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MULTI-CHANNEL RETAILERS SET TO BECOME NEXT GENERATION CEOs

MULTI-CHANNEL RETAILERS SET TO BECOME NEXT GENERATION CEOs

Study of retail chief executives reveals likely future leadership of the sector

Recent appointments at Argos, Marks & Spencer and Dixons highlight emerging trend

The rise of multi-channel retailing will lead to multi-channel directors becoming the next generation of chief executives in the sector, according to a new study(1) by Korn/Ferry Whitehead Mann, the executive search and leadership consultancy.

Korn/Ferry interviewed 30 chief executives to understand how retailers are tackling innovation.  The study reveals that as the multi-channel function is becoming central to retail, integrating the customer experience across stores, websites, direct mail and catalogues, mobile platforms, social networks, home shopping and gaming, the remit of multi-channel directors is expanding.

The study reveals that seven out of 10 of the nation’s leading retailers with significant e-commerce and multi-channel operations have changed the leadership of that function since late 2010, highlighting greater mobility among this kind of executive than any other function in the consumer sector.

Recent retail appointments of this kind include Argos and Mothercare bringing in chief executives without traditional retail experience but with significant e-commerce and multi-channel capabilities, Marks & Spencer’s appointment of Laura Wade-Gery as Executive Director, multi channel e-commerce, and Dixons’ promotion of Katie Bickerstaffe to Chief Executive UK & Ireland from a previous position that included e-commerce.

The strategic importance of multi-channel is also recognised by retail chairmen. In the last year 23 per cent of non-executive directors appointed to the boards of FTSE 350 retailers had online experience, compared to only 7 per cent five years ago.

Sally Elliott, Senior Client Partner and Head of Retail, Korn/Ferry Whitehead Mann, commented: “The role of the multi-channel director typically includes profit-and-loss responsibility for sales over the Internet, but also the challenge of integrating mobile, Internet, and telephone sales with stores. They have to work with IT, marketing, product, supply chain and store teams to ensure that the brand experience remains consistent and the organisation is equipped to meet customer expectations.

“As a result, the multi-channel director is pulling the strings on much of the leading-edge innovation in retail at present and his or her remit is likely to continue to expand so that they will oversee every aspect of the customer journey including strategy, brand and all sales channels.  In the years to come this will emerge as the starring role we expect it to become the recognised number two position and the most likely route to becoming a chief executive in the sector.”

More than half of the retailers surveyed in the Korn/Ferry study said their biggest innovation in recent times had been service-related, with click and collect, m-commerce and price optimisation software among the innovations helping to revolutionise the industry in the past few years.

But the report also reveals that although innovation has never been more important in retail, many retailers are a little reluctant to steer resources into innovation in the current economic climate. The report suggests that there is no specific budget for innovation at 70% of the retailers surveyed, 80% have no dedicated innovation function, and only 50% proactively recruit and develop innovation skills in their business.

The study also suggests that innovation is worthless unless it delivers value, which is often found in the implementation of the idea as much as the idea itself.

Sally Elliott continued: “As traditional retail models are overturned, it is crucial for businesses to attract, develop and retain the talent and leadership they need to deliver multi-channel strategies.  A culture of innovation needs to emanate from the top of the company but not stop there, and forward-thinking retailers are ensuring innovation is led throughout their business.”

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