Tyco Retail Solutions recently partnered with EKN Research to identify key issues driving the need for a new and improved retail KPI and performance culture.
The research e-book, A New Store Excellence Scorecard, defines three pillars to measure store performance and new associated KPIs which provide a foundation to better evaluate business results. By monitoring these insights through real-time in-store data, retailers can make immediate changes and stay ahead in today's highly competitive unified commerce environment.
"In this new digital-driven age, retailers need to re-think store performance management and excellence. By blending essential real-time operational data and customer knowledge, retailers can be in a better position to navigate business complexities. This e-book underscores the value of new KPIs and measurements to provide a new performance scorecard for retailers," said Sahir Anand, managing vice president, research & principal analyst, EKN Research.
THREE PILLARS TO MEASURE STORE PERFORMANCE
Understanding customer path-to-purchase
In the era of omni-channel shopping and multiple brand touchpoints, retailers are struggling to understand customer buying behaviors. Findings indicate nearly 50 per cent of retailers are unable to predict shopper traffic, making it difficult to balance between operational tasks and customer service. Real-time data combined with new key metrics related to in-store mobility, promotional effectiveness, conversion rates and shopper behavior enable retailers to deliver a more seamless, personalised customer experience and increase sales conversions.
Ensuring inventory accuracy and availability
EKN reported only 40 per cent of retailers consistently manage inventory performance and turnover metrics at the store level. Inventory is the foundation for retail regardless of channel and having accurate availability and access is crucial to success. Some of the new KPIs for scoring the ROI of store inventory include available to promise (ATP), merchandise effectiveness and inventory turn, and order fulfilment cost and cycle time. Enterprise-wide access to the "right inventory at the right time" is critical to both the in-store and omni-channel customer experience.
Enabling store execution through empowered associates
Employee engagement and optimum labor hour utilisation are effective tools for driving consistent execution and customer satisfaction. However, research indicates that retailers spend 70 per cent of their labor hours dealing with operational tasks, and only 30 per cent on customer service. Some new actionable KPIs that are effective in understanding operational and shopper satisfaction issues, and the most effective allocation of associate time, include engagement rates, schedule effectiveness and labor cost to sales ratios to name a few.
"As store processes and technologies continue to evolve, retailers can address gaps within store metrics, KPIs and related performance improvement processes that affect associates and customers every day," said Tony D'Onofrio, chief customer officer, Tyco Retail Solutions. "By focusing on the three pillars of retail operations, retailers can create a holistic performance management strategy and a better balance between sales and operational effectiveness."