Retail leaders are facing major challenges as the UK emerges from lockdown; they will set the tone for a new era of collaboration and innovation.
The Covid crisis has had a greater impact on the retail sector than any other event in living memory. The contraction of the UK economy during 2020 was the largest for over 300 years, resulting in carnage on the high street. Aside from pureplay e-commerce businesses and the grocery trade, which stepped up admirably to help feed the nation, there have sadly been more losers than winners. Long bouts of lockdown have threatened the viability of those retailers whose business model depends on physical stores, many of whom were doing little wrong prior to the pandemic.
Retailers who have survived, with or without government support, have shown remarkable resilience and creativity, both qualities that will be needed in abundance as the country starts to reopen. Andy Haldane, chief economist of the Bank of England, recently likened the UK economy to “a coiled spring”, so as they prepare to take advantage of the vaccine rollout, boards and management teams need to think carefully about how to rebuild their customer base and meet consumer expectations in the post-Covid world.
The pandemic has been one of several major forces changing the business landscape and prompting leaders to reappraise the role of their organisation in society. Even before the first lockdown, most retailers were aware that in order to prosper over the long term they were going to have to establish a clear purpose for the business and work hard at creating the right culture to make it a reality.
Leaders have to establish a clear purpose for the business and work hard at creating the right culture to make it a reality.
Leading on purpose
A thoughtful, relevant and well communicated purpose, providing it is fully embraced by the workforce, helps the organisation focus its efforts on being a responsible participant in the sustainability ecosystem; it should also underpin efforts to address inclusivity, diversity and related social issues. The right purpose enables leaders to factor into their strategic decision-making the many stakeholders whose voices are becoming louder and more influential from both a commercial and reputational perspective.
If retailers are to return to growth in a sustainable manner – meeting consumer expectations, balancing the needs of stakeholders and treating employees equitably – then leaders will need to take a close look at how inclusive their cultures are and what they can do to increase diversity at all levels of the organisation. Much has been written about the state of D&I in UK retail and boards and executive committees will need to make a concerted effort to ensure that a truly diverse range of voices contribute to strategic decision-making.
Fortunately, the past year has ushered in a new style of management that stands in stark contrast to the hierarchical model of leadership that was once pervasive in retail. During the pandemic, retail leaders have committed to more frequent, open and transparent communication and have experienced unusually high levels of engagement.
The entire workforce, from management to those involved in customer service, have had to adapt to radically different circumstances. Decentralised decision-making, heightened levels of collaboration and new, agile ways of working have borne fruit in more innovation; this has been the key to accelerated digital adoption and a rapid pivot to ecommerce.
As we emerge from this crisis, retail leaders will need to continue communicating a clear and consistent vision; they may also want to loosen the reins even further by empowering diverse teams to find yet more creative solutions to serving customers’ needs. And they will have to remain committed to training and reskilling the workforce.
"There will be plenty of opportunities to build back better."
The next year will be challenging for retail leaders. Their world has become more complex: consumer behaviour continues to evolve rapidly, supply chains are under growing scrutiny and stakeholders are more demanding. Armed with the right strategy and collaborative, diverse and motivated teams, there will be plenty of opportunities to build back better – and more profitably. Leaders who can inspire a strong followership, both inside and outside their organisations, are most likely to be met with success.
This article was first published in Retail Week magazine.