retail is tough, and growing tougher. how do we improve margins?

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.1

Retail Is Tough and Growing Tougher.

How Do We Improve Margins?

Clay ParnellParker Avery Group

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.2

You’ve got to start with the customer experience and work back toward the technology – not the other way around.

Creating a Foundation for Transformational Growth

Transformation, Innovation, & Change

Blood, Sweat, & Tears

Creating a Foundation for Transformational Growth

Transformation, Innovation, & Change

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.5

Who Is Belk?

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.6

Belk outperformed competitors three years in a row

0.2

0.5

3.0

5.3

4.0

5.5

-25.2

0.3

2.7

3.7

4.0

6.3

-7.4

-1.2

-0.4

1.9

1.0

2.9

FY14

FY13

FY12

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.7

Total Online Sales and Online as a % of Total Sales

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Digital Journey

Phase 1: Grow eCommerce

Phase 2: Fix the Foundation

Phase 3: Omnichannel

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.9

29 Month Journey

Q3FY14Q2FY14Q1 FY14 Q4 FY14Q3FY13Q2FY13Q1 FY13 Q4 FY13

August 2012 – May 2013 November 2013

Demand Forecasting

Merchandise Planning

Master Data

DataWarehouseESB/ ETL

Replenishment

Size Optimization

Allocation

Purchase Order

Pack Optimization

Inventory & Stock Ledger

Q2FY14

Invoice Match

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.10

The Initial 5 Lessons Learned…

Assess the organization’s maturity

Are you prepared for the costs?

Do you have the IT team in place to deliver it?

Do your partners have Skin in the game too?

Change Management

1

2

3

4

5

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Roadmap to Omnichannel

Transform theeCommerceexperience

Transform theIn-Store

experience

ExpandMobile at every

touch point

IntegrateCustomer

Data

EstablishEnterpriseInventory

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Omnichannel Vision

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Typical Retailer Activity - Tactical

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Foundation Execution

What CAN I Do?

What Do I WANT To Do?

CAPABILITIES:• Item • Price• Size Opt• Pack Opt• Plan• Buy• Replenish• Allocate• Receive• Flow to Stores

DIFFERENTIATORS:• How do I view My Consumer• How My Consumer views us• What is My Assortment• How do I consider My Inventory• How do I Serve My Customer

(options)(requirements)

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.15

The Next 5 Lessons

• New and significant, or• Deeper manifestation of earlier learning• More complex• Perhaps more subtle in some areas

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The scale of change is big, and differentPerhaps not truly a larger change, but

touches so many, impacts so much

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There are significant organizational and incentive challenges

Sales and compensation models impactedStore behaviors need to change

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Customer Service Expectations ExpandIt used to be…compete on price, service or assortment

(or two of these)Now consumers expect exceptional service everywhere

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Partner capabilities critical for foundation

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Less about monolithic, more about continuous improvement

Consumers will learn more, want moreTechnology will change ever faster

The cheese will keep moving

On social networks

In stores

On the go Online

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.21

Shifting from discrete commerce channels….

…to a truly engaged and delighted consumer

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.22

You’ve got to start with the customer experience and work back toward the technology – not the other way around.

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.23

Thank you

Clay ParnellPresident and Managing Partner

The Parker Avery Group