Operational Excellence for the Retail Industry

In most retail organizations, front line employees are the people who deal with customers the most. When you deal with individual consumers, service and price become key factors in the buying decisions those consumers make. And retail organizations are not only competing against other physical organizations, they also have online competitors. There are many examples where consumers have used a physical store to find out the details of a certain product and then have gone online or to the competitor down the road to buy the product. Customers might use your resources to determine what they want to buy, but they might buy it elsewhere.

You’ve got to offer that customer something they can’t get online, something they can’t get in another store, something they can’t get elsewhere. One of the things an Internet store can’t provide is comfort and validation. The customer wants a recommendation given by someone knowledgeable so he or she feels like they’re making the right decision.

Online stores try to replicate this need for validation with product reviews and testimonials. Those attempts can’t replicate the comfort level received when an expert confirms that something is the right product for that consumer based on their specific set of circumstances. Retail companies need to offer knowledgeable, friendly staff that can make consumer recommendations and give consumers comfort that they’re making the right decision.

Here are some keys to operational excellence in retail:

  • Having an effective hiring and retention process. Treating employees well and being the place where people want to work is essential.
  • Hiring employees who are strong at relationship building and can build rapport quickly with different kinds of customers. It helps dramatically when your employees are passionate about your organization and what it offers to customers.
  • Empower employees to make decisions that are in the best interest of the customer. Power in retail organizations needs to be decentralized because you only have a few moments with a customer. How the employee behaves with that customer and the judgment they use will determine how loyal that customer becomes.
  • Employees need to take ownership for success and failure. Retail organizations should have a culture of accountability. With the empowerment to make decisions also comes the accountability for the outcomes of those decisions.
  • Alignment between the strategy of the overall organization and the work that front-line employees do is also important. Employees need to know how their behavior can impact the direction of the organization so that they can perform in a way that is consistent with what is expected of them.

In retail, operational excellence happens on the front line, so that is where top people need to be. They are the face of the organization. What face do you want your customers to see?


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