The store is evolving fast. Today’s shopper often engages with brands through multiple buying channels, so it’s imperative for retailers to offer an in-store experience that provides strong customer service and a seamless connection, whatever their journey.
The pace of this development is such that the traditional assessment models that are used to measure store performance have become overly narrow in scope. Consequently, the gaps between store metrics, KPIs and related performance improvement processes are growing by the day, causing retailers to lose sight of the operations that underpin their business.
A New Store Excellence Scorecard from Tyco Retail Solutions, created in partnership with EKN Research, suggests a new model for measuring store performance, based on three core principles:
Understanding the path to purchase
Consumer shopping patterns are becoming more difficult to identify. Shoppers no longer take straightforward journeys while researching and buying, making it harder for retailers to decide where in their business to invest.
A huge number of organisations are missing out on opportunities to monitor footfall and react accordingly; our findings indicate that nearly 50% of retailers cannot predict shopper traffic.
Today’s advanced analytics solutions offer real-time data which, when measured against key metrics, offers insights into various areas of the business, such as promotion effectiveness and conversion rates. Armed with this knowledge, retailers can take a cost-effective approach to delivering customers a more seamless, personalised experience, growing sales in turn.
Inventory accuracy and availability
Stock availability and transparency can set one retailer apart from the competition. Today’s consumers demand rapid fulfilment, and are quick to go elsewhere if a stockist is not up to scratch, or if its various channels are telling them different things about the availability of stock.
Effective inventory management is also essential at an operational level, particularly given the pressures on stores to maximise return on floor space in a world of rising rates and rent.
As is often the case, the devil is in the details. Our research found that only 40% of retailers consistently manage inventory performance and turnover metrics at the store level, which can lead to missed opportunities to satisfy the customer.
Having the right product at the right time – and enabling visibility of inventory across the entire business – is crucial. A New Store Excellence Scorecard from Tyco introduces new KPIs such as available to promise (ATP), merchandise effectiveness and inventory turn, giving retailers new tools for effective, detailed inventory management.
Empowering store associates
Staff are one of a retailer’s most valuable assets, yet many are not being deployed effectively. Our research indicates that retailers spend 70% of their time dealing with operational tasks; leaving just 30% of time remaining to deal with customers.
If customer engagement sets the in-store experience apart, surely store associates’ time is best spent offering guidance and purchasing support, or ensuring checkout queues are kept short.
Retailers can develop a better understanding of their workforce by looking carefully at factors such as engagement rates, schedule effectiveness and labour cost-to-sales ratios, before addressing any inefficiencies holding them back.
Enabling change at every level
Improving store performance takes a holistic approach; retailers need to look at every level of their business to identify where they can improve both sales and operational effectiveness.
Retail may be more complicated than ever, but by generating in-store insights from real-time data, and assessing store performance against this new set of KPIs, businesses will be better positioned to streamline operations and increase the quality of their customer relationships.
Download A New Store Excellence Scorecard from Tyco to learn more about measuring store performance.