recruiting merchant leaders: a perspective
Retail is in the middle of a seismic shift and major re-invention. The brick and mortar industry that was transformed by ecommerce is transforming once again—into and beyond “omni-channel” retailing. Despite its commonality, the term “omni-channel” is still not quite accurate in its representation of where the industry seems to be moving or what it wants to become. “Omni-channel” implies that there are still separate, distinct channels for approaching the Customer, when, in reality, Customers now expect seamless connectivity and a singular experience across all touch points. The lines between so-called channels are blurring rapidly to the point of non-existence.
The new retail market calls for a new type of retail leader and a fresh approach to hiring external talent and developing an internal bench. There is an increased focus on creating a deep bench of up-and-coming leaders while simultaneously recruiting proven industry superstars who can manage the business as it is andtransform it from the inside out. And nowhere is this more apparent than in the search for great merchants.
The Evolving Role of the Merchant
Merchants, once the only critical player in the retail industry, now share that distinction with other creative functions – Marketing and Design, for example. Merchants continue to drive the business by knowing the Customer, developing the product for that Customer, understanding and interpreting the color palette, and taking calculated risks based on their “reading of the tea leaves” (or at least the runway shows). However, they must now also be able to absorb enhanced analytics and work even more closely with Design and Marketing to understand and adapt trends.
Because the role of the merchant has changed, there is also a degree of confusion about how merchants can reach the top of their organizations. This confusion has been exacerbated by the elimination of the formal career paths and training programs that were so much a part of retail operations in decades past. High-potential merchants were often given one or more specific developmental opportunities aimed at enhancing their leadership skills and training them to maximize profitability. These included internal mentoring as well as external coaching and learning opportunities.
"CEOs who were usually Chief Merchants aren’t teaching the teams at any level how to drive their business. In the ‘glory days’ I had almost daily exposure to a CEO who taught me how to be a great merchant and how to lead. My cohorts from that time are leading companies because of that training. We have gotten caught up in process and not taught to think broadly."
~Brian Ruskin, SVP Merchandising
In a rapidly transforming retail market, simply leading a team is no longer enough. Now, a merchant must be an expert at hiring and actively developing future bench talent. This is particularly true for specialty retailers where there are few, if any, executive development programs. The burden of talent development falls almost completely on the leader, and many leaders are simply not prepared.
Until recently, a merchant has been evaluated almost exclusively on his or her ability to forecast fashion trends, select or develop product, and profitably manage a business. All of these responsibilities depended on an intimate understanding of the Customer and a clear sense of product and pricing. Today, understanding the Customer has become exponentially more complex. Merchants must evaluate data analytics, patterns in online shopping behavior, and fluid pop culture and entertainment trends. They must also gauge the impact of macro-economic conditions and buying habits. Then merchants must integrate all of these data points with their own Customer experience to make the most impactful business decisions that affect company direction. Overall, being a successful merchant requires a broader business understanding and heightened adaptability.
“In the past, merchants were taught to do everything and to know everything. They knew the right questions to ask of their cross-functional partners and they had a specific thought process. As the role of the merchant changed, no retailer invested time in development, in guiding a merchant to think more broadly or understand other functions in any depth. It became all about the financials and merchants were not expected to understand Marketing or Sourcing or running a multi-channel business. How can you expect a merchant to be ready for the intricacies of running a more complex business when they don’t understand the fundamentals of making a garment let alone knowing the customer?”
~Alice Hilliard, Retail Consultant and Former GMM, Lane Bryant
Needs in the retail industry are transitioning. What could be termed the “classic” merchant leader is becoming obsolete, and the new merchant leader—a business leader who fully manages multiple functions and channels while providing analytical insight into Customer behavior and buying patterns—is more in demand. It is no longer sufficient for merchants to look one or two seasons ahead. They must now understand where the entire industry is going and be able to move as quickly as the Customer.
“We no longer invest in talent at an entry level let alone investing in individuals identified as future leaders. And when business gets tough, organizations only look at the P&L and forget about anything that has to do with development or investment in people or opportunities.”
~Alice Hilliard, Retail Consultant and Former GMM, Lane Bryant
Assessing Strong Merchants
Shifts in the retail market and the evolution of the merchant role have forced many retail companies, as well as internal and external recruiters, to re-evaluate the criteria for recruiting and assessing merchants. Assessing the non-merchandising abilities of a senior merchant is just as important as assessing fashion sense and an understanding of Customer tastes and moods. Interviewing has become more competency-based than simply behavioral or experiential. A key merchant, in order to become a successful future leader, must now have experience in at least one or more related but separate disciplines (i.e., ecommerce, marketing, systems, planning, etc.). Reviewing a candidate now includes a deeper assessment of background, stretch assignments, coaching and testing, and experiences outside of the retail and merchandising environment:
- Does the merchant have experience outside of merchandising?
- Does the merchant understand brand marketing, marketing analytics, and newly developed Customer-related systems?
- Can the merchant demonstrate the ability to work with multiple, interrelated Customer profiles (as opposed to a single Customer profile)?
- Has the merchant been able to influence other parts of the organization (i.e. marketing, customer experience, strategic planning, etc.)?
- In order to properly assess a merchant in the current retail environment, the interviewer must also be required to understand a broader range of skills, and not merely the more “traditional” merchant competencies.
Making the Most of Strategic Search Partners
As a result of these market developments – a transformed retail market, a redefined merchant role, and new criteria for assessing that role – skilled merchants are in high demand and recruiting them is far more time and resource intensive. Many companies have developed hybrid recruiting strategies. They build an internal talent team focused on internal development and filling open positions at the operating committee level and below. Meanwhile, established external search partners drive the search for longer-term external bench-building recruitment, based on internal talent identification initiatives. This strategic partnership is the most efficient way to ensure that both of these critical initiatives are proactively managed.
The external review of talent is a full-time activity that cannot be realistically managed by current Human Resources teams if they are also actively focused on retaining and developing in-house talent. Trying to do it all will require far more than the currently allotted resources. A partnership with the right executive search firm allows both the search partner and the client to focus on what they do best.
We are now seeing the client/search firm relationship evolving into more of a true strategic partnership. In these relationships, the search firm becomes more of an arm of the client and takes on a broader role by reading the market, uncovering and meeting current and future talent, and creating a continuous talent flow.
Recruiting is no longer a position-by-position activity. It has become a far more strategic process that must be constant, consistent, and managed by experts, thereby helping the retailer to achieve its expected strategic and financial goals and, ultimately, thrive in the new retail landscape.