Empowering Store Operations with Analytics and Business Intelligence

Posted on 02/09/2010

By Bill Robinson, Senior Advisor, QuantiSense

Across the retail industry, Store Operations is underserved when it comes to analytics and Business Intelligence (BI). Merchants and marketers must exploit this information every day in order to succeed - if Store Ops were empowered to do the same, retailers could build and sustain competitive advantage in a market that's tougher than ever.

Most District Managers and Store Managers are given static Flash Sales reports via email or POS printouts. These reports deliver no insight and little context as to how stores are performing, and they drive no real action. This leaves the field personnel in reactionary mode jumping from one fire to the next, day after day, week after week, season after season.

So what is the answer? We believe it is a combination of BI and mobile Web (whether it's via smartphone or laptop.) BI filters out the noise and delivers actionable information, while the smartphone can present the information, record the action, and disseminate multimedia instructions to colleagues.

Let's look at how a BI-enabled mobile device might come in handy to deal with the daunting problems of managing a chain of stores.

BI and Mobile Web in Action - Pinpointing the Trouble Spots

Imagine that you are a District Manager responsible for 12 throughout two metropolitan areas. Your data warehouse has three to four years of store data, including sales and returns, traffic, associate hours, staffing plans, customer data, and payroll.

It's Wednesday morning during the biggest week of your Back to School promotional period. At 7 a.m., your BlackBerry alerts you that three stores are significantly under your week-to-date plan. Your alert suggests that your slow stores should cut back weekend hours based on recent weekend traffic trends, and your outperforming store should add 10 hours to capitalize on higher recent weekend traffic. You like the suggestions and record a brief voice instruction to each of the four managers before forwarding the alert. Each Store Manager will hear the instructions as they check in on their BlackBerrys, and by noon, the affected employees are notified of their schedule changes, aligning expenses to demand.

After your morning coffee, you shift your attention to performance in the current Back to School promotions. A Promotion To-Date report summarizes promotion performance for each store in your district and comparing your performance to last year, other districts, chain average, and the best stores. You study the uplift in traffic and sales as well as changes to the gross margin.

You look to your BlackBerry for a simple cluster chart designed to pinpoint outliers. You note that you have one store that is dramatically underperforming in sales and conversion ratio as well Units Per Transaction and Average Sale. You drill down to that store's unique promotional inventory, looking first to key items, then through the whole promoted assortment. The store is loaded. You request to see a photo of the promotional planogram that was required to be taken by the stores' management on the promotional launch - and there's no photo.

You email the Store Manager to note her lack of compliance and schedule a trip to the store to review their preparedness for this weekend's big Back to School push. The report arrives on your BlackBerry in 15 minutes. You see that only 48 percent of its customers are enrolled in the store's program, compared to 91 percent district-wide – and that traffic conversion rates in this store are 35 percent in contrast to a district-wide 50 percent.

In the next installment of this two-part series, we'll examine the actions you could take in this scenario, using BI and the mobile web as your tools to improve the situation at the troublesome store. Stay tuned!