On Agile Retail: Thoughts from a Software Company

APRIL 17, 2018

The concept of Agile Retail is picking up speed. In the fast-paced world of retail, brands can feel like they’re playing catch up to always-changing consumer expectations. Naturally, retailers are looking for ways to move faster and deliver their offerings—whether it’s the newest fashion craze or staple household goods—in a timely manner. An Agile methodology may be the answer to this challenge.

We employ an Agile methodology in our software development every day. This translates to a specific set of workplace elements: speedy processes, empowered employees, a mindset to embrace change, and software that is inspired by our end users. When a retail company adopts Agile methodology, the outputs can look very similar.

BUT FIRST, SOME HISTORY.

Let’s journey back to the early 90’s, when software development was finding its footing. Rooted in the practice of civil engineering, development moved very slowly. Project planning was high-level and the work processes were standardized. Priorities trickled down from top management on an annual basis. Issues were difficult to communicate up and down the chain of command. The focus for implementers was to follow the plan created by people several steps away from the actual solutions—a disconnected workplace. This drained developers, busted through budgets, and created products that didn’t always connect with actual users.

Enter: The Agile Manifesto. Agile marked the move to faster, more informed production. Agile workplaces continuously evolve and reexamine the creation process.

A few main tenets are imperative:

  • Short feedback cycles
  • Partnerships with end-users
  • Improved Collaboration
  • Openness to Change
  • Empowered Employees

Quick decisions, validated with stakeholders, are an asset rather than a hindrance. Each project’s purpose and process are revisited monthly or even weekly. An Agile team stays in face-to-face contact and continually asks, “How can we make this work better?”—and then they adjust in response. This shift to agility over process made a huge difference in the quality and speed of software products.

Fast forward to current day, and this is how we operate at Square Root. Daily stand-up meetings, weekly demos, and constant feedback from our users drive our software development, which allows us to stay on top of trends and anticipate customer needs.

So, can any of these Agile best practices make the leap to retail? We think so.

PICK UP THE PACE

The heartbeats of an Agile workplace are rapid. Innovation cycles are short and require frequent adjustments. Instead of a static, annual blueprint, companies can pivot fastest when they allow themselves the freedom to explore potential improvements as they emerge.

A Software Company’s Perspective: At Square Root, we build, measure, and give feedback on engineering initiatives in two-week cycles, with the next 6-12 months planned at a high level that’s always subject to change. This allows us to test new hypotheses faster and take small steps of progress towards a goal that is always changing. We communicate often so we build the right product for today, and our workplace feels energized.

In Agile Retail: Retailers like Zara exemplify quick iterations in their retail enterprises—now referred to as “fast fashion.” Their methods allow them to get the newest designs on their racks within two weeks. They combine e-commerce efforts and big data with agile decision making to predict future trends and get ahead of the next big thing in fashion. However, to keep up with the rising tide of online retailers, even these fast fashion retailers continue to reevaluate their processes and increase their velocity.

PARTNER WITH YOUR CUSTOMER(‘S DATA)

Gone are the days of viewing your customers as just customers. Think of them instead as partners who offer valuable insights to drive business decisions. Their feedback can then be used to build solutions that are 100% driven by their needs.

A Software Company’s Perspective: We regroup with our users regularly to gather qualitative and quantitative data. Through phone calls, “ride-alongs,” and focus groups, customers engage with our team throughout the entire process of software creation, unlike our pre-Agile predecessors who made contact only at the initial contract-signing and final delivery. The end product? One that is truly inspired by the client needs.

In Agile Retail: In retail, partnering with your customers means going beyond high-level NPS stats to uncover what’s really driving them. Ubiquitous customer surveys, for example, provide instant insights, but require further exploration to turn into operational change. The VP of Customer Experience at a national fast-food chain shared this anecdote about digging into survey data: “My favorite example from doing satisfaction surveys is a time when the scores showed ‘low accuracy.’ We can tell everyone to double check and repeat back the order, but when we dived into the comments, it turned out we were in a wings promotion and people weren’t receiving a fork like they thought they should.” Taking the time to understand what customers are really trying to say means you can communicate the right changes out to your stores.

ELEVATE YOUR COLLABORATION

A key element of Agile environment is internal, real-time interaction. When a team talks face-to-face (or via video call, if they’re geographically distributed), miscommunications decrease and productive brainstorming improves.

A Software Company’s Perspective: At Square Root, our engineering teams have daily stand-up meetings to touch base on each project to ensure alignment. Every person on the team shares their status and blockers, and raised issues are handled or escalated right after the meeting. Because everyone’s full attention is needed for effective communication, distracting devices aren’t allowed.

In Agile Retail: For distributed retailers spread across the country or globe, finding a consistent time for live communication presents a challenge. But the driving philosophy can be inherited: individuals and interactions take priority over processes. Forward-thinking retailers like Walgreens encourage daily in-store touch-base meetings among store managers and associates. Distributed teams, like the field support staff, might instead use innovative software to enable connected cooperation. We’re biased, but we think technologies that don’t just consolidate data, but also include the action items and community forum necessary to affect quick change, are particularly impactful.

EMBRACE CHANGE

Customer expectations change with every new app and pop-up store they interact with. Agile prioritizes responding to change over following a pre-set plan, removing the fixed mindset that slows growth.

A Software Company’s Perspective: We embrace experimentation and a “Let’s try it!” attitude. What makes these mini risks easier to take on (especially for our executive team) is the knowledge that we’ll check in on the process and early outcomes in just two short weeks. Whether it’s an internal shift to our process or an external update to our product, we like to think:

What will entice our users? Let’s try it.

Will a change to our process make it work even better? Let’s try it.

In Agile Retail: Embracing change is less frightening for Agile retailers when experiments are small and quick. Since assessment is timely, management can quickly decide whether the outcomes are worth the time, budget, or effort. Many new brands run small pilots as they’re refining their offering. For instance, when a healthy snacks company rolled out a new product line, they didn’t do a national rollout; they recognized that a few quick iterations in the market would yield a better end result. So the brand launched the new snack in a handful of stores, carefully gathered early feedback, and made a final round of adjustments to ensure the packaging resonated with customers. Other retailers use standing pilot stores, often choosing a location near headquarters to serve as a nearby laboratory for merchandising and process experiments. What these approaches have in common is easy observation and adjustment, to allow the executive team to quickly choose whether to double down or pull the plug on new ideas.

PASS THE TORCH TO YOUR STORES

The purpose of Agile is to empower people to improve their processes so they can deliver more meaningful products to customers. Or, as the original manifesto puts it, we need to give employees “the environment and support they need and trust them to get the job done.” Do your store managers feel supported and trusted today?

 

If the corporate team is willing to trust the store and run quick-feedback experiments, you may find yourself innovating faster than ever, with adaptations that remain true to the brand.  

They’re eager for the chance to drive success. Store managers and associates live the closest to your customers, literally and figuratively, and often know what works best. Their requests to adapt the standard corporate greeting, or try a separate queue for returns, or run ship-from-store fulfillment from the cash/wrap are probably based in practical experience. If the corporate team is willing to trust the store and run quick-feedback experiments, you may find yourself innovating faster than ever, with adaptations that remain true to the brand.  

So perhaps you’ve decided you want to be an Agile Retail organization, to reap the benefits of speedier processes, embracing change, and data-driven decisions. There’s one underlying requirement for all of this. It’s as simple (and as complicated) as communication. Store teams need to talk honestly and often, and the executive team needs to say important things as well as hear them. Those channels of communication can be the engine that powers your organization to its unique strategic destination.

In summary, here’s what we know about Agile philosophy in a retail world:

  • Agile is bottom up and lean, allowing the people who have the problem come up with the solution. So this means…
  • It gives a lot of autonomy to the people on the ground. In order to empower these individuals but still maintain a consistent brand…
  • Communication is key. Quick feedback loops that iterate often are essential to reduce risk and encourage experimentation. Particularly, the change must…
  • Utilize data (beyond just revenue) to understand and predict the habits of your customers.

Interested in making your retail company an Agile one? Our store relationship management platform, CoEFFICIENT®, provides the tools for quick decision making, actionable data, and store alignment: all the makings of an Agile workplace. Connect with us to discuss the future of your Agile business.

ABOUT THE AUTHOR:

As our VP of Product, Sarah finds solutions for customers that they didn’t even realize they needed. With 15 years in product management and more than 20 years in technology overall, Sarah specializes in creating long-term focus groups with valued clients, helping them use technology to meet their business needs. She understands that building relationships through empathy leads to the most dynamic ideas and strategies. Driven by a passion for behavioral economics and a desire to study how people make decisions, Sarah received a BA in Cognitive Science from University of California at Berkeley.