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Retail Forum Process Excellence Playbook

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Overview

The inaugural Retail Forum for Process Excellence, sponsored by SSA & Company and organized by iSixSigma, was the first-ever conference event conducted on the topic of business process improvement in the retail sector. With more than 70 attendees from the retail and consumer product goods (CPG) industries, the conference focused on how retailers can leverage process excellence to reduce costs, drive revenue growth and cultivate systems of continuous improvement within their organizations. We hope you will find this summary of conference topics useful, and as always, we welcome your feedback and invite your questions.

Seeng More than Just the Numbers

Benchmarking and statistical evaluations are among the most useful and analytically rigorous tools available to retailers. However, many business leaders have never considered the potential flaws associated with their benchmarking methods. Presenters at the conference shared instances of how the numbers actually mislead business decisions:

  • Comparing Apples to Oranges: Retailers often grow through acquisition, and subsequently absorb both the data and metrics of the acquired company. Rarely, however, do companies validate the accuracy of the data or take time to understand the formulas used to create the performance metrics. As a result, internal benchmarking becomes a compari son of apples to oranges, often leading retailersto address problems that may not truly exist and ignore other more lucrative opportunities for improvement.
  • The Flawed “Science” of Benchmarking: External bench marking efforts often fall victim to the same pitfalls as internal benchmarking, but on a larger scale. For example, attendees shared at least four different methods for measuring shrink in the retail industry, each of which would yield very different results. Consequently, external benchmarking – when executed incorrectly – may mislead companies about their performance relative to their competitors.
  • Averages Disguise Opportunities: Presenters shared how measuring retail performance using averages can be misleading when the numbers fail to account for variations that may exist in the business. One presenter offered the following example: a calculated average might indicate that the check out time in a given store is 4 minutes. However, this number could mean that half of customers experience 7-minute checkout times because they visit during the busiest time of the day, while the other half of customers experience 1 minute checkout time during non-peak hours.The 4 minute average, therefore, tells an incomplete story.

A clear lesson can be gleaned from these presentations: numbers are useful, but notunto themselves. Benchmarking and metrics should be carefully designed to capture a real-time, accurate image of operations that negotiates the contours and variations of a business. Numbers bereft of this nuance are not only inaccurate, but potentially dangerous to a business looking to make process changes.

A World of issed Opportunities

Leveraging an anthropological study of sales interactions conducted by SSA at three national retailers (a drug/pharmacy chain, a mid-range clothing retailer, and a consumer electronics retailer), presenters discussed the sales loss that can result when organizations do not execute on fundamental processes, such as customer engagement, consultative selling and customer management. The discussion was punctuated with estimates of the revenues that could be achieved if those same retailers were able to improve their sales and customer management performance by the smallest of margins.

  • Poor Customer Engagement: SSA’s surveyors found themselves greeted by sales associates in fewer than 50% of their visits and proactively offered assistance in less than 24% of cases. More than two-thirds of the time, the surveyors struggled to solicit any assistance at all from sales representatives.

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