Retail's Agile moment - is now. Many industries have already changed gear to a new operating system for their organization - Quorso
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Retail’s Agile moment is now. Many industries have already changed gear to a new operating system for their organization. Retail is about to become Agile, Simple, and Human. Welcome to a new era in retail store management.
Introduction
Retail’s Agile moment
is now.
Agility, on every level of retail
management, enables leaders of an
organization to anticipate the future,
not catch up to it. Agility management With thanks to
empowers employees (retail’s greatest
natural resources) and liberates Agile Program Contributors
managers from meaningless hours
of tedious, distracting reporting and Alex Genov, Head of Customer
documentation. The currency for Research, Zappos
successful retail operations today,
Brian Reaves, former COO, DXL Group
eliminating as much friction as
possible, is speed. And I’m not talking Chris Richardson, VP Ops, Party City
about a race to the bottom, I mean
Chris Taylor, ex-Chief of Staff,
an Agile plan to deliver customized
products and services to customers Marks & Spencer
I’ve said it for over a decade, and
when, where, and how they want them. Chris Walton, Co-CEO, OmniTalk
I’ll say it again: the winners in retail
Bluntly, the brands that cannot deliver
will be led by enlightened executives Dan Goldman, VP Strategy & Business
this will be toast.
that use systems thinking to view the
Development, GAP
business holistically; an imperative for
Say what you may about the
using technology as a tool to develop Daniel Slowe, CPO & Co-Founder,
unstoppable force of technology, but
smart, consumer-centric solutions; Quorso
when all of its assets are used as tools,
and most importantly, the need for
it will make business and consumers’ David Gore, Head of Industries, BJSS
agility in pivoting, building or buying
lives more Agile in the future. When Elinor Noble, Global Head of Retail
solutions, and rethinking business
combined with human intuition and
models based on a complex, evolving Excellence & Operations, LOEWE
empathy, agility management will
retail marketplace.
redefine consumers’ relationship Hasan Javed, Product Manager,
with retailers and retail leaders’ Microsoft
So, let’s talk agility. It’s especially critical
relationships with their partners and
in the wake of an international pandemic Julian Mills, CEO & Co-Founder,
workforce. And that is a permanent
that accelerated fundamental changes Quorso
game changer.
in retail. We’ve just experienced the
brutal convergence of three fronts of a Julia Raymond, Editor in Chief,
The Robin Report works with Quorso as
perfect storm: mobile as a transactional RETHINK Retail
a member of our Innovators Network
powerhouse; the customer as point-
to connect their startup brand with Kris Kohler Burrows, Alvarez & Marsal
of-sale; and the pandemic which has
our 35,000 leading retail and brand Mike Simoncic, MD, Consumer & Retail
separated the winners from the losers.
executives. The Network includes 10 well- Group, Alvarez & Marsal
Agility is a synonym for resilience, the
respected brands with unique solutions to
greatest competitive edge and most
improve the experience and profitability Mohit Mohal, MD Consumer & Retail
powerful survival skill in running a
of retail brands. Group, Alvarez & Marsal
relevant, meaningful business. And
agility is the key to emerging from the Ollie Banks, Retail Transformation
perfect storm with a stronger, more Show
vital business.
Robin Lewis, Founder & CEO,
The Robin Report
Agile Report Editorial
Gabrielle Reason, Editor-in-Chief
Phil Thor ne, Editor
Sophie Slowe, Editor
Design
Hatched London
Quorso NRF Report 2021 2
Contents
Contents
Why retail must What makes
go Agile, today. a store Agile?
The pandemic has been a defining moment for retail. Agility is a word almost every retailer has used in
Everyone has had their term for how to think about their boardroom in the last 12 months, but Agile
it – “the great acceleration”, “the great convergence,” goes beyond an adjective. ‘Agile’ is a revolution in
“the great restructuring”. The overarching theme is the management mindset, extensively adopted by
that agility and adaptability are no longer a nice to the tech industry over the last 20-years to drive
have, they’re imperative to retail’s survival. rapid growth and engagement. But what does it
mean for retail?
P.4 The four trends that demand Agile P.11 The Agile Stores Manifesto.
stores.
P.13 A day in the life of an Agile Store
P.6 Why retail should think like a mobile Manager.
app for rapid engagement and
P.14 Four Chrises talk Agile retail.
improvement.
Agile impact Applying Agile
in action. to your business.
You may be surprised which retailers have gone You can start being Agile tomorrow. It doesn’t need
Agile already. Some of the biggest companies out a 5-year plan. We provide some practical advice
there have transformed their operating model and for retailers to think not only about themselves
are starting to see results. Using Quorso's data, beyond the 4-walled box of a retail store, but also
we're actually able to show you how impressive to adopt an Agile mindset and culture - and embrace
those results can be. technology as part of this.
P.8 Why Walmart, not Amazon, has taken P.23 Your four point plan for going Agile.
the Prime position in retail’s future.
P.27 Get Agile in days.
P.18 The future of the store: fusing the
physical with the digital.
P.20 Agile impact in numbers.
Quorso NRF Report 2021 3
The four trends that demand Agile stores.
The four trends that
demand Agile stores.
Even before the pandemic ever hit, Mobile consumers personalized ways. The complexity
retail was in the midst of the biggest of selling goods in multiple channels,
transformation it has ever seen. As expect their worlds physical and digital, and offering
the digital revolution disrupted, retail multiple delivery and return options
found itself grappling with four new
to revolve around (in store, BOPIS, last mile) is now the
realities: them. norm.
• consumer demanding
A
78% of people alive today were born And competitors are no longer limited
frictionless flexibility
before the iPhone came into existence to other retailers: competitors are
• A retail universal standard 13 years ago, yet its invention has emerging beyond ecommerce players.
transformed all our lives. With Social media companies, like Facebook
• A fractured operating model
information, access, collaboration, and and Instagram, now have shops.
• workforce lacking in
A inspiration in everyone’s pocket, whole Delivery companies, like InstaCart
motivation industries have been transformed and and DoorDash, are now becoming
none more so than retail. retailers.
Addressing any one of these themes
would be a once in a generation task Whereas 99% of goods would have The rise of mobile asks fundamental
for many executives. Coupled with a been both bought and delivered to questions about the role of stores,
pandemic, they are giving rise to the you in store ten years ago, the mobile the relationship with suppliers
type of volatility which is threatening device has allowed shopping from (direct-to-consumer becoming
but a potential huge opportunity. As anywhere with enough phone signal. increasingly prominent), and optimal
new markets are made, so too are And yet ecommerce is becoming far organizational design. Mobile is
the opportunities to capture market bigger than just appending a website: applying an evolutionary pressure
share for retailers who can best adapt it’s now about understanding the to retail that makes it a volatile and
to them. impatience of consumers to have exciting sector to play in.
their goods delivered and enjoyed in
ever more flexible, frictionless, and
Quorso NRF Report 2021 Back to contents 4
The four trends that demand Agile stores.
Back to basics:
Quality, value,
convenience.
Most people look at Amazon in the
wrong way. They see it as a competitor
that is out to eat their lunch, Jeff
Bezos’s shadow lingering over
boardroom discussions with constant
undercutting and impossible-to-
replicate fulfilment options.
What every retailer needs to now realize
is that this is not the competition: it’s
the universal commodity standard.
This standard consistently sees ways
in which it can provide better value
and convenience to the customer. If
you cannot provide a better blend of
quality, value, or convenience to your
customer than Amazon, your retail
model is not differentiated and no
better than this commodity standard.
The key is understanding the areas of
differentiation.
There has been a general theme that two different people. While this may dynamics need to be supported.
'experiential retail' is the appropriate have made sense as these trends Therefore, when a workforce becomes
response to Amazon. Yet creating were starting, retail’s evolution today disengaged, it inevitably prevents
experiences is not the only level. There demands a less siloed and more lasting customer relationships from
are also areas like quality of service, collaborative approach between being built and stops retailers from
value and ongoing relationships - just departments. Customers have being able to adapt and learn their
ask any luxury retailer or successful shown themselves to be fickle, and way to future success.
independent store. This is not just an individual coming to the store is
about looking to the future, but also just as likely to also require delivery
focusing on what has made retail
successful in the past. Creativity, pride,
or seek BOPIS. Different preferences, Agile: flexibility
different times.
and entrepreneurial spirit used to be for customers,
at the heart of being a shopkeeper.
Sam Walton’s first success as an
The Frankenstein approach to retail is
preventing companies from providing
and stability for
independent merchant was to put a
candy floss maker outside his store
a uniform and coordinated approach business.
to customers. Words like omnichannel
to drive footfall. and digital now seem outdated - these The common themes throughout are
are just the norm now as simple increasing volatility, more competitive
The new universal standard modern retail. threat, and a need to radically simplify
demands that retailers discover how
and engage workforces. Agile has
they can rapidly and sustainably
been the organizational success
create differentiated products and
experiences, so that their offering
Disengaged staff story of the last two decades, with its
focus on customer value, small teams
is indispensable and delightful to means disengaged working in rapid growth cycles, and
customers.
customers. aligned collaborative organizations.
It allows business to offer both the
dynamism and personability of a
Frankenstein retail Over the course of the last 20 years,
small independent boutique, with
retail has looked to increasingly
feels disjointed and reduce store labor, unable to pass on the stability and scale of a large
rent and wage inflation to customers. enterprise. Retailers no longer have
uncomfortable. The standard model has been a push to make a trade off between flexibility
for centrally-decreed consistency and and reliability.
From its position of stability, most uniformity across stores. Workers
retailers have reacted to a changing have felt like robotic task compliance The most valuable and fastest growing
landscape by adding new departments. agents, and retail has lost its luster as companies in the US - Apple, Amazon,
Themes like omnichannel, store of the a place where you can grow a career. Microsoft, Facebook, Google - operate
future, and data analytics have risen under Agile values and principles.
up over the last few years to answer The next decade will be a time of Top retailers like Walmart have also
changing customer behavior. rapid change and volatility, often adopted these ways of working, and
differentiated at local levels. The many more are planning to do so. As
In some cases today you see stores frontline is the frontier of any retailer’s it gives companies such an advantage
with separate ops and ecommerce relationship with their customers, over competitors, it's not even an
teams, tasked with different activities and thus key for cultivating their option for the remainder: go Agile,
under the same roof, reporting into brand and learning what changing or go bust.
Quorso NRF Report 2021 Back to contents 5
Why retail should think like a mobile app for rapid engagement and improvement.
Why retail should think
like a mobile app for
rapid engagement and
improvement.
Love them or loathe them, one the Get these principles if you manage to cross the follower
greatest growth stories of the last 10 threshold into ‘micro-influencer’. In
years has been the rise of mobile apps, right, and you’ll find a few years, influencers have created
built using Agile methodologies. Such mini-industries for themselves by
processes, which constantly optimise
your retail business providing highly rewarding and easily
these products to meet our needs reaching viral levels accessible content and communities.
and desires, explain their explosive With the rise of social commerce,
success, and they have changed of growth. individual influencers are becoming
the way we communicate, our daily storefronts in the palm of everyone’s
habits, and the way we share. More There are three areas that lie at the hand.
fundamentally, they’ve shifted the very heart of what makes large social
relationship that we have with our media and mobile giants successful, But it’s not just relevant to the
internal selves. and are now expected as default by customer-facing part of your business:
consumers. If an offering falls short of you should be taking it as seriously
Such social tools are starting to these new deal-breaking technology for your back office. Whilst simplicity
encroach on retail in three ways. Firstly, standards, brands can end up bleeding and convenience have transformed
in the relationships with customers market share to in-tune competitors the shopping experience for your
who spend a significant amount or failing to get off the ground early consumer, retail managers are still
of their day on them and expect on. stuck with poor UI, or worse, no
everything to be as easy. Secondly, technology at all. Many still find
as tools to manage and engage their Simple user experiences. themselves drowning in multiple
employees. Finally, as potential retail spreadsheets and reports, and
Instagram is about following,
competitors themselves - something hundreds of varied tasks per week to
Facebook is about friends, Twitter is
that has been developing in China for get done. Whilst it may be tempting
about re-tweeting, and all are about
the past five years and more recently to think that customer experience
liking. In every one of the main social
in the US. is solely an issue for the storefront
media tools it is both easy, intuitive
and shop floor, there is a wealth of
and rewarding to figure out the
So what lessons should retailers take untapped opportunity to digitize and
basics of what you need to do to
from the biggest business growth simplify management and supply
grow yourself on these platforms.
story of the last decade? What pitfalls chain. The power of simplicity is a
Through this simple structure,
should we learn from it to take into focused view of success for everyone,
creativity, discipline, and ingenuity
account? that they know to continuously
are rewarded with short bursts of
improve towards.
dopamine, peer status, and money
Quorso NRF Report 2021 Back to contents 6
Why retail should think like a mobile app for rapid engagement and improvement.
Always iterating to better.
Amazon, Facebook, Netflix, and
Google run thousands of experiments
a year. Using test paradigms like A/B
testing, they will rapidly experiment
with 1-2% of their user base to see
how a change hypothesis impacts key
metrics, quickly stopping what doesn’t
work and rapidly scaling what does.
The importance of the data isn’t in
the act of capturing it, but how the
data can prove or disprove proposed
ideas and plans and ensure that the
whole company learns from and
replicates success. These companies
Gamification and reward. have become successful so quickly by
creating the most sophisticated and
I got off my Peloton this morning efficient experiment engines in the
1,247th out of 12,428 people (humble world. At its very essence, they ensure
brag: my first time in the top 10%!), they get it right almost all the time,
achieving 375 kJ versus my personal versus competitors who navigate on
best of 370 kJ. I was ecstatic. gut and a 50:50 chance of making the
right decision.
Competition and reward done in the
right way can be incredibly motivating. For most retailers the idea of
What these social media tools running one new project a quarter
“
have learnt is that competition for is scary. But introducing this kind of
competition’s sake isn’t appropriate. experimentation isn't an option - it's
Competition needs to be relevant, a necessity to compete with the digital
reward needs to feel deserved and companies encroaching on the retail
The need to increase genuine. space.
experimentation is As well as motivating users to strive,
gamification can actually improve
Thankfully, the move to Agile is
actually more rapid and undisruptive
vital to keep up with real-world problem solving as well.
When humans are given a pure logic
than most think. It's an ongoing
process rather than a standalone one,
problem to solve, a huge proportion gradually becoming adopted day-to-
these new digital get it wrong. However, if the exact day with little training needed. With
same problem is positioned as a the same time and resource that a
companies.” real-world scenario, then the inverse
happens and most people get it
retailer might put towards a quarterly
review, they could be on their way to
right. Gamifying problems within a becoming an Agile retailer and market
social context or narrative means leader.
that almost anyone can become a
self-taught strategic problem solver. Whilst it’s easy to think that Agile
Whereas there are few who can get methodologies might just have been
their head around chess or cryptic an operational way to develop the
crosswords, millions from all walks most successful platforms, it loses
of life do so within Call of Duty or sight of the fact that Agile was also
Minecraft. Transforming cryptic BI a crucial factor in their strategy. By
data and insights into a compulsive having a process which is continuously
and social game could be - quite re-evaluating audiences and then
literally - game-changing for your rapidly designing product to adapt
sales and KPIs. to change, Agile allows adopters to
deliver the highest quality product,
The challenge retail has often had with lean resources, and get it to
on this is two-fold. Firstly, a lack market before their competitors.
of fair ways to judge competition.
When comparing just last year LFL Agile B2C technology companies
performance, there can be so many have paved the way for the growth
different factors that impact sales: a formula of the future, mixing
change in local competition, weather, simplicity, gamification and rapid
a pandemic! It is often felt that being in experimentation to continuously and
the right place at the right time is what sustainably build innovation for the
gets rewarded, rather than whether future. When rapid progress is made
someone’s actions drove results. Both there will always be unforeseen issues
leadership and managers have told to iron out, but these innovations
us that they feel that reward goes remain transformational and have
to the best performing stores, and set a new standard for consumers
not necessarily the best performing that they also demand from retailers.
managers. Secondly, the rewards don’t Those who do not keep up will lose out
feel genuine, often because they come to those that are already using Agile
through a corporate program which to deliver to these needs.
lacks a human interaction.
Quorso NRF Report 2021 Back to contents 7
Why Walmart, not Amazon, has taken the Prime position in retail's future?
Why Walmart,
not Amazon, has taken
the Prime position in
retail’s future.
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Annual reports and market estimates as at 13th January 2021
In the last decade, Amazon’s growth As 2020 has unfolded, however,
has been phenomenal, seeing an 11- another key retail player has been
fold increase in revenues and a 33- playing Amazon at its own game.
fold increase in market value. Until Between 2014 and 2017, Walmart
getting overtaken by Elon Musk early began adopting Agile ways of working
this year, it also made Jeff Bezos the right across its business which really
world’s richest man. Such rapid and began to show results in 2020. Now,
excessive growth can only come from in 2021, it really has become the
being incredibly disruptive to steal retailer everyone is watching. The
market share, and many Execs keep a battle between Walmart and Amazon
keen eye trained on Amazon and hope is one to which every retailer should
their counter-strategy is sufficient to be paying attention to.
keep it away from their doorstep.
And out of the gates, there are many
reasons to believe that Walmart has
laid the stronger opening position.
Quorso NRF Report 2021 Back to contents 8
Why Walmart, not Amazon, has taken the Prime position in retail's future?
Walmart is sizing up than Amazon’s purely last mile focus, In cloud storage, two key players
putting Walmart in a prime spot to have been encroaching on Amazon’s
to Amazon. compete on price. early dominance: Microsoft’s Azure
(the clear #2 and retail leader) and
One of the biggest retail announce- It is also better poised for the big Google Cloud. We’re likely to see a
ments of 2020 was the launch of market opportunity that both Walmart highly competitive battle over the next
Walmart+, the first true competitor to and Amazon are clearly after: health. decade as most businesses move from
Amazon’s Prime membership service Walmart will be able to offer on-site legacy infrastructure to a cloud-first
which offered many of the same vaccinations this year, which presents approach, and these tech titans fight
benefits, particularly around delivery. a unique brand opportunity to get for power in the space. Amazon is also
Within 14 days of launch, surveying ahead of Amazon in being associated stuck with the challenge that it also
analysts expected that membership with healthcare. cannibalizes itself through its other
subscriptions were already a third business activities: data-heavy retail
of Amazon’s estimated 126 million and media companies are loath to give
subscriptions. Amazon may have Amazon any cloud business when they
resent them as a retail competitor.
In the retail domain, Walmart is spread itself too
certainly a heavy-hitting competitor.
Ever since the days of founder Sam
thinly, across too Amazon has also been experiencing
similar challenges for its media share.
Walton, their logistics capabilities have much. The last 12 months have seen both
always been superb and the bedrock HBO and Disney launching their own
of their coordinated expansion. Their Amazon’s super high valuation is likely streaming services, with other big
expertise here will rival Amazon’s last to become the millstone around its broadcasters such as NBC and CBS
mile capabilities. neck. Trading at a multiple more than soon to follow. Media is clearly for
four times higher in earnings than Amazon a consumer acquisition story
Yet there’s an obvious differentiator Walmart, the market is expecting where it is playing a different strategy
in the 5,763 Walmart and Sam’s Club Amazon to continue its stellar growth to Walmart (see later).
stores across North America. track.
Ecommerce is Amazon’s original front
BOPIS has become an important Amazon operates on three fronts: where it has dominated and continues
fulfilment channel for more than cloud storage, media, and the original to do so - almost 50% of US ecommerce
70% of Americans, and 49% of BOPIS retail. But opening up a battle on more transactions happen on Amazon. Yet
transactions involve additional than one front rarely bodes well, and with the battle and pressure now on
purchases. Walmart’s infrastructure Amazon is starting to face increasing so many fronts, can Amazon maintain
is poised to be able to provide competition and scrutiny in each of strength in all of them?
customers with a more differentiated them.
and potentially lower-cost alternative
Quorso NRF Report 2021 Back to contents 9
Why Walmart, not Amazon, has taken the Prime position in retail's future?
Where Amazon In 2021, Walmart looks set to continue
in their collaborative spirit having
competes, Walmart just partnered with Ribbit Capital,
the venture capital firm behind
collaborates. Robinhood, Affirm, and Credit Karma,
to develop fintech products.
Amazon’s approach to business is
almost imperial: find a market, and
disrupt it with a better offering.
Walmart feels by contrast more
Walmart has the
collaborative. It competes fiercely human factor.
in the retail space, but also tries to
increase the pie for others rather In a topic much discussed at this
than enter and compete in different year’s NRF, purpose and how you
markets. treat people will matter greatly over
the next decade.
The contrast is apparent in their
“
customer acquisition strategies. In serving the customer, associates
Amazon’s focus is to use Prime media have always been at the core of
to drive membership, taking on other Walmart’s vision, with Sam Walton
giants in the same game, whereas claiming “the way management treats
A community Walmart has relied on a collaborative associates is exactly how associates
approach with social media and will treat the customer”. He also
approach is at merchant aggregators. recognized the power customers
inevitably had: “There is only one
the very heart of Amazon’s behavior in 2020 was
typically all-conquering. Third party
boss. The customer, and they can fire
anyone from the chairman down,
sales have been vital to Amazon’s simply by spending their money
Walmart’s culture.” growth, accounting for 50% of online somewhere else”.
sales. Amazon’s new relationships
with Shopify and Thredup are Over the course of 2020, Walmart
therefore important for a couple of put their associates front and centre.
reasons. Firstly, they’re important for Four times they have given special
repairing a brand perception which bonuses over the course of the
was damaged in 2020 when former pandemic. Amazon only did so when
employees suggested that Amazon employees threatened to strike
had been using sales data to make and over Black Friday. They have driven
sell competing products. But it also some great employee initiatives, like
allows Amazon to expand and diversify Mamava pods for mothers for after
their delivery network, giving them they return back from maternity leave.
physical store bases for fulfilment. It A community approach is at the very
also presents a valuable option with heart of Walmart’s culture, and it has
limited cost and risk as Amazon can led the way in areas like sustainability,
take advantage of a crowd of smaller committing to be net carbon neutral
retailers, rather than needing to by 2040.
negotiate supplier relationships for
goods customers want to buy. All driven through an Agile
Walmart’s move into the social
approach.
commerce space, on the other The number of initiatives Walmart
hand, was more cooperative than now experiments with annually rivals
competitive. In 2020 Walmart took any of its tech competitors, no doubt
a 7.5% stake in TikTok, starting thanks to the Agile ways of working
live streaming on the platform in adopted from 2014. With purpose and
December and making Walmart community behind them, will Amazon
products available directly on the keep up?
platform. Walmart’s bet is clearly
a demographic one, especially to
younger generations, but it is also
an employee engagement tool with
Walmart now building an army of their
own staff into TikTok influencers.
Whilst the opportunity might currently
seem small or gimmicky to us in the
West, bear in mind that China already
saw over $186bn of transactions on
this channel in 2019 - the US saw just
a tenth of this. Social commerce is
expected to grow at 33% per annum,
prompting both Facebook and
Instagram to start offering commerce
through their tools in 2020.
Quorso NRF Report 2021 Back to contents 10The Agile Stores Manifesto.
The Agile Stores
Manifesto.
Quorso’s ‘Agile Stores’ Manifesto.
The Agile movement has brought
the speed, innovation, flexibility and
enthusiasm of entrepreneurial startups,
to businesses of all shapes and sizes. Our
Agile Stores Manifesto empowers retail Engaged humans over
organizations to shift their mindset and
rapidly adapt and succeed in the face compliant task-doers.
of change.
Retail success depends on store
20 years ago, a group of software teams who really care and will
developers recognized that product go the extra mile for customers
management was too slow and and colleagues. So, while ensuring
cumbersome to keep up with market conformity and consistency is
demands. Their solution was the important, motivated and engaged
Agile Manifesto, a new approach to
store teams are even more so.
management that has been adopted
by and driven rapid growth across
many industries.
Since the 1960s the retail industry has Action over insight.
become more and more complex and,
accelerated by the volatility of 2020, Having insights is clearly important
has now reached a similar inflection for focusing and prioritizing efforts.
point. The Agile Methodology has However endless analysis, meetings
already been adopted by fast fashion, and reports must not get in the way
supply chain and ecommerce, but we
of actually getting work done, fast.
believe 2021 is the year that the stores
must also join this Agile movement.
So we have taken the four values of
the Agile Manifesto and translated Store networking over
them for the Retail Store:
central instruction.
The center is responsible for
1. E
ngaged humans over setting important company-wide
compliant task-doers goals. However, each store faces its
2. Action over insight own challenges on the ground. Stores,
and their peers who are closest to the
3. Store networking over
problem, should collaborate to best
central instruction fix them.
4. L
earning and adapting
over following a plan
Learning and adapting
We use the same ‘over’ construct as
the original manifesto. That is, while
over following a plan.
there is value in the items on the right,
we value the items on the left more. Plans are important, but they
cannot be too rigid to accommodate
inevitable changes in the environment,
the customer, or – most critically – the
things that are learned along the way.
Quorso NRF Report 2021 Back to contents 11The Agile Stores Manifesto.
12 Principles of Agile Software 12 Principles of Agile Store
Management Management
Our highest priority is to satisfy the customer Our highest priority is to satisfy the customer,
through early and continuous delivery of valuable through both consistency and delight.
software.
Welcome changing requirements, even late in Welcome responding to change, in a way that is
development. Agile processes harness change for aligned with the priorities of the company.
the business's competitive advantage.
Deliver working software frequently, from a couple Set continuous and frequent action plans, from a
of weeks to a couple of months, with a preference couple of weeks to a couple of months, that aim to
for the shorter timescale. drive improvement, with preference for a shorter
timescale.
Businesspeople and developers must work Support effective daily coaching and best practice
together daily throughout the project. sharing across the organization by breaking down
silos.
Build projects around motivated individuals. Give Empower teams of motivated people, informed
them the environment and support they need and with the right information, to collaborate and get
trust them to get the job done. the job done.
The most efficient and effective method Centrally accessible and easily digestible digital
of conveying information to and within a communication trumps excessive physical
development team is face-to-face conversation. documentation.
Working software is the primary measure of Improving trading performance is the primary
progress. measure of progress.
Agile processes promote sustainable Promote sustainable working. Teams should be
development. The sponsors, developers, and able to maintain a constant pace indefinitely.
users should be able to maintain a constant pace
indefinitely.
Continuous attention to technical excellence and A focus on quality and excellence enhances agility.
good design enhances agility.
Simplicity – the art of maximizing the amount of Simplicity – the art of maximizing the amount of
work not done – is essential. work not done – is essential.
The best architectures, requirements, and designs Great teams will build the best ways of working.
emerge from self-organizing teams.
At regular intervals, the team reflects on how to Regularly reflect on how to be more effective and
become more effective, then tunes and adjusts its adjust appropriately.
behavior accordingly.
Quorso NRF Report 2021 Back to contents 12A day in the life of
Amazing Abbie:
AGILE STORE MANAGER
07:20
Whilst having a hearty breakfast,
Abbie gets some incredible
news. What a gouda way to start
the day!
We did it, Jo! You’re BRIElliant!
Sent to Jo – Head of Dairy
Notifications Messages
With the cheese challenge
conquered, it’s time to up the
09:00
steaks – literally!
Saw you went from #132 to #1 in
cheese sales. Amazing!
From Sam 09:15
Please teach me your ways store
sensei
Jay, From Sara
I need you to check
on-shelf availability Thanks guys,
every 30 mins! We can’t I’ll send you
afford any ‘missed
steaks’! Let’s do it!
a video of Jo.
Uh-oh, whilst sales are
up-up-and-away, customer
satisfaction is down. But fear not, Aron shows
what’s worked at other stores and they set a plan.
11:00
A while later, Abbie’s Area Manager, Aron,
comes for a catch up over coffee to review her
personal marvellous performance data.
ALERT
Now the Avocado
planogram is
taken care of, it’s
time to check in on
Jay’s meat.
Amazing work
Jay and team!
WELL DONE Jay, it's
RARE to see someone
BEEF up steak sales
14:15 that fast!
What the Guac?! There is an out From Aron
17:00
of control bruising issue in the
avocado shipment. It’s the pits, but This just in! Jay’s steak sales are up. And so ends
Abbie comes to the rescue. another heroic day for Amazing Abbie and her team!
Quorso NRF Report 2021 Back to contents 13Four Chrises talk Agile retail.
Four Chrises talk
Agile retail.
2020 was a crazy year, but one where we learned a lot about the future of retail. Quorso sat down
with four retail operators, all surprisingly called Chris, to understand who they thought had handled
things well on the ground, the importance of Agile and what’s crucial for retail in the years to come.
Who are our Chrises?
The Influencer The Operator The Veteran The Consultant
Chris Walton is CEO and Chris Richardson is Chris Taylor has Kris Kohler Burrows
Founder of Omni Talk, VP Store Operations over 40-years of retail is a Senior Director
one of the best retail for Party City. The experience, from Store for Alvarez and Marsal,
blogs and podcasts +900-location, Manager all the way Consumer Retail Group
out there. Previously multi-billion dollar, up into the C-Suite, and previously CEO at
he was VP of Target’s US retailer. including Chief Of Staff several footwear and
Store of the Future. at Marks & Spencer. apparel brands.
1. How important Chris Veteran Chris Influencer
I think the reason Agile wasn't such When you look at what you're
is it for retail stores a big catalyst and a lot of people espousing with Agile theory, it's, you
to be Agile? didn't really, really, truly adopt it was know, how do you keep people more
because the pace of change was still engaged? How do you put more value
quite slow. on actions over insights, networks,
Chris Operator over centralized control, learning and
When you think about the four Agile Online was going to grow and stores adapting over following a plan.
values, and the way you have applied were going to drop. You could see all
them to retail, you look at it and think, this happening, but it was happening Kris Consultant
how is that not what we were always at a pace that wasn't critical to your
shooting for?` business. You lost a bit of market I think what's so critical is stores need
share, lost a bit of profit, maybe. And to become more and more customer
I think a lot of people discovered Agile you had plans to address it, but you focused, right? So you need to push
almost by accident in 2020, because thought you had 2-3 years to address decision-making down to the frontline,
they had to, and they will eventually it. Obviously the events of 2020 meant to the person who's dealing with the
learn how much more it can be.` that it all suddenly twisted and you customer.
had three weeks to address it. So all of
a sudden Agile became a real catalyst
for people that they genuinely had
to adopt.
Quorso NRF Report 2021 Back to contents 14Four Chrises talk Agile retail.
Chris Influencer Kris Consultant Kris Consultant
From my background, as a Store For the companies we're working with I think for me, the one that really
Manager, you don't see those types we've instituted what we call ‘short sticks out is Best Buy. The fact that
of things in a retail store operation. bursts’ against key initiatives. So for they actually were able to be nimble
You don't see that in a retail box. It's example, appointment scheduling. and Agile enough to capitalize. Both
not set up to be handled like a piece We're going to have one week where from an inventory standpoint and
of software, but there's no reason it we test it in a few stores, the second then, most importantly, from the
can't be. week we're going to address and adapt buy online pickup in store. They were
based on what worked and what didn't relentlessly customer-focused in
My favorite saying, I think it comes and the third week roll it out. So it's terms of how they executed that.
from IDEO, is that enlightened trial having these groups come together
and error succeeds over planning to focus on solving a problem, test the Chris Influencer
every time. problem, react to that problem, and
then solve it and roll it out. I think Best Buy has given a master-
class in the Scientific Method in terms
2. What are your Chris Veteran of how to improve yourself as a
retailer. They shut all the stores down
stores/the stores What retailers are trying to do is and they said, we're going to go to
improve speed of decision-making. curbside pickup and experiment. They
you work with They're trying to look at how do we learned that they kept 70% of their
doing to be Agile make quick, fast decisions without the sales volume, even when their stores
risk that we make too many wrong were closed. How many retailers
today? ones and cause chaos. I think people got the chance to know that? Right?
are genuinely trying true delegation, They did. They thought about it. And
Chris Operator proper delegation, not abdication, or then what did they do? They went to
basically giving them a to do list and appointment scheduling. Okay. You
From a store and a retail standpoint, saying, "Hey, we've delegated, you've know, how much volume can they
a big part of our journey at Party got no room to maneuver it." keep when they start bringing these
City is making sure we've got a good people into stores, but they do it in a
strong foundation from which to really specific way. And so they got an
anchor. If we look at the four values 3. Which retailers understanding of that by geography.
that you've translated, you've got to And now not surprisingly, what did
have anchor points to that. So making do you think they announce in the late fall? They’re
sure that roles and responsibilities are
clearly defined, that you can deliver a
excelled in 2020? going to start turning their stores into
fulfilment hubs, because they have
consistent experience, that you have better data about how to serve their
the ability to find the balance and Chris Influencer customers.
that your pendulum isn't constantly We have to be careful to filter out all
swinging from one side to the other... the pandemic related noise and over- Chris Operator
that's really where I think we are in assessing how well people are doing.
our journey. The other one that kind of stands out
However, I actually think Amazon's
is Dick's Sporting Goods. They did
doing great. They're not getting talked
And what's super exciting to me is to not have curbside pickup. They had
about enough versus the traditional
be able to see the opportunities that a pretty robust buy-online-pickup-
players. Look what Amazon's done
are on the horizon, not just for Party instore program, but the curbside
even during the pandemic. They now
City, but I think for retail in general. was new, although maybe they had
have 30 Amazon Go stores, they've got
It's about learning and opening the been testing it before. Watching them
incredible delivery and pickup services
minds of our associates and our move from, “Hey, we clearly just set
at Whole Foods.
leaders in our buildings to really fulfill this up and we'll run stuff out to your
this potential. The great thing about car” to getting it more process driven,
Chris Veteran something that could be consistently
Party City is that our real purpose is
to help people celebrate life. Even though they are the big, bad delivered to the customer – that was
Wolf, you have to admire Amazon. really impressive.
They just ramped up staffing,
warehousing, vans...they took all the
non-exceptional stuff off their sites,
they were incredibly effective.
Quorso NRF Report 2021 Back to contents 15Four Chrises talk Agile retail.
4. Looking ahead to better than 70%, whereas in an actual be important technology as we look
fulfillment warehouse, you're usually forward, for how in store operations
2021, what elements in the mid- to high-nineties. work, how ecommerce operations
work, even how social media and our
of store operations mobile interactions with the world
Chris Veteran
are most in need of So all this stock is wandering around
work. I keep advising companies to
continue to invest and look into that.
a rethink? the system. If it's not in a depot to Start your experimentation.
send to a customer online, or a store
Chris Operator that somebody wants to buy it from, Thirdly, I think micro fulfillment, in
it's dead money. terms of how you use the stores as
I think everybody knew before 2020, a network, how to use robotics and
how big omnichannel was becoming. And if it takes a week to get back from automation within those setups at the
But in March 2020 it went overnight a customer back into circulation, that's store level to give you better inventory
from, yes, it's important, to it's a week's tied-up cashflow. About a accuracy, to pick and pack faster and
critically important. week's worth of lost sales. more efficiently.
You're now serving the customer Lastly, how people work together. How
seamlessly - where, when and how 5. What excites do we create more of a networked
they want it. And ultimately it has to Agile mentality in terms of how we
become seamless to the organization you about the operate? Day in and day out because
as well, because in order to serve the
customer seamlessly, you have to be next decade for that's what gets us excited. Most
importantly, from a business model
seamless inside as well. retail stores, in standpoint, it's also what helps us
to find the efficiencies in what we're
Chris Influencer particular from a doing to find the cost savings, to drive
Getting to the omnichannel ethos store technology sales, but to do it in a more productive
way.
of everything means you need to
leverage the store as a node within the
standpoint?
network, so accuracy actually really Kris Consultant
starts to matter over time. Chris Walton I think what technology is going to
I always think about the intersection allow us to do is to provide for more
I think the place to rethink for me, of technology on the total retail in-store, tactile customer experiences.
when I look at Store Ops, is really experience, but especially the blend Taking tasking away from store teams,
around inventory management and of the physical and digital. so that they can focus on the customer
accuracy in the store. experience.
There are probably four areas that
Kristin Consultant I'm excited about. I think one is Chris Operator
the evolution of cloud commerce.
Inventory, inventory, inventory. I I think retail by nature is still a people
Specifically, the day-to-day
mean the age-old problem, and it's driven business. I think there's always
foundational things that drive our
even more complex now. Because not going to be that desire for interaction.
data understanding. So the order
only do you need to figure out how We kind of see that. People start to get
management systems, the point of
much inventory you're going to need weary of the lockdowns and they want
sale systems, what products and
against customer demand, but now to reconnect with people. People still
people are doing, how they're moving,
you’ve got to know is my inventory in went to stores. Even when they were
exchanging, through space and time,
store? Is it in the warehouse? locked in their homes.
I think is really interesting.
Chris Influencer So I think people are always going to be
The other thing I'm watching
there. I think the technology is always
I think what a lot of the time people really closely because of the work
going to be a support mechanism to
don't realize, is that your inventory Amazon's doing is computer vision.
the people-first connection.
accuracy in your stores is usually no I think computer vision is going to
Quorso NRF Report 2021 Back to contents 166. What are the the next offer? What's the offer that
they don't even know they want?
top three most What's the new channel? Who could
we merge with?
important values
retail stores need Kris Consultant
to live by today? Customer-focus.
Employee-empowered.
And then Agile.
Chris Operator And they all then empower those
I think, from a retail in general stores to be action-oriented.
standpoint, convenience is one of
those values that is at the top of the Chris Walton
list. We've got to meet our customers
I like mnemonics a lot. So I'm going to
where they want to be.
give you my three A's.
We've gone through this whole thing,
When I think about the three most
talking about agility. I'll use the word
important things. One is Agile. I’ve
nimble just to be a little different. The
long been a proponent of that.
“
ability to make quick shifts and know
that it's going to be continual.
The second I think it's agnostic. You
have to be agnostic to the channel to
I really struggled with the third one,
how the consumer wants to consume.
Customer-focus. but I'm gonna say consistent. That's
a little bit of a counterbalance to the
And then the last thing I would say is
nimbleness, but to the customer, the
Employee- consistency has to be seamless behind
accepting. Accepting that things are
going to change and you're not going
the scenes. The act of being able to
empowered. change quickly can become consistent
and can be a value that you live by.
to get it right. And you've got to learn
as you go. And that's fundamental to
making yourself better.
And then Agile.” Chris Veteran
Number one in my head is and always
will be trust. Customers have to have
trust in your brand, in your people.
Your people have to have trust in your
sustainability. They have to have trust
in your products. They have to trust in
your reporting, your efficiency.
Second is accountability. I think too
often, accountability is quite vague.
When you do something, who is
accountable for the good result or the
bad result? And where is it reported
and is it clear?
The third one would be innovation. I
think you've got always to be looking
at what's the next product? What's
the next customer service? What's
Quorso NRF Report 2021 Back to contents 17The future of the store: fusing the physical with the digital.
The future of the store:
fusing the physical with
the digital.
At NRF 2020, the role of the store Stores are vital, yet their role is moving The pandemic has shown that an
was centre stage. After years when beyond a four-walled box simply omnichannel approach is no longer
physical retail had been second fiddle to transact goods into something just physical + website, but physical +
to the glitz and glamour of a rising broader. For the store to succeed, BOPIS + curb side + social + last mile.
ecommerce, many asked the question: we need to re-examine two crucial Customers want to shop where they
what is the role of physical stores in questions: want, when they want, and how they
retail? And now, after everything want.
we’ve learnt from 2020, we’re asking 1. H
ow we measure store
whether this role changed once again? performance Table 1 on the next page provides a
view of how some digital and physical
2. T
he role of those charged
Physical’s demise has been visible performance metrics can be better
with coordinating performance
over the last decade. Yes, in many harmonized and even learn from each
across stores – Area Leaders.
sub-sectors (e.g. toys), ecommerce has other in some of their core funnel and
risen to around the 50% mark. And value metrics.
yes, after a period of mass expansion We need to move beyond
the US became over-stored. But we just Last Year Like for Like From ecommerce, the ideas of traffic,
forget two factors. Sales growth. conversion, customer acquisition
cost ('CAC') can be equally useful in
Firstly, that physical still plays a crucial Ever since Italian monks discovered understanding store performance.
part in how consumers purchase and double entry bookkeeping, retail has But online can equally learn a lot from
want to be fulfilled. Ecommerce is looked at the P&L and Balance Sheet physical stores.
currently hovering around 20% of as the cornerstone of performance.
total retail sales. Even in a pandemic Despite the exponential rise of Ecommerce's strong focus on pure
year, physical is still the way most available operational and financial growth and capturing market demand
customers choose to shop. 2020 has data, stores have still been viewed has often come at the expense of cost
also shown the importance of the and incentivised on like-for-like sales efficiency – for example, the growing
store as a logistical hub, both as part growth and inventory stock turns. issue of returns. Optimizing costs is a
of ecommerce last mile delivery, but core area of focus for Store Operations.
also for the rise of BOPIS. Such metrics now look less relevant as Shrink and waste, for instance, have
the cornerstone of store performance the support of full asset protection
Secondly, the store still plays a very today: Firstly, they ignore the broader teams. A similar focus is needed
important brand role, highlighted by role a store now plays across brand on the ecommerce side, providing
Doug Stephens as the ‘store as media’. and fulfillment. Secondly, these great opportunity for performance
When customers enter your store, are lagging indicators that are the improvement and improving margins.
there is the possibility of a transaction outcomes of buying and shopping
but there is also the absorption of a activities, rather than inputs that lead
brand experience. In the same way to sales. Thirdly, and perhaps key, we
that every click to a website is valuable need to start harmonizing physical and
to a brand, so should be every in-store digital performance metrics to be able
visitor: 100k store visitors is the brand to better understand and evaluate
value equivalent of ~$100k. effectiveness across all channels in
retail’s omnichannel approach today.
Quorso NRF Report 2021 Back to contents 18The future of the store: fusing the physical with the digital.
Table 1. Example of harmonizing physical and ecommerce performance metrics
Physical Ecommerce
Sales funnel
Traffic Footfall Site traffic
Conversion Transactions per footfall Click through rate
Average Order Value ("AOV")
Basket Size
# Items per basket
Time per visit Average store visit time Average session duration
Delivery
Shrink
Wastage Shrink
Returns
Fulfilment Store labor + rent Last mile distribution costs
Customer Marketing spend + distribution cost
(Labor + rent + other costs) / Customer transactions
Acquisition Cost / Customers transactions
Customer Value AOV/CAC AOV/CAC
Harmonization is not just important To be more growth orientated, the blended to provide customer value
for assessing the relative value of the relationship between Area Leaders that will drive their success in the
different channels, it is also key for and Store Managers should evolve in future. Both the old steward of the
agility. Digital channels have been able two ways. store and the young newbie of digital
to rapidly experiment and learn and can learn from the other’s experience
scale what works for consumers, in a Firstly, it should be growth-focused. and results. Yet in both their
way stores haven’t to date. Retailers It should be about setting OKRs – measurement and in outlook, there
should also see the potential of every objectives and the measurable key is an urgent need to turn to focusing
store as an experiment engine where, results to drive them – as introduced by on harmonization and growth, rather
with the right measurement in place, Andy Grove, who used this approach than a backward and compliant view
they can test, measure, learn, and to build rapid growth at places like of performance.
scale what is driving most value for Google, Microsoft and Uber.
the consumer. Ultimately it’s those retailers who
Secondly, the role needs to be more blend best the benefits of both who
Area Leaders: From Store cross-functional and understand will be the most successful.
how a store’s success is driven by
visits to continuous Agile
the collaboration between different
coaches. stakeholders, merchandising,
Combined with measurement, the supply chain, marketing, and other
way that Store Managers are coached departments. To date, store operations
and upskilled also needs an urgent have been too siloed, only focusing
rethink. Typically this has been the role on the execution challenges from an
of the monthly (at best fortnightly) operator's perspective.
Area Leader store visit.
The store isn’t dead, but has a
The challenge with the store visit lot of new roles to play.
is that it has become a mostly
compliance-focused activity over After a decade being seen as the less
the years. Checks and balances to favored child in retail, stores remain
see whether inventories have been critically important to the overall
properly checked and stores and experience retailers provide to their
presentations laid out correctly are customers. Rather than being digital
very limited views of the the business. versus physical, it’s how both are
Quorso NRF Report 2021 Back to contents 19When Agile works,
When Agile store management works, it really
works. Retailers that are already living and
breathing Agile find they’re reaping incredible
it really works. benefits – take a look at our Quorso data to see
what you could also be doing.
Value #1.
Agile engages your staff to become
problem solvers, not robots.
Everyday, stores face barriers to sales and improvement.
Availability poor at times 26%
Other issue which we can fix 16%
Presentation unappealing 13%
Something non-SOP I want to try 13%
Not as per planogram / merchandising plan 9%
Not all products clearly visible 6%
Pricing & promotions not clear 6%
Not well maintained e.g. by size 3%
Stock control SOPs not in place 3%
Other staffing challenges 2%
Lack of knowledge and/or training 1%
Product quality unacceptable 0.4%
29%
of these issues need creativity and
collaborative problem solving to be
fixed. So compliance checklists and These issues cost you, but each one
SOP won’t cut it. addressed gives an average improvement of
And people learn from their success, so their
+ 14%
missions continue to deliver improvement even
when they’ve ended, driving a
+ 37% And feeling that successful all the time
makes Agile pretty addictive.
95%
increase in sales for the next 3 months.
of Agile store managers complete
improvement missions each week,
And when people are successful, they take on more compared with average engagement
missions, and those missions deliver even more of 45% for other enterprise software.
improvement than the last!
Average improvement per mission (%)
35
30 D OI NG M OR E WOR K
Which leads to a
25
great feedback loop
20 for your managers.
15
10 F EE LI NG DOING
G R EAT BETTER
5 AB OU T W O RK
WOR K
0
0 10 20 30 40 50 60 70
Number of missions per store in the first 3 months
Back to contents 20You can also read
