How do retailers reduce the hit on the ‘bottom line’ at Christmas?Sarah Whitworth
Christmas is only 14 weeks away … yes I said it. Christmas and any type of holiday are key times for retail, they always have been. It’s when prices come down, competition goes up and the race is on to clear the stocks to reduce the hit on the bottom line.
So, how are retailers and other businesses using technology to help reduce the bottom line hit, improve processes, gain valuable insight from data AND keep themselves one step-ahead of their competitors?
Here, I focus on retail, but the solutions are suitable for all types of businesses.
As a young man I ‘accidentally’ fell into the retail sector starting as a Saturday lad working to earn some pocket money in Burton menswear. I was lucky enough to forge a fast-paced career to become Burton Groups’ youngest ever store manager at 22 years old followed by becoming the youngest Area Manager at just 25. Following that, I moved into retail operations as a company ‘trouble shooter’ for two major high street retailers, of which I reported directly to the CEO. Back then, decision making was very much a ‘finger in the air’ scenario, due to data and real insight being scarce.
Only a few weeks ago, as a nation we reminisced on the anniversary of the death of Princess Diana. I bring this up because it was a time when I had to make one of the biggest decisions in my career so far. The big decision I had to make was to do with the upcoming funeral, the current mood of the nation and how the brand I worked for, recognised and respected this sad occasion. To me, the answer was simple. We had to close our doors for the day and allow our staff to pay their respects, take the time to reflect and mourn the sad event with their families. Working in retail 20 years ago had its challenges. It was an era where the internet, email, social media didn’t exist and the term ‘Big data’ would have been interpreted as a new burger that Wimpy, the then leading fast food burger joint, had brought to market.
We were heavily reliant on a handful of head office personnel to provide stores with very basic reporting, often just a best seller list of top 20 products which were swiftly shoved to the front of the store to continue the success of those products and the rest pushed back into the stock room to then be bought back out after Christmas and sold in the new year sales at a loss. No planning, no forward thinking, no predictive insight, just finger in the air thinking.
But where are Retailers now?
Retailers face many challenges, including:
- Cut throat competition
- Consumer demand for personalisation, efficient service and accessible data
- Evolving consumer trends and expectations
- Understanding and managing customer sentiment
- The need to be quick to market
- The ever-growing rise of ecommerce
- Cost-side pressures stemming from a weak pound
All of which point to retailers needing to be agile, flexible and ready to handle change, quickly. When it comes to dealing with any of these challenges and staying at the fore-front of your market, the data held in Epos systems and internet transactions, is possibly the most valuable asset at your disposal. However, it is only valuable if you put it to work in the right way, such as knowing how to extract and structure the data so that it delivers real insight. To move away from the ‘finger in the air’ technique you have to make changes.
Legacy financial systems and technologies which are clunky, inflexible and driven by many manual tasks are going to hold you back. To avoid your competitors getting ahead, you need to adapt your processes and technology to allow you to deal with the constant challenge of predicting and responding to changing trends and buyer behaviour. This isn’t all pie in the sky, this is possible, retailers are adopting it and it is something which you can work towards. Failing that, let’s go back to stock piling those products in the new year sale at a loss!
How do you handle multiple retail stores, data inputs and reporting needs?
If you have multiple stores, internet traffic and sales, social media presence, then you have the challenge of combining all this data to deliver valuable insight. This data brings together customer data, sales data, stock data plus more, which is then used to inform business wide decision making. And of course, data has little value if no-one can make sense of it and add business relevance. In an ideal world, data from every store and online platform should combine to give you the full picture. Wouldn’t it be great to be able to discover sales patterns, inventory and margins for every location and have the ability to optimise your processes across every store?
We think it would be…
To reduce the hit on the bottom line, discovering hidden problems and opportunities from under achieving stores and product lines needs to be done as soon as possible. Avoiding it becoming fodder in your new year sales.
Sadly, for many retailers they have multiple systems, data types, reporting needs and multiple ways business users access and consume data. Often this mix of needs and data inputs lead to having multiple versions of the truth and never a complete overview of what’s really happening in the business. Without a single view of the truth or collaboration between key stakeholders and departments, the company will always be one step behind.
However, I have had the privilege of helping many retailers solve challenges in their businesses, at HAYNE we focus on just that, your challenges. Technology is our business but technology doesn’t solve your problem alone. It takes business acumen working with organisations to understand those challenges and working together to fit the right technology to solve those issues.
The right technology delivers more than just data
When I have delivered Business Analytics solutions to my clients with HAYNE, we don’t just deliver the technology, we deliver results such as giving our clients the power to:
- Understand customer/ buyer sentiment analysis
- Analyse retail loyalty card analytics
- Improve supply chain efficiency
- Easily access rolling financial forecasts
- Driver based planning
- Present effective sales forecasts
- Deliver effective resource planning
- Empower teams by allowing self-service real time analysis for decision makers
- Improve stock loss targets
- Gain insight into marketing campaign effectiveness
HAYNE understands that a complete solution goes beyond technology, encompassing processes and, most importantly, the people within the organisation.
How are you going to prepare for the Christmas sales this year?
Christmas is coming, yes only 14 weeks to go, so ask yourself how much stock are you selling this year at less than you paid for it, in order to clear those back-room store and distribution centres?
If you would like to learn more about how you can leverage your data to deliver insight then contact us or join the webinar:
WEBINAR: Budgeting and Planning in Uncertain Times
20 September at 2pm