Retailers can increase sales by an average of 3.7% per store through strong compliance initiatives, according to a research study commissioned by technology firms Foko Retail and Retail Info Systems. This translates to millions of dollars in savings for many companies.
Excellent store execution rewards retailers by helping them achieve financial goals, reduce costs and win against competitors.
“Complex store communications are killing the retail bottom line,” says Marc Gingras, founder and CEO of Foko Retail. “The issue many retailers face is poor management of complicated systems, which breeds inefficiency.”
The study results also show that the gap between HQ’s plans and how the stores actually deliver them is widening. By contrast, excellent store execution rewards retailers by helping them achieve financial goals, reduce costs, and win against competitors, he adds.
Typical issues creating complexity include stockout replenishment, compliance with HQ goals, and promotions and merchandising resets. In addition, inefficiencies that hinder store performance include heavier associate workload, lack of clear guidelines and directions, and insufficient training and visual merchandising tools.
The study clearly finds that better communication with managers and store associates is essential for solving store level compliance problems. It also reveals that one of the best tools — mobile devices — is underutilized today. Only 57% of retailers make them available to store managers.
These problems along with well-known industry trends, such as the boom in online shopping, hyper competition and changes in consumer lifestyles, exacerbate issues with stores unable to maintain growth. As a result, the study points to the larger trend of declining revenues with 37% of retailers polled seeing a decrease over the last 12 months, according to the study.