“It might be said that it is the ideal of the employer to have production without employees and the ideal of the employee is to have income without work.” – EF Schumacher
In some of our core retail operational diagnostic work (Fit for Business programs), we often have the pleasure of conducting some fairly straightforward time and motion studies. This approach requires the recording of all tasks retail staff are asked to conduct during their day-to-day activities.
Essentially, these tasks are divided into activities that are “customer-facing” (the front door) and “non-customer-facing” (the back door). These back door tasks include areas such as:
- Stock receipt and ticketing
- Product replenishment
Interestingly, in a sample of five speciality retailers, we have recently recorded up to 40% of available hours for selling are consumed with these back door activities! Now imagine this in an environment where sales and individual attainment of sales are not measured and we start to see a retail environment that is clearly ‘unfit’.
Our data also reveals another dimension to this problem. On average, only one in four shoppers in a speciality retail environment will actually purchase a product, so the plot thickens as to why for some, the basic fitness steps of maximising the environment to make the sale has not yet been implemented.
Even the most experiential and captivating cross-channel retail experiences won’t ‘cut the mustard’ if store staff are either unmotivated or ill-resourced to make the sale and on some occasions we’ve even discovered salespeople in retail who don’t like selling!
Moreover, we have uncovered retailers who offer little product, service or sales training, no real targets and certainly no sales target for the salesperson, essentially giving them free rein to simply ‘float around’. Marry this problem with the fact some retailers are offering the same old, same old each day and you start to see that the problem lies in leadership at a higher level.
It’s imperative that your team members are focused and have the time, space and incentives to make those sales, so this week we’ve looked at some fitness tips to help you achieve sales increases in store:
- Diagnose the investment in customer service and satisfaction levels. You need to understand your customers’ service elasticity – or in other words the point at which too much service is actually as uneconomical as too little service is damaging.
- Analyse how much time customers are actually spending in the store.
- Define the front door and back door tasks and reduce the latter where possible.
- Increase product knowledge training and test and reward a deep product understanding. Product knowledge is critical to driving a sale.
- Create a culture of sales performance by introducing sales targets to individual team members, supported by coaching and reward programs. (Weekly sales start-up meetings are helpful and motivational here.)
- Link staff rostering to customer transaction numbers both in average time and rate.
- Don’t buy into the commentary that says ‘no two days are the same here and therefore we don’t measure sales’.
- Have the right product depth and range in stock (e.g. fashion retailers: check out the main size runs in many retailers and you will see gaps all over the shop).
Sales come from your fitness in two areas:
- Differentiated brand positioning (outside the store) and
- Inside the store:
- Visual impact
- Ranging and depth of stock
- Merchandise presentation
- Staff presentation and interpersonal skills
- Staff product knowledge and confidence
- A culture of sales productivity
Sounds easy? The silver bullet doesn’t exist. Rather, it’s the combination of many factors inside the store that will lift sales, really having little to do with anything that is going on outside of the store.
Happy fit retailing.
Brian Walker is managing director of Australasia’s leading retail consultancy Retail Doctor Group.