How To Interpret KPI?

January 14, 2009 | Leave a Comment


Some retailers have difficulty figuring out reasons why their sales revenue is unsatisfactory. Key Performance Indicators, or KPI as they are most often referred to, are absolutely crucial for any business. Retail is no different.

This is a fact; if you can’t measure it, you can’t manage it. And, going even further, if you don’t know exactly how you are measuring it and how to interpret the result, you are not managing it.

Retail maths is crucial in retail management. Gaining an understanding of retail math lets the Store Manager put everything in perspective. The Store Manager gains new insight into exactly what is going on in their store. The Store Manager who knows some retail math will be able to focus on his store performance and interpret results much more easily. He will see the relationship between his sales performance, sales target, expenses, and how it reflects on his profit and loss. Just knowing all of the components makes it easy to see what needs to be improved upon.

The Store Manager will understand the current situation and the root cause. He will see that all alternative countermeasures were explored, and are deployed - even ones that are unpopular. He will know what to track when the plan is being executed, how to check the results against expectations, and see what additional countermeasures are needed to handle any gaps.

In any business, results come as an outcome of specific actions taken, not blind luck.

For more resources on Retail Maths.

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Refill And Recovery

January 13, 2009 | Leave a Comment


This term is used to describe the process of restocking your shelves and making sure that your retail store is neat and tidy before opening for business. Too often a lack of attention to this process and the result is lost sales. In our retail store, we do refill and recovery an hour before the store opens for business. This ensures that our store is as new and ready for business when our customers come in.

Restock

Restock

Some Store Managers will tell you that they don’t need to schedule a specific time for refill and recovery; that it is something that is done on an on-going basis, through out the business day. They are losing sales and they don’t even know it.

Of course, the refill and recovery of the store is an on-going process that has to be continuously kept up by all associates to keep it under control, but that alone will not ensure you keep on top of it because sales associates have other priorities, including replenishment and serving your customers.

Lack of proper attention to the process, will result in loss of productivity, reduced floor coverage, out of stock situation on the selling floor, and disorganization in the warehouse.

Many customers will not bother to ask for the item if it is not on your selling floor. If the customer don’t see it, they will assume that you do not stock it. It’s a fair and reasonable assumption. After all, if you want to sell it, it should be displayed on the sales floor. Imagine the impact this can have on your sale target if that happens just a few times a day. It could make the difference between making your target and missing it.

For more articles, “How Much Is Your Customer Worth?”

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Creativity In Retailing

January 11, 2009 | Leave a Comment


In any economic times, organizations should push creativity and new ideas to the fore and concentrate on execution of marketing strategies. In competitive times, new ideas can make the difference and persuade customers to visit your store. In today’s difficult times, creativity is a factor that can make the difference.

Christmas Activities

Christmas Activities

While most companies focus on enticing the customer to make a purchase, market leaders engages the customer long after the purchase is made. Your marketing message need to be better at engaging the customer, and the front line employees absolutely must be on top of their game, using all of their creativity and pulling out all the stops.

Cost cutting strategies, everything from advertising and staff reduction, is very often the wrong strategy overall. Yes, wasteful spending should be eliminated but why was there wasteful spending in the first place? That’s something that needs to be addressed. What is required is creativity and coming up with innovative measures that your competition hasn’t thought of. Otherwise, no matter what you do, you still won’t be ahead of your competition because they are all doing the same things. Creativity can be used to gain a competitive advantage, make your competition react to you initiatives.

Start now by initiating Creative Workout sessions at management level. Don’t allow your Store Managers just want to quietly navigate through tough times. Before morale starts sinking, get people together and ask some serious questions. The quality of your questions usually determines the quality of your answers. Make sure all of your questions are targeted at specific issues and very focused in order to get the most useful answers.

What Are The Issues?

  • Sales has to be top priority. Make sure everybody knows that and involved in selling.
  • Control your inventory. Partner with your suppliers to manage your inventory effectively.
  • Increase your promotional activities. Engage your customers.

Focus on the details
Ask very specific questions around what is happening to your business and what actions you need to take to turn it around. Look positively forward, make the Creative Workout sessions upbeat and exciting. Effective management depends on creative thinking.

For more articles, “Unique Selling Point In Retailing”.

Read also, “More About Unique Selling Point”.

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Back To Retail Basics

January 10, 2009 | Leave a Comment


The economic might experience a slow down, but however negative the predictions are, the truth is that people will still need to shop in the malls. They will still need to buy clothes, supplies and grocery, even gifts for family and friends. I agree that they might be spending a bit less than normal. The fact that customers may be controlling their spending, makes it more imperative that retailers compete for their share of the wallet.

Even in bad economic times, there are still sales to made, people still buy. So, what can a retailer do to ensure they have the very best possible chance for success? The answer to getting your share of the customer’s wallet is to be better than the others. Whatever it is you are selling, do it better than the others. Retailers don’t have to beat the economy, they just have to do what they do better than the others in the same business.

Getting Back To Basics

First of all, the merchandising team must make sure the purchase of the merchandise is done at the right price and quantity. Allocation of the merchandise, and delivery of inventory must arrive at the retail location in the right quantity, at the right time.

The retail store management must make the shopping experience pleasant for the customers. Have friendly, smiling, knowledgeable, well trained staff available to serve the customers; and have enough of them. Have customer friendly policies and procedures in place. Maintain a clean and well organized store. Have clear signage. Respect for your customers for shopping at your retail store.

Deliver what you promise to do and do it better than every other retailer out there. Control your expenses, while ensuring you can provide your customers with the service and the pleasant shopping experience that they deserve.

In the final analysis, every component of the retail organization have to execute their game plan during these times. Merchandising, Warehouse, Logistics, Loss Prevention, Marketing, Finance, Customer Service and Retail store must deliver and do it better than the competition if you want to win. The customers deserve better, and with disposable incomes diminishing, retailers must deliver that shopping experience.

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Winning At Retailing

January 9, 2009 | Leave a Comment

Winning At Retail:
Developing a Sustained Model for Retail Success
By Willard N. Ander, Neil Z. Stern

For those who have not read this book, you can see a sneak preview in pdf format right here.

Here are some reviewers have to say about this book:
“In a difficult retail environment, this book provides crucial guidance for staying on top of your competition-by taking the customer seriously and leveraging your strengths to provide experiences that increase customer loyalty. Will Ander and Neil Stern elegantly argue that you can’t always be the biggest, fastest, and trendiest place on the block, but it takes only one of these ‘Ests’ to be a category leader. Businesses big and small can benefit from the carefully distilled lessons in this book.”
- Bernd Schmitt, Professor of Marketing, Columbia Business School and author of Customer Experience Management

“Winning at Retail offers the most effective strategies available for retailers. At McDonald’s, the ‘Quick-EST’ model is crucial, because being close and convenient to where our customers live, work, and shop helps us create maximum value. If you want to harness your company’s strengths to become a leader in your category–and stay in tune with what your customers want-this is the book for you.”
- Jim Rand, Senior Vice President of Business Development, McDonald’s Corporation

“Winning at Retail provides a thoughtful approach to retail differentiation. Ander and Stern warn of the ‘treacherous middle’ into which retailers too easily drift. They inspire us to avoid this peril through case studies of retailers who have assumed leadership through courageous choice.”
- Robert L. Price, Senior Vice President and Chief Marketing Officer, Wawa

For more information about the book: Book Store | Page 3

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Factors Of Retail Success

January 8, 2009 | Leave a Comment


In 2008, retailers in many parts of the world faced many difficult and challenging issues. From the impact of high oil prices, failures of many retailers and business. In view of the current economic slowdown, it is even more essential to know how the market is moving and to know how your company stands. Recognizing the factors that contribute to your retail success is part of what retail management is about.

  • Key Performance Indicators
  • Market Intelligence
  • Strategic Management

Know Your Key Performance Indicators
Knowing your Key Performance Indicators (KPI) is the identification and selection of the critical metrics in your business for correct balanced scorecard implementation. From the strategic level to the operations level, these are the numbers that tell us how we are performing. Retail management on the front lines is knowing your Key Performance Indicators, and using that data to execute your retail marketing and operational plans.

Market Intelligence
Market intelligence informs us what direction the market trends are moving, what the competitors actions are likely to be, what new regulatory or industrial regulations are likely to be implemented. All of which affects the retail operation from strategic level to the operations in the frontlines.

Knowing how the retail environment is changing enables us to get the jump on our competition, to anticipate what our customers expect and demand of us. Intelligence enables us to implement changes that either reduce the negative impact of current market or allows us to reduce wastage on the expenditure budget. When you get down to it, this is how we earn our pay, by anticapting, preparing for and meeting the changing market demands.

Strategic Management
Strategic management and leadership is how we develop strategic imperatives to drive the company’s growth and take us in the direction to secure our future. It is through competent leadership that enables a company to focus on a performance based culture, develop retail concepts, and implement best practices in the industry.

Retail business owners and retail managers must take the initiative in acquiring cutting edge information, strategies and leadership, marketing tactics and the advanced concepts in managing a successful retail operation.

Have you read this post? Management Competes, Not Products

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Management Competes, Not Products

January 1, 2009 | 1 Comment


From time to time, you come across an article that stays with you. This is an article that I have kept with me over the years. My notes indicates that it was published in our local newspaper, Daily Express in February 2002. Written by Gunther Conradi.

At that time, I was in the midst of my marketing module for an MBA program. It just made sense to me because for a retailer to outlast his competition, it is management that is the winning factor. Not products, prices or advertisement. Unfortunately,  many of my colleagues focused solely on the 4 Ps - Product, Price, Promotion, Place. Well, yes but if you don’t manage the 4 Ps, nothing you do will make you stand out from the crowd.

Other than the 30 years he mentioned, this is one of my favorite articles. I have been through the crash of 1997 when Asians economies took a major hit, and forex currency rates doubled. Yet in the years from 1997 to 2002, my retail unit experience sales growth of over 20%. We captured market share and outlasted many competitors. The lesson I learned was that there is no substitute for effective management.

It takes good management to secure that business behavior is in accordance with the changing patterns in the marketplace, including the overall environment.

Managers make or break an enterprise. Just look at the list of bankruptcies, de-listed companies and the hundreds suspended from trading ….. then we see what disastrous consequences bad management has to account for.

In business, a corporation’s life expectancy can be directly traced to the general level of its managerial competence. Managerial incompetence is a frequently over-looked factor when business go down and prices go up.

Management has its problems, challenges, commitment and place, playing the pivotal role ….. more managers are required but many of them have a poor perception on what they are supposed to be. The better management will respond positively when a downturn occurs. They do not accept a downturn as the cause of business failure. If there is a crisis, then there ought to be a crisis management, a contingency plan. The better management will always have and hold the competitive edge.

There must be practical ability and motivation to meet the challenges of the next 30 years. The task for today’s managers is to create conditions for tomorrow, to prepare their organizations to move into the future.

It is management that competes in the marketplace and not the products.

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