for the office,” it may instead “be shifted to other uses.” For example, they noted that “sales of home office equipment, digital tools, and enhanced connectivity gear have boomed.”
Shifting company focus to online and social properties is key. According to the US Department of Commerce, eCommerce in the first quarter of 2021 accounted for 13.6% of all retail sales, marking a 39.1% increase from the first quarter of 2020. Retailers who can take advantage of these changing consumer spending habits are most likely to succeed in this new climate.
The balance of remote vs. in-person working will likely remain fluid as COVID variants emerge. Despite the common feeling that remote work is the new normal, data from our 2021 Goal Management Report suggested otherwise. Of that group, two-thirds said they would return to in-person work in the foreseeable future. Another 23.4% said they would have a hybrid setup (some remote and some in-person work). Only 10% said they would remain solely working from home. This survey was taken prior to the Delta variant emerging, however, so the future state of work is anyone’s guess—making it even more vital that retail brands build the systems—and invest in the collaborative tools—that enable quick pivots and lock-step alignment for everything from marketing campaigns to supply chain management.
One of the immediate challenges retail brands face is the need to align the way they’re managing inventory with the way their customers are buying inventory. In most cases, that looks like restructuring supply chain, merchandising, and other related functions to have an omni-channel presence.
Retail executives surveyed in Deloitte’s 2021 Retail Industry Outlook affirm this need, calling out that “supply chains, inventory management, and digital user experience can no longer operate in separate silos.” When these functions work in harmony, merging together their retail and online businesses, they’re better able to meet the needs of the customer.
Given that an omni-channel strategy often requires massive internal reorganizations, process changes, and new IT systems, some organizations are turning to an interim solution: drop-shipping. This is when digital purchases come directly from manufacturers, rather than sellers acting as an intermediary and holding inventory until the buyer makes a purchase. According to Salesforce’s State of Commerce report, drop-shipping for essential goods saw a 200% year over year increase due to the pandemic.
Whichever strategy retail brands embrace, it is more important than ever for teams to work closely together to quickly take advantage of the increased time that consumers are spending online and on social, to turn browsing time into dollar signs.
According to our latest Goal Management Report, having a goal framework to refer to ensures alignment towards cross-org goals. We found that while 93% of Ally.io customers said they feel aligned to their coworkers, only 72% of individual contributors who didn’t use a goal framework could say the same.
For brands to anticipate and react swiftly to changing customer demand, they need to go beyond the data and kick off processes that allow them to take risks and act with agility.
Most brands today are aware of the need to embrace digital investments that reveal customer behavior, market trends, and other business-critical data. But all that insight doesn’t matter if companies can’t act upon it to drive sales.
At the height of the pandemic, the brands who got ahead were the ones who could anticipate demand and fulfill customer expectations. In fact, Salesforce found that retailers with “creative pickup options – curbside, in-store, drive-through – grew more than 60% higher than those that didn’t during the last five days before Christmas.” Clearly, agility and risk-taking pays.
Our Goal Management report found that when a goal framework isn’t in place, only 53% of people said they felt empowered to take risks. Compare that to 88% of Ally.io customers who say they feel empowered to take risks, even if they may fail. It’s this attitude and empowerment that will enable retail brands to lean into insights and respond to changing customer demands.
That feeling of empowerment is partly attributable to having systems and processes in place to support risk-taking, which leads directly to a strong company culture. We saw that company culture plays a significant role in alignment, risk-taking, and other areas of performance. Take a look:
Especially in retail environments, it can be difficult to engage in-store teams in larger organizational goals. And yet, it’s essential that individual employees understand how their work connects to the company’s larger business objectives. Of respondents who rated company culture highly, 94.9% say they understand this connection. Comparatively, only 53% could say the same if they feel positively about their company culture.
Clearly, culture has a big part to play in performance. For Ally.io customers, 77% say it has helped them create a stronger company culture, and 80% say it has helped them create a higher performing team. There’s also evidence that building a strong internal culture can also spill over to your customers – who care more than ever about an organization’s values.
As the market continues to shift, retail organizations will need to keep a close eye on these trends in order to remain competitive. They’ll also need to embrace systems and processes that support their shifting goals and strategies. To learn more about how goal management frameworks can enable these changes, download our 2021 State of Goal Management Report.
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