Consumer products & retail

Store process improvements for North America specialty retailer

A specialty retailer had successfully grown to over 125 stores across North America. These stores were accustomed to operating independently within the entrepreneurial culture that had developed across the network and the retailer organization. Additionally, each region had developed its own approach to best practices for a variety of processes, and few processes had been given a thorough and holistic review for their impact on the store.

Challenge
The challenge was to introduce and embed best practice processes to increase the stores’ efficiency and stimulate savings. Although the stores would continue to benefit from some localized management differences, there was a strong belief that store processes could be streamlined and standardized. A thorough, data-driven examination of the processes and practices was required to identify productivity opportunities.

Approach
A thorough understanding of the store requirements was developed through detailed in-store observations and data gathering, store management and associate interviews, and customer intercepts. To begin gaining store buy-in and develop further insights, the team conducted a series of regional workshops and corporate interviews. They identified several high potential store productivity opportunities in operational processes, customer service functions, and back-office processes.

Implementation focused on:

Applying cross-industry principles to ensure efficient use of space and resources in merchandising the store, from the receiving door to the store shelf
Improving customer experience at check-out and customer service desks through improving focus on what matters most to the customer and reducing time spent on non-value added tasks
Developing a store inventory strategy to ensure the right product is available while slow moving and obsolete inventory is purged
Ensuring staff scheduling was aligned with customer traffic patterns and fixed operational demands

Results
Within 6-7 months the retailer realized significant improvements across all stores in the network. A rapid roll-out supported by detailed training programs ensured district teams were able to quickly implement the changes and make them stick.

Highlights included:

22 percent labor cost reduction in operations and merchandising
15 percent labor cost reduction in customer-service labor
40 percent increase in receiving productivity, which saved over 110,000 person-hours per year
Improved customer experience – easier to find products on the shelf, reduced wait to be served at the customer service desk, and improved service from staff