The beginning of the end?
28th November 20
The beginning of the end? News is just breaking of the positive results from the Covid 19 vaccine trials that mean the first vaccines may be available around the end of this year. A huge step forward yet the end is not quite in sight yet and business is likely to have more months of disruption to come.
The way we have done things has been changed for such a long period that we probably won’t go back to how things were, and new behaviours have had long enough to become entrenched habits. All businesses are looking at new ways of doing things as sales and trading patterns have changed forever. All businesses are likely to be looking hard at their cost base and making sure they right size their operating model. We created an article for an Irish grocery trade publication, shown below, that covers our top tips on cutting costs without damaging customer experience.
In today’s difficult trading environment with ongoing uncertainty, it’s important to balance considerations of cost and customer experience. So, we’ve put together our top opportunity list to help you review your operation.
First, let’s consider growing productivity by selling more. The things we often spot that get in the way of driving sales are:
- Queues – when the queue is too big customers vote with their feet and don’t shop with you. When we measure queue length and colleague numbers throughout the day the data often shows a mismatch between customer demand and the number of tills open.
Your Challenge: take a hard look at your customer service – When do customers visit your business? Does that match your colleague availability? Are there times of the day when queues build up? Are your colleagues focussed on stock tasks rather than prioritising customers? If so, free up more people to be available for customers by shuffling shift start times, breaks and when other tasks are completed.
It is easiest to drive sales during peak trading when the highest number of customers are around. How much more can you sell during peak trading by moving resources?
- Process Problems – slow processes soak up team time, so they have less time for customers. Common ones we see include slow running systems, policies that require a manager to authorise every refund, and excessive time spent cashing up every till daily. Your Challenge: ask your team what they find frustrating and what stops them looking after customers. They will soon tell you the things to address to remove barriers and increase sales.
Once you’ve optimised sales, it’s time to turn to your costs. We start by looking for waste activity within the operation that can be removed without an impact on customer experience. Below are the most common culprits we see:
- Walk unladen – This is a technical workstudy term for time spent walking unnecessarily. The first place to look is deliveries. Our retail benchmark shows that retailers spend a third of total time on stock handling on average, so it’s a good target to go after. Ideally, stock arrives pre-sorted sorted, avoiding time spent sorting and decanting deliveries. Efficient stock trolleys equipped with everything a colleague to prevent multiple trips between the stock room and stop the hunt for scissors to open a box.
Your challenge: watch your delivery being put away. Are your team walking further necessary? If so, you have identified some time and cost you can save.
Click & Collect can be another source of excessive walk time – and it wastes your customers’ time too. We’ve seen parcels stored so far at the back of a distant stock room that it is quicker for the customer to select the items from the sales floor and pay at the till than it is to wait for a colleague to find and bring back their parcel.
Your challenge: Look at your Click & Collect operation – are the parcels to be collected as close to the service desk as possible? The average time we observe for parcel collection is over a minute, and the fastest retrieve and hand out parcels I just 29 seconds. Get parcel retrieval right and you won’t just save labour cost, you’ll also encourage your customers to interact with you via all your channels.
- Waiting for customers – this means that more colleagues have been deployed to a customer service area than are required so there is spare time that can be reallocated or saved.
Your challenge: Review your customer-facing operation; how many colleagues are under-occupied and could usefully be doing something else? Can you save those hours or move work shifts so they are available at your busiest time?
- When teams are under-occupied, we see that their pace of work tends to drop, as there is no point hurrying when there is nothing to do afterwards. We also see a culture develop where colleagues chat about non-work matters and then struggle to be motivated when work needs doing. This vicious cycle of not having enough to do, filling time with chatting and the pace of work dropping can be solved in two ways.
Your challenge: Firstly, check you have the right resource available at the time you need it; take any slack time and put it into your busiest customer times. The second is to ensure your business has a culture where everyone knows what is expected of them and gets on with it. Leadership makes a big difference.
- Tills typically take 19% of total time for a retailer in our benchmark. Seconds shaved off the process here quickly add up to substantial savings and increased customer capacity.
Your challenge: look critically at your till operation. Is it easy for the team to use? Are button presses minimised? Does the system cope well with every possible transaction scenario?
Is the till area well laid out – is everything easily to hand?
It’s also worth a look at a receipt – most of them are too long and only use one side of the paper. Typically, retailers can save up to 20% of their till roll costs by condensing the receipt copy and switching to e receipts.
Taking the time to get the till experience right helps ensure that your customer experience moment of truth leaves a good last impression and can reduce salary costs too.
- Get rid of your overstock, especially in slow-selling lines. The more stock you have the more there is to count, the more top up fills are needed. There’s also the risk that stock gets damaged; let alone what all that unnecessary stock holding does for your cash flow. Cut the money you have tied up and give your store team a break by having the right amount of stock in each store.
Taking a fresh look at your operation can help you to delight your customers while managing your cost base and grow your business.
Read more? Efficiency Studies are a great diagnostic tool to identify opportunities to streamline your operations and quantify potential savings. And comparisons with our extensive benchmarks brings a useful external perspective too. Efficiency Study can be a quick route to creating a robust evidence base to cut through prolonged discussions, help you prioritise and start making changes that really make a difference. We’ve published a case study on our website that explains what Efficiency Study helps you do and shares some examples from our client work. Click the link to read more