Change is a familiar force in the retail industry.
As advances in technology, business models, disruptive startups, and shifts in consumer preferences reshaped the industry over the past decade, many traditional retailers already struggled to keep pace.
Now, as the world adjusts to life during and after the coronavirus pandemic, retailers face an unprecedented challenge.
Navigating the treacherous and always-changing terrain of the coronavirus economy will require retail organizations and their leaders to become agile and adapt to short-term challenges without losing sight of long-term vision. Coaching is the ideal tool to help leaders rise above the day-to-day challenges, to remain resilient, lead strategically, and ensure the ever-changing customer experience serves as a north star moving forward.
In his seminal Harvard Business Review article on the future of shopping, Darrell Rigby shared how the retail sector has undergone a major disruption and transformation every half-century beginning with the advent of the urban department store, followed by the spread of suburban shopping malls, which were then eclipsed by discount chains— Walmart, Kmart, and Target, among others—and big-box category killers such as Best Buy and Barnes & Noble.
Now, the coronavirus is accelerating the next evolution of the retail industry. Even before the pandemic, digital retail presented an existential threat to shopping malls, big box retailers and department stores. Physical store closures hit an all time high in 2019.
While online shopping accounted for more than half of retail growth last year, it was still just 16% of total sales. Now that in-person shopping is an at-risk activity, that percentage is bound to skyrocket. Even grocery stores are going digital. Before the pandemic, only four percent of grocery spending was online. Now, online sales represent 15% of grocery spending in the U.S.
Online marketplaces (Walmart and Amazon) and direct-to-consumer brands are booming, posting record stock prices and hundreds of thousands of job openings. However, some of these companies have come under fire for allegedly putting their employees at risk in order to meet demand.
As countries around the world begin to loosen restrictions on daily life, it is difficult to predict what the post-coronavirus economy will look like. Very few industries are likely to look the way they did before the world began sheltering in place. Retail organizations will face a future where disruption is frequent and challenges are increasingly complex. For many retail leaders, that will be a particularly challenging world in which to operate.
Our experience has shown us that retail leaders tend to be pragmatic. This characteristic makes them adept at identifying seasonal trends, finding opportunities for cost savings, and enacting incremental changes to increase margins.
But however well a tactical mindset worked in the past, it won’t work for tomorrow’s retail leaders.
Executive coaching is an ideal tool to help retail leaders adapt the agile, creative mindsets they will need to thrive in a post-coronavirus environment. Executive coaches can help retail leaders step back from tactical problem solving and see the bigger picture. They help leaders reduce complexity and identify new and innovative solutions to address the challenges their organizations face.
At a personal level, leading through constant flux puts retail leaders under enormous stress. This constant strain puts leaders at greater risk of career derailment than their peers in other industries. According to a study of CEO succession, the rate of announced CEO changes in retail companies rose to 23% from 2017-2018, more than double the 11% average across industries. Beyond the C-suite, turnover among retail executives is costly, and the loss of institutional knowledge with each departure is detrimental to retail organizations’ ability to execute on long-term strategy.
Working within a proven coaching methodology, AIIR executive coaching engagements include a rigorous assessment phase that can provide leaders with an unmatched understanding of their strengths, derailers, and how those characteristics are likely to show up under pressure and undermine retail executives’ ability to motivate employees and produce results. Building on this self-awareness, executive coaches can provide leaders with clear techniques for managing stress, and help them leverage their strengths to both overcome organizational challenges as well as stay focused on the customer experience.
The pace of change in the retail sector has accelerated exponentially over the past decade. Given the complexity of the coronavirus crisis, the rate of disruption in the retail space shows no signs of slowing down. Retailers and their leaders will have to adapt to the changing environment or risk extinction. Executive coaching can provide retail leaders with the insight, resiliency, and adaptability they need to survive, and ultimately thrive, in this new environment.
Partner with AIIR to empower your leaders and ascend into the future.