By Logan Rodriguez, Director of Retail, Square Root
Retail is considerably different than it was 10 years ago, yet the tools and techniques used to identify store performance gaps haven't changed. In an industry demanding agility, Store Relationship Management technology is crucial for pinpointing areas of improvement, quickly diagnosing problems, collaborating on improvement plans, and empowering teams to make informed decisions.
Square Root recently teamed up with Forrester to commission a national study aimed at examining the gaps between high- and low-performing brick and mortar stores. Through our research, we identified key issues in the growing gap, as well as the impact it has on customer experience and loyalty. For tech-driven retail executives looking to boost performance and drive change, consider these three tips.
Understand The Barriers To Growth
According to an eMarketer report, department stores across the U.S. saw sales shrink from $87.46 billion in 2005 to $60.65 billion in 2015. Adding to the frustration of declining sales, over one-third of retailers agree driving store-to-store change is the biggest obstacle to improving poor store performance. What’s more, retail leaders identified operational issues across stores (33 percent) and their store execution management systems (30 percent) as two of the biggest barriers to success.
This data proves operational alignment from the top-down and across stores is the foundation of sustained brick-and-mortar growth. Without an aligned execution of a retailer’s vision and values from store managers on the floor, the customer experience falters — nearly guaranteeing a sales slip. So how can stores ensure this alignment? Training and empowerment.
Empower Your Teams Store-To-Store
When it comes to bridging the gap between high- and low- performing stores, retailers report two main areas of priority: improved training — specifically store employee training (69 percent) and field and store management training (41 percent); and empowering store managers to make actionable decisions in order to improve the customer experience (53 percent).
Empowering store-to-store teams is incredibly beneficial and can affect much more than team morale. When on-the-floor teams feel vested in by upper management, stores see improved customer experience (60 percent), reduced operational costs (47 percent), and progress in employee productivity (44 percent). But without the proper tools and technology in place to support empowerment, it’s often all for not.
Implement New Tools And Tech
While a substantial number of brands know long-term retail success is indicative of a positive customer experience, too many continue to struggle to understand and measure how it impacts financial performance. Contributing to that challenge is the fact many retailers are still employing legacy store technologies that lack the ability to measure the velocity, variety, and volume of data required in omni-channel retail strategies.
Typically, retail operations leaders look to a few key financial KPIs to understand store growth; average sales per transaction (46 percent), gross margin (44 percent), and same store comparison (44 percent). In order to measure store performance, leading technologies retailers focus on three other key indicators: Store Inventory Management (65 percent), PoS transaction logs (64 percent), and Store Portals or Intranets (63 percent). These methods are laborious, intense systems requiring heavy data mining. Unlike today’s store relationship management platforms, the major problem with these outdated systems is they yield no agility and don’t allow brands to quickly and accurately identify areas of weakness.
For retail executives, aligning stores and improving the operational relationship between teams is key. Doing so will increase productivity, agility, and improve the overall customer experience, and thus, the bottom line. Only those who implement the right tools and empower teams to quickly adapt to change and make data-backed decisions will thrive in the ever-evolving retail space.
About The Author
Logan Rodriguez is the Director of Retail at Square Root. With over 20 years of experience in the retail industry, Logan is an expert in store operations and driving brand initiatives. Prior to his role at Square Root, he was with Macy's for nearly a decade. His experience managing and operating in stores has given Logan insight into nearly every sector of retail. His current role at Square Root allows him to directly support innovation and improvement within the retail industry.