Fundamentals of retail won’t change despite tech disruption, say experts

Future leaders of the retail sector will always have to be focused on the customer, despite having to cope with technology change, according to experts.

During a BRC event focused on what skills will be needed to lead retailers in the future, a panel comprising representatives from BRC, Marks and Spencer and John Lewis agreed that digital will play a part in retail’s future, but the main skills needed will always come down to empathy and consumer understanding.

Leading the discussion, Helen Dickinson, chief executive of the BRC, said despite shops struggling and the certainty that future retail jobs will be “very different”, the core values of retail will remain the same. “The fundamentals of retailing are as they ever were, which is all about the customer,” she said.

Changes in consumer behaviour, driven by access to technology, are forcing retailers to adopt a digital approach, using technology to provide a more relevant customer experience, meeting consumers on whatever channel they want to shop through.

Paula Nickolds, managing director of John Lewis and Partners, said she made her own way into retail by shadowing her father on shop visits when he worked for Marks and Spencer, saying she was “fascinated by why customers turned left instead of right, why they handled some merchandise instead of others”.

Retailers can now find out such things through analytics, said Nickolds, citing machine learning and automation as technologies that retailers are adopting to engage with customers.

“Tech is increasingly being used in place of human interaction, at a larger scale and at a faster pace than we have ever known before,” she said.

With 10% of the UK’s workforce in retail, and the industry facing “challenging times”, Nickolds warned retailers to strike the right balance between experimentation and keeping up with the pace of change, but not trying to change too quickly.

“We don’t even know what device we’re going to be shopping on in 10 years’ time,” she said, adding that it is better to experiment with, and test, new technology rather than shift the entire business.

Physical retail is struggling in many instances because brands can sell directly to customers on the internet, said Nickolds, and having breadth of products is “no longer a differentiator” because online shopping has increased consumers’ access to products. Both of these factors are “unsustainable” for retailers with a huge amount of legacy, she said, and are just some of the challenges the retail sector faces.

“In a world of endless aisles, in a world where we are increasingly overwhelmed by the tyranny of choice, retailers are fighting a joyless battle of speed,” said Nickolds.

But this does not mean the “end of personal, human-led roles” in retail, especially as retail is about providing a service, she said.

What it does mean is that all roles in retail need to be “continually learning and developing new technical skills at pace in order to stay relevant”, Nickolds added.

“Businesses particularly like ours have a responsibility to reskill a generation in order to adapt to that new reality.”

The skills needed for retail will shift, future sales roles may be “less about filling shelves and manning tills” and more about being product experts, brand ambassadors and long-term relationship building with customers, said Nickolds.

She said anyone who is “able to make connections, see patterns, be curious” will fit into the role of a retail leader in the future.

“The thing that’s going to stay in retail in the future is people who think customers, who think human beings,” said Nickolds.

Technology’s impact on the future of retail jobs has concerned the industry for some time.

While technology adoption is driving down retail working hours, many future retail jobs are likely to be created by technology – it’s just a case of predicting what these roles might be, ensuring people have the right skills for them, and encouraging them to pursue these careers.

Jill McDonald, clothing, home and beauty managing director at Marks and Spencer, said that if it wasn’t for one of her early bosses acting as a role model, she doesn’t know where she would be in her career now.

Having taken a demotion to pursue her career plan, she eventually became chief marking officer at McDonald’s, and was told by her manager that she was next in line to become UK CEO when he left.

When McDonald claimed she could not do the job because of lack of experience in supply chain or never having run a restaurant, she was told: “It’s not about having all the detailed technical knowledge, it’s about being a good leader.”

McDonald said she realised that “nobody is the finished article – what you need to be able to do is spot talent and then nurture it and polish it”.

She observed that 20% of businesses success is focused on planning and strategy, and 80% is about “your team and the people around you”.

The teams at M&S stores are “creative” in their interpretation of company guidelines, said McDonald, adding that they create “inspirational moments in store”. This is a direction in which retail is increasingly moving, with physical stores becoming locations for experiences, rather than purchases, she said.

Future retail leaders, and other retail roles, will need a combination of technical skills and creativity, said McDonald.

“Data is more and more important to understand customers, but it needs to be coupled with a creative brain that can spot and identify opportunities,” she said.

McDonald said it is becoming harder to predict and understand customer behaviour, and although you can analyse data “up the wazoo”, it is about having people who can “understand customers and keep pace with customers”.

“It’s about the customer, it’s about people who can have empathy,” she said. “They can be from digital, they can be from the supply chain or operations, but you’ve got to be able to connect with people.”