Showing posts with label Revenue Improvement. Show all posts
Showing posts with label Revenue Improvement. Show all posts

Category Management

Retail Merchandising


In today's highly competitive retail environment, retailers must work harder than ever to differentiate
themselves in the minds of consumers as well as determine and procure the best offerings for these consumers in an efficient and timely manner. Retailers who act now to effectively exploit existing and developing consumer data technology will be those leading the industry into the next century.

Category management is a strategic tool which allows you to harness today's resources to gain a larger part of tomorrow's market share. Implementation of category management improves your
productivity through:
  • Focusing on consumer needs
  • Aligning categories into strategic business units
  • Integrating key business functions
  • Exploiting new technology
  • Developing strategic business alliances
  • Creating proactive business processes

Category management is more than the application of technology and information tools - it is a business philosophy focused on asset management which facilitates your ability to:
  • Maximize both sales and profitability
  • Optimize shelf space, inventory movement, and customer traffic
  • Reap the benefits of the retail industry's (ECR) efficient consumer response initiative

Our recommendation for retail involves the people, processes and systems of your organization. We suggest that you focus on the following components of the category management process:
  • Development of an overall identity for your company
  • Development of an organizational model with clearly defined roles for buying and merchandising (category managers and replenishment buyers) and built-in accountability
  • Assessment of corporate financial goals
  • Analysis of activity-based costing (ABC) and direct product profit (DPP options
  • Selection or improvement and application of customer and retail data technologies, both hardware and software, as well as training
  • Definition and assessment of categories within the framework of the corporate gameplan
  • Development of strategies, tactics, goals and objectives for category segments
  • Creation-of comprehensive category performance measures and scorecards
  • Category Management Training Programs for buyers/merchandisers and store operations personnel
  • Forging or improving partnerships with other players in your logistics pipeline to reach category sales and profit goals

Effective category management is reliant upon teamwork and cross-functional communication. Our team works in conjunction with yours in developing and executing plans, as well as measuring your performance and refining your approach accordingly.

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

Managing Retail Pricing Integrity

Retail Advisory Services


It's no secret that retailers are struggling with price integrity. Unfortunately, determining the cause of pricing errors isn't easy. The entire process - from buying to selling - needs to be examined.

Pricing Errors
There are several types of pricing errors, each with varying causes and solutions.
  • Scanning Errors occur when shelf prices and register prices are not consistent.
  • Controller Errors arise when register prices do not match host prices, often because increases are not updated to the store POS controller.
  • Not On File (NOF) Errors occur when items are not in the computer file

Ramifications
  • Diminished customer confidence - Consumers are demanding more than enhanced service. They are more price and value conscious than ever before. Incorrect and inconsistent pricing procedures adds to shoppers' discontent
  • Lost revenues - Grocers, for instance, are losing an average of 5+ cents per pricing error. In addition, a common overcharge policy is to give the first item to the customer at no cost. Less obvious losses stem from an unproductive use of time, such as balancing under-rings and over-rings
  • Increased regulation - As a result of consumer litigation, standards are being developed by various state and federal agencies, including the National Conference on Weights and Measures
  • Regulatory fines - Civil penalties, due to price integrity violations, are increasingly impacting retailers nationwide

In order to help your organization deal with this challenge we recommend that you evaluate existing pricing systems, sample pricing in select locations, determine the depth and cause of the errors,
and develop a process to correct these errors. This should be accomplished through:
  • Store visits
  • Pricing audits
  • Interviews with store managers and pricing coordinators
  • Operational observations; as well as
  • Operational data collection and analysis

This process should include an examination of several areas to achieve optimal
results. These include:
  • The Price Coordinator Position - Review job responsibilities, performance standards and training materials
  • Store Reports - Ensure they are user-friendly and contain pertinent information
  • Pricing Cycle Timing - Implement adequate lead times for various tasks
  • Operating Policies - Ensure they are up-to-date and in use. If not, policies are refined for efficiency and practicality
  • Communication Process - Establish effective communication between all levels
  • Buying - Review policies and procedures for new item set-up, price changes, DSD, special deals and ad breaks
  • Distribution - Identify and correct unauthorized items and inaccurate UPC codes before products arrive at the store
  • Systems - Evaluate file synchronization on store price files. Review time cycles for new items and item corrections from buyer to store. Determine system gaps
  • Management Philosophy - Determine if and how each employee is responsible for price integrity

Typical improvements that retailers experience from properly addressing this challenge include:
  • A 98 percent pricing accuracy
  • Establishment of training procedures and performance standards for the store price coordinators
  • More user-friendly reports that provide useful and actionable information
  • Enhanced communication throughout the organization
  • A price integrity corporate focus that leads to better customer service and enhanced profitability


For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

Creating a Pure Customer Environment

Retail Customer Service


Retailers want to deliver a shopping experience consistent with customers' expectations of the
service environment, products and employees found in their stores. But too often associates concentrate on non-selling tasks when customers are in your stores. Associates need to be refocused on the customer. Sounds simple enough, but many of today's foremost retailers are not effectively and
consistently achieving this focus in all of their stores.

Turn your managers into leaders
Managers are in a unique position to set the tone on customer satisfaction in each and everyone of your stores. You can help your managers by streamlining administrative and non-selling tasks so that they can help associates set selling priorities. The emphasis should be on an active approach to selling.

Develop a customer service vision for the entire organization
A clear vision is the driving force of an effective customer service strategy. The vision should be more than a slogan --it should be a vital, living, changing culture. Everything at your company should be aligned with this vision. And keeping the vision simple will allow consistent execution by all employees, creating satisfied, repeat customers.

Involve the whole organization
Your service vision should be a company-­wide effort that sends the message that, "This is a great place to shop and a great place to work." You must first and foremost convey the company standards to your staff because these are the people who will convey the message to your customers. The company standards must be carefully defined and thoroughly understood by your staff -- so that the desired attitudes and behaviors can be reflected in their actions and interactions with customers. In the end, actions alone will make a lasting impression on your customers.

Vision and Training are not enough
A well-defined vision and thorough training won't guarantee success. Employees must embrace the ideas before they can practice the techniques and communicate the vision to customers. Many programs fail because they're viewed by employees as another "flavor-of-the-month" program, a cardboard priority that will bend or crumble during the next expense crunch. The program needs commitment -- not lip-service -- from top management.

Consistency is the key to commitment
Everything from labor scheduling, training, store policies and performance reviews must be aligned with the vision and applied consistently. Only the program's consistent application can develop the managers' and associates' complete commitment to your customers.

Remember the program is conveyed first from associate to associate and then from associate to customers. Many departments never deal directly with customers, but they do deal with other associates. By ensuring that internal customers are treated with the same vision as external customers, the needs of your external customers will be met.

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

Minimize Payroll Costs, Maximize Productivity Levels

Improve Your Operating Efficiency
Understanding Your Challenge
Payroll-- the single largest operating expense in retailing -- must be controlled, and it must be controlled without negatively impacting customer service.

Helping You Meet The Challenge
We combine retail business knowledge and re-engineering experience with technological ingenuity so you realize significant, measurable savings, while achieving enhanced customer service, associate productivity, and morale. Our practice develops and implements retailer-specific strategies utilizing the most contemporary automated labor scheduling solutions and time and attendance software packages. Our team of retail professionals does more than just automate your current practices. We recommend industry best practices, and we work with managers and associates at every level to
determine the best solutions for your stores and your customers.

Service Approach
Components of a labor management process include:
  • Conduct a focused needs analysis
  • Re-engineer necessary processes to Best Practice levels
  • Establish performance standards by key task
  • Install and configure your chosen labor scheduling and time and attendance software
  • Model the installation in various formats and volumes until desired results are achieved
  • Roll out the new procedures and labor management techniques to the chain
  • Train field management to support and maintain the new tools
  • Follow up and refine

Typical Results
An approach that includes a blend of technology and re-engineering yields substantial results.
  • Labor costs decline 8 percent to 15 percent
  • Store payroll improves 0.5 to 1.5 payroll percentage points
  • Sales trend increases 1 percent to 3 percent
  • Staff hours match customer traffic patterns
  • The rate of completion for non-selling tasks increases

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

Operating Procedure Manuals: The Final Word

Optimizing Your Store Procedures 


Doing it by the book. That's what retailers are doing as they discover the benefits -- and necessity -- of utilizing a policy and procedure manual. Manuals contain specific information about many areas, including: store operations, safety, loss prevention, receiving, customer service - and the list goes on. From taking out the trash to negotiating with vendors -- these retailer-specific documents make it easier for store managers to do their jobs. And it makes it easier for retailers to deliver consistent messages to the consumer. In fact, the use of a procedures manual ensures consistency throughout several areas of a retail chain, which yields numerous benefits -- from enhanced customer satisfaction to increased sales.

Overcoming Writer's Block
There are several warning signs that indicate a need for a policy and procedure manual-- many of which should spur your team into action. For example:
  • Payroll for specific functions varies from store to store
  • Levels of compliance differ from store to store
  • Store profits are impacted negatively by inconsistent practices
  • Customer relationships are adversely affected by inconsistent practices
  • Store emergencies are handled incorrectly and unprofessionally

Make it a Best Seller
Utilize several best practices to compose the most effective manual for your organization. For instance:
  • Every area of managing a store must be included
  • Managers and associates should not memorize each policy and procedure, but they must know how to reference the manual if an issue does arise
  • Avoid minute details, but include relevant information necessary for managing a specific procedure

The Final Chapter
Retailers are sure to realize benefits as a result of developing a policy and procedure manual. Specifically:
  • Sales and profits are enhanced
  • Customer satisfaction increases
  • Consistency is maintained from store to store
  • Expenses decrease
  • Business won't come to a halt because corporate offices are closed or a regional director is not available to assist with an issue

Case in Point
After assisting a retailer that was preparing to open a chain of stores. Developing a manual established guidelines to manage stores consistently. It also standardized the decision ­making process during the planning phase to open stores.


For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

Merchandising: Door To Floor

Efficient Store Stock Flow


Retailers have slashed costs, pumped-up sales, streamlined activities and re-engineered processes throughout their pipeline. Now they're going back to basics. Leading retailers routinely examine the fundamental practices of their retail operations, ensuring the best practices are being utilized within the store's four walls.

Best practices for moving merchandise door to floor aren't necessarily cutting edge. In fact, most of you could probably recite them in your sleep. However, the trick for most retailers -- even the most astute -- is revisiting the basics and ensuring each and every step is enforced. Sometimes we overlook the simple solutions for more complex ones, even at the risk of terrific results.


Check List
Take a step back. Look at the basics. You could put yourself two steps ahead.
  • Is merchandise pre-processed and floor ready?
  • Is merchandise sorted by department and/ or aisle?
  • Is apparel pre-hung and pre-ticketed?
  • Are myriad items put in re-packs?
  • Is the backroom configured with the most effective and efficient layout?
  • Does the backroom have the necessary equipment?
  • Is the frequency of deliveries appropriate?
  • Have standards been established and measured?
  • Do you have price integrity?

Benchmarks
Measure yourself against the best practices of leading retailers.
  • Process floor ready merchandise door to floor: 2 - 3 hours
  • Units processed per labor hour: 260+
  • Percentage of goods preticketed: 40% - 75%
  • Percentage of goods received floor ready from vendor: 70% - 75%
  • Percentage of goods received floor ready from DC: 70% - 90%

Benefits
Just a reminder of the rewards you'll reap after revisiting the fundamental elements of moving merchandise door to floor:
  • Reduced labor expenses
  • Additional selling time
  • Increased revenues

Case in Point
A previous client, a $500 million specialty store chain, improved its door to floor activities by returning to the basics. The retailer re-engineered store processes to streamline existing activities, eliminated duplicate tasks, and implemented best practices. As a result, the retailer improved productivity by 20 percent and reduced direct annual operating costs by almost $10 million.


For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

Customers For Life

The Value of Customer Retention


Customer retention is one of the few ways to ensure long-term financial success. Consider this: A 5% increase in customer retention can increase profits 30% - 50%. Not to mention that recommendations from existing customers can account for up to 60 percent of sales. Satisfying customers is not a new concept, but it's one that isn't easily mastered. Many retailers spend time and money attracting new customers or creating new customer satisfaction slogans when, in fact, retailers should spend time considering the lifetime value of each customer.

Stew Leonard, one of the most iconic and successful independent grocers of all time, recognized the lifetime value of his customers. Years ago he figured that the average customer would shop with him for about seven years before moving to another neighborhood. Since the average shopper's monthly food bill was $250, he figured each customer was worth $3,000 a year in sales, or $21,000 over the course of seven years.

Current day market basket values are much higher now making customer retention even that much more valuable. Armed with this knowledge, he was much more willing to replace a carton of cracked eggs or to provide an extra service -- all in an effort to create a lasting, profitable relationship with customers. Stew recognized that developing a long term relationship with valuable customers requires providing satisfying experiences over many visits and focusing on key customer relationships.

Satisfying Offers
A retailer has a lot to offer - from merchandise to service. To ensure you're providing a complete and satisfying offer, incorporate the following elements into a continuous improvement program.
  • Customer Satisfaction Index. Monitor the performance of each point in your offering - through ongoing customer surveys.
  • Satisfaction Goals. Establish clear and challenging customer satisfaction goals for employees at all levels.
  • Value Driven Initiatives. Continuous improvement efforts should focus on areas that customers value most.
Service Recovery
Success at the point of service recovery is critical to customer satisfaction and depends upon employees. When a customer's experience is disappointing, the first associate they contact must be empowered to resolve the issue. Associates must:
  • Understand your policies completely
  • Be Committed to satisfying customers
  • Be equipped and empowered to resolve issues
  • Be rewarded on the basis of customer satisfaction goals
Identify & Attract Valuable Customers
Not all customers provide equal value over the long term. Relationship developing efforts must focus on the most valuable customers, including:
  • Defining valuable customers to the company
  • Identifying and understanding their needs
  • Ensuring the offer meet their needs
  • Focusing marketing efforts to effectively reach, attract and retain them
Create Closeness with Customers
Loyalty stems from a feeling of attachment or closeness. Key components include:
  • Customer Focused Culture - All levels in the organization must exhibit customer focus
  • Employee Satisfaction - The employees must feel welcome to make customers welcome
  • Customer Recognition - Customers should receive extra value for staying loyal
Understand Results of Effort
A focused effort requires understanding of results Success in retaining valuable customers must be quantified, understood, and translated into actions. Key tools include:
  • Customer retention measurement
  • Customer satisfaction measurement
  • Valuable customer defection analysis

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc
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