Unlocking Agility Requires the Right Combination

During the WWD Apparel & Retail CEO summit, David Bassuk, Global Retail Practice Leader, and Sonia Lapinsky, Managing Director at AlixPartners, compared the retail industry’s experience through the pandemic to riding a roller coaster – describing an initial climb, anticipation for big drops and multiple loops.

The “craziness,” they said, isn’t over. However, looking across different stages of the pandemic, what’s different about the current stage is that the industry now knows that disruptions – and the resulting shifts in consumer behavior – are here to stay.

David Bassuk, Global Retail Practice Leader at AlixPartners.

“For anyone in retail, it can feel like you’re stuck in a never-ending loop-the-loop,” said Bassuk. “But there’s also the positive: we have learned valuable lessons and we now know how to be better prepared for these continuous disruptions. Retailers that embrace AgilityEQ will be in a much better position to meet these unexpected turns and emerge from the ride feeling exhilarated.”

AgilityEQ is the AlixPartners coined term for its “quantifiable and actionable metric that allows a company to measure and understand their ability to respond…and really operate with agility.”

“We’ve been studying this for a number of years, not only studying it, but we’ve been working with companies and being inside and seeing how this works for a number of years,” said Bassuk. “And we’ve done that through talking to hundreds of executives, pulling apart the data from many retailers and helping to really understand what is it that is working or not. What we’ve seen is there are many aspects of agility that many companies in the industry have really gained a lot of ground in and there’s a number of other areas that were falling way short and we’re not getting there.”

For every retailer, the combination of behaviors needed to confront ongoing challenges looks different. To unlock true performance to navigate this new consumer, AlixPartners’ AgilityEQ looks at three different columns that break down twelve different behaviors. The three categories of AgilityEQ are: break down silos, embrace speed and accelerate insights. Each category has four possible options, or codes. In total, there are over 20,000 combinations of agility combinations – but there is a unique answer for every retailer.

Sonia Lapinsky, Managing Director at AlixPartners.

“It’s critical for retailers to figure out the winning combination that’s right for their organization based on their competitive positioning and their target consumer,” said Lapinsky. “Determining your right combination of behaviors starts with a thorough company-wide assessment and setting a baseline. After you land on your unique winning combination, you must relentlessly focus and embed behaviors across the organization.”

Moreover, she said, “you can’t, and shouldn’t, implement something that has worked for someone else if the solution is not the right fit for you. We’ve seen many retailers try to copy other retailers – for example, trying to emulate Amazon’s free one- or two-day shipping promise – and it can be a very expensive and very unfruitful strategy.”

While the market was pretty clear pre-pandemic, there is no going back. Even at phase three of the pandemic the consumer journey was evolving, and new consumer behaviors emerged.

“It’s surprising to see how many retailers will only focus on customer insights that look backward and, as a result, are not prepared for what’s coming next,” said Lapinsky. “These are retailers that have invested in technology and capabilities that help them integrate customer insights. But they aren’t investing in the right mix of capabilities.”

At the same time, knowing what the industry knows now about disruption, Lapinsky said “retailers must use predictive analytics to help determine where the customer is going in the future. If you don’t know where your consumer will be tomorrow, you won’t be able to deliver the right product at the right time and on the right platform. Of course, insights must be matched with action. Once you know where you need to be, leverage speed models that are customized for your particular situation.”

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