In 2017, Mirabeau, a Cognizant Digital Business launched The Click: A Human Touch to Retail. In a series of seven articles throughout 2017 and 2018, we explored the customer journey, and ways that retailers could get closer to customers with the power of digital. Now, we’re launching a new series of The Click. The theme this time? Accelerating the Pace of Change. We’ll explore what retailers and CPGs need to do to keep pace with – or surpass – the competition in the ever-changing retail landscape.

“While the first series of The Click focused on the value chain, this series will focus on how digitalization can help propel retailers and CPGs to their desired position in the market,” says Pieter Post, Principal Consultant Retail at Mirabeau, a Cognizant Digital Business

Jeroen Caré, Head of Digital Consulting at Cognizant, adds his perspective. “The retail sector develops rapidly, and Mirabeau, a Cognizant Digital Business has its fingers on the pulse of that change. In this series of The Click, we’ll amplify the specific topics we feel are essential for retailers and CPGs to focus on and build on last year’s foundation with current insights.”

A look inside 

In a series of four articles, this year’s The Click series will explore the internal structure and composition of modern retailers and CPGs and address the pain points and roadblocks that can slow progress and competitive edge. The articles will address how retailers and CPGs need to examine their business model and value proposition, organizational model and operating model, and technology model to achieve the speed they need to make the progress they desire.

“Retailers often find it easier to deal with external challenges. But our experience shows us that real change happens – and real challenges get addressed – when companies take a critical look inside their own businesses,” Jeroen explains.

The voice of experience 

Readers of The Click will again hear from our experts who know all about initiating change that makes a difference in retail. From a human-centric approach, teams guide clients through ways to use digital to enable behavioral change within the organization itself. And perhaps more importantly, how to be prepared for the constantly changing customer behaviors that can challenge the retail business.

“Ideally, we help companies reach new levels of maturity by discussing behavior. What behaviors do retailers want to influence, both inside and outside their walls? And what online and offline behaviors can truly make an impact? This is all about ways of working, tools and insights that are the starting point for both innovation and the optimization of existing solutions,” Jeroen explains.

Lead or fall behind

“In retail, we notice two general types of companies,” says Pieter. “The leaders, who are somewhat up to speed, know who their customers are, and have the flexibility to deal with the changing market demands. Then you have the rest of the industry, who are struggling to catch up.” The problem, Pieter says, often begins with technology. “Many retailers are stuck with legacy systems and outdated technology. So even if they innovate, they can’t integrate new technology into their systems.”

Jeroen agrees, and takes it a step further. “Most companies struggle to take an innovation from Proof of Concept to scalable solution. They’re hindered by outdated technology and can’t accelerate on great ideas. Sometimes, they choose to run their innovative solutions in parallel to their legacy systems, hoping to make up some lost time. But in the end, if innovations aren’t integrated across the company, they end up cannibalizing the company’s own business.”

The hard truth

Be forewarned, this series of The Click will offer insights that will require retailers and CPGs to make significant investments – in time, funds and behaviors. “To truly accelerate the pace of change, retailers and CPGs need to take an Enterprise perspective,” Jeroen says. “When every department and team is working in its own silo, innovating in its own area, and there’s no alignment of strategy and purpose, efforts to accelerate will often fail in the end.”

The solution? A bottom-up approach that reaches the highest levels of the organization and creates a single purpose. “Often, change begins with the innovators at the lower levels of an organization. But their energy and enthusiasm to do things differently needs to be allowed to spread through the highest levels of the organization. Only when top-level executives – who are often the most stuck in their ways – can put aside their legacy culture and embrace new ways of working, can change really happen.”

What it looks like

One need only look at some of the biggest market leaders to see this in practice. When Walmart started to feel the threat of Amazon encroaching on their sales, they dug deep and made radical changes. “Instead of trying to compete with Amazon, Walmart found ways to innovate that fit their existing business and differentiate in the areas that mattered most to their customers,” Pieter explains. “Now, they’re not only competing with Amazon – they've surpassed Amazon on many levels.”

The same is true for Nike. “With a 60-year legacy of selling B2B, Nike decided to infiltrate the B2C market,” Jeroen recalls. “They knew they’d need to change internally before they could address this new way of working. They started evaluating employees on their ability to adapt to change. And those who struggled with adapting were eventually let go. It’s a harsh reality, but an essential one: change isn’t possible when employees resist it.”

The first steps

It wouldn’t be The Click unless we included some advice to get started. So Jeroen and Pieter created a list of must-have mentalities to prepare for change acceleration. Of course, there’s no need for retailers and CPGs to throw out their entire business model and start over. But close examination and critical thinking are key.

1. Put behavior first: “With customer journey mapping, you can clearly define the customer behaviors you want to change and where most value can be created, and the internal behaviors that need to change with them,” Jeroen begins.
   
   
2. Be willing to make the tough decisions: “Many retailers can’t keep the pace of change because they fail to make the really difficult decisions. Like making a radical change to the operating model, letting go of a promising concept that’s just not delivering on its potential, or following through on commitments to change,” Pieter says.
   
   
3. Get the Enterprise View: “Silos are the enemy of change acceleration,” Jeroen says. “If you want to move faster, you have to move together as an organization. And that means aligning the strategies and objectives of every department, from production to sales to procurement and HR.”

    

4. Take a new look: “When you closely examine your resources, you can often find new ways to match these with what is needed to transform your organization,” says Pieter. “Often, the Enterprise View will open opportunities that you’ve had in house all along.”

    

5. Use benchmarking to guide you: No matter what challenges you face in retail or CPG, chances are, another retailer has experienced them too. And they’ve likely found a solution. Create measurable, actionable benchmarks based on industry experiences and best practices. And remember: change doesn’t happen overnight. Incremental benchmarks will help you keep a steady pace and recognize key improvements.

 Download the second edition of The Click: Accelerating the Pace of Change.