Is there a failure to communicate between retail HQs and stores?
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.
Retail’s corporate teams are facing challenges in finding the best way for district and store managers to interpret and roll out company-wide strategies at the local level. In fact, according to new research, 42 percent of retailers agree their initiatives aren’t well integrated across the business.
One challenge is aligning data in a way that makes sense for a wide variety of stores. An urban store has different needs than a rural location, as is the case with a smaller store versus a flagship.
“What we see in practice is that those tools work pretty well in the boardroom for the things that we want to try to move across the organization,” Chris Taylor, CEO of Square Root, whose firm published the research, told Retail TouchPoints. “Where they fall short is how they paint with a very broad brush and often aren’t really telling the stories in a way that’s useful down to the store and district managers.”
A small store might be able to explain away low sales by blaming its size, but being shown that it is among the lowest-performing small locations chainwide provides context that highlights the issue. From there, the retailer can suggest tactics that have worked at successful stores with similar demographics.
Technology also can be a valuable tool for managers. Seventy-eight percent of retailers agreed that improved backend tools and technology would help them better understand and improve the customer experience. However, 71 percent said their organization invests almost exclusively in customer-facing technology.
“If you can get a tool to the district and store managers that allows them to really understand and set priorities, that’s what’s going to make all these different initiatives effective in the store,” said Mr. Taylor. “The reality is each store probably has different initiatives that it focuses on, or a different way a corporate initiative is happening.”
Discussion Questions
DISCUSSION QUESTIONS: What challenges do district and store managers face acting on corporate’s initiatives? Are the insights coming from corporate often too broad and out of context with individual store needs? What solutions do you see?
Poll
BrainTrust
This is absolutely a problem in retailing today. The torrent of data that now flows from HQ to the field is remarkable, and the expectations HQ has on district and store managers to extract insights from and apply to running their stores is often unrealistic. HQ needs to focus on the critical, relevant data that DMs/store managers need to make decisions and run their stores. HQ also needs to make the information more visual and easy to process and use by field managers. A little more training on how to interpret and use the data would also go a long way.
The local stores don’t need data; they need solutions. If a chain finds that broad-stroke initiatives don’t apply or make sense when they’ve filtered down, it’s the chain management’s fault, not the district or local guy. That said, sometimes the district or local guy is not the right person for the job. Have someone outside the chain find where the problem is and fix it. Internally there will be too much blame going on.
Two things are true about effective communications between HQ and stores. One, communication from HQ to stores could be much better. Two, retailers are spending a lot of time, money, and effort on the shiny new objects, often at the expense of basics that may be just as important and are certainly the underpinning of a well-oiled machine. There are existing tools in the marketplace already that are designed to improve the dissemination of the vision at the top to the trenches of execution, yet many retailers today are not spending the time to look at them. Retailers ignore these tools at their own risk.
Where is Reflexis when you need them? Pretty much, this article sums up all of the challenges that company addresses. Corporate initiatives are planned in isolation of each other – marketing vs. merchandising vs. store ops vs. everyone else. Everyone at HQ thinks they have a say in what happens in stores. The reality of that view is chaos – 10 lbs of work in a 5 lb bag, often without clear prioritization for the store and without all the pieces in place in order to execute, and not designed to execute in that store’s format, forget about the labor available to do non-selling work.
The solution has been around for almost 20 years now. But the hardest part of selling it is getting corporate to recognize the ridiculous and competing demands that are thrown over the wall at stores. You can’t solve a problem if you can’t admit you have one, and if multiple corporate resources don’t walk a mile in a store’s shoes, they’ll never have the visibility to help them develop the empathy they need to see it from the store’s perspective.
Short of investing in software, every corporate leader should have to work 40 hours in a store at least once a year. Sometimes that seems like it might be more trouble than it’s worth, but just like the TV show Undercover Boss proved over and over, you won’t understand the front line unless you live it.
Thanks for the shout-out, Nikki. We’re increasingly hearing from retailers who understand there is a dire need to free up their store leaders, managers, and associates so they can tend to the business of paying attention to the shopper.
This is massive issue in retail that is getting worse, not better, as HQ teams increasingly capture valuable local insights from their digital analytic tools. Without investment in digital store communication, they are stuffing more information through the same, already under-sized, pipe. To succeed, retailers must complement their investment in making better local decisions at HQ with investment in how they communicate those decisions to each store.
There were many reasons why Sam Walton visited stores EVERY week. He wanted to meet with local customers and communities. The reality is that he spent most of his store time with staff — LISTENING to them. He expected his managers to do the same. In all too many retailers the communication flows primarily one way from the top down. Another major challenge is the burden of operations and paperwork falling on district and store managers reducing their ability to implement.
The bottom line is that a tool might be useful if it reduces operational burden and increases efficiency in some way. The reality is that stores operate differently because store managers are adjusting to local markets and customer needs. Maybe the C-suite needs to start by recognizing that retail has entered the age of “mass localization.” Many senior execs need to discover the incredible value of walking in Sam Walton’s shoes to local stores. A major part of the solution is to discover how Corporate must adapt to local markets, and provide the local managers with resources they need for localization.
I would flip the question. “What challenges does corporate face in acting on individual regions’ and stores’ NEEDS?” Corporate may indeed have solid strategies and initiatives at the macro level. But until the execution is solved for at the micro level it can’t be effective. In fact it can be harmful. There are no cookie cutter solutions today. Timing and size of store are critical issues. Boston needs Fall product six weeks before Atlanta and there is a lot of Fall product that Miami may never need. Or the attitude and aesthetic of Fall is just different in Miami than it is in Boston. Same brand promise, different solution for CLIMATE. And I can’t keep track of the number of mall stores I visit where there is clearly four pounds being sent to a two pound store. I can see the good product, but I can’t see the story. The stores are being given an impossible job of sorting it all out. Even when I see the two-inch thick floor set manual out on the fixture, I see a store employee standing there scratching their head. Picture has a 10-foot table. Store has a six-foot table. It’s just not that tough. Planners and distributors and merchandisers actually have to talk to each other about the different levels of execution required in the field. It’s both bottom up AND top down.
An easy yes and yes to the first two questions, which fellow BrainTrusters have spoken well to — store visits for increasing empathy being one of my favorites! — and as for the solution, I’ll pull a direct quote from the TouchPoints take: “Giving district and store-level managers the tools and knowledge they need to mold companywide initiatives into local tactics is the first step in providing a strong customer experience.”
Tools and knowledge. Democratizing access to information. Great retail C-suite folks ask, “how can I empower my store-level team to outperform themselves last year?” Those motivated by fear may not ask that question first. The difference of these approaches can be felt by the customer and can be seen in quarterly reports. Using cloud-based tech that collects and visualizes store performance trends (and making a habit of sharing those trends with store-level teams) is a great place to start moving toward that better approach.
Hey, here’s novel idea: Let’s call it a “dose of reality.” Every month have some executives work (really work, not observe) in a store for two days and employ the strategies about to be mandated to district personnel. Then, upon their return to the offices, have a meeting where top management gets their doses of reality about what is and isn’t easy to implement, and what other problems they learned during their time in the store. This executive visit should happen at least once every quarter.
We used to call it “branching.” Every Wednesday, without fail. If somebody at central was at their desk instead of out in the stores there better be a damn good reason. And I should mention this was at a regional department store (Bullock’s) — a long time ago. Every store had a different footprint — literally every store. Couldn’t cookie cutter anything. Had to be planned and bought with store-by-store precision. Long before Excel was invented. Yikes — that was a looong time ago!
I haven’t been a chain store manager in a long time but I can say with confidence that the lack of communications between headquarters and the stores isn’t anything new. We see it all the time, store associates who can’t answer customer questions or deliver incorrect information.
Sharing data that may or may not be useful at store management level aside, corporate offices have a hard enough time keeping store managers up on sales, promotions, new company direction, and policies. It’s always a good idea for headquarters personal to spend quality time on the sales floor but it doesn’t happen often enough.
HQ managers would say that the field doesn’t execute its direction, and field managers would say that HQ doesn’t listen to its feedback. This is not a new problem but retail consolidation has made it worse. Back when the business was dominated by local and regional department stores and discounters, it was easier for the HQ team (buyers and others) to be personally hands-on by visiting stores. Today’s corporate managers are often overwhelmed by data, bureaucracy and meetings.
So, two potential solutions: First, make sure the “data science” is robust enough to tailor each store’s assortment to its very specific preferences — whether climate, lifestyle or demographic. Second, make sure that field managers are empowered to a degree — but not at the expense of major company-wide initiatives such as a brand introduction or category rollout. Easier said than done!
There are two broad types of communications between stores and headquarters. One type involve plan-o-grams, initial and changes to assortments and pricing, inbound goods, and general transactional data. These represent the operational flow and lifeblood of the store and how HQ and store make meaning out of inventory and customer transactions.
The other communication category is more soft and squishy but equally important: the brand’s and banner’s story, execution of the visual experience in each store, and the use of technology in the hands of the store associates and as embedded intelligence in the store itself.
Both happen in parallel but not at the exclusion of the other. They are intertwined and, properly set up and executed, they can be the difference between failure and success. Organizations tend to focus operationally on the former type of communications due to its “hard” data with measurable, tangible, and more real characteristics. The thinking is if you focus on that category, the second one will come through according to active management of the right KPIs. From my experience, ignore one and both will suffer and so will overall performance and associates’ morale.
The best-run retailers require every corporate employee up to and including the CEO to not only walk, but shop their stores weekly. Talk is cheap. But action, like this, gets results.
Communication is such a key factor for retailers. Store walkthroughs, internal audits, operational standards and district and regional team gatherings are critical for district and regional managers to work with individual stores to build not just relationships but the ability to communicate well. Setting a new POP display rollout when stores are already underwater throws stores into a frenzy — with many store managers just abandoning whatever instructions were forwarded from HQ. Marketers at HQ then start wondering why their nationwide marketing campaign performed so poorly. Companies like Reflexis, Opterus, Tulip, et. al. and some of the larger time management vendors have optimized HQ-store communication solutions that can be critical for retail.
Before speaking about the challenges that district and store managers face in acting on corporate initiatives, it behooves us to step back and examine the fundamental gap between retail stores and the corporate office. The gap is not one way, from corporate down to the stores, but in fact is both ways, as corporate consistently fails to acknowledge critical feedback from the retail workers that can be used to dramatically improve customer experience and revenue.
Corporate executives involved in determining retail strategy must begin to spend time in stores on a frequent basis, and also develop key contacts at the store level to provide them with frank, honest feedback about issues facing store associates as well as the difficulty of translating corporate initiatives. Only in this way can we work to lessen this critical gap.
I am hearing what was the old “Ivory Tower” problem in the auto industry many years ago. It seems the same is happening in today’s retail world. There are too many inexperienced, fresh out of college type young people working with what they learned that might not come close to being applicable in the real world of retail.
Until the inexperienced get experience “down at the store level,” they will not know how to solve problems. But they will be able to create problems. Store managers can’t spend their day at their desk attempting to analyze data that might not be significant. The managers need to be on the sales floor greeting customers and working with their team.
Store compliance with corporate initiatives is always a challenge. With all the daily activities of managing a store, it is often difficult to complete activities assigned by corporate, either because they don’t have the time or don’t fully understand how to complete the tasks. In some cases the task might not even make sense for the context of the individual store.
As others have mentioned, there are great technologies, like Reflexis, that help companies disseminate, monitor and respond to tasks to better manage the compliance of corporate initiatives. It is important for the systems be monitored in real-time to enable store managers, district managers and corporate teams to sense and respond quickly. It doesn’t help to respond to yesterdays problems today yet almost all retailers do just that. They identify problems of shortage, shrink, theft, margin after it has happened via yesterdays TLOG … a day late and usually more than a dollar short.
There has always been a big gap between corporate strategy and store execution. There are absolutely technologies (Task Management — notably Reflexis as Nikki mentions) available that can help close this gap as well as share information amongst associates, managers and executives.