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Why Big Retailers Should Act More Like Small Businesses

Big Retailers Should Act Like Small Businesses

Big retailers have unique challenges, but they also have the benefit of scale and formal processes to overcome them. Sometimes, this can limit their creativity and hinder their ability to adapt quickly.  Merchants have to become nimble because of the competitive nature of the industry.  But that’s easier said than done when you have a 12-week lead time!

Small businesses are more flexible and willing to change. Retailers that act like small businesses will be better prepared to tackle the evolving retail landscape, and here’s how to do it.

Use A Cross-Functional Team To Increase Agility

Small businesses are built for agility.  Teams are small by necessity.  Big retailers should have a cross-functional team at the ready for tackling specific initiatives, but these teams should consist of no more than 5-7 people, with one person per department represented.

Smaller teams make decisions faster, and individuals in a small team are more productive because they play a larger role within the team – there’s more at risk for them.  Jeff Bezos at Amazon has been a champion of the “two-pizza team”: if two pizzas weren’t enough to feed a team, the team was too big.  Not a bad rule to live by!

A Hands-On Onboarding Process Improves Transparency

In small businesses, people have multiple roles within the organization and put in time where the hands are most needed at any given moment.  At big retailers, working several shifts in the stores should be part of the on-boarding process for all Head Office staff, so that they live the day-to-day world of store staff and understand the implications of Head Office-developed procedures, programs and policies.

In addition, job rotation among Head Office departments that work most closely together (e.g. Category Management, Merchandising, Inventory) would help employees understand the impact of their work on others.  Including a cross functional career path program for high potential employees also helps merchants build employees with broad based experience to inhabit the executive suite.

Give Your Employees More Autonomy

Give your store managers/owners and their front-line employees more decision-making power.  Today, a store owner is just one click away from the customer and nobody at Head Office knows a customer better than front-line employees.  Don’t create layers or hoops for customers.  Look at what increased autonomy has done for Nordstrom and CVS.

For your store, take the time to talk to store owners/managers about their most common in-store and online customer interactions and transactions.  Then develop parameters and guidelines to let owners/managers make decisions on the spot that will satisfy and retain customers in their stores.

It All Stems From Your Culture

Traditionally, big companies throw money at a problem; small companies throw creativity at it.  Most problems in big companies occur when people don’t understand how their work impacts others, because the organization is too big.  As with most transformational initiatives, behaving like a small business requires a culture shift and it has to start from the top.

A retail CEO should spend more time in stores than in her office.  A C-suite team that embraces small business thinking and behavior will have the greatest chance of success and have employees who are passionate, flexible, and eager to create positive change.

In an age where the next hot retailer is popping up down the street, you need to be a David instead of a Goliath. By adopting principles of small businesses, big retailers will find themselves in a better position to win in a changing market.


To learn more about how we can help your retail business achieve success, visit our retail services page or contact us for further information.