The ‘Owner Mindset’: Why Commercial Skill Trumps Digital Strategy
In the current retail climate, we are constantly told that the future is digital, automated, and centrally controlled. We are encouraged to invest in complex L&D platforms and AI-driven engagement tools. Yet, the recent Fosway Digital Learning Realities 2025 report highlights a stark truth: despite all this tech, L&D teams are facing budget cuts and struggling to demonstrate real business impact to their Boards.
While the industry chases the next digital trend, there is a quiet anomaly in the US market that offers a more profitable lesson. Dillard’s, a department store often described as "old school," is delivering record-breaking gross margins (over 40%) by doing the exact opposite of the industry norm. They are not winning through algorithms; they are winning by empowering their Store Managers to act like business owners.
This reveals a critical disconnect. We are over-investing in delivery systems and under-investing in commercial capability.
The Business Case for the 'Human' Merchant
The Dillard’s model proves that when a Store Manager is given autonomy over their inventory and their team, the P&L responds. But—and this is the caveat many retailers miss—you cannot simply grant autonomy without first building capability. Handing the keys to an untrained driver is a crash waiting to happen.
To replicate this "Owner Mindset" and solve the business impact gap highlighted by Fosway, we must pivot our training focus in three areas:
1. From ‘Sales Chasers’ to ‘Margin Managers’ Most Store Managers are trained to chase top-line sales, often at the expense of profit. The ‘Owner Mindset’ requires a deep understanding of Gross Margin Return on Inventory (GMROI). Dillard’s managers are obsessive about selling at full price. To achieve this, your managers need the commercial literacy to understand how markdowns destroy their specific location's profitability, and the autonomy to make merchandising decisions that protect that margin.
2. Mastering Inventory Flow In a centralized model, stores are passive recipients of stock. In a high-performance model, managers actively pull what sells. This requires a level of skill that goes beyond simple replenishment. Managers need to be trained to read their local market demand signals and manage their stock turn aggressively. If they cannot read a WSSI (Weekly Sales, Stock and Intake) or analyze a variance report, they cannot "act like an owner." They are just minding the shop.
3. The Human Connection as a Differentiator Fosway notes that "engagement" is a vanity metric. Real impact comes from performance. Dillard’s has cut tech spend to prioritize human staff on the floor. The lesson here is that high-touch service is a commercial strategy. But this requires staff who are not just transactional, but relational. They need the product knowledge and selling skills to build a personal client book, converting a one-off visitor into a lifetime value asset.
Conclusion The lesson from 2025 is clear: technology is an enabler, but commercial skill is the driver. Stop measuring L&D success by 'course completions' or 'platform logins.' Start measuring it by the P&L performance of your managers.
If we want our Store Managers to act like owners, we must train them to think like merchants. This is the core philosophy behind our Store Management Learning Paths—a curriculum designed not just to teach operations, but to build the financial and commercial acumen required to run a profitable business unit.
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Posted by Martin Dugan
10th December 2025
