07 Jul Retail Recovery: Calculating ROI – retail operations software
“Calculating ROI – retail operations software” is the fourth part of our four-part Retail Recovery series. Click here to download the full retail recovery plan.
Before COVID-19 closed stores all over the world, companies sometimes told us they found it hard to make a business case for investing in technology to support retail operations. While it has always been clear that streamlined communications and better in-store execution improves both the store team and customer experience, some companies felt they could continue with their existing processes.
This has changed.
Three things have become critically important to retailers as they reopen stores and get their business back on its feet, these are:
- Agile communication and real time compliance records
- Productivity improvements, sometimes to enable headcount reductions
- Operating cost reductions
Improved retail execution drives sales and margin benefits, as “time to compliance” is shortened; rework is reduced and full price sell through rates are improved. Here we will focus on these three critical areas where retail operations software adds quantifiable value.
Agile communication and real-time compliance records
It’s never been more important for your store teams to know exactly what they have to do.
If you’re using email, social channels and an intranet, your store teams will waste time searching for information and finding what is relevant for them. They will be asking questions (sometimes repeatedly) on social platforms, which will often be answered incorrectly. They will waste time reworking things that have already been actioned.
At a conservative estimate, a company with 250 stores will waste 3,700 labour hours a week. This is not affordable in the current climate.
It’s bad enough when your store teams waste time. But your increased responsibility to keep your staff and customers safe means that you have to know that new procedures are implemented correctly and on time. Digital checklists, in-app photo uploads and task completion reports means you can monitor the situation across your stores. Of course, it’s possible without retail operations software, but new compliance regimes are driving thousands of hours of work for store teams and management teams.
Retail operations software means you can meet new compliance requirements with minimal additional hours.
Retail operations software saves time.
Time savings are conservatively estimated at 1 – 4 hours / week for each store manager, district manager and head office user. For 250 stores this could add up to around 50,000 hours each year, three quarters of which are in stores.
Examples of activities that are faster with retail operations software are:
- Completion of regular compliance checks and forms in store, and compilation of compliance reports in Head Office
- Resolution of support issues, eliminating email black holes and enabling photos / comments to stay linked to the original issues
- Store photo uploads, and management review is much faster (no extracting photos from individual stores’ emails / WhatsApp and consolidating into one place)
- Creation and completion of surveys, and analysis of the results
- Finding policies, “how to” guides and training content
No one wants job losses, but the fact is that many retailers have no choice but to reduce staff numbers and to rethink ways of working so the new, leaner team can still deliver business goals.
Area Managers can manage more stores if they have the right tools; meaning that a store portfolio can be supported with fewer Area Managers.
Just a 10% increase in productivity means 1-2 fewer Area Managers are required for a typical 250 store estate.
Increasingly, Store Managers are managing more than one store. While this used to be the exception – to manage vacancies, or to leverage particularly talented managers, it could become the norm. These multi-site managers will need to be properly supported to be successful– but with significant savings possible with just 10% of store managers running more than one store, it’s an option few can ignore.
Operating Cost Reductions
Some companies terminate contracts with other suppliers and shift the activity to their retail ops platform, where it is supported within their subscription. Examples of this are internal audit programmes (Health & Safety, Compliance) or third-party-supported compliance programmes (fixture & fittings audits, execution audit. etc). Other companies terminate contracts with intranet providers, employee engagement applications or learning management platforms. These savings can often total £50 – 100k.
Going digital reduces the amount of paper (forms, checklists, policies, VM guidelines etc) used in store. Having an accurate view of each store’s POS and display requirements means that marketing and VM collateral wastage can be minimised. At an estimated print saving of £200 / store / year, this adds up to £50k for 250 stores.
We wouldn’t suggest field teams spend less time with their store teams, but even when travel restrictions are lifted, it’s clearly possible to leverage software to reduce the number of routine visits to stores, and for a proportion of visits to move online, with the associated savings in travel costs.
It’s not uncommon for retail operations platforms to be a retailer’s first investment in third party software in an area which has previously been supported by in-house development.
Many companies find that third party platforms, because of their access to best in class technology and regular releases deliver exceptional value for money compared to the cost of an in-house development team. Especially when the full costs of employment are considered.
Want to learn more?
Download the full StorIQ Retail Recovery Plan by clicking this link.
The plan is set out in 4 stages. We’ll help you develop an agile communication strategy, improve compliance, and conduct remote store visits all whilst cutting costs and building a leaner operations function. We’ll help you analyse ROI and offer advice of investing in smart tech solutions to support your recovery.
If you need help or advice managing remote store visits, then please get in touch – we’ll be happy to help!