12 November 2020
12 November 2020
Store operational efficiency might not be the most exciting phrase in the retail world.
But in 2020, efficient store operations are critical - not only for profitability - but also for a superior customer experience.
This post will help you improve store operational efficiency and identify the biggest challenges your stores are facing on the road to operational excellence.
Let's start with the basics. What is store operational efficiency?
Operational efficiency is a state of higher desired outputs while requiring less inputs to get there.
What does this mean for stores?
An operationally efficient retail store has maximized its outputs (which we’ll define as the quality of the customer experience, brand image and sales) while requiring fewer inputs (which we’ll define as people, time and money) to get there.
Why is store operational efficiency critical for success in retail?
It helps retailers:
How can retailers continue to reduce costs and boost operational efficiency in 2020? Download this free Ebook to learn more!
It helps store teams:
It helps consumers:
Why is store operational efficiency the key to a true omnichannel experience?
Omnichannel: retail’s fluffiest and most meaningless buzzword or what every retailer should have mastered by now?
What does it actually mean?
According to a study published by MIT Sloan’s Management Review, omnichannel makes “the distinctions between physical and online vanish, turning the world into a showroom without walls”.
What's the goal of omnichannel shopping?
Why are retailers lagging behind?
Why is operational efficiency necessary for this integration?
The truth is, stores have a lot to learn from online shopping before they can master operational efficiency.
Retailers with eCommerce platforms are constantly analyzing vast amounts of data to optimize the user experience and make the customer journey as seamless as possible. Every new innovation is correlated to a sales output - or else what would be the point?
But the approach most retailers take to optimizing the customer journey and increasing conversions in-store is a lot like throwing fistfulls of cooked spaghetti at the wall to see what sticks.
That’s why operational efficiency is so desperately needed to fully integrate stores into the omnichannel experience.
And the time to get that done was yesterday.
Why is operational efficiency a challenge for retailers?
Best practices for improving store operational efficiency
Making these changes will help you better support your stores in their quest to master operational efficiency. And with the right support, stores will achieve a state of operational excellence.
Operational excellence simply means that maximum performance with minimum effort to get there has become the default mode of the store.
Where do I start?
Here are a few of the most inefficient store processes:
While all these procedures are vital, the way they're done hasn't changed in decades. And that's what needs to change to reach a state of operational excellence.
Here’s how other retailers did it
See how streamlined communications helped Lacoste perfect in-store brand image and be more reactive as a retailer:
See how efficient dealership audits helped Peugeot kick their customer experience into high gear:
See how operational efficiency supercharged leading French toy retailer King Jouet’s digitization and differentiation strategies:
If increased profits, data-driven decisions, happier employees and an improved customer experience aren't reasons enough to focus on store operational efficiency, consider that the survival of brick and mortar retail depends on its ability to seamlessly integrate with other ways of shopping.
Consumers expect a seamless shopping experience on your website, on Instagram, on Amazon, in your stores and everywhere in between. A seamless shopping experience is one that revolves around them. And if they can't get it they'll move on.
For every retailer who can't master omnichannel, there are thousands of others nailing it every day.
The survival of a retailer's physical store depends on the extent to which stores can put the customer journey first. So why not start today?
The right in-store tech can help your stores achieve operational excellence - watch this 1 minute video to see how!
 Byrnjolfsonn, Hu and Rahman. Competing in the Age of Omnichannel Retailing. MIT Sloan Management Review, May 2013.
 Thomas, Barr, Cron & Slocum. A Process for Evaluating Retail Store Efficiency: A Restricted DEA Approach. International Journal of Research in Marketing, 1998.
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