Tips for Structuring Your Retail Store Organization

Keeping the Line Between Owner and Customer as Short as Possible

Man paying with credit card reader in shop
••• Hero Images/Getty Images

The organizational structure of a retail store will vary by the size and type of business. A lot of the tasks involved with operating a retail business will be the same or have some overlap; 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 for its Sporting Goods department, Home and Garden, Bed and Bath, and each additional department.

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 take a good look at who's 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 Start

To define the store's organization, a good place to begin is by specifying all tasks that need to be performed. Develop an organizational chart that shows who will be handling which parts of the business. For instance, you probably don't expect your human resources personnel to be handling inventory control. 

An organizational chart is also important for accountability, so everyone knows who their direct boss is. 

It's also a good idea to have clearly written and frequently updated job descriptions for each separate position, so there is no confusion about job responsibilities. The clearer everyone is about what is expected of them, the smoother things will run. 

For example, if you are a retailer that sells fitness equipment, the people in the company who spend the most time with your customers may be 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.

One rule 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 is all the customer will remember. And if that is all the customer remembers, the likelihood you will ever see them again is very low. 

In this fitness store example, you may begin to compensate the 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 will help ensure that no matter what structure is in place, the customer experience is the priority. 

How to Build a Retail Team

The CEO, owner or president is typically the person who reports to stakeholders and oversees 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 is especially true in the first few years when an owner/founder would expect to wear many different hats to keep the business running.

Under store operations, you would expect to see store managers, as well as department or assistant managers, cashiers, salespeople, receiving and loss prevention (security) personnel. 

A marketing department would include those 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 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 is paramount, then, to redesign the store's organizational chart to support the decision-making, collaboration and leadership capabilities that are essential during and after a growth period.

Regardless of what size your organization is, here are some tips to guide you in your structure planning:

  • Focus on the customer experience. This is the most important aspect. If the role you are thinking about adding does not directly impact the customer experience, consider eliminating it. 
  • Keep as few layers as possible. The more layers you have, the more complicated it is for the employee and the customer. 
  • Tie compensation to customer experience, regardless of what the role is. 
  • Develop a culture of one company and one team. Eliminate the silos between sales and operations 

The bottom line is to keep the line from the owner to the customer as short as possible. The is the only way to ensure the customer experience is remarkable.