Digital disruption and changes in consumer behaviour are among the issues forcing retailers to rethink both their organisation and their workforce

Digital disruption and changes in consumer behaviour are among the issues forcing retailers to rethink both their organisation and their workforce

Retailers need to act now if they are to future-proof their businesses against the changing landscape, by rethinking their workforces, adopting analytics, being smarter at using data, and even rethinking how they organise into units such as supply chain, merchandising, pricing, logistics and customer experience.

"The next three years will be a defining period for UK retail and will determine who will be the winners and losers in the longer term," according to the report 'Retail Productivity: Shop for tomorrow's workforce,' from Deloitte.

"We believe that it is no longer enough to compartmentalise retail businesses into units such as supply chain, merchandising, pricing, logistics and customer experience. Retailers need to rethink both their organisation and their workforce to survive in a new world where the rules of work have changed."

Digital disruption and changes in consumer behaviour are among the issues forcing retailers to rethink both their organisation and their workforce.

And with bottom lines under pressure, they are increasingly investing in and adopting new technology, such as artificial intelligence (AI) and robotic process automation (RPA) in order to automate manual tasks, make their existing workforce more efficient and create new, higher-skilled job roles as a result.

Digital capabilities

"Retailers' profits are under pressure at a time when they need to incorporate a number of new and different sales channels in order to match customer expectations," says Laurence Collins, HR, digital workforce and people analytics partner at Deloitte. "Defining how much work and who – or what – will deliver this is going to be critical to enable retailers to change and evolve their workforce in the right way."

Deloitte says retailers need to use digital capabilities to move them into the new, future era of business. The report suggests a focus on delivering three key capability areas:

1: Define customer experience: Understanding and delivering against the brand's 'customer promise' across the entire value chain, as well as designing products, services, experiences and offers to fulfil that promise.

2: Rethink the workforce experience: The emphasis is on the changing nature of how talent is sourced, deployed and supported. As the reliance on contingent and on-demand specialists grows (those not actually employed permanently), having the right workforce experience will become even more critical to having a strong internal culture and workforce for these individuals to slot into.

3: Use analytics: There needs to be an organisational shift from reporting history towards predicting outcomes and prescribing action. Retailers need to establish clear ownership for data, and identify how the data generated across the business ecosystem can be used to inform decision making and shape future outcomes.

Changing workforce

Retailers are also having to adapt to the changing composition of the workforce. According to Deloitte, by 2020 millennials will make up more than half of all workers, rising to 75% by 2025. In order to attract and retain the best talent, retailers are having to accommodate work expectations from millennials that are very different to previous generations.

While there is still much to be gained by increasing the productivity of the current workforce, the report recommends retailers consider adopting analytics technology as part of the future-proofing exercise, and use the data to predict outcomes and prescribe action.

"The world of work is changing and new technologies will increasingly automate many tasks in such a way that will transform retail over the next decade," Collins says. "Retailers are already responding to these labour challenges, but the question is, are they moving fast enough?

"The next three years will be a defining period for UK retail and will very much determine who will be the winners and losers in the longer term."

Deloitte offers a number of examples of how some key roles within retail businesses are likely to change in the future and some of the new roles that will need to be created.

Buyers/merchandising

Present Future
Buyers work with designers and select the products they want to sell based on future trends and predictionsAI-assisted design will be used to make accurate predictions of future trends and demand
Merchandisers analyse supplier costs and will budget according to retailer’s requirements.Merchandisers will use AI to track demand, reduce waste and accurately predict demand for each product
Very limited use of automationBuyers and merchandisers will provide insight around highly automated processes
Stock units are allocated to stores based on their predictions and limited use of historical sales dataStock will be allocated automatically based on predictive algorithms

Logistics

Present Future
Customers typically visit a store to purchase items requiring significant in-store inventory Employees spend less time restocking shelves as there is less reliance on instore inventory to fulfil customer orders
Stock needs to be frequently replenishedIncreased number of warehouse employees to manage greater volume of online orders
Inventory has to be manually allocated to each store based on historical sales data and predictionsAs customers more frequently shop across different channels it is important to have more locations that hold stock
Increased communication between staff instore and at the e-commerce warehouse as there is an increased demand for click and collect services
AIs can analyse data on stock flows, inventory and external factors like the weather and traffic to more accurately predict demand and reduce the amount of time any location is out of stock