Disruption in retail is not new. However, the frequency and intensity of changes impacting the industry are challenging retailers like never before. The pandemic accelerated a host of consumer trends that had previously been developing gradually. The length and magnitude of the latest phase of disruption has changed consumer behavior for good and raised expectations of retailers to new heights.
The resulting power shift has put consumers in the control seat, with a new ability to demand what they want, when they want it, how they want to buy it, and continually wanting something more. Given the speed at which trends and behaviors are changing, and at a time when macro disruptions in the supply chain, economy, and environment further exacerbate challenges, the only way for retailers to respond and adapt is to embrace agility.
AlixPartners has developed a quantifiable and actionable methodology that allows retailers to measure their ability to understand their consumer’s evolving needs and respond to disruption with agility. This framework, called AgilityEQ, ascertains a retailer’s capacity to breakdown silos of inflexibility, embrace speed in processes and decision-making, and use data to draw actionable insights. Within these three areas, there are 12 key behaviors that retailers should prioritize and adopt.
Global retail practice leader David Bassuk and managing director Sonia Lapinsky introduced the concept of AgilityEQ at the WWD Apparel & Retail CEO Summit and shared examples of winning combinations that retailers have successfully adopted.
Our executive study shows that historically, retailers with higher AgilityEQ have higher profit margins and rebound faster after a disruption. However, because the industry is facing more frequent and intense disruptions, the agility combinations that previously worked are no longer sufficient. As an example, some retailers chose speed over operational excellence early in the pandemic, and while it was the right decision at the time, profitability suffered as a result.
Although there are tens of thousands of unique agility combinations, when we look across retailers, sectors, and challenges in this phase of disruption, we continually come back to a handful of combinations that provide the right unlock for most retailers. The key is to quickly align on the answer, relentlessly focus on these behaviors across the organization, and then enjoy the ride as performance soars.
Performance soars when you unlock agility
The pandemic significantly changed consumer habits and accelerated trends, sending retailers on a disruption rollercoaster. However, brands can respond and recover with the help of agility and AlixPartners’ AgilityEQ methodology; breaking down silos, embracing speed, and accelerating insights. Watch AlixPartners Managing Directors Dave Bassuk and Sonia Lapinksy share their insights on how AgilityEQ can improve and transform businesses at the 2021 WWD Apparel & Retail CEO Summit.