Daily Dose of iQ: Manage Retail "By the Right Numbers"

Jan 13, 2012 — Brayden Gervan

What are common customer frustrations with the in-store experience?

Marshall Fisher, UPS Professor of Operatons and Information Management at the Wharton School of Business, listed a few in a recent Harvard Business Review column: product not in stock, no store associate to help them, unhelpful/rude staff, long checkout lines, problems at the POS terminal...

Fisher says problems like these are a huge issue for retailers -- customers are unhappy and employee morale suffers. "I think the root cause is business-school thinking gone wrong. We teach our student to be rigorous and manage by the numbers. Not a bad idea, except that it leads to over-weighting the measurable and under-weighting what's hard to measure," he writes.

"The cure is not to give up managing by the numbers, but to manage by the right numbers."

RQ4 + ShopperTrak: Make Better, Faster Decisions

Next week, we'll be exhibiting our XQ Interactive Retail solution at the NRF Retail's Big Show (visit us at Booth #2859).

We'll also be present with our partner, ShopperTrak (Booth #2327), to show how the ShopperTrak's store-tracking data has been integrated into our RQ4 Business Intelligence module.

By Marshall's account, tracking the wrong stats leads retailers to underdeliver in the customer experience.

If the cure is to manage by the right numbers, how can RQ4 ShopperTrak B.I. help?

The RQ4 ShopperTrak integration centralizes the key metrics relating to store traffic, monitoring the following stats:

  • Total Contracts
  • # of Invoices
  • Traffic Count
  • Act. Close Rate
  • Contract Close Rate
  • Transaction Close Rate
  • Accessory Revenue
  • Accessory Revenue/Contract
  • Staff - Customer Ratio

RQ4 ShopperTrak B.I. provides store managers with immediate insight into what's happening in-store at a given moment, with a snapshot view of traffic patterns. There's no better way to examine historical data and adjust staffing according to peak times.

Marshall conducted a study on the effect of store-staffing levels on sales and customer satisfaction. "The impact on revenue of increased store staffing was incredibly high," he writes.

"On average, revenue increased by $10 for every additional dollar of payroll added to a store, and for some stores that were particularly understaffed, the revenue lift was as high as $28. At the 40% gross margins this retailer was earning on revenue, adding payroll was highly profitable, and fully supported by the numbers, once you had the right numbers."

Inevitably, there will be times where the customer needs exceed staffing levels. But with the right tools in place, you can make efforts to alleviate that disparity by identifying peak times and ensuring optimal staffing -- thereby preventing customers from walking out unsatisfied with their buying experience.

Topics: Retail Operations, RQ, Mobile Industry, Customer Experience, Business Intelligence

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