Retailers face an existential challenge: balancing a conservative approach to cost while supporting growth to survive the present COVID-19 crisis and beyond. Adding to the complexity are changes in customer preferences prompted by the pandemic, most notably online shopping and e-commerce, which have become the norm for many retail categories. Retailers have been retooling their brick-and-mortar footprint for a long time, but the pandemic is triggering further review of the long-term value of the store. Sanitary concerns brought on by COVID-19 are likely to radically alter customer preferences in terms of store experience and trigger massive changes in retail workforce requirements.

The crisis is driving retailers toward new ways of doing things. One key strategy is organizational redesign — specifically, a bottom-up line of attack. Traditional top-down approaches to organization redesign, typically powered by high-level executives with a focus on cutting costs, often prove ineffective due to the lack of attention paid to the changing customer and how such changes drive innovation. A more effective “first principles, zero-based” approach to organization redesign in the retail space involves a ground-up interaction with key employee stakeholder groups that can provide the most value in addressing rapidly evolving customer needs.

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