How to Structure Your Retail Store Organization
The organizational structure of a retail store varies based on the size and type of business. A lot of the tasks involved with operating a retail business will be the same regardless of a store's size, however, small or independent retail stores may combine many sectors together under one division, while larger stores create various divisions for each particular function along with many layers of management.
For example, a small specialty shop may have all of its employees under one category called Store Operations. A large department store may have a complete staff consisting of a manager, assistant manager, and sales associates just for its Sporting Goods department. Other departments, such as Home and Garden and Bed and Bath, would have the same team lineup.
Defining Job Descriptions
When a store is part of a large retail chain, the jobs are likely to be clearly defined and not vary greatly from store to store. But if you're just starting out building a retail business, you may need to assemble clear guidelines and job descriptions of who should be doing what to keep things from descending into chaos. Even if you only have a small staff, everyone should be tasked with specific duties so that things don't fall through the cracks.
Where to Begin
To define the store's organization, a good place to start is by detailing all tasks that need to be performed. Develop an organizational chart that shows who will be handling what parts of the business. For instance, you probably don't expect your human resources personnel to be handling inventory control.
An organizational chart with areas of responsibility also plays an important role in accountability, because it describes where each employee fits in and everyone knows who their direct boss is.
It's also a good idea to frequently update your written-out job descriptions for each separate position so there is no confusion about job responsibilities, especially as your organization grows and evolves. The more clarity everyone has about what is expected of them, the smoother things will run.
A Fitness Store Example
Part of defining job roles and responsibilities on your organizational chart includes appropriate compensation. Say, for example, that you have a retail store that sells fitness equipment, and the people in the company that spend the most time with your customers are the delivery and install team. Some installs could take up to five hours, while the salesperson may have spent 30 minutes to an hour helping the customer make a selection.
An important and very relevant saying in retail is that the last impression is the lasting impression. This means that no matter how awesome the store experience was, if the delivery and installation were terrible that's all the customer will remember. And if the delivery went poorly and that's all the customer remembers, there's a very low likelihood you will ever see them again.
In this fitness store example, you may consider compensating your installation team based on customer experience scores. You could also include them in the bonus pool ordinarily reserved for the sales team. This "one company/one team" approach can help ensure that no matter what structure you have in place, you let every employee know that the customer experience is the first priority.
Building a Retail Team
The CEO, owner, or president typically assumes the responsibility of reporting to stakeholders and overseeing all aspects of the company including profits, personnel matters, and operations. In a small company, the owner is likely to have more one-on-one time with employees and customers. This holds especially true in the first few years when an owner/founder would expect to wear many different hats to keep the business running.
On the organizational chart under store operations, you would expect to see a tree or hierarchy diagram of store managers, as well as department or assistant managers, cashiers, salespeople, receiving, and loss prevention (security) personnel.
A marketing department would include staff charged with public relations, promotions, and in-store visual displays. Under merchandising, you may find planning, buying, and inventory control personnel, and under human relations would be staff who hire and train employees and handle benefits and other personnel matters. Finally, your information technology staff would handle such things as mainframe and desktop computer maintenance and backup, online security, and other information technology issues.
As the store grows and the retail business evolves, the dynamics of the organization's structure will change too. It becomes important to redesign the store's organizational chart on an ongoing basis to support the decision-making, collaboration and leadership capabilities that are essential during and after a growth period.
Regardless of the size of your organization, the following tips can guide you in your structure planning:
- Focus on the customer experience. All work should culminate in achieving this most important aspect. If the role you have considered adding does not somehow impact and improve the customer experience, evaluate whether or not it's actually necessary.
- Keep as few layers as possible. The more layers you have, the more complicated things become for the employee and the customer.
- Tie compensation to customer experience, regardless of the role or job duties.
- Develop a culture of one company and one team. Eliminate the silos between sales and operations, reminding all employees that each cog in the machine has its own usefulness and importance.
Ultimately, setting your organization up to keep the line from the owner to the customer as short as possible benefits both employees and customers. This is the best way to ensure the customer always has a remarkable experience.