Interview with Jim Smits Part 2: Data Management and the Ideal ‘Total Store’
The highly competitive retail industry is undergoing tremendous change. From the progression of omnichannel and digital technologies, to changing consumer tastes and behaviors, retailers have a lot to keep up on. Jim Smits, RSi’s VP of Retail Development in North America, is no stranger to the transformation retail is facing. With over 30 years of experience, holding executive-level positions with major retailers, Jim possesses a wealth of industry knowledge. In the second piece of this series, Jim discusses the ideal “Total Store” solution for retailers, a solution that allows retailers the ability to access and analyze data across the entire store, and the challenges they may face on implementation.
What would the ideal “Total Store” solution look like, and where would this kind of visibility make a difference?
Wow – that’s a big question. The ideal total store solution could be different from multiple points of view. What a merchant would look for would differ slightly from the marketing team, and even more from the replenishment team’s view. Retailers are looking for full department (Grocery, Health & Beauty, etc.) and the ability to view how the departments, categories, sub-categories, and items are performing against a total store view.
What specific business process or KPIs would be impacted?
The specific KPIs to focus on are on-shelf availability (OSA) and Promotional Planning (specifically – predictive inventory management). All retailers are working hard to build comp sales and a strong OSA program has a huge impact on recovered sales. In some cases, we are seeing 100 to 200 basis point improvements in sales which is huge for a retailer. Some of their strongest promotions only net them 15 to 25 basis point improvements.
What challenges are retailers encountering when attempting to assemble a total store view? Are there process or personnel changes required?
The primary challenge is the growing volumes of data and the limited amount of analysts available to dig into the data and provide meaningful reports. Another challenge is that analysts tend to be departmentally focused with limited cross departmental analysis and reporting. A 3rd party approach that leverages integrated digital technologies can benefit by focusing on a specific department but also looking across the store to view how that department is performing against the total store. This would allow them to look for opportunities for cross promotions that would build a customer’s basket.
I think it would require more of a process change than a people change. That said, retailers just don’t have enough people these days. That is why so many large retailers look to CPGs to provide the category and item insight for their merchandising and supply chain teams. Yes, existing technology can be used, but it will require massive data storage because of the amount of detail in the data. That’s why having a technology that provides the cross-functional visibility needed might be the better option.
Missed out on the first part of the series? Click here to read it now.