Retail Operations Excellence
May 2010
by Tim Lynch
How retailers can break down the barriers to cross-functional collaboration and drive operations excellence
in four important retail processes: new item introductions, promotions, price changes, and product recalls.
2 Executive Summary 4 New Product Introductions 6 Promotions
8 Price Changes 9 Product Recall
11 Mini-Case Study: Advertising Planning 13 Future Recommendations
Table of Contents
Executive Summary
In the past decade, retailers have invested billions of dollars on advertising and tech-nology to attract customers and get the right product in the right store at the right time at the right price. Retailers have invested in new technologies such as wired and wireless networks, supply chain systems, planning software, and more to improve efficiency and reduce costs. At the same time, retailers have spent significant time and money developing and implementing marketing and merchandising strategies to drive increased customer foot traffic and build customer loyalty.
Most of the technology retailers have implemented in the last decade has enabled improved performance in one functional area, such as merchandising, marketing, or supply chain. Although these applications can streamline planning and approval workflows and increase efficiency within one department, they do not do as well at improving collaboration among two or more functional areas. Furthermore, when it is time to communicate and implement their retail strategy in their stores, many retailers still rely on obsolete tools such as email, plain old telephone, and even faxes and paper memos. The use of these manual tools makes it difficult or impossible for re-tailers to monitor how well their strategy is being implemented, analyze the effective-ness of the strategy, and respond on a timely basis if necessary.
The lack of cross-functional visibility and collaboration in four key retail processes – new item introductions, promotions, price changes, and recalls – often leads to suboptimal execution of retail strategy. Retailers use inefficient tools and processes in their operations when better solutions are available that enable success in the increasingly competitive and dynamic world of retailing. By implementing these tools, retailers could realize the following benefits:
A retailer could drive a positive impact of millions of dollars by:
• Executing new product launches as intended – a retailer could increase sales by 2-5%
• Carrying out promotions as intended – a retailer could increase sales by 2-3% • Improving price change execution – a retailer could increase compliance by
20%
• Executing product withdrawals more efficiently – a retailer could improve brand loyalty by reducing the time to complete a product recall from 5 days to 3 hours
Break Down the Barriers to Retail Operations Excellence
In the past decade, retailers have invested billions of dollars on advertising and tech-nology to attract customers and get the right product in the right store at the right time at the right price. Retailers have invested in new technologies such as wired and wireless networks, supply chain systems, planning software, and more to improve efficiency and reduce costs. At the same time, retailers have spent significant time and money developing and implementing marketing and merchandising strategies to drive increased customer foot traffic and build customer loyalty.
In 2008, Wal-Mart alone is estimated to have spent about $1.7 billion on advertis-ing, and that was just for its U.S. stores. In the same year, retail supplanted the automotive industry as the number one ad spender in the U.S., based on measured spending.1 In 2008, the Miscellaneous Retail category of advertisers (not including
Department Store or Home Furnishing/Building Supply) spent $8.4 billion on adver-tising in the U.S.2
Most of the technology retailers have implemented in the previous ten years has enabled improved performance in one functional area, such as merchandising, marketing, or supply chain. Although these applications can streamline planning and approval workflows and increase efficiency within one department, they do not do as well at improving collaboration among two or more functional areas. Furthermore, when it is time to communicate and implement their retail strategy in their stores, many retailers still rely on obsolete tools such as email, plain old telephone, and even faxes and paper memos.
The use of these manual tools makes it difficult or impossible for retailers to monitor how well their strategy is being implemented, analyze its effectiveness, and respond proactively if necessary. And because nobody in corporate has the time to read and summarize input from thousands of emails or phone calls coming back from the stores, suggestions for improvement disappear into a black hole. The opportunity for continuous improvement is lost.
The lack of cross-functional visibility and collaboration in four key retail processes – new item introductions, promotions, price changes, and recalls – often leads to suboptimal execution of retail strategy. Retailers use inefficient tools and processes in their operations when better solutions are available that enable success in the increasingly competitive and dynamic world of retailing.
1 “Spending Fell (Only) 2.7% in ‘08. The Real Issue: ‘09,” by Bradley Johnson, AdAge, June 22, 2009. http:// adage.com/datacenter/article?article_id=137409
2 “Kantar Media Reports U.S. Advertising Expenditures Declined 12.3 Percent in 2009,” by Kantar Media, March 17, 2010. http://www.kantarmediana.com/news/03172010.htm
“ In 2008, Wal-Mart alone is estimated to have
spent about $1.7 billion on advertising, and
that was just for its U.S. stores. In the same
year, retail supplanted the automotive
indus-try as the number one ad spender in the U.S.,
based on measured spending.”
Merchandising HR Operations Supply
Chain Legal IT Real Estate Finance
Field • Administration • Loss Prevention • Store Resets • Training • Product Specialists • Field HR Private Label Management Store Operations Process Store Comm. Store Support Field Operations Division Regional District Pricing Visual Merchandising Category Management 3rd Party Vendor Management Promotions Planning & Allocation Planogram & Space Planning Replenishment AD/Media Loyalty Brand Management Screening & Hiring Procedures Corporate Personnel Management Learning & Development
Health & Safety
Warehouse Management Distribution Application Development Store Systems Information Systems Tech Support Computer Operations Promotion Price Management Planning & Allocation Marketing Refurbish Stores New Stores Financial Planning Labor Budgeting Payroll Account Payables Account Receivables Corporate Loss Prevention Marketing Replenishment Planning & Allocation
New Product Introductions
One of the best methods for any type of retailer to increase sales is through the introduction of new items. Category Managers in the retailer’s merchandising group rely heavily on new product introductions to boost sales: at least one new consumer packaged goods product is launched somewhere in the world every two minutes.3
Retailers know they can increase market share if they can be first in their trading area to introduce a popular new item or do a better job of marketing it than their competi-tors. The retailer can continue to gain market share if it can build a reputation as a company that is consistently first to market with new products. This same reputation results in vendors eagerly vying to become one of the retailer’s suppliers. By work-ing with retailers who do a better job of promotwork-ing and merchandiswork-ing their goods, vendors can increase sales and profitability.
Not all new items can or should receive the same amount of attention. But if the item is unique and the vendor support level warrants, the retailer is best served with a strategic regimen for level one (high priority) new item introductions.
3 Mintel Global New Products Database
Figure 1: Areas of the organization involved with New Product Introductions are highlighted in light blue.
New item introductions involve a lot of behind-the-scenes work involving numerous departments before the product arrives inside the store. In the case of a tier one national brand launch of a unique item, months of planning and activities precede the item’s first sale. The most important are related to deciding the strategy:
• Will the retailer introduce the item at “regular” retail or a promotional price? • In which retail channels will the new item be distributed and in what quantities? • How will the new item be advertised?
• Where will the new item be placed in the store?
Decisions regarding the new item introduction strategy are usually made centrally. Managers from merchandising, marketing, supply chain, and other functional areas sit in a room and hammer out the details. If this is done appropriately, a manager from store operations participates in the process to support the last piece – place-ment in the stores.
While it may not seem the step of store placement should be difficult, many times the execution of a new item introduction is inconsistent across the retail chain. The reasons for inconsistent execution include insufficient or incomplete communica-tion, varying store footprints and formats, misinterpretations among managers, and missing or incomplete Point of Sale materials such as signage. If store managers are too busy reading and responding to emails or completing other tasks such as writing the weekly employee schedule, they may miss important information about the new product rollout and may not have the time to ensure correct execution. Or, they may decide that something else is more important to do.
The various factors that are necessary for flawless execution of a new item introduc-tion include the following:
Distribution. Stores need to be notified ahead of time of the expected quantities and when to expect them. A robust methodology includes a vehicle for feedback and resolution if the order isn’t received as expected.
Placement. Stores will be required to display the new item in high traffic locations. The specific location may be “end cap #1” or “minimum 4 feet in the promo run.” The less you leave to individual interpretation, the closer you get to flawless execu-tion.
Point of sale. Many times POS material is supplied by the vendor for new items and shipped from a third party. The same type of robust methodology surrounding distribution of the product should prevail with POS material as should surround the actual product itself.
Flawless store-level execution of new product rollouts is imperative. New product introductions are vital for retailers to preserve and expand market share. Increased sales and market share are almost guaranteed with the timely and efficient
introduc-“ At least one new consumer packaged goods
product is launched somewhere in the world
every two minutes. Retailers know they can
increase market share if they can be first in
their trading area to introduce a popular new
item or do a better job of marketing it than
their competitors.”
tion of a tier one new item. New CPG item sales in the U.S. generated more than $21 billion in sales in 2008, according to the Nielsen Group. Additionally, vendors count on the implementation of the agreed upon plan. In some cases, the ven-dor may pay the retailer for successful implementation of a new item introduction (e.g., providing funds for preferred placement in the store). New item introductions consume much time, effort, and resources from both the vendor and the retailer. Consistent execution is crucial to boosting sales and maintaining integrity with the vendor community to garner future support.
Numerous retailers, including ones in the home improvement, apparel, books, and general merchandise categories have conducted pilot studies where they imple-mented task management solutions in a few stores and compared the uplift in sales to a control group of similar stores. These studies found that a task management application could greatly improve in-store compliance of new product initiatives by streamlining communication, prioritizing tasks, and providing a closed loop chan-nel for two-way feedback to drive operational improvement. The application also enabled store managers to spend less time in the office and more time on the sales floor helping customers, ensuring proper execution of new product launches, and coaching employees. The result was an average increase of sales of 5 percent in the pilot stores. The impact to a billion dollar retailer of that 5 percent boost: a $50 mil-lion increase in annual sales. A conservative estimate of a 2 percent increase in sales due to consistent execution of new product launches would mean an additional $20 million in sales for a billion dollar retailer.
Promotions
Individual promotions are susceptible to the same types of “breakdowns” and consequently lost sales, profits, and integrity as that of new item introductions. The challenge is compounded by a recent trend in retailing of the increased use of store-specific promotions based on local sales trends. Whether the promotion is for the retailer’s weekly ad or a new continuity program (e.g., frequent shopper discounts), the same type of comprehensive and concise communication system required to ensure the consistent execution of new item introductions must be in place. A tier one retailer may have to field thousands of promotion proposals per week. Many of these proposals may include the provision of trade funds to the retailer by the vendor for proper execution of the promotion. The proposal, negotiation, and reconciliation of trade promotions is typically managed using manual, unstructured tools such as email, spreadsheets, and faxes. These tools are inefficient and prone to error.
Adding to the complexity of this process is the wide variety of different types of promotions stores are expected to execute, including “Buy One, Get One Free,” temporary price reductions (which by their nature have to be rescinded after a certain amount of time), and changes in product placement/location within the store. When store managers use manual tools such as email and spreadsheets to keep track of all these various promotions, it’s no wonder some of the promotions fall through the cracks.
“ A conservative estimate of a 2 percent
increase in sales due to consistent
ex-ecution of new product launches would
mean an additional $20 million in sales
for a billion dollar retailer.”
Merchandising HR Operations Supply Chain Legal IT Real Estate Finance CEO Field • Administration • Loss Prevention • Store Resets • Training • Product Specialists • Field HR Private Label Management Store Operations Process Store Comm. Store Support Field Operations Division Regional District Pricing Visual Merchandising Category Management 3rd Party Vendor Management Promotions Planning & Allocation Planogram & Space Planning Replenishment AD/Media Loyalty Brand Management Screening & Hiring Procedures Corporate Personnel Management Learning & Development
Health & Safety
Warehouse Management Distribution Application Development Store Systems Information Systems Tech Support Computer Operations Promotion Price Management Planning & Allocation Marketing Refurbish Stores
New Stores Financial Planning
Labor Budgeting Payroll Account Payables Account Receivables Corporate Loss Prevention Marketing
Finally, in the case of trade funds, verification of successful execution of a promotion can be very resource intensive. Retailers and vendors sometimes employ “Secret (Mystery) Shoppers” who travel from store to store and confirm that a promotion was carried out as the retailer and vendor intended. Needless to say, this is a slow and inefficient process. It is also prone to inaccuracy. Unless a vendor or retailer em-ploys a team that is large enough to visit every store in the chain on the first day of a promotion, it is almost impossible to verify 100-percent successful execution on the intended date using Secret Shoppers.
Several research reports in the past five years have estimated that sales of items on promotion account for between 15-20 percent of a retailer’s annual sales, depending on the type of retailer. Some grocery retailers may generate as much as 60 percent of sales from promotional items. Assuming the lower end of that spectrum, that means a billion dollar retailer can expect promotional items to generate $150 million in annual sales.
Several retailers have conducted pilot studies which compared sales of promotional items in stores that had implemented task management solutions to those that used older solutions such as email and company-wide portals. They found that stores who used task management saw a dramatic increase in the number of promotions that were executed as intended. This improved compliance drove sales increases from between 15 percent to 50 percent for promoted items, depending on the product and nature of promotion (e.g., sales increases for advertised commodity items on
Figure 2: Areas of the organization involved with Product Promotions are highlighted in light blue.
1000s of Proposals Per Week
“ A tier one retailer may have to field thousands
of promotion proposals per week. Many of
these proposals may include the provision of
trade funds to the retailer by the vendor for
proper execution of the promotion.”
promotion were higher than increases for slower moving, high ticket items). Assum-ing a 15 percent increase in the $150 million in sales of promotion items referenced above, a billion dollar retailer could increase sales by a very conservative estimate of $22.5 million per year through better promotion execution.
Price Changes
Price changes are an important component of retailing. At least once a week, the retailer sends stores a list of products that have to be changed. Many experts feel the frequency of price changes will increase, for several reasons:
• Consumers are increasingly turning to the Internet for product and price infor-mation. Retailers must be cognizant of the prices their brick-and-mortar and online competitors are offering consumers and react quickly to changes. The number of emergency price changes will increase.
• Consumers are also increasingly using the Internet to buy products. Consumers can purchase products from more sources than ever, increasing pressure on retailers to use price changes as a tool to entice customers to buy.
• Retailers are implementing new pricing optimization applications to scientifi-cally determine when they should adjust prices in the product lifecycle to drive increased sales.
• In a down economy, consumers are likely to be more responsive to reduced prices.
Price change execution is an important element of retail. When sales are down, reducing the price of a product can drive increased sales. But if the consumer is not aware of the price change due to promotional material not being set up (e.g., sig-nage announcing “20 percent off all sweaters!”), the opportunity for the sale is lost to both the retailer and the vendor. And situations such as when the price on the label doesn’t match the weekly advertisement or the price at the checkout stand can have a negative impact on the retail brand.
The reasons for inconsistent execution of price changes are numerous. Some retailers have price change reports printed automatically in each store’s office. But if the printer is out of paper or toner and nobody notices, the price changes can be missed. Other retailers send the report via email for the store manager or assistant to print out. But if that person is out that day, the message may again be missed. The email may also get overlooked by the store manager due to communication and task overload. This problem is exacerbated in the case of emergency price changes that the retailer’s store managers may not be expecting as they would the regular weekly price changes.
Other causes of poor execution can be the store’s inability to complete the price changes in the required timeframe due to poor planning, lack of human resources, or unqualified/improperly trained employees.
$22.5 million
“ A billion dollar retailer could increase
sales by a very conservative estimate
of $22.5 million per year through better
promotion execution.”
Merchandising HR Operations Supply Chain Legal IT Real Estate Finance CEO Field • Administration • Loss Prevention • Store Resets • Training • Product Specialists • Field HR Private Label Management Store Operations Process Store Comm. Store Support Field Operations Division Regional District Pricing Visual Merchandising Category Management 3rd Party Vendor Management Promotions Planning & Allocation Planogram & Space Planning Replenishment AD/Media Loyalty Brand Management Screening & Hiring Procedures Corporate Personnel Management Learning & Development
Health & Safety
Warehouse Management Distribution Application Development Store Systems Information Systems Tech Support Computer Operations Promotion Price Management Planning & Allocation Marketing Refurbish Stores
New Stores Financial Planning
Labor Budgeting Payroll Account Payables Account Receivables Corporate Loss Prevention Marketing
“ A home improvement retailer that used
task management saw compliance
rates for price changes increase by 20
percent.”
Increase of 20%
A home improvement retailer that used email and a company portal to manage its price changes tested the effect of implementing task management in 18 stores. In the stores that used task management, the retailer saw compliance rates for price changes increase by 20 percent compared to stores that relied on email and the company portal.
Product Recalls
Every category of retailers has to deal with recalls. Whether the retailer is in con-sumer electronics, grocery, toys, automobile, apparel, general merchandise, or any other category, recalls are a fact of life and need to be completed quickly and in every store to protect both the consumer and the retail brand. Recalls are increasing due to the global nature of the supply chain and variable quality control standards in different countries. In the U.S. alone, the Food and Drug Administration says 1,730 food and cosmetic products were recalled in 2009. That’s a stunning increase of 184 percent compared to 2008!
At the same time, consumer awareness about recalls is also increasing due to wide-spread access to information through the Internet and other news sources. Whether it’s unsafe toys, food, automobiles, tires, baby cribs, cosmetics, or drugs, it doesn’t take long for a major recall to make headlines all over the world. Unfortunately, the headlines don’t always provide the detail consumers need. For example, the headline may say “Major Peanut Butter Recall,” but the story may not say which brand, which SKU, and which lot. In some cases, the consumer may not be aware of the recall, in
others, they may know more about a specific recall than do store employees. Consumers are less forgiving of brands and product categories in the case of recalls. It may take months or years to win back the customers’ trust. Poor communication by the retailer to the consumer can have a wider negative impact on sales than just the specific product in question. For example, a recall of a specific brand of peanut butter may have a negative impact on sales of other brands and even all peanut-based products if the retailer is not clear that only a specific brand and batch had to be pulled.
Recalls tax the entire retail supply chain system, from the manufacturer/grower to the customer. Most of these recalls result in an inconvenience to the customer and for the retailer, increased labor costs, lost sales, and perhaps, tarnished reputation. Recalls significantly affect the profitability of the retailer. When recalled goods are removed from shelves, this often leaves a gap on the shelf, resulting in lost sales and profits.
There are many reasons to have a structured, comprehensive, and efficient recall process in place. The first reason is customer safety. If the product being withdrawn presents a hazard to consumers, the recall needs to be completed as quickly as possible. Not only does the retailer need to remove the product in question from sale, but it should have a system that accounts for all product, not only in stores but the larger supply chain as well. The retailer should also have a system that alerts appropriate management when the process is complete or, if it hasn’t been completed, where the breakdown is so it can be quickly fixed. Recalls are by their nature unplanned events that add to store workload. So, not only do recalls create an unplanned increase in store workload, but they have a more profound impact: they divert the planned (scheduled) labor away from important and strategic activities such as promotions set-up, customer service, training, and accident prevention.
A lot of retailers still use inefficient tools such as email and telephone to manage recalls. These tools don’t provide the retail chain with real-time visibility into store-level compliance store-levels. Take a retail chain with more than 100 stores as an example. The retailer is relying on 100 different store managers to read the email and ensure the product is pulled and the correct informational signage is put in place. With store managers getting all sorts of emails from a variety of departments such as loss pre-vention, merchandising, marketing, finance, HR, and more, there’s no guarantee they will see the email on a timely basis.
And then there’s the problem of verification. With email, someone at headquarters has to read hundreds of emails messages back from the stores, cut and paste the data into a spreadsheet, and then either email or call the stores that haven’t com-pleted the recall. It’s very inefficient and time consuming. The problem of verification also exists if a company-wide portal is used. None of those solutions provide a way for HQ to track compliance levels in real time and focus on the exceptions, the stores that are not in compliance. And the problem is obviously compounded for chains
“ A lot of retailers still use inefficient tools
such as email and telephone to manage
recalls. These tools don’t provide the
retail chain with real-time visibility into
store-level compliance levels.”
“ In the U.S. alone, the Food and Drug
Administration says 1,730 food and
cos-metic products were recalled in 2009.”
Merchandising HR Operations Supply Chain Legal IT Real Estate Finance CEO Field • Administration • Loss Prevention • Store Resets • Training • Product Specialists • Field HR Private Label Management Store Operations Process Store Comm. Store Support Field Operations Division Regional District Pricing Visual Merchandising Category Management 3rd Party Vendor Management Promotions Planning & Allocation Planogram & Space Planning Replenishment AD/Media Loyalty Brand Management Screening & Hiring Procedures Corporate Personnel Management Learning & Development
Health & Safety
Warehouse Management Distribution Application Development Store Systems Information Systems Tech Support Computer Operations Promotion Price Management Planning & Allocation Marketing Refurbish Stores
New Stores Financial Planning
Labor Budgeting Payroll Account Payables Account Receivables Corporate Loss Prevention Marketing
with thousands of stores. A system that enables the retailer to efficiently and rapidly complete a recall will reduce the amount of labor required to do the job so they can return to their other activities such as selling, corporate-driven, re-stocking, and other tasks.
But after safety, the most important reason to complete recalls successfully and to clearly communicate this to the customer is brand loyalty. Customers that walk into a store where the correct signage has been placed informing them of exactly which products were recalled (including SKU and batch lot number) will have increased confidence that the retailer is on top of the situation and selling safe products. Furthermore, the retailer may be able to save the sale if a suitable substitute product has been placed on shelf, with informational signage that assures the customer the product is safe.
Numerous case studies have been published about home improvement, apparel, grocery, general merchandise, and other types of retailers which saw significant increases in recall compliance after implementing a task management solution. All of them saw 100 percent compliance rates. In fact, one grocery retailer found that by implementing task management, it was able to reduce the amount of time to achieve 100 percent recall compliance from 5 days to as little as 3 hours.
Mini-Case Study: Advertising Planning
Advertising planning is a complex undertaking for a large retail enterprise. It is a cross-functional endeavor that involves the company’s marketing, merchandising,
“ One grocery retailer found that by
imple-menting task management, it was able to
reduce the amount of time to achieve 100
percent recall compliance from 5 days to
as little as 3 hours.”
Save $645 per employee
Figure 4: Areas of the organization involved with Product Recalls are highlighted in light blue.store operations, and supply chain functions. The table below summarizes two very different approaches taken by two divisions within the same company, a Top 250 Global retailer.
DIVISION A: THE WAY IT SHOULD BE DIVISION B: THE WAY IT SHOULD NOT BE
* Merchants determine ad items, price, quantity, ad location, display location, and POS material.
* Merchants meet with Operators and propose the items above. The two groups have robust dialog − consisting of genuine discussion about process-es and next steps for future improve-ment − and make adjustimprove-ments. At the end of this meeting everyone “owned” the program.
* Four weeks prior to the sale, ad programs were sent to the stores for pre orders (for customers who want to order/reserve product before it is avail-able in the stores).
* Two to three days prior to the ad break, product arrives at the store. * After the ad, cross-functional teams
meet to debrief. Based on additional robust conversation from all functional teams, price, quantity, ad location, display location, and POS material adjustments were made for future “like” sales and ads. These notes were then used for future, cross-functional ad meetings.
* Merchants determine ad items, price, quantity, ad location, display location, and POS material.
* Four weeks prior to the sale, ad programs were sent to the stores for pre orders (for customers who want to order/reserve product before it is avail-able in the stores).
* Two to three days prior to the ad break, product arrives at the store * After the ad, cross-functional teams
meet to debrief. In this scenario, the debrief session can range from robust to perfunctory unfortunately, it’s usually the latter.
* This is usually the end of the process.
Process Gap
Process Gap
As you can imagine, the group that conducted its advertising and marketing campaigns in “the way it should be” benefitted from the continuous feedback from all involved functional areas, including the customer. Benefits included:
• More effective execution of the ad • Less time spent interpreting the plan • Less misinterpretation of the ad plans
• More of store management’s time spent on issues such as enhancing customer service, coaching and training employees, and ensuring a safe working/shopping environment
Future Recommendations
This white paper has described the negative impact on consistent execution of four key retail processes caused by vague instructions, poor collaboration, unstructured commu-nication, information/task overload, and lack of real-time task completion visibility. When corporate planners and store managers (and therefore employees) are not sure what to do, distracted by communication overload, and spending too much time on detail work, the result is inconsistent execution and reduced customer service levels.
This is why the business and IT functions need robust collaboration in their discussions and a realization that ultimately, the business has to have the proper tools to get the job done. As previously noted, many organizations today rely on obsolete applications such as email and spreadsheets to manage decisions that impact – and are impacted by – mul-tiple functional areas in the organization. But as has been shown, these tools, although effective for one-to-one and even one-to-many communication, are not suited to handling the many-to-many communication needs of a geographically dispersed organization. It is impossible on a consistent basis for managers and employees to be able to focus on and address the key operational issues in their area when they are too busy sorting through disparate and sometimes unclear communications from a variety of functional ar-eas. Similarly, planners and store managers who are overloaded by detail work (e.g., read-ing and respondread-ing to hundreds of email to get status updates, spendread-ing hours writread-ing an employee labor schedule) cannot be expected to operate at peak performance levels. And without a system to provide and process structured two-way feedback, an organization cannot realistically expect to consistently identify problem areas and respond appropriately on a timely basis.
A previous white paper called “Cross-Functional Collaboration: How Retailers Can Uncov-er Hidden Profits” identified how retailUncov-ers can have a positive impact on annual sales and their bottom line by implementing systems that break down the walls between previously isolated departments and improve visibility, streamline communication, align work with strategy, and foster robust collaboration. These retail execution and workforce manage-ment systems are available today.
“ It is impossible on a consistent basis for
managers and employees to be able to focus
on and address the key operational issues
in their area when they are too busy sorting
through disparate and sometimes unclear
communications from a variety of functional
areas.”
Furthermore, today’s Web-based solutions can be implemented easily and start gen-erating ROI in a matter of 3-4 months – not years. Retailers should take a close look at integrated Retail Execution Management software platforms consisting of labor scheduling, task execution, KPI/compliance, and Vendor Management solutions. They streamline operations throughout the company, align store labor and activity to corporate goals, increase the ability to quickly identify important trends, and improve execution of retail strategy. They free corporate and store managers from detail work such as labor scheduling and spending hours per week trying to learn what hap-pened, or what they should do. They enable retail managers to focus on the most important activities that need to be completed, ensure that they are done, and most importantly, respond to dynamic conditions in retailing using best practices.
About the Author:
Tim Lynch has extensive experience in retail operations at some of the larg-est retailers in the world and a passion for execution excellence. He can be reached at tim.lynch99@gmail.com
