Page 151 - DMGT553_RETAIL_STORE_MANAGEMENT

Retail Store Management

Notes Meaningful Information: As margins narrow and budgets tighten, retailers are continually
being pressured to do more with less. A relatively small number of people must manage
valuable resources. This means there is limited time available for managers to analyze
information, relevant or not. And this is where a well-executed performance management
system can offer a competitive edge. While many retail managers are overwhelmed by vast
amounts of data that must be analyzed before they can take action, a performance management
system presents its users with only those metrics that truly impact the business. There may be
50 performance metrics that could be managed at a store, but 10 drive 80% of the store
profitability. This holds true for most retail functions. If telephone expenses are less than 1% of
store expenses, they should not be reported as a KPI for the stores. Surprisingly, reports like this
are often found and prove distracting to managers, keeping them from focusing on more
important factors. In marketing, if only a small percentage of cost is driven by postage, and
there is little action that can be taken to impact postage once a catalogue delivery decision is
made, then postage should not be a marketing KPI.
Performance management systems also address a retail manager’s limited time for reviewing
and analyzing data by capturing and summarizing critical information in reports which are
graphically presented in the form of dashboards, scorecards, graphs and charts. At a glance,
managers can assess a situation and take action. A store manager wishing to compare holiday
season sales results for the current year over previous years might have to manually pull
information from different reports and databases to make the comparisons. But with an integrated
performance management system, the manager could quickly see from a bar chart that sales are
abnormally low and consider promotional strategies to boost sales for the current year.
Time spent reviewing and analyzing data can also be reduced by reporting or alerting users to
exceptions, instead of making them review a report to find the exceptions. This is a benefit many
performance management system vendors stress with traffic lighting or ranking features. These
features have now been taken a step further, and performance management systems today can
proactively alert users of issues, preventing them from even having to log in to the system –
unless there is a discrepancy that requires action.
In the overtime situation described above, if the store manager knows an alert will be generated
and sent to his handheld when there is any deviation from the plan – in this case if associates
have worked over 30 hours for the period – he/she need not bother to log in to check on
overtime.

Ability to Research Online: While it is true that information should be limited to what’s important
and presented on an exception basis, background information should be readily available to
managers whenever they need to delve deeper into a particular situation. If an HR department
finds – through an exception on one of its KPI’s – that organizational turnover has increased
dramatically, it needs to be able to drill down into the associated data to determine which
regions or departments have caused the increase. It may also need to review which associates
were terminated from which departments, as well as the causes for termination in order to
better assess the situation and take action. In many cases, performance management tools will
stop at the exception point forcing the user to spend time accessing other systems to identify
root causes of issues. Ideally, the supporting detail should be available through an integrated
performance management system, for viewing at the user’s discretion.
Ability to Benchmark: Whether merchants are comparing product profitability by channel, or
district managers are comparing store performance, or executives are evaluating profitability
of similar business units, functional managers need to be able to view performance comparatively.
This enables various parts of an organization to share best practices. A district manager may
wish to compare the labour cost-versus-planned exception report for the individual departments
within a given store, but with an integrated system can also now determine which store in the

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