Retail agility is the ability to change, evolve and pivot when necessary, as consumer demands shift. The agile methodology itself has roots in software development. DevOps (development + operations) teams work together to continuously develop, test and improve performance. DevOps teams use a system of continuous integration and continuous deployment (CI/CD) that is constantly growing, evolving and improving.
Retail leaders in digital transformation have adapted this agile strategy to fuel innovation and deliver better customer experiences. It’s resulted in a shift in mindset that threw much of conventional thinking out the proverbial window. Rather than spend years researching, planning and developing products and processes, agile theory focuses on creating minimal viable products (MVPs), getting rapid feedback and iterating for refinement.
For example, an agile marketing strategy allows you to respond more quickly when customer data indicates a shift in priorities or customer behavior. In an agile retail framework, the customer becomes part of the iteration process and helps guide further development.
Driving the retail transformation are four key aspects of the agile methodology:
1. Individuals and interactions take precedent over processes and tools
2. Working products take precedent over comprehensive development
3. Customer collaboration is essential to product or process development
4. Responding to consumer changes is more important than following a prescribed plan.
In essence, the commitment to adapting to changes in the customer journey is the plan.
A McKinsey study of retailers that moved quickly to agile strategies during the pandemic showed material gains. They were successful by focusing on a small set of defined priorities that were customer-centric. They created and empowered small cross-functional teams and pushed for faster decisions. Rapid decisions meant the process wasn’t always perfect, but by gathering customer feedback, they had faster iteration and learning cycles.
The customer is part of the iteration process when you enact agile processes. Because you are listening to customers' feedback and using it as part of your iteration process, you are improving the process in a way that customers appreciate. As such, customers respond better.
Over the past year, 40% of Americans have reported trying a new shopping method. The shopping experience transitioned through four multiple iterations quickly:
1. Shopping in-store
2. Buying online and picking up in-store (BOPIS)
3. Buying online and curbside delivery or home delivery
4. Touchless payments
Retailers that responded to changing needs saw improved customer loyalty and revenue growth, while many less agile retailers saw downturns. Customers voted with their spending.
In response to changing consumer buying habits, the share of retailers offering curbside pickup has now increased by more than 40%. More than three-quarters of shoppers that tried it said they plan to use the service more often and that it makes a choice in where they shop.