Download our latest report to explore how retail and consumer organisations are reshaping for the future and where leaders are choosing to invest, simplify and build capability.
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Economic pressure, technological change, geopolitical uncertainty and changing customer expectations continue to reshape the sector. The talent market has shifted; growth is harder won and the pressure to improve productivity has not gone away.
Against that backdrop, organisations are having to be much more deliberate about where they put their time, people and investment, raising an important question: where are retailers placing their bets?
That is the question at the heart of our inaugural Q5 Retail and Consumer Benchmarking Report, Built to Win.
We looked across more than 160 UK retail and consumer brands, alongside conversations with leading organisations, to understand how the sector is changing. Where are organisations investing? Where are they simplifying? Which skills are becoming more important? What does all of this tell us about the organisations retailers are building for the future?
The picture is more nuanced than organisations simply getting smaller. Retailers are making deliberate choices about what to protect, where to invest and what they will need more of in the future.
There is no ‘right’ shape
One of the most interesting things about looking across the sector is just how differently organisations are set up.
Grocery, Fashion, Beauty, FMCG and Leisure are dealing with different margins, customer expectations and sources of competitive advantage and their organisations reflect that.
For some, the bet is on lean central teams and operational efficiency. For others, it is on brand, customer experience and the commercial capabilities that help them stand out and this variation matters.
It is tempting to look at a benchmark and ask, ‘Should we look more like everyone else?’. We think the more useful question is, ‘Is there a good reason why we don’t?’.
There is no perfect benchmark to aim for. What matters is whether the organisation you have reflects your strategy and what you want to be brilliant at.
The workforce is being rebalanced
Look beyond organisation structures and another shift becomes clear. Demand for roles across Retail and Consumer has fallen yet underneath that headline, the picture is much more interesting.
Organisations are not pulling back everywhere equally. They are reducing, protecting and investing in different places. That tells us something important about the workforce conversation. This is just as much about people creating value as it is about headcount.
As more routine work is simplified, automated, outsourced or moved into shared services, organisations have choices about where to reinvest that capacity.
For corporate functions, that is putting more emphasis on strategic, advisory and analytical work. For customer-facing teams, the picture is different. The frontline remains critical because customer interaction, judgement and execution are still fundamental to the retail experience.
The question to ask yourself is ‘where do we need people most?’ rather than ‘where can we take people out?’.
Skills may be the bigger bet
Changing the shape of an organisation is one thing but building the capability to make it work is another revealing a bigger challenge.
The skills retail and consumer organisations need are changing. Capabilities linked to data, continuous improvement and navigating greater complexity are becoming more important alongside the commercial and functional expertise retailers have always relied on. Most leaders recognise this.
In our conversations, 15 out of 16 organisations told us upskilling and reskilling was a key business priority. Yet only six said they had a good view of the skills they have today – that is quite a gap.
If you cannot see the capabilities you have today, it becomes much harder to make deliberate decisions about what to build, buy, redeploy or access differently tomorrow. For People Leaders, this takes workforce planning beyond roles and headcount. It becomes a much more strategic conversation about where the business is going and what people will need to be brilliant at when it gets there.
Technology changes the equation
AI and automation are creating new possibilities for how work gets done and whilst the number of jobs technology might replace is top of many leaders’ minds, we think it should be much more about the things organisations choose to do differently because the technology exists.
As repeatable activity becomes easier to automate or augment, roles can be redesigned around the work where people add more value from judgement, decision-making and relationships.
That makes technology another input into organisation design, rather than a separate conversation about the future of work.
Where are you placing your bets?
There is no blueprint for the retail and consumer organisation of the future, and this is probably a good thing. The organisations in our research are making different choices because they have different strategies, customers and sources of competitive advantage.
What matters more is being deliberate.
Where will you invest? What will you simplify? Which capabilities will you build? What should technology enable? What does your organisation need to be brilliant at?
Whilst benchmarking can give you a much more informed starting point, it cannot answer those specific questions for you.
This report gives you the sector view. We can also take that further, tailoring our benchmarking to your organisation to understand where you sit against relevant peers, where you are making different choices and what that might mean for the organisation you want to build.
Speak to our Retail, Consumer & Leisure team to find out where your organisation sits.
Head of Retail
Q5 Analytics
We are all about organisational health, which separates good organisations from the great. Whether our clients are at the top of their game (and want to remain there) or are in ‘turnaround’ mode, we all need to work on our organisational health.
Whatever the situation, be it a strategic conundrum, a market opportunity, or an operational gripe, we combine the art and science of organisational health to help our clients improve and excel.
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