The new world has created a strategic shift in the way we measure store performance. Metrics tied to last year’s numbers are now compromised metrics. There is a need to come up with new thought processes, and more importantly, come up with how to identify and monitor the right KPIs to establish the effectiveness of your stores.
Retailers have had to become more agile, efficient, and intelligent at making data-driven decisions at every level and doing more with less. With store labor being the number one expense, stores are now tasked to maintain efficiency when there is less staff, but more to do.
“Comp has been the standard for how to measure retail performance. But with the pandemic and rolling store closings and openings from market to market, comp no longer tells you anything,” says Graeme Grant, EVP, Analytics at Tulip. “This could be a chance to reinvent what we measure, how we measure, and then we can start to look at opportunities beyond what that single metric did.”
The pandemic has increased the speed of change and productivity for store operations, making it no longer possible to wait a quarter to make decisions like before. Do you have the metrics in place to see if your business is shifting effectively or efficiently? Here are five considerations when measuring metrics today:
Define the metrics that are right for you
What metrics might be right for one brand may not be right for another. Now is the time to determine the right metrics for you and clearly communicate what the expectations and targets are and how they align to the business. Also, understanding where you want to make the difference is important across all silos whether it be financial, customer focus, driving impact, creating new business, or changing behavior.
Determine what outcomes you are looking for
What type of outcomes do you want to achieve? Focus on narrowing down your outcomes so that you don’t get lost in too many metrics and ensure you’re capturing the full sentiment. Are you creating a two-way dialogue with your associates to know how they are feeling right now? Do you have a way to capture a 360° view of the customer journey? Are you capturing what customers are saying about your brand? Are you creating a new baseline now to measure against that rather than trying to look back at numbers from a year ago? Determine what outcomes you want whether through associate experience, customer experience, timeframes, or productivity and map out what success metrics look like for you.
Align your resources to results
Not everything can be done with less resources than before and so, match the needs of the business with the available tools and fund appropriately. Consider the return on investment. Choose to invest what you can in where it will have the biggest payback now. Then use that growth to reinvest in the next highest priority. Afterwards, create agile action plans that allow for regular evaluation of action steps in short bursts. This will allow you to be more flexible and to adjust to any issues or trends coming up. Finally, have regular reviews of the financial forecasting to see if it is aligned with the action changes you are making. In the end, ensure your resources and planning are both agile and constantly changing when the business changes.
Align your actions
Now is the time to shift the paradigms in your business and the leaders. Challenge the status quo and look for positive ways to generate change. Use your data to help determine and define the actions you and your teams need to take, while using observations to measure the actions to the outcomes you are seeking. Learn from failed experiences quickly and make the necessary adjustments to flex with your customers and needs.
Choose the right cadence
Things are moving at a much faster pace than ever before. No longer can we wait to make decisions in a month, a quarter or even a year. Step back and assess if your organization is moving at the speed of change it needs to for growth. Are you capturing progress and performance over periods of time rather than in a single snapshot view? Perhaps chart performance week over week to see what movement is taking place and use those shifts to convert behaviors. Ultimately, determine if you are moving at the right speed of time.
“Things are crazy in stores right now with protocols changing almost day to day, and with reduced staff to execute it all. In this environment, there is a tendency to just get things done and not worry about how well it is done. That can make sense for a short while, but we now know COVID is not just for a month or two. We have to do things fast, but it is equally imperative to be smart. We have to see what is working, what is not, and be able to make rapid adjustments. To do this, retailers need better, actionable data,” says Graeme.
The pandemic has tested retailers to work faster and share innovative ways to reach customers such as creating personalized shopping experiences that weren’t necessarily part of the business plan prior to this year. Now they can take this and decide if this is working well and determine if and how they can make it work moving forward. Examples such as these have arrived in the business plan unexpectedly as the result of businesses working to adjust to the current times and prepare for the new future. To succeed now and beyond, retailers need to explore new ideas, redefine their goals, remain agile, focus on activation, and adjust to the speed at which things are changing.
To learn more about how Tulip is helping stores measure their performance, contact a Tulip representative today.