I don’t want to talk about variability in retail performance without mentioning the C-word. It’s 2021 after all and we want to leave it in 2020. However, COVID (ok, I said it) has made retailers stop looking at the variability from location to location and rightfully so.
The thing I find the most interesting is the variability from retailer to retailer. I can provide examples of department stores who are thriving and others who will be shuttering permanently. Mom and pop stores who have made it through COVID and are seeing a surge in sales while others never reopened their doors. Direct to Consumer brands who are opening brick and mortar stores while others are remaining online only.
So why are some winning and others losing? This is a complicated question to answer because there are so many variables to what is driving these outcomes. Forbes has written an interesting article about the reality of retail in a COVID world.
How does your performance stand up against the competition? Or is that really the question? Might the question really be about the performance variability within your own organization? Is this low hanging fruit and is anyone looking at it?
Variability in performance within brick and mortar stores across regions, districts and stores is often overlooked. I have personally experienced how focusing on the cause of variability to be one of the keys to unlocking performance potential. (On a side note, there is no doubt that some areas are more impacted by COVID so keep that in mind when thinking about the variability in performance).
There are many variables to consider when evaluating performance across stores. I want us to consider these 3 for today’s post:
- Key Performance Metrics like Conversion, ADS, UPT
- Labor scheduling efficiency and accuracy
- Performance Management assessing high, mid or low performing team members
Key Performance Metrics
Sales are down. Traffic is down. Conversion is up. UPTs are down. These are some of the constants that retail brick and mortar stores are seeing. But if you look across your organization, by region, by district, by store, what do you see? Of course there will be variability across markets, but the question is, is it good or bad variability? Are there stores who are bucking the trend? If the majority of your stores are seeing an uptick in conversion, what about the stores who are down trending? Do you know the cause? Is anyone asking the questions?
I am not suggesting that all stores should be at the same conversion number as there are many variables that impact raw conversion. But I am suggesting that stores who are trending down in conversion where the enterprise is trending up may need support.
Often times when sales are slow for big reasons like COVID, we tend to justify the poor results. Don’t. Dig under the covers and get to the root cause of what is driving the results. Leaders who are doing well want to talk about what they are doing to drive the results. Those who are struggling need your help.
Labor Scheduling Efficiency and Accuracy
Retail hours of operation continue to be shorter than pre-COVID so that is saving retailers some payroll. There are different approaches to how schedules are being written from store to store. Some stores are on minimum coverage while others appear to be spending at the rate of “pre-COVID” payroll dollars.
The payroll spend appears to reflect whether there is dedicated front door coverage to help customers understand the new protocols. Whether stores are running on minimum coverage or not, the question comes down to the level of talent scheduled and how productive they are to delivering sales and customer experience.
Associate Availability & Talent
There are two components of scheduling where variability could be costing you money.
- Store Team Availability. Is the team available when the store is busiest? Or has COVID handcuffed managers into using who they have whenever they have them? When the stores have the right availability, they can maximize coverage when they need it most. If the store doesn’t have the availability to use the schedule as written, they often schedule shifts when they have team availability, which may not support customer traffic. This means the potential for lost sales just went up exponentially. Why? Because the schedule is now written to the team availability and not the traffic trend.
- Scheduling Associates with the Right Skills. If the majority of store tasks is filling online orders, you want to schedule associates who are efficient at following the process and getting orders filled quickly and accurately. But if you need associates who can engage customers creating W-O-W experiences, and convert them, than you need a different skill set all together. If a store isn’t diligent about who is working when, the result can be lost sales.
Team Performance Management
Top performing retail leaders will get the job done, regardless of the challenging environment. As you look across your organization, what is the variability in talent at all levels? While most teams will follow the bell curve (top performers are 10-20%, middle performers are 60-70% and bottom performers are 10-20%), there is no more important time than now to evaluate teams and provide the appropriate training and support to ensure leaders are performing at their highest level.
One of my favorite quotes
I am not sure where I first heard this quote but it has stuck with me. It is applicable as we talk about performance variability within organizations. It can be so easy to tell teams (as one example) to cut payroll but then not provide the important keys to maximizing the payroll they do have. Great example of where we step over dollars to pick up dimes.
It’s Your Turn
I encourage you to look inside your organization and identify where you might have performance variability that addressed, could lead to improved results. Are you blaming COVID for your results or digging into the plethora of opportunities to measure variability in performance?
Reach out to me and let me know how I can help your brand deliver unparalleled customer experiences and run operationally excellent stores.
Always in your corner,