15 December 2020
COVID-19 is rewiring a new world of work. In this episode we discuss the impact and disruption that COVID-19 has brought to the retail sector. How do businesses evolve from bricks and mortar into the digital space, while still maintaining authentic customer experience.
Ben Hamer: Hi there, my name's Ben Hamer, and this is a podcast about all things future of work. It's something that we've been talking about for some time, but now we're living it. It's throwing us lots of questions, now, I'm going in search of answers, and to do that, I'm talking to senior leaders from some iconic Australian brands about how they've been experiencing the future of work and what their expectations are moving forwards.
In this episode, I chat virtually with Sarah Hunter, managing director at Officeworks, about:
How they've been supplying Australia's national work from home experiment and whether or not it's here to stay.
The blurred lines between an individual's home and work life and what that means for leaders.
and whether or not this is the death of traditional retail as we know it.
You're exploring the future of work with PwC Australia.
Ben Hamer: I'm joined now by Sarah Hunter. Sarah, how are you going?
Sarah Hunter: I'm great Ben. How are you?
Ben Hamer: I'm very good because we're here to talk about the future of work, which is my favourite topic. And I'm hoping you're as excited as I am.
Sarah Hunter: I am super excited. There is so much being discussed at the moment, both within our business and outside, more broadly in corporate Australia around the future of work. So it's really, really topical we're having this conversation.
Ben Hamer: Very excited to be talking to you. We'll get stuck straight into things. Retail and Officeworks has been undoubtedly impacted by COVID-19. And in terms of how we've experienced it throughout 2020, it was absolutely in waves. I'm wondering how is it being experienced by Officeworks and by the retail sector at large?
Sarah Hunter: It's been, as you say, a series of different emotions at different times throughout. And actually each state has been slightly different, depending on how they've addressed COVID-19.
So certainly across Australia, we saw as the pandemic kicked off in March and through April, we certainly saw the crisis period happen. Lots of panic buying businesses, small businesses and large businesses trying to figure out how they moved their workforces to working safely at home or in a different location really, really quickly in a matter of days.
In our case, we moved our support centres around the country, predominantly in Victoria and New South Wales, to work from home within four days. And it was amazing to see how quickly our business could mobilise to make that happen. So there was certainly from a customer perspective, a period of kind of panic of crisis, genuine, gosh, this is happening really fast and we've got to move. And then we really hit a different phase, kind of the second stage of the wave where everyone was in lockdown, we were here for a temporary period of time. We were making do so, you know, it's the rise of the cardboard desk or the dining table desk and short term solutions, it's not forever, but we're doing our bit to keep everyone safe.
So a different change from a customer lens. And then certainly in Victoria, what then happened and in New South Wales is as other states that started to open up, we saw for us this oh, my goodness, sustained lockdown, this isn't going away and what we saw a lot of our customers do at that time is realize that actually we're probably not going back to the office - psychology changed.
We really and certainly we did in our team we stopped talking about returning to the office. We changed our wording because we realized at that point it was about the future and we were living in this unsafe and unlocked world and we had to find a way to shape the future and embrace the positives of what had happened.
So we started talking about how do we leapfrog and how do we create a new future, a new way of working. That we could paint a positive light on the hill for our team to say, actually, this is not this is not about return to the office anymore. This is about how do we define our new ways of working going forward.
Let's try and take something good from what has been an extraordinarily challenging 2020.
Ben Hamer: And how are you defining some of these new ways of working, moving forwards?
Sarah Hunter: Well, very like PwC, we've been doing lots of listening to our team. So listening to our team, asking for them, asking their feedback and asking across the whole business, not just in our support center, you know, what would work for them?
Definitely putting safety at the heart of our decision making and understanding what we can do, what's best in class, how that how is that going to best work for us in our stores, our CFCs (Customer Fulfilment Centre) and in our support centers, and then being honest about the fact that this is a learning journey for us. This is going to require different leadership. It's going to require us to try on it almost like try on some new clothes and find new ways of working. So in February, actually, we've told our team we're going to launch Flex Feb and Flex Feb is about trying on some new ways of working that hopefully enable us and inform us around how we best find the right balance around flexibility and enable what our team are telling us they want to say and how they want to work.
Ben Hamer: I look forward to saying the hashtag #flexfab trending.
Sarah Hunter: So you've heard it first here, then let's see how we go on LinkedIn and on Instagram if we can create #FlexFeb all over Australia.
Ben Hamer: I want to draw on something that you've said publicly before. It's when you were talking about your organisational strategy and you said: “We had to consider what worked in the past. That wouldn't work in the future. Our customers expectations are changing all the time and we need to be across that”. So to me, that's talking about disruption, that's talking about how organisations need to adapt and evolve and pay tribute to what might have worked in the past, but it's not necessarily going to get us to where we need to go. It all sounds a bit fortuitous with the whole COVID-19 thing happening.
Sarah Hunter: It is interesting because I said that a definitely a couple of years ago and now you play it back to me, it is amazing how fortuitous it probably sounded. I think the reality is with the level of disruption and change that's been happening in society for many, many years, with the advancement of technology, those words were clearly true a couple of years ago and probably a couple of years before that, but really resonate this year or in 2020 because the pace of what's changing and the pace of disruption has just accelerated so immensely. It certainly feels like in my business in 2020 we've had three to four years of change in just an eight to nine month period.
Ben Hamer: Absolutely. I think that, you know, I've been talking about the future of work for a long time, and I think that it's probably, you know, five years of transformation happening in all of six or nine months. So you've been living through the thick of it and it seems like retail been massively hit by the pandemic as well. So you've got some organisations that have seen a massive spike in demand. Others have seen a real big drop off and others then again as seeing a shift from a bricks and mortar space to more of an online environment, how has Officeworks been impacted in terms of the work that you do and with working from home?
Sarah Hunter: I think you've just articulated the level of disruption really, really well that we're seeing in our industry, Ben and it really does depend on the type of retail and how your business was set up prior to COVID-19 as to which opportunities you've been able to embrace or the level of disruption that you've seen.
And we were very fortunate that several years ago we invested in building not an omnichannel strategy, but in every channel strategy. So that means that when we think about our business, we think about how a customer wants to shop with us and making sure that we have every possible reasonable option available to them, whether that's online, in-store, through a business specialist or even over the phone through our call centre.
And I think that positioning our every channel strategy, coupled with the fact that we were on and already on a journey to disrupt ourselves, listening to our customer means that we were very fortunately positioned to capture the opportunities that were presented through COVID-19. Recognising that there was clearly a crisis when corporate Australia that was sitting in offices had to move its business to work from home. That was clearly an opportunity for us.
And equally, there was an opportunity in all of the schoolchildren and university students having to learn from home. But being able to meet their needs and keep people safe working and learning from home meant we had to make some choices in our business, both around purchasing stock but also building capacity really, really quickly.
So we've hired a lot more people. We've employed a lot more people coming into summer this year we've employed over twelve hundred people around the country. We're employing in the digital space, we're employing in our supply chain. So making a bet to back ourselves, both in terms of having stock available and also ensuring that the customer experience is the best we can make, has been a real focus for Officeworks to capture the sales over over that time.
But really, honestly, business with a drive to enable Australia and has been with a drive to enable Australia to work and learn from home safely. And now looking forward, how do we take a leadership role around the future of work and enabling employers and employees to work flexibly. Which is what I think our certainly our team are telling us they want to do. So lots of opportunities ahead, not just in what's happened in the last nine months.
Ben Hamer: And one of the things that you were just talking about was how do we enable Australians to work from home safely, and the frontline workers that you have, you know, a little birdie told me and by a little birdie I mean, you, when we last spoke, told me about the perspex shields at the cash registers. So do you want to talk a little bit about the impacts around health and safety within your stores and what that's meant for workers as well?
Sarah Hunter: Yeah, absolutely. I mean, future of work and transitioning through 2020 and a global pandemic isn't just about our support centre. It's also about making sure that our team are safe. And by ensuring that they're safe, that means that customers feel safe and they can get what they need to work and learn from from home.
For us, you're right. We put safety at the heart of our decision making and it was at the forefront of every decision we've made and we continue to make actually as a business full stop. We had this fantastic situation where really early on in 2020 at the start of the pandemic, we saw we saw one of our local Melbourne manufacturing suppliers. He said to us, look, we can make you some perspex screens to put that aren't attached to the point of sale, but are safe and will help the team feel safe. And they generally provide a really good distance between the team member and the customer and a nice sneeze barrier or screen barrier. And one of our team actually in store saw these go up and a day later said to us, “well, can't we sell them”? We've had customers coming in, small business, customers wanting them and then we found even some of the government agencies came in and said, “how do we get these”?.
So it was an amazing success story; within a week, we were selling them and we sold thousands of these perspex screens all over the country to keep Australia in business, safely. So I think recognising that safety needs to be at the heart of all decision making has, its been a guiding light for us through 2020. And to be honest was through 2019 and will be in 2021. We've just had to shift our thinking around what safety means to enable that working environment to the best of our ability, and that's going to continue to change as we evolve out COVID-19.
Ben Hamer: And you said 2021, and one of the things I was thinking as you were talking, then is; things like the Perspex shields and other safety measures that we have in store, hand sanitizer, things specifically around COVID-19, are they things that you think will hang around into the future and will just become normal.
Sarah Hunter: Maybe not forever changed, but we’ve certainly changed for a very long time around hygiene and safety expectations. We're equally very much changed, I think, around how we want to shop, how we embrace interaction and connection with people. And I think certainly in my sales I've seen it, cleaning and hygiene was a hundreds of thousands, small, hundreds of thousands dollars a week in sales category before COVID-19. It's now in millions of dollars category post-COVID-19 a week.
So we have an important role to play in helping Australian small businesses and schools and even large businesses operate safely. And I think hand sanitizer and screens and changes in behavior are here to stay for a very long time.
Ben Hamer: Absolutely. And when we think about the complexity of that environment and what that means for leaders and leadership, it's a whole new ball game. I mean, we've heard that almost a third of our people at PwC say they feel like they're being less creative working from home. We've heard that, a third of people also feel like their career progression could potentially be impacted because there's this idea that do I need to be seen to be adding value? And so what do you think about what all of this might mean for leaders and leadership and some of the things that we need to be thinking about?
Sarah Hunter: I think you've hit two of the three probably nails on the head in terms of, you know, the challenges around leadership. I think there are some real challenges around the cultural shift in corporate Australia from presenteeism to genuine performance management and outcome focus.
Having worked overseas in the UK, where or even in the international market where you build skills around remote workforces and you can have teams in very different countries working different time zones, it's not a skill I think corporate Australia has at the ready, easily, to the same extent that maybe some of our international counterparts do.
So that's a challenge for productivity for us. We've got to learn those skills really, really quickly. I think your other concern around fit for purpose, home work environment or your alternative primary workplace is really important, too. I know a lot of employers are grappling with how do I ensure that that work space is safe, that I've discharged my obligations as an employer, but also more broadly than that, your point around creativity is really interesting.
And then I think the third real leadership challenge, actually, for anyone who leads a large people business or maybe even a small business, right now, some of our small business customers are grappling with it is: what's the role of the office then and how do we need to change from a leadership perspective? How do we need to change the role of the office? And we think about that because we do want people to feel that they can be creative and connect and learn in a collective way, I think that human need is still there. So they're all very real leadership challenges. But I think by doing things like this podcast and sharing how we're all going on the journey, I think hopefully we'll get up the learning curve as quickly as we can.
Ben Hamer: And I think one of the other things I'm hearing from clients as well is the challenge around wellbeing with working from home because we're hearing about increased reporting or instances of isolation, loneliness, potential burnout.
We've heard from our own people that over half of people feel like their workload has increased, and that's a sentiment that's being echoed across other organisations as well. And when you can't always see someone face to face, it can be quite difficult to pick up on cues, and particularly with working from home it's like that line between work and your personal life is quite blurred. Do you have any thoughts around what leaders can or should be doing to support the wellbeing of their employees?
Sarah Hunter: I think my first reflection is you have to be really careful not to think that the environment we are in is normal. 2020 is a year of not normal. We are in an unsafe environment. And for some of us based in Melbourne like me, we've been locked down for far more of the year than we've been allowed out. And in some cases, like my business, I've got sales growing at 20 plus percent, so the workload has increased. I haven't had any freedom. And I've had my children at home, that's not normal, so the risk is as a leader, and I'd really encourage us all to remember right now that that isn't normal. And if we are talking about how we shape our new ways of working in the future of work, let's not do it based on 2020, let's embrace the positives that come from it.
I'm not saying that to undermine the mental health and physical health impacts of what has happened, we've done a lot to invest, as I know many, many leaders have in our team. We supported a fabulous startup in Melbourne called Moving Minds. It's an app and we've just coming to the end of a 12 week program that got everyone around the business moving. But they also do lots around mindfulness, mental health supported by Deakin University. So trying to invest in things that we can continue to do to give the team something else really positive to focus on whether they're in the support centre or they're in stores or they're in our supply chain. Across the whole business giving people something positive to be part of has been really important. But I come back to 2020 is not a normal year. And so we just have to acknowledge that, try and take the positives and the opportunities and shape something that is sustainable when we do have a vaccine and a COVID-19 free society, which is hopefully not that far away.
Ben Hamer: One of the other lessons that I've taken from what you were just saying as well is the importance of throughout all of this, just remaining authentic, transparent, having empathy and just being a human.
Sarah Hunter: That's not a COVID-19 thing either, though. Being a normal person and being an authentic leader for me, I don't get out of bed to do anything else. So I don't see any other way COVID-19 or no COVID-19, 2020, or no 2020. That's just who I am. And my number one job is my family. And if I couldn't be myself at work, then what's the point in doing the job I do.
Ben Hamer: Yeah, it's a nice reminder of some of the simple things to take top of mind. I'm going to now pivot a little bit and go back to talking more about retail, because I'm not sure if you've picked up on this, but I do like to stir the pot from time to time. And being devil's advocate here, some cynics out there are suggesting that COVID-19 is the final nail in the coffin. It is the death of traditional bricks and mortar retail. What are your thoughts on this?
Sarah Hunter: I actually think for those cynical commentators, I think 2020 has probably reframed a bunch of that cynicism. It's been really interesting to see customers, when lockdown's have finished all over the world, you know, not just in Australia or in New Zealand where Wesfarmers have businesses, so we've experienced it first hand, people flock back to stores because they actually love human connection and they want to be able to browse. And and more practically in our business, we've seen when you do get to big investment decisions or quite complicated decisions, you're trying to set up a business for the first time and you need a payment solution or you need a networking solution, you're trying to buy the right device for your child to start high school.
Those are decisions that you want support around and you need advice around. And customers want to get that support and advice. Similarly, if you are looking for a creative solution, it's amazing how many people have taken up hobbies through 2020. Our art sales are going through the roof. And for people who are taking up painting for the first time or rediscovering a passion for painting, they often want to go into a store and see the colours buying online. It's not the same. They want to see the canvas. They want to see the brushes and make the choices through that experience.
So I absolutely don't think retail bricks and mortar retailers dead. What I do think is as a retailer, whether you're an online retailer or a bricks and mortar retailer, you have to be good at listening to your customers and you have to be putting them at the heart of your decision making, also your team, but your customers and make sure that the experience that you're providing them is easy and engaging and relevant.
If you don't provide an easy, engaging and relevant service online, your customers aren't going to shop with you. If you don't do that in-store, your customers aren't going to shop with you. That's just being a good retailer. So those retailers who listen to their customers and really put them at the heart of their decision making will be the ones who continue to be successful, regardless of the channel that they sell through.
Ben Hamer: Sarah Hunter, it's been an absolute pleasure. Thank you so much for your time.
Sarah Hunter: Thanks, Ben. It's been awesome to connect and get to know you and talk about something that is so exciting for Australia, the future of work.
Ben Hamer: Thanks for listening to this episode of Exploring the future of work with PwC Australia. For additional in-depth analysis, head on over to pwc.com/future of work/thinkingbeyond where you'll find our latest report; ‘Thinking Beyond: How the Pandemic Is Rewiring a New World of Work’.
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My name is Ben Hamer and you've been listening to Exploring the future of work with PwC Australia. Thanks for joining us and goodbye for now.
Dr Ben Hamer
Lead, Future of Work, PwC Australia
Tel: +61 437 159 517