Why Retailers With Complex Organizational Structures Require Specialized Communications Solutions

Retail Execution
June 24, 2020
Zipline Staff Contribution

If you have ever wondered how the best retailers in the world ensure that 100% of their fleet see and act on every HQ directive, you can stop wondering. It just doesn’t happen. The truth is that average store execution hovers at less than 30% and even the best retailers who focus on communication with the fleet don’t break 90%. And, that’s for retailers with simple organizational structures such as a single headquarters office and company-owned stores.

A research study by Pareto that helped build the business case for Zipline’s founders found that store execution is typically low for the three following reasons:

Lack of adequate systems 

Many times, HQ-mandated initiatives fall through the cracks because companies don’t have the proper systems to communicate direction and context to store teams. They might send communications via emails, intranets or spreadsheets, but there’s no single source of truth. As a result, stores don’t understand prioritization and important projects get missed. For instance: A single store could be fielding multiple marketing campaign requests a week. Without systems in place to deliver clear, concise communication on marketing campaigns and prioritization, it is impossible for that store team to know which campaigns should require the most time and attention.

Lack of ownership

When HQ sends direction down to stores, responsibility to execute on those initiatives is delegated to the store staff. But too often, that direction lacks context or an implementation plan. This causes confusion of ownership and results in a lack of compliance. HQ assumes that once a message is sent and execution is requested, stores are all over it. But without an implementation plan with clearly defined ownership, very little actually gets executed. When everybody is responsible, nobody is responsible. 

Lack of monitoring

The biggest disconnect happens due to a lack of monitoring. A company that doesn’t have monitoring tools in place sends a communication or task downs and just... assumes that it will get gone. Sure, they know their stores are not happening uniformly… but they don’t realize just how bad it is. In order for HQ to fully understand compliance levels and marketing effectiveness, they must track and monitor compliance and execution rates of the tasks and initiatives being sent to stores. 

Effective store execution is difficult for all retailers, even those with the simplest organizational structures. But, imagine a business like Starbucks or Canadian Telecom in Canada. They have added layers of complexity because in addition to operating their own stores, they also need to get unified company messages out to dealer-owned stores, third-party retailers, kiosks and stores within stores, for example. These businesses are not just trying to communicate with employees, they’re trying to communicate with business partners as well.

What is the solution? First, complex retail organizations need to realize that they don’t have the tools on hand to solve their communication problems. Rather, they need a retail-specific solution that is purpose-built to solve retails’ challenges. Even packaged software solutions that look like they might work, such as Microsoft Teams, will never stretch enough to meet your unique needs, especially around communication targeting.

With geographically diverse fleets and different relationships between HQ and each location, complex retailers need the ability to segment stores and personalize communications. For example, you employ some store associates while others are employed by your partners. Do you want them getting the same comms and access to files? Absolutely not. You need the ability to get very granular in your communications and file access or you will overwhelm your fleet.

Second, you need a communication platform that drives accountability. News and information needs to be filtered to cut the clutter and confusion and ensure that individuals understand what they are responsible for accomplishing every shift. If new signage needs to be put out or extra cleanings need to happen to comply with new guidelines, there’s no ambiguity about who needs to do it or if it was accomplished. 

Empowering your workforce to drive store execution requires engaging people at all levels. When people know the why and the context of what is being communicated, they are more engaged, inspired, and empowered to execute their work. Staff needs to know why an individual task is important in the larger picture and why their role is critical. They need to see how the actions they’ll be taking for an initiative will impact the result. In short, leaders need to give them a reason to believe and your communication platform should enable this.

Finally, you need a way to monitor results. Today, execution is a guessing game. But with task tracking and reporting, you can ensure that you know who your top performers are and which stores might need additional support. This is becoming increasingly important as stores respond to Covid-19 with critical health and safety policies and procedures.

Why should companies focus on communication and store execution? According to Pareto, the payback is immense and there is a direct, one-to-one relationship between the success of a promotion and compliance levels. As the report explains, “for every 1% increase in execution, there's a corresponding 1% increase in sales.”

Want to learn more about how Zipline can help even the most complex retail organization efficiently communicate with the fleet? Reach out or visit retailzipline.com. We would love to share more.