March 26, 2023

Electronic transformation is on pretty much every retailer’s to-do list these days. If it wasn’t deemed a priority before the pandemic, it most certainly is now with digital behaviors bred in lockdown now firmly entrenched.  

But like most buzzwords, there are many misconceptions about what digital transformation will be, which is usually why Samir Desai, Chief Digital and Technology Officer at Abercrombie & Fitch Co. said he always starts off conversations on the topic by first defining what digital transformation doesn’t mean: “ It’s not optimizing a single channel; it’s definitely not just a new app or a website; plus it’s not doing what you do today, in a more efficient or faster way , ” he said during this year’s Retail Innovation Conference & Expo in Chicago. “[Digital transformation] is more than that. None of [the things I listed] ultimately have the impact that they’re intended to have. ” 

So, What is Digital Transformation?  

According to Desai, true electronic transformation is more about making a cultural shift than implementing any single new technology or capability. In his opinion, this process has three crucial facets:    

  1. Removing complexity and friction in order to unlock speed and agility. This means “looking across the organization at how different groups are operating and [asking] how do you automate or streamline those [processes], ” Desai explained.  
  1. Creating new processes plus customer experiences, or modifying existing ones, to accelerate growth and create business value , which Desai said requires “looking at the fundamentals of your business plus understanding: are there new categories? Are there new revenue lines? Are there different ways to drive growth within your company and to be able to capitalize on some of that will new ability? ” 
  1. Changing exactly how work gets done in the company , which should be a natural result of the first two steps when they’re approached correctly.      

How the ‘Squad’ Structure is Driving Transformation at Abercrombie  

Desai practices exactly what he preaches — cultural and organizational change was one of the first things he implemented when this individual joined the particular retailer within 2021.  

“[The typical] waterfall model where the teams that are actually developing [a new] capability are the furthest removed from defining what it is that needs in order to be developed — that will model just doesn’t didn’t make sense, so we turned it upside down, ” he stated.  

Instead, the company has pivoted to what Desai calls a “ customer-first squad model . ” It’s an company system that was pioneered by tech companies like Spotify and is now commonplace in that sector. Squads are “agile pods” made up of no more than 12 people. “Making sure the size associated with the team does not exceed 10, or max twelve, is a really important aspect of this, ” said Desai. If the particular squad will get larger than that will “you need to break it down into two or even more groups, ” he or she advised.    

The core squad is typically made up of the digital product manager, a tech lead, an user experience and design person and engineers. Those people are focused full-time on a specific project or goal for a set period of time . The particular project isn’t something that’s added to their existing workload; it is their whole workload for the length of the “sprint. ”  

Then right now there are other employees outside of the particular squad who are involved, but in a supporting role. This includes staff from adjacent teams like data plus analytics, marketing and merchandising. “These people need to be able in order to give input, but not upon a full-time basis, ” Desai mentioned.   “There’s a connective tissue between the squad and those supporting functions. ” 

The unlock that this kind of team structure supports is definitely shifting the strategic focus of digital transformation initiatives. “The key cultural change this drives is helping our business partners define the problems that need to be solved versus coming to the group with a specific solution to be implemented , ” described Desai. For example, instead of tasking the particular tech team with integrating a new 3D fit tech solution, a squad will be tasked with finding a way to make the match experience on the website more effective for customers.  

“The goal is not in order to remove merchants or any other part of the business from the process, but instead to empower the squads to really listen to the customer experience and then use data to come to the right conclusion on what should be prioritized and what [solution] is going to work, ” said Desai. “ I simply can’t underscore enough just how little the particular technology part of innovation and electronic transformation really matters. In my opinion, it’s everything before this around the people, the particular culture and the working model [that creates real change]. ” 

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