Change Intervention at David Jones - Case Study Example

Change intervention at David Jones Name Institution Course Unit Instructor Date Introduction About 2000 years ago, a Greek philosopher named Heraclitus said that the only thing constant in this world is change itself. This claim is most relevant to the modern business environment, which is changing day and night. This means for firms to thrive these environments, they must change and adapt. Take for instance ecommerce. A few years ago, e-commerce was only a preserve of a few but today it is a major shopping and distribution channel. Although Australia was slow in taking up e-commerce, it is catching up gradually1. As of 2010, 6% of all retail transactions in Australia were made online compared to 11% in US and 8% in the UK.2 To ease the transition to online shopping, David Jones, one of Australia’s oldest supermarket stores, introduced ‘click & pick’ service as a change initiative in response to market changes. To learn more about this change process at DJs, I interviewed David Robinson who oversaw the Omni Channel and Integration program that introduced click and collect service but currently holds a different position in the firm. This report discusses the process in brief and links it to change theories learned in this unit. Description David Jones operates 36 stores across Australia. It targets the fashion all stocking apparel, electronics, footwear, cosmetics, furnishing, gifts and consultations services for interior design. In august 2013, the firm introduced ‘click and collect’ service that allows shoppers to buy and pay online and pick the purchased items at any of the 36 stores the following day. The impact of this service was almost instantaneous with sales in the second quarter of 2014 growing by 2.1% and online sales growing phenomenally by 150%.3 There is need to maintain this momentum and integrate this service into DJs core operations. Type of change DJs changed in response to market developments. Australians have grown more receptive to online shopping and click and pick service was directed towards boosting online sales from the then 3%.4 This service aimed at diversifying the firms retailing channels. Furthermore, competing players such as Coles, Dan Murphy’s and Woolworths had already introduced similar services. Change rationale The change in the case of DJs was an intervention to address a problem. The problem at DJs was declining online sales. This was in spite of reports showing growth in e-commerce in Australia.5 Foreign based online sites such as e-Bay and Amazon and foreign players were attracting Australian shoppers than local sites. To compete effectively with these foreign players, Robinson says that there was need to take a wholesome approach to the problem and identify what the firm needed to achieve. The change aimed among other things “increasing the options that consumers can access DJs products and services, increase convenience, integrate firm operations for harmonized services, grow sales, upgrade technology and increase efficiency.”6 This required analysing the factors that drove Australians to shop in foreign websites where they incur an additional $50 shipping fee instead of doing it locally at a lower shipping fee. “We realized that while shipping fee was high in foreign websites, the lower prices compensated for that while delivery time was largely similar to the local deliveries,” said Robinson. Change Drivers a. External Responding to growth in ecommerce as retailing channel. Robin said that DJs keeps a close look at industry changes and reports timely indicated this shift into online shopping. Some shoppers shunned online shopping for fear that their goods might be damaged during shipping or it takes too long. Local delivery services take 2-10 days to deliver goods with Western Australia affected by most delays. Most e-tailers contracted third party courier services to make deliveries hence their inefficiency affected DJs and other e-tailers. Competition from other firms such as Coles, which had initiated such services, moved DJs to roll out a similar service. Internal Internal drivers comprised of need to drive up online sales, move to a new platform, train employees, increase profits, achieve the firms vision. The firm has also been reporting losses in the past few years hence the need to drive up sales in all channels.7 One way of driving up sales was combining the online store and the brick and mortar service through the click and collect option. This service enabled DJs to make shopping more convenient. The other reason was a need to move to a better technological platform, this involved customized mobile phone applications for various devices to enable the brand reach out a greater online market. Furthermore, the new service would reduce time consumed by shopping, eliminate the need for courier services and reduce ‘delivery’ time drastically. Change Perspectives The change management process has taken different perspectives as below a. Biological Online shopping as an industry on its own is on the growth stage on the product life cycle path. The click and collect service is relatively new and in the introduction stage. Many e-tailers have introduced the service but it is yet to pick up completely. Robinson says that DJs has dedicated necessary resources needed for the service to grow and stabilize. b. Institutional To effect the change, the firm had to create the right institutions. According to Robinson, the post of Executive Omni Channel & Integration was created in 2012 as a part of the change process. The new post required harmonizing all the marketing and merchandizing activities of the firm. Furthermore, “each of the various outlets and departments at the headquarters had a liaison officer who reported to me on the progress made by the change tactics we employed. This meant that all departments were aware and aligned to the new processes.”8 Planning/strategy perspective DJs most dominant perspective is the system approach. A system is identified as a combination of elements whereby the conduct of one influences the whole and the behaviour of all the elements and the whole are interdependent but none of the elements are interdependent.9 Robinson said that each department and individual store had a role to play in making the change realistic and felt by DJs clients. The branding, merchandising, finance, supplies and human resource departments were all involved. The senior management first discussed the change process before communicating this to employees and departments. The Omni Channel & Integration office was created to oversee the change. Underlying assumptions were about the change The management at David Jones assumes that austral has finally accepted the idea of online shopping. This is indicated by the firm’s commitment of resources in upgrading and creating capacity of the online platform. Australian shoppers’ greatest concern is delivery inefficiency by courier services and time taken to deliver purchased goods. The collecting aspect of the click and collect service reduces delivery time and delivery costs to the consumer. This is supposedly the major marketing point for service. Availability of internet enabled devices will spur online sales. This assumption has been proven in other markets such as the US where online transactions via mobile phones are expected to hit 25% in 2017.10 Therefore by developing DJs applications for iPhone, tablets and android phones, the firm will be strategically placed in the market. Planned change Robinson believes that their approach to change management at DJs is planned. The manager claims that the click and collect service had been planned in the 2012 strategic plan in which all the options were reviewed and the actual tactics in implementing the change planned. Most leaders assume that they are in control of things at organizations hence all change made is planned and not emergent.11 Robinson actually likened the click and collect service to reserving a table in a hotel or a room and paying in advance, a concept that was not existent a few years ago. He said that this approach was very effective for selling products that were ‘hot’ in the market where shoppers can sought of book a product but be assured of its availability. In such a case, the service would be every efficient in serving shoppers seeking to buy fast moving products such as iphones or the Harry Potter book series as it enables buyers to check availability of stock online. Success and limitations of intervention The intervention at DJs was very successful. As aforementioned, the click and collect service was instrumental in the 150% increase in online sales in the 3rd quarter of 2013/14.12 While consumers readily responded this move to click and collect, consumers have had a rather sceptical approach in DJs ability to retail online after late entrance. One of this challenges was the fact that consumers had trouble utilizing the ‘check availability’ service before making purchases as previously DJs had insisted on customers calling DJs to check the availability of some products displayed online before making purchases. Eroding this kind of negative publicity was quite challenging for the firm but it emerged successful. In fact, the move received significant media coverage which worked as free marketing.13 Another challenge is the attitude of employees who feared increased focus on e-tailing as a threat to their jobs. The long-term effect of this change is that DJs image has been radically enhanced as a technology savvy outlet capable of attracting young shoppers. Recommendation In future, the firm should consider factoring a new perspective in managing change by addressing the environmental impact in the intervention. For instance, management should look at how such change affects environment conscious consumers and stakeholders. Do they perceive the change as environmentally beneficial or detrimental? This can be answered through adequate market research to understand consumers’ attitudes and perceptions.14 This is because consumers are increasingly aware of their carbon footprints and are more receptive to green firms and products. Bibliography Albereci, E. Australian retailers are losing the online race. 2013. 24.03.2014., http://www.abc.net.au/news/2013-06-17/alberici-online-shopping/4760168 Amagoh, F. Perspectives on Organizational Change: Systems and Complexity Theories. The Innovation Journal: The Public Sector Innovation Journal, Volume 13(3), 2008 Euromonitor. Retailing industry in Australia report. Euromonitor. 2014. 24.03.2014., http://www.euromonitor.com/retailing-in-australia/report Cameron, E. & Green, M. Making sense of change management: a complete guide to the models tools and techniques of organizational change. Brisbane: Kogan. 2012. David Jones. Annual Report. David Jones, 2014. 24.03.2014. http://www.davidjones.com.au/ Jones, D. & Recardo, R. Leading and implementing business change management: making change stick in the contemporary organization. London: Routlegde. 2013. Lower, G. David Jones Warns Profit May Fall 40%. 2012. 24.03.2014. http://online.wsj.com/news/articles/SB10001424052702304724404577294431160881126 L2. The Organisation as Context for change: Early theories of Organisation (Managing Change 300, Unit Code: 11018, Semester 1, 2014, Curtin University) L3. The Organisation as context for change: Recent theories of Organisation. (Managing Change 300 Unit Code: 11018, Semester 1, 2014, Curtin University) L4. Perspectives on Managing Change (Managing Change 300, Unit Code: 11018, Semester 1, 2014, Curtin University) Robinson, D. Interview held on 24th Macrh 2014. Poweretail. Australia’s Answer to Retail Logistics: Click and Collect Partnerships, 2014. 24.03.2014. http://www.powerretail.com.au/news/multichannel-retailer-logistics-clickcollect-partnerships/ Appendices Interview with David Robinson, Executive Marketing and Financial Services (formerly the Executive Omni Channel & Integration) Q: Please tell me about a situation in your work / workplace that involved or required some form of change. ROBINSON: The most recent and most comprehensive has to be the Omni Channel & Integration program currently being undertaken. I am responsible for overseeing this change. The flagship initiative in the program is the Click and Pick service. Q: Why did this situation come about? Robinson: I must say that the change was motivated by changes in the market. DJs cannot continue to burry its head in the sand and operate in the same old fashioned manner. We realized that more consumers are growing receptive to online shopping although another a section of these consumers were concerned about delivery time and the condition in which they receive their purchases. Therefore, we are increasing options for our consumers by proving a hybrid of online ad brick and mortar shopping to take the best of the two options. Q. What was the change all about? First the senior management had to assess the firm’s current position in the market vis a vis where the firm wants to be. The 2012 strategic plan identified omni channel retailing as the one of strategies of increasing our sales. Q. Why was it necessary to deal with the change situation? Robinson: The change process was increasing the options that consumers can access DJs products and services, increase convenience, integrate firm operations for harmonized services, grow sales, upgrade technology and increase efficiency. Q: How did you (or others) deal with the change? What did you do? I was leading the team charged with overseeing the change. Given that there was support from the top levels, I must admit that I did not come face to face with resistance to change from some employees which was often reported. 6. What was the outcome of your actions (in dealing with the change situation)? Or: What changed as a result of your actions? Q: what do you have to say about the timing of this intervention? Was it late or timely? Robinson: I must admit that the firm was a late entrant into online retailing. However, the move to stick to brick and mortar shopping was hinged on the firms belief that fashion shopping was a leisure activity that required one’s physical presence. This is why the firm offers onsite services such as interior design consultation. The firm wanted to alleviate the problems of online purchasing characterized mainly by retuned goods. The move to introduce the click & collect service is aimed at alleviating the inconveniences that can occur through the delivery process in regular online shopping. ‘ Q: Do you believe that this click & collect service has contributed the growth in online sales? Robinson: Yes, however, the click & collect service is just of the flagship project of our Omni Channel Retailing process that started implementing since 2012. This has involved installing a new content management system, creating mobile online sales applications, realigning processes and even training our people. The click & collect service has emerged as the greatest achiever in this change process. Q: How has this happened? Robinson: The click & collect service allows DJ’s to cater to busy shoppers. While our positioning the market has largely targeted women as the more fashion conscious consumers, we realize that the modern lifestyle denies women time and space to do their shopping as before. This service allows women to quickly shop lets for a dress, without wasting time on the store aisles and pick it on her way home. Q: Was this move planned or it emerged? Robinson: We planned this change but was pushed by industry developments. In fact, it is contained in the 2012 strategic plan Q: Are these some things you feel you could have done differently offered the chance? Robinson: Not really. I feel the change achieved its goals as witnessed by quarterly reports where online sales grew 150%. Q: What were the main limitations that other change leaders can expect? Robinson: Training was very challenging because of the time factor. Time was short while training was very comprehensive. For other change leaders, I would advise them to invest more in training that in creating institutions. Change is more about changing the employees’ mind-sets rather than changing processes. Read More