These past two years have been like a difficult rollercoaster ride for all of us. But without downplaying the difficulty of the stomach-churning ups and downs for anyone, this is easily the toughest period that anyone in retail has seen in recent memory. As we speak with industry insiders who’re preparing for 2022, the general sense is that circumstances will stay uneven for a while to come. So, how does a retailer confront all this while still running a profitable business?
We recognize this is hard to do. Here at AlixPartners we have developed a quantifiable and actionable methodology that lets retailers understand their consumer’s changing needs and respond with agility. This framework, called AgilityEQ, determines a retailer’s capacity to do three things. The first is to break down silos and rethink organizational structure and how your different teams work with each other. The second is embracing speed in decision-making and action. And the third is to find practical and actionable insights from data and embed these into all processes. Within these three areas, there are 12 key behaviors that retailers should prioritize and adopt.
While the 12 agility behaviors can lead to tens of thousands of unique agility combinations, when we look across retailers, sectors, and challenges in this phase of disruption, we continually come back to a handful of combinations that provide the right unlock for most retailers.
You can watch a full description of the AgilityEQ methodology and the key behaviors from our presentation at the Women’s Wear Daily CEO Summit here. We also have some real-life examples of retailers successfully using these behaviors in this presentation.
Over the last two years especially, disruptions have come without much warning and have been both intense in impact and frequent in occurrence. From closed stores for much of 2020 to supply chain issues during the ongoing holiday season, things have been challenging, to say the least. What this means that the agility combinations that previously worked for a retailers may need to change. As an example, some retailers chose speed over operational excellence early in the pandemic, and while it was the right decision at the time, profitability suffered as a result.
We have been studying and working with retailers for decades now and have found that those with a higher AgilityEQ have higher profit margins and rebound faster after a disruption. The key is to quickly align on the answer, relentlessly focus on these behaviors across the organization, and then enjoy the ride as performance soars.
Let us know if you have any stories about how you are staying agile.