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Seven ways to boost store efficiency

20th May 2020

Efficiency has gone from being something of an optional extra that only the retail geeks were interested in, to an essential in your retail survival tool kit.

Retail is experiencing massive change as technology, innovation and customer behaviour shifts create a perfect storm that is shaking all parts of the retail sector. This leads to an increase in competitive and commercial pressures where margins are tighter, and every penny counts in a way it never really did before. An efficient store operation is essential to reliably give your customers the experience your brand promises while keeping costs under control; so you can invest in the changes needed to retain and build your customer base.

Where there is change, there is also opportunity. Having an efficient and agile operating model frees you up to exploit the business opportunities that today’s market changes will bring to you.

The challenge with efficiency is where to start. At one extreme it can feel a bit of a vague concept, at the other something you can only do if you have a battery of measures and KPIs that create a whole industry of measuring and monitoring.

We’ve worked with leading retailers in many sectors and markets and these are our top tips for practical ways to get you the fastest improvement in your efficiency.

 

  1. Sell more – This might sound a glib statement and we know in a tough market it isn’t always easy to drive sales. Yet selling more is the single best thing you can do for your productivity. You can often sell more without increasing your costs and needing a bigger team. And higher revenues mean you sweat your property assets harder and improve your stock turn.

So, what can you do to sell more? Review your category sales and identify where sales are not keeping pace with the store figures overall. By looking at a category a week and optimising the offer, store managers can start to get incremental growth from customers already in your shop. It might be stock availability, not communicating great offers as clearly as possible or not having the latest products that manufacturers are spending advertising Euros on. And don’t forget your impulse sales. If you could sell and extra item to every other customer, it could have a big impact. I don’t mean offering every customer something that is not relevant to them in an automatic way, as WH Smith are now famous for doing in the UK. Instead you need to think like your customers and identify what might be appealing to your customers. Your model is Penneys who have perfected the art of impulse offer in their queues, to such an extent that the payment area is a mini shop full of things to tempt you. You don’t need to go for their scale; what would Penneys do if they had your shop?

 

  1. Speed up payment – Did you know that typically it takes half the time for customers to pay with a contactless card or device than a chip and pin card or cash? We know, we’ve measured it! Switching more of your customers to contactless will be quicker for your customers and for you. Make sure it’s easy for customers to reach your contactless device and use the point of sale material well to prompt your customers to use contactless when they can.

 

  1. Slick Click and Collect retrieval – Click and collect is a great way of giving customers easy access to your widest range and generates footfall into your store. Yet the average time we’ve measured for retrieval is 1 minute 12 seconds, which is longer than many till transactions take. The fastest retailer we’ve measured is an average of 19 seconds from start to finish. They achieve this by having a well laid out storage area right by the tills so it’s easy to put your hand straight on the parcel the customer is calling for. Are you spending longer than you need on order retrieval?

 

  1. Stock levels – it is essential to have the stock your customer want to but available on your shelves. Yet stock in a stockroom just creates work for your teams and increases the chance it will get damaged. The ideal stock process is for items to be delivered when needed and put directly to the shelf. This means your team touch an item once before the customer selects it. Any additional stock handling and counting is work that could potentially be eliminated. To improve your efficiency, empty as much of the stock from your stock room onto the store shelves and manage your stock flow so lines don’t have to be moved around and counted while they hang around in the shop. Work out how often your team touch an item before it is sold, you might be surprised.

 

  1. Efficiency study – is a useful measurement technique we use that looks at the operation, capturing data on what colleagues and customers are doing. This data analytics creates a detailed picture of how much time is spent with customers rather than on processes and how well the available colleague resource matches the customer flow and demand.

Insights from this study help retailers remove wasted time form their operation and release time from tasks to increase time with customers. One client with over stores across Europe has used their analysis to reduce time on essential tasks and eliminate wasted time in their business. They’ve increased the time they spend with customers by almost 40 percent over a period of 7 years.

 

  1. Rotas – it’s worth a look at your rotas to see if the shift patterns match the business demand and opportunity. Do you have enough people available for your peaks, the time when it is easier to grow your business? Do you have too many people if it gets quieter towards the end of the day? Do your break patterns fit the quieter times, so you don’t lose people from the salesfloor when you need them most? Simple tweaks can make a big difference to the service you deliver when it matters most to customers

 

  1. Repeat – your operation and customers will continue to change. To keep your operating model slick, agile and ready for the opportunities that will come your way you will need to have efficiency permanently on your agenda. Efficiency is not a one off project, it’s a way of working that the best retailers embrace.

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