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How to stop the retail executive exodus

BY Christine Rivers

Compared with most other industries, retail companies face shorter time horizons and tighter metrics. The pressure to perform is great, which perhaps explains why many retail firms are having trouble holding onto their top executives.

For example, one major U.S. retailer recently suffered the departures of a senior marketing executive, a division president and another executive VP, all within the space of a few months. One of those executives had lasted only five months, while another had a tenure of less than two years.

This high turnover problem goes right to the top of the retail executive ranks. A recent study (2011 Russell Reynolds Associates U.S. Retail CEO Study, “A Perfect Storm: CEO Succession Challenges in Retail”) of more than 80 major U.S. retailers with more than $1 billion in annual revenues found that retail CEOs were 80% more likely than their Fortune 1000 CEO peers to leave within two years of being hired.

How can the retail industry find a way to reduce executive turnover and improve retention? Here are five suggestions:

1.Make hiring decisions based on where the company is headed, not where it has been.

Operational excellence should be an important consideration in CEO succession, but it should not be the determining factor. Rapid technological change is pushing companies to reinvent their business models and rethink the way they reach customers. In this environment, it is crucial to have executives at the top who are willing to take risks, make mistakes and focus on top-line growth, even if such actions fly in the face of conventional operational excellence beliefs.

2.Realign the culture to embrace innovation.

Your best executives can have excellent alignment with your strategic goals as a retailer, but they will still end up exhausted and thinking about jumping ship if they have to fight constant battles with the corporate culture. Hiring an executive for his or her capabilities as a strategic thinker does not make sense if the overall organization continues to worship at the altar of operational excellence.

3.Build bridges; break down silos.

Retail companies want their leaders to be innovative, but most innovation requires the interplay of opinions, perspectives and ideas. When a work force is segregated into silos, there is little room or opportunity for innovation to take place.

One way to start breaking down silos is to make sure that leadership development tracks give executives a chance to experience both the functional and commercial side of the business. As long as silos are allowed to persist, they will impede innovation, causing frustration among creative senior leaders and ultimately making it harder to retain the sort of forward-thinking executives that companies need most.

4.Don’t ask an individual to move a mountain.

Individual leaders may be talented, strategic and creative, but they do not operate in a vacuum. Asking an executive to lead change in a static and entrenched organizational culture is like asking a single person to move a mountain northward when thousands of others are being paid to push the mountain in the other direction.

Yes, it is important for companies to have innovative executives in key positions, but it is equally important to develop governance structures, systems and processes to support these executives, foster a culture of debate, and encourage calculated and strategic risk-taking.

5.Make sure HR has a seat at the table.

Beyond showing that the CEO understands human capital is a strategic concern, having an HR representative on the top leadership team gives companies an opportunity to map out the organization’s talent demands several years into the future. This talent map gives companies the ability to build, develop and recruit leaders whose skills, temperament and vision match the company’s own culture, strategy and objectives.

Christine Rivers is a VP and leader of Hay Group’s Leadership and Talent practice for the Retail sector. Hay Group is a global management-consulting firm.

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Digital Signage Goes Portable

BY Marianne Wilson

Portable digital displays proved the ideal solution for a temporary installation at a Gap store in Manhattan. The application takes the hassle, along with the unsightly cords and wiring, out of digital signage.

The retailer deployed tabletop digital signage displays that run on rechargeable batteries, eliminating the need for any external power. The freestanding portable displays, from BrightSign, measure 10.5 in. by 19.9 in. by 9.9 in. and feature a built-in 12.1-in. high-resolution screen and media player. They are self-contained and enclosed in a sleek steel display tower.

“There aren’t a lot of electrical outfits on the floors of most retailers, and that has dictated where digital signage displays are placed, which is often on the perimeter of the store,” said Jeff Hastings, CEO, BrightSign, Los Gatos, Calif. “But with the battery-operated portable displays, the retailer can place the signage directly on merchandise tables and check-out counters, and right where the shopper is making the buying decision.”

The batteries in the BrightSign tabletop displays provide 15 hours of life. Gap recharges the batteries overnight, similar to how a consumer would recharge a cell phone, while the store is closed.

Gap installed the displays in the small shop adjacent to its flagship on Fifth Avenue and 54th Street. The space is routinely made over to spotlight limited-time Gap partnerships and special collections. At the beginning of the summer, it was dedicated to the Gap-Threadless summer collection of graphic T-shirts. (In February, Gap entered into a partnership with the Chicago-based Threadless, which works with emerging artists to produce unique T-shirt designs.)

The chain used the digital displays — 15 in all — to draw attention to the individual artists who designed the 15 T-shirts on display and to tell the story about what inspired the design. (The displays were positioned on the top of the fixtures.) Threadless used BrightSign’s BrightAuthor PC software application to create the content (video, which plays as a slide show) that ran on the players. The software is available free to the supplier’s customers.

“This type of display takes the customer from being interested to being engaged to purchasing,” Hastings said.

The screens, which provide full-motion high-definition video, are designed with a 180-degree viewing angle, he added.

The BrightSign tabletop displays are equipped with Wi-Fi adaptors that allow for content updates through store networks or other remote locations.

“New content can be downloaded very quickly with the Wi-Fi connection,” Hastings said, “which makes the displays very dynamic in nature.”

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Leveraging Technology to Improve Business

BY CSA STAFF

Wading through retail technological innovations and deciding what options and applications should be top priority can be daunting at best. But the opportunities clearly outweigh the challenges, said Epicor Solutions’ Douglas Taylor in an interview with Chain Store Age.

What are the biggest operational challenges facing retailers today?

Today’s operational challenges are equally social, economic and technological. On the social side, technology innovation and accessibility to information have put consumers in the driver’s seat, allowing them to dictate how they want to interact with retailers and giving them the freedom to share their experiences widely online. From an economic standpoint, retailers continue to feel the squeeze — sales volume remains flat or is down, pricing pressures are tremendous, and supply chain costs are skyrocketing. With respect to technology, retailers have to step up their games to meet high consumer expectations, but some are challenged with legacy, disconnected systems and/or tight budgets — which prevent them from getting there as fast as they want and need to.

What about opportunities?

Key opportunities are to improve or change the way retailers interact and service consumers, leveraging technology and information. Providing rich customer engagement means leveraging mobility and CRM to offer a more personalized shopping experience. Tablet devices support a new style of selling, in which sales associates become “personal shoppers,” providing an engaging purchasing experience.

Also, channel unification and system integration create operational efficiencies and reduce complexity and redundancy of data, processes and business rules, allowing consumers to make purchases through a variety of channels while enjoying a rewarding and uniform brand experience.

What are some general trends you are seeing in POS software and solutions?

Today’s retail POS systems are the workhorse of the retail store, and trends are shifting POS functions to mobile and consumer devices, to additional channels and toward a more enterprise POS deployment. Aside from this, what started with the CRM database and ordering facilities is now expanding to cash and employee management, with the goal of treating “400 stores as one giant store.” These trends allow retailers to mobilize their retail enterprises, enabling store personnel to have access to information and be more available to engage with customers on the sales floor while never having to go to a cashwrap station.

There is also the explosive trend of electronic wallet payments, which are being driven by the consumer who wants to make everything as quick and easy as possible, and I’m all for it.

Do both small and large chains experience the same challenges and opportunities in terms of retail systems?

Yes, the customer experience has taken on new importance as it has become the “new marketing.” Due to the growth in use of social media channels from anywhere, it has become very easy for customers to share — with thousands of potential customers — their good or bad experiences with retail brands, and the size of the retailer doesn’t matter.

How do your solutions most impact the way a retailer does business?

Epicor has been at the forefront of expanding its POS and customer engagement capabilities to support mobility and multichannel. For examples, earlier this year we introduced the Epicor Retail Clienteling application, designed for tablet devices and optimized for the Apple iPad. The app delivers critical customer insight from the retailer’s CRM database directly into the hands of sales associates engaging with customers on the floor.

The Epicor Retail Mobile Store solution, optimized for Apple iPad/iPod, is now being deployed by a number of retail clients who want to manage all aspects of a sales transaction from any location and allow customers to shop easily on their own time and terms. And for operations, the Epicor Retail WebIM and Business Intelligence solutions update merchandising in real time and use KPI data and dashboards with alerts and notifications.

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P.Banik says:
Mar-08-2013 01:20 pm

Thanks to Chain Store Age for
Thanks to Chain Store Age for sharing this interview with us. Since Duncan is responsible for product management and customer transaction solutions for Epicor software and he is running it successfully, So I would like to raise a question to him. My question is pretty simple but very important for small business owners like me. Is business intelligence required to run a company successfully and if so then how it actually effect decision making process? I will be really pleased if you can place my question to him and let us all know his answer.

P.Banik says:
Mar-08-2013 01:20 pm

Thanks to Chain Store Age for sharing this interview with us. Since Duncan is responsible for product management and customer transaction solutions for Epicor software and he is running it successfully, So I would like to raise a question to him. My question is pretty simple but very important for small business owners like me. Is business intelligence required to run a company successfully and if so then how it actually effect decision making process? I will be really pleased if you can place my question to him and let us all know his answer.

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