batc new retail model
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Today, 2010 and beyond: a market perspective
Presented by Tom FriedmanPresident and Founder,
Retail Systems Alert Group Inc.
© 2004 Retail Systems Alert Group Inc.
Agenda
• Today’s Market Dynamics• Today’s Value Propositions• Today’s Retail Process• Today’s Limitations• Today’s Best Practices• Tomorrow’s New Model
© 2004 Retail Systems Alert Group Inc.
Market Dynamics in 2004
Danger Quarter for Fashion – Why?
High Margin, High Expense Quarter –
Enough?
High Volume, Low Margin Quarter –
Efficient?
Price
HIGH
LOW
Maslow’s Hierarchy of Needs(Sustainment – Security – Belonging - Esteem - Wisdom)
COMPLEX
Danger Quarter for
Basics – How?
BASIC
Squeezable Center
© 2004 Retail Systems Alert Group Inc.
Value Propostions in 2004
Convenience Exclusivity and Service
Accessibility and Price
Price
HIGH
LOW
Maslow’s Hierarchy of Needs(Sustainment – Security – Belonging - Esteem - Wisdom)
COMPLEXBASIC
Balance
Smart, Quick and Innovative
© 2004 Retail Systems Alert Group Inc.
Today’s Retail Process
• Marketing and merchandising• Buying, assortment, and allocation
planning• Customer service• Returns and complaint resolution• Pricing and promotion• Inventory and shelf management• Warranty and rebate management
© 2004 Retail Systems Alert Group Inc.
Current data practices hindering the retail business
process
• Flood of POS data• Islands of data• Lack of data integration• Lack of access to data
© 2004 Retail Systems Alert Group Inc.
How to Return to Fundamentals
• Customer Behavior• Key Performance Indicators (KPIs)• Basic Analytics• Operational Staff Support• Information Sharing
© 2004 Retail Systems Alert Group Inc.
How to Return to Fundamentals:CUSTOMER BEHAVIOR
• Fundamental retailing lets customers tell retailers what they want through their actions in stores.
© 2004 Retail Systems Alert Group Inc.
How to Return to Fundamentals:BASIC ANALYTICS
• Simple analysis of KPIs will enable retailers to quickly identify and resolve basic problems and inefficiencies in their strategy and execution.
© 2004 Retail Systems Alert Group Inc.
How to Return to Fundamentals:OPERATIONAL STAFF SUPPORT• Fundamental retailing enables easy access to
the best and most appropriate information for all members of the retail team, enhancing the actions they take day in and day out.
© 2004 Retail Systems Alert Group Inc.
How to Return to Fundamentals:INFORMATION SHARING
• The approach also turns suppliers and customers into partners in retailers’ success by sharing information that will increase their confidence in the business and encourage their active participation in its improvement.
© 2004 Retail Systems Alert Group Inc.
The New Fundamental Retail Model
• BASIC RETAILING is the core function of the retail organization and includes such activities as merchandising, promotion, and pricing
• NETWORK refers to the operational support required to execute the retail business process
• FULL CYCLE encompasses the collaborative aspects of the retail business process
© 2004 Retail Systems Alert Group Inc.
The New Fundamental Retail Model:BASIC RETAILING
BASIC
RETAILINGSales/Store
Ops
Assortment
Pricing
Promotion
Merchandising
Marketing
© 2004 Retail Systems Alert Group Inc.
The New Fundamental Retail Model:BASIC RETAILING
Timely knowledge of customer behaviorImpact of promotional activity
Price adjustmentsOverstock, stock outs
Need for rapid analytics
INTEGRATION CHALLENGES
© 2004 Retail Systems Alert Group Inc.
The New Fundamental Retail Model:BASIC RETAILING
Bi-directional flow of data between functions
Rapid dissemination of data from checkout line to functions
KPI and analytics Exchange of information with Network and Full Cycle
INFORMATION FLOW
© 2004 Retail Systems Alert Group Inc.
The New Fundamental Retail Model:NETWORK
BASIC RETAILING
Sales/ Store Ops
Assortment
Pricing
Promotion
Merchandising
Marketing
NETWORK
Sourcing
Logistics
Receiving/Distribution
Warehousing
Product Planning
© 2004 Retail Systems Alert Group Inc.
The New Fundamental Retail Model:NETWORK
Lack of awareness of basic retailing initiatives
Lack of connection to customer activityLack of forward visibility
INTEGRATION CHALLENGES
© 2004 Retail Systems Alert Group Inc.
The New Fundamental Retail Model:NETWORK
Timely access to KPIsAdvance alerts to changes and decisions
taken on the flyExchange of information with vendors
INFORMATION FLOW
© 2004 Retail Systems Alert Group Inc.
The New Fundamental Retail Model “The Full Cycle”
Customer Service
Store Management
Supplier Collaboration
Operational Improvement
BASIC RETAILING
NETWORK
Assortment
Pricing
Promotion
Merchandising
Marketing
Receiving/ Distribution
Warehousing
Logistics
Sourcing
Sales/ Store Ops
Product Planning
© 2004 Retail Systems Alert Group Inc.
The New Fundamental Retail Model:FULL CYCLE
Distrust among partiesResistance to change
Loss of customer focusLack of information
INTEGRATION CHALLENGES
© 2004 Retail Systems Alert Group Inc.
The New Fundamental Retail Model:FULL CYCLE
Timely exchange of information between retailer and suppliers
Easy customer access to informationAccess to appropriate KPIs and analytics
INFORMATION FLOW
© 2004 Retail Systems Alert Group Inc.
The New Fundamental Retail Model “The Full Cycle”
Customer Service
Store Management
Supplier Collaboration
Operational Improvement
BASIC RETAILING
(Gross Margin)
NETWORK (Expense)
Assortment
Pricing
Promotion
Merchandising
Marketing
Receiving/ Distribution
Warehousing
Logistics
Sales/ Store Ops
Sourcing
Product Planning
© 2004 Retail Systems Alert Group Inc.
CONCLUSION: Fundamental Retailing Pays Off
1) enables retailers to focus on actual customer behavior by leveraging POS transaction data across the retail business process
2) extends data access and/or analysis to customers and suppliers
© 2004 Retail Systems Alert Group Inc.
CONCLUSION: Fundamental Retailing Pays Off
3) enables analysis with key suppliers for increased accountability and responsibility
4) enables customers to directly engage in the process
© 2004 Retail Systems Alert Group Inc.
CONCLUSION: Fundamental Retailing Pays Off
5) Serves as a strategic differentiator in the effort to compete and ultimately thrive in a challenging competitive environment
© 2004 Retail Systems Alert Group Inc.
For more information please visit:
www.retailsystems.com
© 2004 Retail Systems Alert Group Inc. Back Cover / Thank You
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