Great Retail Study by PWC: Retailing in 2015 – Impact for HR!

For all of the HR folks out there that work with Retail, this is a great study to read – as it is an in depth review of how retail is going to change. There are a number of key findings:

1. Retail footprint space is running out – so there has to be format changes
2. ROIC on internet vs. retail footprints is switching – so the nature of a store is changing.
3. International growth for US firms will be critical
4. There will be some international consolidations – to include some mergers involving US companies
The study is written for CEO and COO’s of retailers and as a result does not dig deep into the underlying talent issues – which on the one hand is understandable, and the other hand a major mistake.
Once you read the study – you will see that any retail organization is going to need to change rapidly and have best of breed talent. If we think the switch to ecommerce has been a challenge – this should be fun.
So key Talent Questions to ask yourself:
1. In terms of store format and real estate strategies – how out of the box is your talent? Do you have the right people that can build a vision that the board can support in order to get the right capital funding?
2. How good is your talent at multi-channel development? I know many retailers that used to, and many still do, leave and die by the weekly tab. How about direct marketing, social marketing, internet presence? How coordinated is it?
3. How much international experience does your leadership have? Regardless of whether it is a merger or a growth plan – what of the most difficult areas for talent development is International Leadership. Taking a good US operator or Merchant and telling him/her to go grow a market in Latin America is not a good plan. As a pop quiz – ask folks if they know who Carrefour or Metro AG are. They are only some of the top Retail Brands in the world – but don’t have a US presence.
To Do’s?
1. Make sure HR has visibility to the strategic planning process and document.
2. Look and make sure some of the questions raised by PWC are being addressed.
3. Then look and see how your HR strategic plan ties into it to support it. Here is a quick test. If your company is going to expand internationally three years from now – you should be:
Sourcing and bringing in international talent for operations, finance, marketing and HR NOW!
You should be building a HR delivery model that supports additional countries (HRIS, Benefits, talent sourcing, etc.)
Financial Modeling- It will take you a year to understand the labor model – as every country is different (e.g. 13 months of pay!). So make sure HR is fluent on the cost structures.
We all know retail is one of the most difficult industries to run due to the incredibly low net operating profits, and as a result – it is way too easy to get sucked into a trap of only looking at this month, this quarter, and maybe this annual year. Yes – a tactical plan is important – but if you do not have a strategic plan in place that is tended to and operational – I can guarantee you will get blindsided by something that will force you to close. There are way too many retail case studies out there on this – and I am personally convinced a lot of this has to do with the lack of a strategic human capital plan. 

Leave a Reply

Your email address will not be published. Required fields are marked *