Unpacking resilience and agility in the retail sector

The state of affairs in retail

Predictably, challenges surrounding resilience and agility aren’t exclusive to the retail sector. As detailed in our 2023 report, “Unlocking Business Resilience and Agility,” we observed that within retail, confidence levels aren’t particularly promising: less than half (49%) of surveyed businesses consider themselves “strong” or “very strong.”

In fact, 27% of retail respondents took it a step further, calling themselves “weak or very weak.” In general, these figures fall in line with results we gathered from other industries, with the exception of financial services (67% and 21%, respectively).

How can today’s retailers stand out in uncertain times — both within the industry and across the broader landscape?

Factors that move the needle

Our research revealed a number of crucial considerations. With regard to resilience and agility, we discovered 10 attributes (listed in order of importance):

1. Our workforce has sufficient autonomy to act on threats and opportunities without executive leadership getting involved.
2. We have enough resources to try new things or technologies to improve the way we work.
3. We actively share knowledge within the organization so that everyone has the information they need.
4. We gather ongoing data analytics on our products and services, so that we understand how they are performing and how customers are using them.
5. We are regularly trained in new skills or capabilities.
6. We have a dedicated innovation unit whose focus is solely to innovate with fewer constraints than the rest of the organization.
7. Our organization is organized and governed in a way that makes us agile and resilient.
8. We have a strong communication setup with specific tools and channels to keep everyone up to date.
9. Our company has a clear vision for the future, which everyone in the organization understands.
10. We have voice-of-employee processes and tools so we can understand and adapt to our employees’ changing needs.

Among surveyed retailers, four of these attributes are particularly well-leveraged: knowledge sharing (3), data analytics (4), employee training (5) and strong communication (8).

On the whole, retailers face a long road ahead. Some respondents shared that businesses leverage many of the 10 attributes — with minimal impact. A number of other attributes are underleveraged — namely, employee autonomy (1), experimentation (2), dedicated innovation units (6), governance and organization (7) and voice-of-employee processes (10). These overlooked drivers are also some of the most impactful.

Four major barriers (and how to overcome them)

A growing number of retailers are striving toward new models of resilience and agility — beginning with the drivers listed above. To make tangible strides, however, retailers must adopt an even more strategic and granular approach. That begins with breaking down existing roadblocks:

1. Underestimating the power of people

To thrive in today’s retail landscape, businesses must recognize that people are often the solution — even when they’re the challenge. By ensuring alignment on the broader organizational vision, expanding access to new technology and resources and encouraging others to embrace a mindset of change, stakeholders can begin to see employees for who they are — their business’ greatest asset.

2. Turning to technology as a cure-all solution

In retail and beyond, businesses are digitizing at record speed. When it comes to resilience and agility, however, technology is at best an enabler — and far from a one-and-done solution.

Continuous technological innovation requires major investment — all with the promise of a rewarding payoff. But many retailers fail to maximize their return on investment, largely thanks to people- and process-related barriers. By investing proper time and money in their people — whether through training, upskilling or some other means — businesses can make the most of new innovations.

3. Failing to balance compliance with autonomy

In a climate rife with risk, the stakes are higher than ever. But when executives take governance and compliance too far, employee autonomy often suffers —as does organization-wide agility. 

Retail is notoriously unpredictable. Businesses must be prepared to respond decisively to unanticipated setbacks and delays, even in the face of growing risk.

4. Bouncing back instead of forward

Challenges are inevitable. Resilience requires proactive action and ongoing improvement. In the face of new and long-standing crises, retailers must continue to bounce forward — not back to their pre-crisis state.

Today’s retailers are struggling to gather the right information and data for product- and process-related improvements. Moreover, few executives are able to balance their longer-term vision with their macro business understanding.

Ultimately, investments in business intelligence, innovation and leadership can go a long way.

A stronger retail landscape awaits

Within retail, many uncertainties show no signs of letting up. That said, businesses can emerge victorious — as long as resilience and agility remain critical priorities.