Retailers: What’s Stunting Growth?
BY: SARAH GERICHTEN
JUNE 8, 2017
Over the last decade, the retail industry has undergone massive changes, from high and mighty mega malls to a focus on omnichannel shopping experiences. With news of layoffs, store closures, and bankruptcy filings, retailers know in order to survive, now is the time to improve performance and adapt to new customer expectations.
Luckily, there’s good news for retailers. New, national data from Close The Gap Between High- and Low-Performing Stores: Management And Measurement of Brick-and-Mortar Retail Locations, a commissioned study conducted by Forrester Consulting, on behalf of Square Root, pinpoints what retailers need to do to improve store performance and the customer experience.
With insights from more than 100 retail operations leaders at organizations with 250+ store locations, the study uncovered that today, agility and improvement rely on three important factors: better training, employee empowerment, and new technology.
On June 1, Forrester analyst George Lawrie joined our CEO Chris Taylor for a webinar, where they dug into the key findings and what they mean for today’s retailers.
WHAT’S REALLY STUNTING GROWTH?
In an industry where success relies on managing initiatives, aligning teams, and identifying and addressing problems and opportunities across multiple geographic locations, it’s not surprising to hear one of the biggest barriers facing retailers is the ability to drive change across the organization—at the management and store level (34%).
“Sharing data information should be simple, smart, and actionable. That way, retailers can hone in on the metrics that matter, enabling machine learning to uncover trends, empower teams, and solve problems,” said Taylor.
Today, district managers spend nearly half of their weeks collecting, analyzing, and reporting on data. But amidst the multitude of available information and a slew of KPIs for each store, many retailers still struggle to pinpoint the data that matters most. By the time improvement opportunities are identified, it’s too late. Driving needed change starts with quickly uncovering the right data, getting it into the hands of those who can best take action, and empowering them to do so.
For retail operations leaders, breaking down the barriers means getting all teams aligned and empowered to make actionable decisions based on accessible data. How? Nearly 70% of respondents reported improved training for employees and field and store managers (41%) was the key to better performance. The study also showed from empowerment comes multiple benefits, including improved customer experience (60%), reduced operational costs (47%), and improved employee productivity (44%).
“Every store experiences their own set of growth problems, and it’s up to store managers and district managers to collaborate and identify opportunities for a solution,” said our CEO, Chris Taylor, on accessible data. “Sharing data information should be simple, smart, and actionable. That way, retailers can hone in on the metrics that matter, enabling machine learning to uncover trends, empower teams, and solve problems.”
NEW TOOLS AND TECH
Truth be told, improving training programs and team empowerment are easier said than done. Today, retail operators are stuck using legacy store technologies that can’t handle processing the type or volumes of data the modern omnichannel retailer needs to succeed. In an industry where success depends on quickly adapting to change, the top technologies retailers rely on to measure performance—Store Inventory Management (65%), PoS transaction logs (64%), and Store Portals or Intranets (63%)—are all labor intensive systems that require heavy data mining instead of allowing for quick accurate identification of areas of weakness.
“Traditionally, there’s an overabundance of technology investment in the store experience,” said Taylor. “But the collaborative relationship between the field and stores—the areas that drive satisfaction and efficiency—have had almost no investment in tools. District and Store Managers spend hours collecting and analyzing data and reporting on visits, and often these processes end up slowing down the organization. By investing in new tools and tech, managers are presented with the opportunity to redirect their time toward something far more high-level.”
Despite agreement that improvements to the customer and store experience are critical for long-term success, retailers continue to rely on the wrong KPIs to measure and understand performance, with nearly 50% prioritizing average sales per transaction, gross margin (44%), and same store comparison (44%).