Two years into running units inside a multi-retailer footprint, I noticed a pattern that surprised me the first time I saw it clearly and then never stopped showing up. Every host retailer I worked inside had two teams whose scorecards structurally conflicted, and the embedded operators who thrived were the ones who understood the conflict and served both sides. The ones who struggled had aligned themselves with one side without realizing it, and had made an enemy of the other side without ever having a fight.
The two teams are merchandising and operations. The tension between them is not a personality issue. It is structural. And it has more effect on your slot than almost any other retailer dynamic.
Two scorecards, one building
Merchandising is measured on category performance. Comp sales in the category. Category share. Planogram compliance across the fleet. Promo execution effectiveness. Assortment fit against the brand story. Merchandising teams win when the shelf tells a clean, on-brand story that grows the category.
Operations is measured on throughput and cost. Sales per labor hour. Cost per transaction. Store P&L. Shrink control. Store-level guest experience metrics. Operations wins when the building runs efficiently, predictably, and without drag.
Fig. 1 · Two scorecards. Different KPIs. You are the operator at the intersection.
Both scorecards are legitimate. Both matter to the retailer. And both frequently pull in opposite directions.
Where the conflict actually shows up
A few concrete examples from the field.
The feature display that adds a labor step
Merchandising wants a new feature display at the endcap adjacent to your unit for the seasonal promo. Operations sees that the display sits at a receiving path that already gets congested on Thursday deliveries, and putting a feature there means adding a labor step to route trucks. Merchandising thinks operations is being obstructionist. Operations thinks merchandising is being tone-deaf to the receiving flow. Both are partly right.
The planogram reset that changes traffic
Merchandising sees a category refresh as a chance to reset the adjacent aisle for better cross-sell with your embedded unit. The operations team knows that the specific reset moves a heavy-shrink SKU closer to your unit, which will complicate loss prevention. Merchandising did not think about shrink. Operations was not consulted on the reset.
The promo compliance ask that hits your unit
Merchandising asks you to add signage and a small display in your unit to support a national promo. Operations at the store level pushes back because the signage will block sightlines that matter for the front-end sight coverage. Merchandising expects your unit to be on-message. Operations expects your unit to be low-friction. You are between them.
The staffing ask that clashes with sales lift
Merchandising is pushing a promo period they expect will lift sales in your unit by 15 percent. Operations is asking why your labor plan does not go down as a percentage of sales, because their model assumes labor should scale sub-linearly. The tradeoff has to be surfaced explicitly or one of them will be unhappy.
The operator's mistake
Most operators, over time, develop a preference. Sometimes because of their own background (a former merchant leans one way, a former operator leans the other). Sometimes because of who is easier to work with at their specific retailer. Sometimes because one side is louder.
The preference becomes visible in small ways. You return the merchandising email first. You accept the merchandising ask without pushing back. You resist the operations ask harder than it deserves. Over months, that pattern becomes your reputation, and it shows up in conversations you are not in.
Pick a side and the other side flags you as difficult. Both flags cost slot. Neutrality is not a passive posture. It is an active one that requires equal responsiveness to both scorecards.
The posture that works
Equal responsiveness to both sides, proactive translation between them, and public credit to both. That is the pattern I have watched the operators who last five years or more inside a host retailer run.
Practically:
- Answer every merchandising and operations email in the same window. Do not let one side wait longer than the other. That signal is loud.
- When one side asks you to do something that will burden the other, name it. Do not agree silently and then absorb the friction. Say: "Yes, we can execute this display. It will require adjusting the receiving flow. I will coordinate with operations to make sure it lands cleanly."
- Bring both sides visibility into your own tradeoffs. If you are staffing up for a promo, tell operations why. If you are choosing not to add a signage element, tell merchandising why. Do not make either side chase.
- Give credit publicly. When the merchandising initiative you supported produced results, credit merchandising in your operations report. When operations flagged an issue that saved you a mistake, credit operations in your merchandising update.
Neutrality is not passive. It is an active posture that requires the same effort on both sides. Done consistently, it earns you an unusual position: an embedded operator both sides trust to represent their concerns.
The bridging opportunity
Retailer merchandising and operations teams often do not talk to each other as well as they should. They sit in different buildings, report to different leadership, use different vocabulary. Their conflicts sometimes get resolved through email threads that neither side reads carefully.
An embedded operator who has strong relationships on both sides can bridge the conversation in ways that both sides find useful. If a merchandising ask is going to create operational friction, take the operational impact to the merchandising contact and propose a modified approach. If an operations concern is going to block a merchandising initiative, take the merchandising rationale to the operations contact and negotiate.
Done well, this positions you as an operator who makes the retailer's internal cross-team coordination smoother. That is a strategic asset that shows up in slot conversations you are not in.
Reading the two vocabularies
Merchandising and operations at a host retailer speak different vocabularies. Merchandising uses words like assortment, planogram, category story, promo lift, brand fit. Operations uses words like throughput, staffing, receiving flow, cost per transaction, shrink control. Same building, same guests, different language.
The operator who learns to speak both fluently gets treated as a peer by both. The operator who defaults to one vocabulary signals to the other side that they are outside the conversation. When you speak to your merchandising contact, use their vocabulary. When you speak to operations, use theirs. This is not code-switching for its own sake. It is showing each side that you understand their world well enough to be useful in it. The signal is small but consistent, and it shapes how each side references you in their internal conversations.
The other benefit of this fluency is that it lets you translate between the two sides when you need to. If merchandising asks for something that operations will resist, you can frame the ask in operations vocabulary when you bring it to them, which increases the chance they will engage rather than reject. That translation service is one of the most concrete forms of value an embedded operator provides to a retailer, and it is entirely dependent on knowing both languages well enough to use them.
How the tension varies by retailer
The specific shape of the tension varies. Learning yours is important.
Walmart
Operations tends to have more structural weight because throughput is the whole operating premise. The merchandising team is powerful, but the store manager is the operational king inside the building, and their read of your unit shapes the merchandising conversation more than the other way around. Bias your relationship investment toward store operations first, then merchandising second.
Whole Foods
Merchandising has more weight because the category story is core to the brand. The regional buyer for prepared foods shapes decisions that operations then executes against. The store team leader is important, but they are executing a category strategy set by merchandising. Bias your relationship investment toward the regional buyer first, then store operations second.
Sam's Club
The tension is compressed because the merchandising rotation is the operating premise. Merchandising and operations at Sam's are more coordinated than at most retailers, because the rotating shelf demands it. Your relationship investment should be roughly balanced.
Target
Both sides run through the guest experience lens. Sometimes this reduces the tension (both teams are aligned on what the guest feels). Sometimes it intensifies it (both teams claim ownership of the guest experience conversation). The Store Director's read is the tiebreaker. Bias your relationship investment toward the Store Director as the neutral arbiter, and be equally responsive to the merchandising ETL and the operations ETL below them.
The invisible cost of aligning with one side
The reason picking a side is so tempting and so damaging is that the cost of it is invisible for a long time. Aligning with merchandising feels productive in year one. The category conversations go well, the promo windows land, the assortment decisions favor your unit. You are winning the strategic conversations.
What you do not see is the operations side quietly building a case that your unit is high-friction. Store leaders start flagging small issues that would have been overlooked before. Receiving teams add friction to your deliveries. Sanitation observations get written up rather than resolved on the spot. None of this shows up as a specific incident. It shows up as a slow, cumulative drift in the operational goodwill you can spend.
By year two, the operational drag has accumulated enough that even the merchandising conversations start reflecting it. The buyer hears from the operations team that your unit is difficult to work with. Your merchandising ally starts having to defend you internally on operational issues, which weakens their ability to advocate on category ones. And by year three, the slot conversation includes a phrase you did not want to hear: "the operators inside the stores say the unit is a drag on the building."
The reverse pattern happens if you align with operations at the expense of merchandising. The store team loves you. The daily execution is clean. But the category conversations stall because the merchandising team feels ignored, and when the slot decisions get made, your unit is described as "well-run but not strategic." That is not a good description to have next to your account name.
The signal that you have gotten it right
You know you are managing the tension correctly when both the merchandising contact and the operations contact independently mention that you are easy to work with. Not efficient. Not fast. Easy. That word is the tell. It means each of them sees you as someone who serves their side without frustrating the other.
You know you have gotten it wrong when one side is enthusiastic about you and the other side is quietly cool. That asymmetry is the leading indicator that your slot is fragile even if the numbers look fine.
The tension between merchandising and operations at a host retailer is not something you can eliminate. It is structural to how retailers operate. What you can do is refuse to pick a side, serve both proactively, translate between them when they need it, and let each side see that you understand their scorecard. That posture, held for a couple of years, is what makes an embedded operator a partner rather than a tenant.