Retailers need an agile operating model approach, says research

Sean Dudley
Sean Dudley
By Sean Dudley on 03 August 2016
Retailers need an agile operating model approach, says research

New research has found that retailers need to take a more agile approach to their operating models in order to improve competitiveness and enable growth.

Accenture research has found that the main challenges faced by retailers include inflexible operating models, with just 17% stating they had an agile model in place which can adapt and deliver on strategy. This is compared to 25% in other industries.

Technology, cost and not having the necessary experience to lead such a transformation were among the reasons given as barriers to change these models.

Retailers are also facing challenges around executing cost reduction programmes and prioritising growth investments.

Accenture has suggested three key actions for companies looking to become an adaptive retailer.

The first is ‘rethinking the operating model’, with the digitisation of operations seen as a key enabler of adaptive retailing, and a reduced lead time between product planning and sales, which directly helps enable growth.

The other two key actions are ‘make digital inside a key element of the business strategy’, which focuses on adopting digital and analytics to enable appealing retail scenarios, and ‘gain everyone on board’, which suggests leadership should be aligned and data used to support business decisions. Furthermore, company strategies, value drivers and anticipated outcomes should be fully communicated across the business.

88% of retailers are focused on becoming leaner in order to free up funds which can then be reinvested with the aim of enabling growth. The key areas for this reinvestment, as highlighted by those surveyed, include entering into new markets and digital.

More than half of retailers feel their businesses are investing in innovation to bring about a competitive advantage. Areas of focus for this include expanding into new geographies, digital technologies and enhancing the customer experience.

“The retail industry is evolving faster than ever, and there are tremendous opportunities for retailers to increase adaptability and competitiveness,” said Courtney Spitz, managing director in Accenture Products’ Retail Practice. “It is encouraging that the majority of retailers are willing to use new business models, including partners for business services, shared services, and digital solutions, to drive value and growth. Digital – when part of the overarching business strategy - can simultaneously enhance flexibility and reduce operating costs as well as contribute to growth in new markets and channels.”

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