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[13 comments]

RSR Research: The Store Manager - On the Cusp of Being Empowered?

December 14, 2011

Through a special arrangement, presented here for discussion is a summary of an article from Retail Paradox, Retail Systems Research's weekly analysis on emerging issues facing retailers.

How is the challenge of the mobile-empowered consumer affecting the job of the store manager, and how are retailers positioning their store managers to better meet that challenge?

Unfortunately, for many retailers, the road to getting store managers into their rightful new position of power is fraught with roadblocks, according to a new RSR benchmark study. In aggregate, many retailers tell us they just have too many other priorities with which to compete (31 percent).

At the same time, their existing technologies and infrastructure are currently standing in the way of being able to empower the store manager any further than they already have (also 31 percent), and conflicting priorities set by different departments, which are then sent to stores, present problematic issues as well (27 percent).

Winners tell us they have an additional problem with which to contend: the best performers report — at an inordinate rate — that they are far more challenged to provide store managers the information they require to be more effective in a timely fashion. Forty-two percent of Winners (vs. only seven percent of average and lagging respondents) cite this as an impediment to giving the store manager better technologies and tools. In fact, it is Winners' top inhibitor. For these forward-thinkers, the issue is not whether the store manager needs more firepower, it's simply an issue of how to get it to him/her faster.

As a result, the key to that evolution resides in more near-real-time exception reporting, particularly for Retail Winners (64 percent vs. 50 percent of average and lagging retailers).

Winners are also much more aggressive in their use of pilot programs in stores (50 percent vs. average and lagging retailers' 29 percent). What's interesting is that for them, the buck stops here. Exception reporting and pilot programs are the only means by which Winners see great value to get past their internal roadblocks. Fast, accurate reporting (and the ability to test it in select stores) represents something of a holy grail to the best performing retailers.

By way of comparison, average and lagging retailers see great value in a host of means across the board — ensuring there's a single point of contact between stores and other departments (57 percent), more involvement from senior management (64 percent), better internal training programs (64 percent). This does not mean these retailers are grasping at straws, as all of the options they selected are solid business practices; it simply confirms that they are not as far along in the process as Winners, and have a long way to go if they are to catch up.

Discussion Questions:

Discussion Questions: Is fast, accurate reporting the primary hurdle to empowering store managers? How is the challenge of the mobile-empowered consumer affecting the job of the store manager?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How much of a hurdle does the lack of fast, accurate reporting represent in terms of empowering store managers?

Comments:

It is ironic that, increasingly, customers are becoming more informed than the managers about the merchandise assortment in the store.

While this is an impediment to great service, the larger issue is a cultural one. As retailers consolidated and centralized over the last several decades, so did the decision-making authority. The role of store management was to execute the decisions of others, not make decisions. Store payrolls were considered necessary expenses to be controlled, not critical elements of success. If you doubt this, see if you can find a major retail CEO that came up through the store's organization.

The winners have figured this out and are taking steps to put more power in the hands of those who are next to the end customer every day. That's why they are the ones with more focus on technology, and pilot programs to address the use of technology at store level. That's why they are winners.

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Bill Emerson, President, Emerson Advisors

With all of the emphasis (at least in word, if not deed) on Shopper Marketing, store clusters, shopper segmentation, local marketing, in-store dynamics, etc. -- it feels inevitable that the store manager will be forced/expected to be more than just the executional arm of the HQ brain. The ability to make mid-course corrections, on-the-fly changes based on the actual store's shopper, footprint, etc., cannot be left to a spreadsheet being pored over at corporate.

One of the initiatives I have been involved with is the concept of putting the merchant back into the store (we lost that neighborhood resource aspect of shopping in the local stores when we went to the larger chain dominance). The days of going to the store for advice on recipes, food preparation, fashion, health aids, etc., seems like a quaint relic of a time gone by -- but I suspect that everything old will be new again -- just enhanced by technology and data IN ADDITION to the personal touch.

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David Zahn, Owner, ZAHN Consulting, LLC

I wonder what the "too many other priorities" the store managers are referring to as the inhibitor to implementing technology. This appears to view technology as a "gimmick" and not a solution for the challenges store managers are currently facing.

Store managers are going to have to learn how to leverage technology as other industries do in 2012. There will be "technologists" that want to promote their gimmick QR Code and RFID stuff but store managers and the entire retail industry will have to start identifying technology solutions and metrics to drive the development of the proper technology tools.

Ed Dunn, Founder, (Stealth Operation)

The obstacles to empowering store managers (and store personnel in general) are more cultural than technological and vary by channel. The store managers of many chain stores are running HUGE businesses. It is in management's best interest to get them and their store personnel the information and other help they need to succeed. When HQ starts to understand that all selling gets done at store level, and that they can boost sales by providing each store with what they need to do their jobs better; then reports and sales will improve.

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Al McClain, CEO, Founder, RetailWire.com

I think the key word in this piece is "cusp," which correctly points out that we're not there yet. It still seems that many retailers are more concerned with adhering to process rules at the expense of customer satisfaction and sales. Let's hope that the pace of empowerment picks up!

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Cathy Hotka, Principal, Cathy Hotka & Associates

Here is a personal story that shows the importance of empowering store managers. I recently visited my local Bed, Bath & Beyond store as I wanted to buy a French Skillet. I compared prices on my mobile device and that exact same skillet was over 10% cheaper at Brand X. I brought this to the attention of a manager by showing him my screen. He rescued the sale straight away by matching the lower price. I would have walked out otherwise and ordered from Brand X.

Dr. Emmanuel Probst, Vice President, Retail, Empathica

In our 25 years of working with retailers, we've found that some retailers actually understand the value and importance of empowered store managers. Others are so focused on having tasks done; their managers are too busy doing reports and other such activities that they have little time to actually manage the store. As technology continues to change how stores function, an empowered store manager is absolutely essential.

George Whalin, President & CEO, Retail Management Consultants

As an ex-store manager, I can say that inventory and pricing data would be great to have at hand. There are some great examples of this in the comments so far. This information, in a mobile platform, would make customer service and inventory management more actionable in real time. There are enough retailers now globally that are making this work without burdening store people with more administrative tasks.

I went to an office supply store for an item that had the best price that I could find, and the website said they were in stock at my nearest store. The store employee confirmed the in-stock situation when I visited the store. They checked in back, came back out to me to tell me that it will take several minutes to dig out the product from the bottom of a pallet and suggested I continue shopping. I did shop further, selected more to purchase and they brought the item they dug out for me to the POS. Great service. Technology CAN help.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Is fast, accurate reporting the primary hurdle to empowering the store manager? No! While I agree with the premise that the store manager has too many priorities to truly "touch" the shopper, the answer is not just technology/tools for empowerment. To properly address this issue requires an all inclusive process, people and tools approach. The first step, process, requires the design of effective merchandising standards and compliance processes.

Next,there must be better alignment of store operations with merchandising and realignment of in-store responsibilities...process and tools alone will not produce the desired results. By realignment of in-store responsibilities, I can build a strong argument to suggest that moving more decision authority to the store is necessary, but a single focus on store manager decision authority will not produce the desired results. There is a much bigger issue relative to the management structure of the store.

And, of course, a retailer must continually investigate opportunities to implement tools designed to more efficiently manage the store.

Yes, there are a number of barriers. But, the solution is not highly complex. We have the answer.

Winston Weber, Chairman and CEO, Winston Weber & Associates, Inc

I am continually amazed that store managers for Fortune 100 retailers who are responsible for millions of dollars in revenue, customer service and all of the challenges facing a business 'owner' is not provided the core tools to at least be on par with their customers and their expectations. NASA sent men to the moon with the computing equivalent of a Commodore 64 and multi-billion dollar retailers are playing 'catch-up' to the digitally empowered consumer. Retailers have been too busy and focused on the operational challenges of putting stuff on a shelf to appease Wall Street rather than listening and observing their customers and brand vendors to design and develop relevant and personalized communication based upon a 'customer-for-life' strategy. They now are scrambling to address the gap but costly mistakes will be made in the rush to 'fix it'.

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Adrian Weidmann, Principal, StoreStream Metrics, LLC

It would be nice to have a definition of "Winners" before commenting rather than having the term simply dumped into the middle of this topic. I also get the idea that the terms "average" and "lagging" (neither capitalized) have definitions that are apropos, and knowing them would also be helpful.

Too many store managers are still more comfortable jumping into a checkstand to help out instead of "managing by walking around." Asking this type of manager to master mobile-empowered shopping is a reach. To me, it comes down to this: Is Store Manager an executive position or a labor position? The tightness of store budgets often dictates that managers become part of the labor force because the store is understaffed and poorly scheduled, and employees are undertrained and undermotivated. How do you become mobile-savvy in those circumstances? How do you elevate your store to "Winner" status, whatever that means?

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M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

Taking a look at the first chart, it is sad to note that the primary impediment to providing better tools to store managers is "too many other priorities." Store managers manage the people who are in direct contract with a chain's shoppers. A store manager's role is so important that how he handles his management tasks can make chain-to-shopper contact a great one and bring the shopper back, or make it a poor one and chase the shoppers away. One of the biggest priorities should be to provide store managers with all they need as quickly as is possible. Taking a look at the second chart, all the bars for every line item, red and blue, should be out near 100%.

Relative to providing the tools to store managers, if there is an obstacle, a bigger bullet should be loaded immediately to solve the problem.

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Roy White, Editor-at-large, RetailWire

Great insights as usual from RSR and analysis worth consideration from any retailer trying to drive business growth. Additionally, it would be interesting to look at how retailers actually measure and manage the execution of all of the various programs and procedures being used to drive this business growth. As has been done in manufacturing, e-commerce, and even sports, success will be driven by not only on-going innovation, but also the ability to monitor, measure and manage the actual impact of each of those innovations to maximize return and minimize expense.

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Verlin Youd, Principal, VPY LLC

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