How organizational structures are changing – and which questions to ask in the process

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In any industry – and especially in retail – evolution comes with the territory. More often than not it’s a visible change, something customers can tangibly see or feel. But as Shop.org’s March webinar about designing the retail organization of the future showcased, retail executives are actively thinking about – and taking action on – how their internal structures should reflect consumer expectations. The topic is timely, particularly because of recent announcements about management structure changes from retailers including Saks Fifth Avenue, Belk and Sephora.

As Forrester Research’s new online retail forecast alludes to, the crux for many fundamental changes is a result of online retail representing an increasingly larger slice of total U.S. retail sales, jumping from 7 percent in 2011 to a projected 10 percent in 2017. As we found in last year’s Social and Mobile Commerce Consumer Study (a joint study by comScore, The Partnering Group and Shop.org), we’ve become a nation of digital “omnivores” – that is, consumers who engage with both retailers and the rest of the world via multiple touch points throughout any given 24-hour time period. The kicker is that this isn’t the way many retailers are traditionally set up.

With these facts in mind, REI Senior Vice President for Digital Retail Brad Brown and Okamura Consulting’s Jim Okamura honed in on five internal considerations that retail executives are broaching every day to build a less silo-ed and more multichannel company culture. These reflections were gleaned from Shop.org’s Organizational Structure Study released in January and provide a glimpse at the ways retailers are starting to shift their working environments.

  1. The senior leadership team. Getting the C-suite on board is merely the first step. Additionally, the company has to ensure it knows what “cross-channel” means to its customers and employees.
  2. E-commerce in the modern retail organization. This explores the notion of where e-commerce does and doesn’t report to. By now, this varies quite a bit – whereas it used to be seen as imperative for the head of e-commerce to report directly to the CEO, today it can just as likely be the chief marketing officer or chief operating officer.
  3. Marketing. To integrate or not to integrate? The study found a propensity among several retailers to integrate digital marketing functions within corporate marketing either on a semi-integrated or a highly integrated basis.
  4. Mobile. Among all areas, this seems to be the organizational bridge that is rapidly accelerating integration of digital functions and strategies.
  5. Metrics and incentives. The fulcrum of organizational success, or, put another way – how to get everyone to work well together and achieve long-term success. For example, Brown noted that a primary goal for REI is “seamless service” for the customer, so the company has developed a set of metrics to ensure everyone in the company is motivated to provide that – a “channel”  free from obstacles.

But our hour-long webinar barely scratched the surface of this complex topic. That’s why today, Shop.org is pleased to announce a new resource to help retailers as they grapple with these and many other questions around organizational structure: the Shop.org Organizational Structure Self-Assessment Framework. Complementing the full study results released earlier this year, our goal for this framework is to provide a structure for retail management teams to analyze, debate and start to formulate decisions on organizational issues related to digital integration strategies. The framework highlights some of the most common questions that retail organizations ask themselves as they determine where and how all things “digital” should fit into their organization, starting with the vision and strategy for digital integration. Subsequent sections cover questions across marketing, merchandising, cross-channel oversight, process and metrics, mobile and more – allowing the retailer to focus on whichever section is most pertinent to them. I invite Shop.org and NRF members to download this framework now from the Shop.org site.

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