Few industries are more demanding than the retail industry. Whether you run a small local corner store or are a C-level executive of a retail chain, you are subject to the well-known maxim that “to succeed, you must know how to do every job in the store.”
Some may think that being an executive of a retailing giant is harder than managing an individual retail store, but that perception is mistaken. C-level executives have lots of departments and support staff to help them; at the local level, store managers have all the decision-making and executive responsibilities. A store manager needs to wear many hats – they are your CEO, your CFO, your CMO, your Chief Human Resources Officer (CHRO) and your Chief Procurement Officer (for non-merchandise goods and services); in fact, they sometimes have discretion as to what to sell (or re-order) and at what price, which also makes them the Chief Merchandising Officer as well.
Therefore, it is easy to see that store managers have more on their plate than simply being the head of the store. They are always juggling competing priorities, and these are things that often cannot wait, making for complexity in keeping everything running smoothly. As such, store managers are always looking for ways to make running their stores simpler.
Store Financial Performance as it Happens
A store manager lives or dies by the store profit and loss (P&L) statement which measures both the top and bottom line contribution that a store makes to a retailer’s performance. Usually, the store P&Ls are compiled after the end of period which is usually once a month or quarter. By then it is too late for a store manager to have any impact on the performance of that period. Imagine the possibilities if the store manager could receive their store P&L on a daily basis, or even instantaneously on demand, or when a material event happens that could impact the store’s performance? Well, modern financial systems can now run on a real-time platform that enables a soft close of the books in the middle of a period, made possible by the ability to process large amounts of data in fractions of a second. This capability has the potential to transform the store P&L from a record of past performance to a tool that will enable insight and action that could impact the stores performance. For example, if sales were trending below plan or forecast, the store manager could be alerted to check shelf inventory, pricing, store traffic, lines at the cash registers, competitive activity, or other external events like weather or traffic.
People – the Store’s Secret Weapon
In retail, choosing the right employees has an extraordinary impact on how well the store does. Employees are your front line, and excellent customer service delivered by them leads to repeat business, which is critical for your success. In this age of intense omnichannel disruption and competition, the store’s associates are a retailer’s secret weapon. They can provide much more than a Website or social network in terms of helping the customer find the right products, giving advice on different brands, providing guidance on care, use and accessories, as well as offering special promotions or discounts and even having the products shipped to the customer’s home if they are not available in store. In order to achieve a high level of customer engagement, a store manager must attract, hire, train, motivate and reward his or her team accordingly. Traditionally, the store manager has done this with mountains of forms, paperwork and manuals which need to be sent back and forth with head office. Today, these tasks can be done simply through electronic means, not only streamlining the work of the store manager but also ensuring consistency and compliance to legal requirements across hundreds or even thousands of store locations of a retail chain. These tools can also provide a high degree of content, for example guidance on writing performance goals and appraisals, as well as workflow for approvals and employee self-service. All these help tremendously in enabling a retailer nurture and leverage what is possibly their most valuable asset.
Indirect Procurement – Keeping the Lights On
To run a store requires not only inventory and people, but also a surprising amount of supplies, whether for electronic technology, lighting and HVAC (heating ventilation and air conditioning), shopping carts and bags, fixtures, fittings and signage, and supplies for offices, breakrooms, bathrooms. It would be wonderful if these supplies could be auto-replenished, much like basic merchandise that a store constantly keeps in stock. However, this is usually not the case and the store manager, putting on the hat of Chief Procurement Officer, has to frequently do this manually. Today, a store manager can be connected electronically to their preferred suppliers’ catalogs, with prices that have been contractually negotiated by the retailer, and easily generate orders to replenish supplies. This not only helps the store manager, but also the accounts payable department which can easily approve the payment of goods. The store manager can also monitor their spend to ensure it is in line with average for similar stores in the chain. Looking further into the future, these business-to-business networks could be used to procure merchandise for resale, particularly of items that are sourced locally. This may be a way to provide more localized store assortments, and help a store differentiate itself by being more in tune with the local community.
Run Simple with SAP
Keeping things simple will help the store manager and store team stay focused on their primary goal – keeping the customer satisfied. There are many more ideas to help the store run simpler at the upcoming 2015 SAPPHIRE NOW and ASUG Annual Conference in Orlando, Florida this week. I hope to see you there! If you missed the show, then you can watch the replays and discover ways to reduce complexity in your business – all from your desktop or mobile device at SAPPHIRE NOW Online.
SAP wants to make the lives of store managers easier and offers solutions that simplify their everyday tasks and are easy to use.
Join us at the Eden Roc in Miami Beach, Florida October 21st – 23rd for the SAP Retail Forum 2015 – Simplify to Innovate. Learn more here.