Tuesday, November 20, 2007
Given the heightened competitive pressures in today’s retail marketplace, more and more retailers are focusing on metrics like customer satisfaction scores and the lifetime value of customers. The folks at Wal-Mart have estimated that the lifetime value of a lost customer for one of their stores can be as much as $200,000.
According to AMR Research, customers will stop shopping at a retailer after three negative experiences. And the factors that typically drive customers away—out-of-stocks, rude or uninformed sales associates—all correlate directly to store execution.
Paras Goel, a Principal Consultant focused on Store Operations and Execution with Infosys, says retailers large and small are realizing the front lines are critical to overall success.
Goel, who has worked with several Fortune 1000 retailers in North America as well as other parts of the globe to define their store strategies, emphasizes that the store is the central “point of convergence” to all customer and merchandising strategies. Retail TouchPoints recently talked with Goel to get his insights into the key metrics and tactics retailers are applying to improve store execution.
THE FRONT LINES
A core area that many retailers are still neglecting, according to Goel, is store associate motivation. “I find most retailers still don’t give this the attention it deserves,” he says. “Providing store associates with tools to do their job better gives them a sense of empowerment and ultimately results in improved customer satisfaction.”
The primary investment retailers make to improve motivation is in the area of training, but Goel points out that new technology has also enabled self-service capabilities which are generally very popular among store associates. “When a retailer is able to offer its associates features like shift-swapping or shift-bidding, which was borrowed from the airline industry, it has a very positive impact.”
Another result of the increased adoption of advanced workforce management solutions, according to Goel, is the ability for corporate management to measure and benchmark how stores are performing from an execution standpoint. Specifically, he suggests looking at the following areas:Productivity, Coverage, Associate Satisfaction, and Communication.
To see descriptions of each area of performance measurements, click here.