Data-Driven Retail Fuels Demand for More High-Tech Skills

The human factor is critical

By Mark Ledbetter, Global VP Retail Strategy, SAP

The changing nature of retail combined with an ever-greater reliance on data is forcing retailers to adjust their workforce and employee skill sets accordingly. From a customer experience standpoint, most retailers are transitioning to a brick-and-click model that aims to ensure customers have a seamless shopping experience regardless of which channel they use.

Meanwhile, just think about all the places that data is sprouting up in retail. Everything can be measured and quantified in digital shopping, from bounce rates at the check-out page and online product reviews to personalized shopping recommendations and social media interactions. Elsewhere, in-store inventories can be monitored and even shared with consumers for product availability, while data for distribution centers and shipping routes can help speed up deliveries. Online advertising, social media networks and mobile apps are also all giving retailers new ways to connect with consumers and provide personalized shopping experiences.

The simple fact is this: new technology and Big Data are engrained in every aspect of a retailer's operations. But they have little value if they don't have the human talent to support and use them to their fullest abilities.

Specifically, retailers need employees who bring new skill sets and critical thinking skills that enable them to be dynamic in a continually evolving industry. Retailers also need to consider dusting off their org charts to realign executive teams with the demands of retail in the 21st century. In addition, they must ensure compensation and benefits packages are competitive enough to attract and retain hard-to-find key members, such as data scientists, marketers, and omni-channel experts.

Skills Shortage
SAP conducted a survey of retail managers at the SAP Retail Forum North America 2013 and found that the three most in-demand competencies for their companies for the next few years would be business analytics/Big Data (80%, omni-channel strategy (72%) and consumer buying behavior analysis (55%). More than half of the respondents anticipate needing to add new employees to obtain these competencies, while 84% said they weren't sure or didn't think these competencies will be easy to find.

But companies are also turning internally to develop these skill sets. More than half of those surveyed said they expect to use experience and training to develop these skills in existing employees, while more than half also said they will offer external educational opportunities to current employees.

Retailers identified other in-demand skills as being mobile commerce management (50%), merchandise buying / planning (37%) and digital and social branding (37%).

Big Data a Big Priority
Big Data is becoming critical to retailers' digital and physical operations. Data and analytics are so integral to the future of the industry that retailers should do a thorough evaluation of the way their data/information infrastructure is set up today; either by giving the CIO the right authority and specific objectives, or clearing out an office for a new C-suite executive: the chief data officer. More immediate, however, is the need to bring data scientists and analytics experts on board. Retailers are competing with each other and several other industries to attract and retain this hard-to-find talent.

Omni-Channel Expertise
U.S. retail e-commerce sales were at $27 billion in 2000, according to the NRF. That number is expected to increase nearly tenfold for 2013, according to Forrester Research, with an estimated $262 billion in total online retail sales, accounting for 8% of all U.S. retail sales.

Mobile commerce, meanwhile, influences about 5% of all sales in U.S. retail stores, according to Deloitte's “The Dawn of Mobile Influence” report. The firm predicts that number will grow to anywhere from 17 to 21% of sales by 2016.

Retailers are adjusting their leadership teams to better align with this omni-channel strategy. Some retailers, such as Macy's, are choosing to create a new position for a chief omni-channel officer. Others, including Saks, are taking the approach of restructuring their management teams to spread omni-channel responsibilities across company leaders. Regardless of who or where omni-channel responsibilities lie, they must be represented at the highest levels of the company.

Feeding the Pipeline
Today, institutions such as New York University, North Carolina State University, Stanford and others have programs in place to churn out data scientists. Ohio State University has even partnered with IBM as the company establishes a new analytics center in Columbus, Ohio, providing a valuable resource for both students and professionals in the region.

While schools are increasingly churning out more of these “new skills” candidates, strong demand and competition for this talent from retail and other industries means the talent pool continues to remain thin. Additionally, the costs associated with recruiting, hiring and training a new employee can range from 25 to 200% of that person's annual compensation, according to Deloitte.

Wherever possible, retailers should be proactively helping employees develop and improve their skills in these key areas. That includes offering in-house training and ensuring access to professional development opportunities such as seminars, conferences and trade shows. Additionally, retailers should take advantage of the range of consultants and solutions providers so they can better understand the best technologies and strategies available to them, as well as to fill any skills gaps or complement the skills they already have in-house.

There's no question that the skills gap facing retailers is a significant challenge. But retailers that can develop a clear vision for leveraging Big Data and creating an omni-channel strategy, as well as harness the right technology and build the necessary talent from internal and external sources around that technology, will be putting themselves in a better position for success.

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