Following is an article on ‘Why College Graduates Should Seriously Consider Retail as a Career’. I published this article earlier in the year. I feel this is timely. I also feel the industry must do more to boost its reputation within the academic community.
Plummer & Associates, a Retail Industry Expert Offers The Following Advice to Students Entering Careers in Retail…
John Plummer, Plummer & Associates
Plummer & Associates, a Retail Industry Expert describes why Retail is now an attractive career for college graduates.
With over 40 years experience in human resources management and search consulting, John Plummer has developed a highly consultative approach to executive recruiting and as a human resources executive, he held senior management positions with major retailers.
John Plummer currently is President, Plummer & Associates, a New Canaan, Connecticut, based boutique executive search consulting firm which specializes in recruiting senior officers for the retail industry. Over the years, he has recruited teams for growth retailers (Staples, Starbucks, 24 Hour Fitness, Urban Outfitters, Anthropologie, Hot Topic!, Chipotle, Jamba Juice, Ulta Salon Cosmetics & Fragrances, The North Face, and many more of the retailers) that have changed the retail landscape. Previously, he had served as a human resources executive for divisions of Federated Department Stores, Fedmart*, and Mervyn’s. He graduated with his MBA degree in 1968 from the University of Southern California and also earned his BA in economics from USC.
“Many years ago when I graduated with an MBA degree, I joined Bullock’s Department Stores in Los Angeles where I had already been working on a part-time basis. I quickly heard from Professors and peers that I had made the wrong choice. They said the industry was not sophisticated enough to use my newly learned tools nor would retail offer the challenges needed. Being contrary, I decided to stay. Of course, being paid more than anyone else in his class comforted him a great deal. “
Well, things have changed. Retail is now a highly complex and sophisticated industry offering incredible challenges and the opportunity to put your new skills to work. When John Plummer joined retail, the organizations were primarily run by owning families and few executives were college educated and most were tactical in orientation. Now, the leaders of the top retail organizations are well-educated with over 85 % having college degrees(1) and 23% having MBA degrees(1). As retail continues to grow Plummer & Associates expects the percentage with college degrees will approach 100% and that the percentage with MBA degrees will be close behind.
What has changed….
First, the industry has consolidated from mostly family-owned and managed regional chains into large corporations operating nationwide and globally.
Secondly, these large businesses are in a highly competitive environment and require sophisticated solutions to strengthen the relationship with the consumer, to manage inventories effectively, to effectively utilize operating and capital expenditures, and to build management, systems, and other infrastructure to support growth and to serve the customer.
Thirdly, the industry works in an ever changing environment in which new ways to serve the customer are constantly being invented along with new ways to communicate with the customer. More importantly, the customer base needs to be better understood to seek ways to better serve the targeted customer as well as to understand consumers who could be effectively served and brought into the customer base. E-commerce has become mainstream over the past few years and opportunities through mobile-commerce are just starting to grow. Who knows what the next channel will be.
Fourthly, global growth in retail has been slow to take hold but is now a significant opportunity. For years global retail seemed to be limited to the luxury brands. Now, the food service industry is rapidly expanding on a global basis (examples: McDonalds, Yum!, Starbucks, etc). Mass merchandising is also expanding rapidly with Carrefour having stores worldwide and Wal-Mart, Staples, Best Buy, Costco, and others catching up. This growth demands executives who have the tools to be effective in different cultures with differing ground-rules.
Lastly, the industry is led by executives who know that highly talented executives are required to lead the businesses going forward. These executives have organized the business so that college graduates can quickly assume roles with responsibilities and require intellectual rigor and offer greater satisfaction.
Market Research – The industry is learning more about how to target consumer segments and how the company can expand that customer base without negatively impacting on the relationship with the core targeted customer. The opportunities are significant for the individual who knows how to design research and who is able to interpret the information into strategies.
Advertising/Sales Promotion – This was what retail was known for and is still an important role. But, with the growing use of social media the communication with customers is changing dramatically.
Merchandising – This role is constantly evolving. Merchants no longer make decisions based upon ‘gut feel’. In the past the manufacturer had all the customer information. Retailers with sophisticated point-of-sale information now know which products best meet their customer needs. As a result, the merchant is now an interpreter of the research and sales data and is often partnering with the manufacturer in product design, quality control, and costing.
Brand Management- Retailers now know that a nameplate is no longer sufficient and that strong brand management principles are required to be consistently successful and that the brand must be carried out through all marketing materials, the store experience and the e-commerce experience. This requires that marketing be involved in store operations, store design, human resources and all other areas of the enterprise.
Store Management – Retail is a labor intensive industry regardless if it is in the food service, retail services, grocery, or fashion sectors. The industry will always need executives who can manage people effectively towards meeting customer expectations and to carry out the essence of the brand.
Operations Management – The opportunities in supply chain management are significant. The efficient movement of merchandise is critical to stay competitive.
Store Development – As retailers look for better predictors of success in store locations and store design, executives are needed with sophisticated financial modeling tools, location selection tools, and store design tools. Green tools are also highly important to reduce energy costs and carbon footprints.
Process Improvement – As with any older industry in a new innovative climate, the retail industry now requires executives who can evaluate procedures and processes starting with a fresh pad rather than looking for incremental improvements.
Accounting/Reporting – With new financial systems, the size of the accounting and reporting organizations has shrunk but opportunities exist for those who know how to work with and get the most out of financial systems.
Financial Planning & Analysis – Retailers look to the financial organization to provide the analytics and lead in the development of forecasts and budget planning. Opportunities are significant for those with strong analytical tools.
Creating Value –The role of financial executives as teachers and coaches in working with the other functions in the organization to help them understand the financial implications of their decisions is growing in importance.
Corporate Finance – Retailers require financing to support inventories all year and also require financing to support growth.
Information Technology …
Over the past few years systems have been developed for merchandising, supply chain management, financial management, and operations management. Now, systems are being built to better handle channels such as e-commerce, direct marketing, m-commerce, and shop-television. In addition, new communications are being established with social networking and media. This is creating a demand for executives with greater IT knowledge.
Human Resources …
Talent Acquisition… Because retail is people intensive, there is always a need to recruit people. More important, is recruiting top talent with the appropriate skills and style to meet the company’s objectives. Understanding new methodologies to recruit talent through social networking and other new practices, policies, and procedures is increasingly important.
Human Capital Development… Identifying talent within the organization and developing that talent to each individual’s potential is significantly important to the survival of a retailer in supporting growth and achieving brand standards throughout the organization.
Talent Retention… No good retailer can afford to lose good talent. Understanding what causes talent to leave and understanding what it takes to retain top talent is of utmost importance.
Compensation and Benefits… Retail has moved to understanding the importance of talent and retaining top talent. As a result, compensation and benefit plans are needed to provide the best return on investment.
Human Capital is no longer considered an expense. Instead, it creates a major differentiation between one retailer and all others.
Which Industry Segments Offer Opportunities
Food Service – Growth in the food service sector is significant. The best growth opportunities are in quick serve and quick casual. Look at the growth of Starbucks, Yum! (Taco Bell, Pizza Hut, KFC), Chipotle’, Jamba Juice, both in the U.S. and internationally. The opportunities because of this growth are significant. Only the sit down dining sector is experiencing slow growth.
Fashion Specialty – Although the U.S. has been over-stored in fashion, the shake out due to the recession is creating new opportunities for the stronger retailers. In addition, fashion manufacturers are opening company owned retail stores.
Hard-lines Specialty – This sector has faced the most challenges during this recession. Growth has slowed for most hard-lines retailers. The growth opportunities are primarily with Home Depot, Lowes, Dick’s Sporting Goods, AutoZone, Petsmart, and similar operations.
Mass Merchandising – This group consists of Wal-Mart, Target, Carrefour, Costco, Sam’s Club, Metro and similar chains. These are sophisticated and driven retail organizations offering significant opportunities in the U.S. and globally. These retailers are also broadening their customer bases and are expanding their merchandise assortments.
Grocery – The grocery industry was caught off guard with the advent of the warehouse clubs and the entrance of mass merchandisers into the grocery categories. These retailers are fighting back through the development of better operating strategies and marketing strategies. It was just announced that almost 50% of Wal-Mart sales are from the grocery categories. At the same time, new successful concepts such as Trader Joe’s, Aldi, and Whole Foods are growing rapidly.
HBA/Drug – This segment has consolidated heavily down to only a couple of major players who are highly sophisticated. They are also redesigning the business model through the addition of mini health clinics and the addition of third party drug provision services. The innovation in this segment will grow in geometric progression.
Retail Services – This is another major growth category and is a result of consumers need for services provided by a reliable brand. All you need to do is look at the growth of Geek Squad, Jiffy Lube, Jackson – Hewitt Tax Service, California Closets, Aamco, Merry Maids, just to name a few.
E-commerce, catalog, shop television, direct selling, direct marketing, m-mobile – The growth of e-commerce has taken share away from traditional catalog retail and direct selling and direct marketing channels. The emergence of multi-channel strategies and the advent of m-commerce will ensure growth in this broad sector.
New Ventures – This has always been the most exciting part of retail. Just look at the new companies that have developed within the last twenty years into industry dominance. For example, look at Starbucks, Staples, Office Depot, Anthropologie/Urban Outfitters, Amazon, PeaPod, 24 Hour Fitness, Trader Joe’s, Whole Foods, Geek Squad, Best Buy Mobile, Jamba Juice, Chipotle’ Mexican Grill, and all the other major retailers which have evolved from a twinkle in the eye to powerhouses.
What is the most rewarding factor?
The most important feed back an executive finds in the retail industry is the customer’s response to new actions and strategies. Regardless of whether you run an entire retail organization or just a small market, you can quickly see the results of your activities. This inspires self-confidence and drives your ambition to do and try more. Nothing builds esteem like seeing your success!
How to investigate a career in retail?
Check with your placement office for when a retailer will be interviewing at your school. If retailers are not interviewing at your school, I strongly recommend you contact the senior human resources executive at the retailer you are interested in joining. A letter to that executive will get you considered for the company’s executive development program. You may find a position at a local branch at a major chain, but that usually will not offer you the opportunity to quickly move into a decision making role.