FAST FORWARDING FASHION: SKILLS FOR THE FUTURE TECHNOLOGY DRIVEN TRANSFORMATION % of retailers who believe the following trends will significantly change how they operate 72% 87% 87% 8% 9% of 18 to 24 year olds report appetite for Rise of Customer Competitors Rise of shopping directly Social Media Convenience Agility Online from social media ADDITIONAL CENTRAL OFFICE ROLES REQUIRED # additional roles in these areas Analytics k Digital & ech k Merchandising k Buying k Supply Chain Management k SKILL SHORTAGES % of retailers struggling to recruit the following skills 57% 48% 35% 32% 30% Technical / Analytical Business Creative Interpersonal IT Skills Skills Economics Skills Skills Skills TRAINING REQUIRED % of retailers who believe external training required (pre or post recruitment) 77% 75% 68% 67% Interpersonal Skills echnical Skills Analytical Business Skills Skills 01 An OC&C Insight Fast Forwarding Fashion EXECUTIVE SUMMARY Technology is at the root of seismic WHAT IS CAUSING THE CHANGE? WHAT IMPACT WILL THIS HAVE? shifts in the retail landscape. Some of the most successful fashion retailers are Technology has increased the number of The shift that is coming has led to now using data as well as intuition and channels through which customers interact, headlines such as the recent prediction experience to react to ever increasing hastened the pace of customer demands, of 1m jobs in retail lost by 20251. This and dynamic customer expectations; in swollen the amount of data available, would equate to a net loss of c. 160,000 many ways they are increasingly similar amplified the potential use of international jobs in fashion were it evenly distributed. to technology companies rather than resources and increased the intensity of However the impact on the number and traditional retailers. To succeed in this the competitive environment. These trends type of resources required has been less environment organisations will need to are not one-offs; their impact will only considered. This change poses a new recruit and foster new skills and create accelerate as greater change occurs. type of challenge; finding, developing and retaining the right people. new central roles, while not shying away At the same time, internationalisation from the need to reform staffing at store continues to impact the retailers’ At a store and warehouse level it is clear level. Explosive role growth of >50% will operations. The increasing complexity in that while the number of pure sales roles be seen in the functions most impacted global sourcing (currency volatility and will decrease, retailers will need to employ such as analytics, while nearly all central an ever broader portfolio of markets for c.15,000-20,000 operatives in order functions will see some increase in the direct sourcing models) is begging for fulfilment to address the speed of delivery number of roles. Overall there will be an specific skills to adapt to an ever-changing and click and collect demands. Many increase of c.20-30% increase in central environment. Internationalisation is also of these may be taken from the pool of employees excluding the supply chain. a challenge from a top-line perspective. A current sales staff. Including changes to the central supply strong vector of growth for many retailers, The largest challenge for retailers will not chain management, and the need to it is not as simple as transposing the home be at store or warehouse level, but will replace employees who leave the industry, business model in a different country be the shift in central roles; in particular retailers will need to recruit 50,000- and requires the different teams to adapt the number of analytical and technical 60,000 new central employees over the to local consumer preferences, manage resources required. OC&C estimate that next five years. local partners to achieve a common set analytical roles will grow by more than of objectives while maintaining group This new army of staff will need analytical 50% and technical roles will grow by profitability levels. It is quite a complex and technological skills. Without these 30-40%. Additionally the intensification alchemy which will often lead to failure if skills companies will be stymied in their in pace will increase demand for some not properly thought-through at every level efforts to attract or retain customers in more traditional roles. We expect to see of the organisation. an increasingly competitive environment. the number of merchandising roles grow Today 48% of companies report struggling As a result of these changes it is widely by 2000-3000. Including the number of to find sufficient analytical candidates: acknowledged that the successful retailer new employees required to replace staff Retailers who do not take an early step of tomorrow will not look the same as the leaving the industry this equates to 4,000- forward to recruit these individuals risk average retailer today. Instead they will 5,000 new employees required in the next being left uncompetitive as they lose 5 years. However this additional need for Develop acute customer insight; the fight for talent. Success will require • merchandisers may only be short term; which requires analytical prowess and improved recruitment and training in the longer run this role is expected to expertise in data collection programmes, alongside collaboration with change as automation enables computers educational institutions to ensure that the • Innovate by channel, customer segment to fulfill the most rudimentary work, One emerging skills gaps can be filled. At the and market to maintain customer leading retailer suggested that this could same time government has a role to play interest; this also demands analytical lead to the buying and merchandising ensuring that relevant qualifications and ability and technological expertise functions to change beyond recognition: information are available to young people. “We probably have 5-10 years of continued • Become an expert in content creation to Buying & Merchandising jobs – because drive more engagement with the brand of companies that will ultimately fail. But and the commercialisation of social entry level roles will increasingly disappear media due to both off-shoring and automation.” • Automate where possible; decreasing The number of roles is not the only change; the number of “low skilled” roles skills required are also evolving. Successful • Increase the pace of operations to meet businesses will increasingly emphasise the consumer demands; requiring more importance of cross functional awareness, focus on the supply chain flexibility, speed of decision making and communication skills as they push their • Create lean operations to compete with organisations to be faster, leaner and more an increasingly competitive market complex while maintaining or improving • Skilfully manage financial product flow customer centricity. This will push retailers and investment in product through to towards recruiting more graduates whilst the end user also poaching experienced individuals from other firms, including those outside of retail. An OC&C Insight Fast Forwarding Fashion 02 Finally there is a strong alignment SO WHAT MUST BE DONE? Finally government has a number of amongst retailers that new roles will be potential roles. It must support educational created, especially in Social Media (eg There are roles for retailers, educational institutions to improve the perception Vlog curator, Virtual Reality Marketer), and institutions, and government in ensuring of retail as a potential career path for Analytics to benefit from the amount of that the change in requirements does not graduates, and help develop experiences data and technology now available (eg roles result in issues for the fashion industry. and qualifications which will be valuable, in for data scientists and algorithm builders). The first step for retailers will be particular for non-graduates. One example In parallel, some roles might become recognising which issues will beset their which could help the industry would be the obsolete in their current form (eg traditional organisation. Although retailers typically creation of a higher apprenticeship - with merchandising roles, visual merchandisers recruit outside of the fashion industry to frameworks designed by retailers – so that or shop floor sales assistants). fill the gaps, many of them report that it the influx of people into retail through the could lead to sub-optimal decisions. Instead apprenticeship channel is at an appropriate WHAT ARE THE RISKS? retailers will need to invest increasing level to successfully address the developing Fashion retailers will increasingly amounts of time and money in rigorous skills gaps. compete for the same limited pool of training and developmental programmes. viable candidates who have analytical Educational institutions are critical in and technical skills, alongside those with driving applicants into fashion, and creative skills. Unless there is a change developing those already in the industry. in the number of individuals entering Institutions with a fashion focus will need the market it seems inevitable that some to ensure they provide courses which will companies will fail to recruit the right staff, fill skills gaps in the industry, particularly and as a result risk being left behind by at the post-graduate level for people more agile or attractive competitors. This with non-fashion backgrounds. For non could lead to an unbalanced competitive graduate education the crucial components