Chapter 6_Store Operations

8/9/2019 Chapter 6_Store Operations

1/20


2/20

Managing Human assetsManaging Human assets

y A study of Sears employees found a 5%

increase in employee satisfaction resulted

in a 1.3% increase in customer

satisfaction. This led to a 0.5% growth insales.


3/20

Human AssetsHuman Assets

HumanAssets

TalentAcquisition

TalentRetention

TalentTransformation


4/20

Gaining Competitive AdvantageGaining Competitive Advantage

through Human Resourcethrough Human Resource

ManagementManagementWhy does human resource management give a

sustainable competitive advantage?y Labor costs account for a significant

percentage of a retailers total expensesy The customer experiences are determinedby the activities of employees (selectingmerchandise, providing information andassistance, etc.)

y

These potential advantages are difficult forcompetitors to duplicate


5/20

Objectives ofObjectives of

Human Resource ManagementHuman Resource Managementy Short Term Increasing Employee Productivity

Productivity = Sales/ Number of Employees

y Long-Term Employee attitude customer satisfaction and loyalty long-term performance

Increasing Employee Satisfaction Reducing Turnover

Employee turnover

= # of employees leaving their job during the year

# of positions


6/20

Human Resource ManagementHuman Resource Management

Challenges in RetailingChallenges in RetailingWork Environmenty Open Long Hours

y Peak Sales Periods

y Emphasis on Cost ControlEmployees

Unskilled

Part-Time Diverse Backgrounds

HHii

gghh

TT

uurr

nnoo

vvee

rr


7/20

Downward Performance SpiralDownward Performance Spiral


8/20

TriadTriad

y TRIAD

HR ProfessionalsLine Managers

Employees


9/20

Customer

Store Staff

Store Managers

Area Managers

Operations Head

VP

President

Organisation Chart at Raymond Retail


10/20

Tasks Performed in a Retail FirmTasks Performed in a Retail Firm


11/20

Attracting TalentAttracting Talent EmploymentEmployment

MarketingMarketing

Marketing programs that

attract best and brightestpotential employees Starbucks Love What You Do

Southwest Free to Actually Enjoy

What You Are Doing

Employment marketing (branding)


12/20

Attracting TalentAttracting Talent EmploymentEmployment

MarketingMarketing JCPenneyJCPenneyTo build its employment brand, JCPenney

uses the tagline A Perfect Fit on all

correspondence and advertising directedtoward potential employees


13/20

Developing TalentDeveloping Talent

Selection and TrainingSelection and Trainingy Selective Hiring:

Recruit the right people

Simply seeking the best and the brightest may notalways be the most effective approach

y Training:

Increasing investments in management training

programs and developing leaders Increasing attention to college graduates - Generation

Y


14/20

Motivating TalentMotivating Talent Aligning GoalsAligning Goals

y Policies and Supervision

Indicate what employees should do

Behavior Enforced by Managersy Incentives

Commission, Bonus, Stock Options

y Organization Culture

The set of values, traditions, and customs of a firmthat guides employee behavior

Behavior enforced by social pressure


15/20


16/20

00/13/07 16

What is the TWhat is the T--matrixmatrix

y The transaction matrix is used to measure performance of the

business on a store-2-store, day-2-day basis. Monitoring thetransaction matrix, indicates the extent to which the store

potentialises customer entry.

y

The parameters measured in the matrix are meant to be used byALL retailers - whether small or big.

y Key variables to be measured for the matrix include:

Conversion Rate,

Average transaction size,

Items per ticket.

y All these are measured with reference to a specific time frame.


17/20

00/13/07 17

Conversion RateConversion Rate

y How many customers out of 100 who enter our storeleave with a purchase

y Measures how well we convert Shoppers to Buyers

y the higher the conversion rate the better

y Conversion Rate = (Total Cash memo / Total Traffic) *100


18/20

00/13/07 18

Average Transaction size (Cash Memo size)Average Transaction size (Cash Memo size)

y How much does the average customer spend in the store

y Critical number as its measures our ability to sell more of

what we have to customers we already havey It should always be improving

y Average transaction size = Sales / Number of transactions

(cash memos)


19/20

00/13/07 19

Items per Transaction (cash memos)Items per Transaction (cash memos)

y Measures how many items the

average customer purchases

y Tells us how we are performing insuggestion selling

y Should be increasing

y Items per Transaction = Total

Items sold / Total transactions (

no. of cash memos)


20/20

Thank you!Thank you!

Chapter 6_Store Operations

Documents