September 1, 2015
How autonomous should store staffs be?
Among the many changes Abercrombie & Fitch is making since its longtime CEO, Mike Jeffries, was ousted last December is giving its store associates more leeway to make changes at the store level.
On the retailer’s second-quarter conference call with analysts, Jonathan Ramsden, COO and EVP, A&F, said store associates — in particular, store managers — at both its flagship chain and Hollister now have "greater autonomy to make changes within the stores."
He added, "If they see something selling well, they can move it within the store. They have some latitude around moving fixtures. We’re also supporting them with some additional training in how they interact with customers and directing them to spend more of the hours that are within the store on customer-facing activities rather than back office-type activities."
The changes are complemented by an incentive scheme set up at the store level tied to the store’s sales performance.
Asked in the Q&A session by an analyst wondering why associates "seem much happier and a lot less stressed," Christos Emilios Angelides said associates are responding favorably to the greater control and incentives.
Photo: RetailWire
"It makes a big difference," said Mr. Angelides. "It means they can have impact on their own sales and they can see if they react in a certain way and they get a positive result. I’m sure that that motivates them."
The greater autonomy represents a significant shift from the micromanagment style of Mr. Jeffries, who oversaw all merchandising decisions as well as how associates looked and behaved.
New management has also improved sightlines throughout the store by removing various props and fixtures, toned down scent and music levels, and brightened the lighting in stores.
A&F spelled out many of the changes in an internal note in April, although getting most of the attention at the time was the decision to shift way from sexualized marketing. At the time, A&F said that the sales-driven incentive program had started in February and that they were giving managers more autonomy over product placement and other store details "so stores won’t feel as prescriptive."
- Abercrombie & Fitch Reports Second Quarter Results – Abercrombie & Fitch
- Abercrombie & Fitch Second Quarter 2015 Conference Call – Seeking Alpha
- A&F tells models to keep their shirts on – RetailWire
- Abercrombie & Fitch’s Happier Employees Are Helping Drive Sexier Sales – Street.com
- A&F Drops ‘Sexualized’ Marketing – Women’s Wear Daily
- Wall Street encouraged by signs of a turnaround at Abercrombie & Fitch – Columbus Business Journals
- Abercrombie Says Farewell To Its Shirtless Men And Sexy Vibes – Buzzfeed
BrainTrust
Richard J. George, Ph.D.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Nikki Baird
VP of Strategy, Aptos
Recent Discussions
Discussion Questions
How much autonomy should store managers have around product placement, fixtures, purchasing and other in-store details? Do you think the move by Abercrombie to motivate store managers with store sales goals will provide a bigger benefit?
Poll
I am a big supporter of additional autonomy at retail. First, all retailing is local and the staff at the individual store have the potential to know their markets and customers better than someone miles away at corporate. Second, greater autonomy transcends a store manager into a merchant, like the days of old when stores were individually or family run. The local merchant with his or her store on Main Street knew the customers and their needs, and built an assortment of goods and services accordingly.
I think autonomy is great — as long as the retailer has processes in place to share what is working well in one store with other stores, so that the entire chain can benefit from local ideas and successes. Without that kind of mechanism in place, Abercrombie & Fitch will undoubtedly find that it will have to invest a lot in training around branding, so that stores don’t wander too far from the corporate brand story overall. When stores don’t have any insight into what other stores are doing and what’s working for them and what’s not, that is the risk the company runs — that stores look too different and the brand overall loses some of its power.
More autonomy for store managers in making display changes in-store is great for morale. But for a consistent brand message, retailers will want to establish a protocol for making these changes.
Smart and rapid changes to store displays can maximize a local trend. But these changes must be data-driven and within protocol to ensure an effective and consistent brand image.
Really depends on the stores and the labor model of the company. Hy-Vee has always given store managers autonomy however I would consider a Hy-Vee store manager a step up in class compared to most grocery managers. If you have executive quality managers then you have people who can make executive decisions. I get the feeling Abercrombie & Fitch has more managers that need training than managers who can provide training.
Store autonomy is good for the staff and can lead to lower turnover. I think this makes more sense in smaller footprints. As an example: I am used to going into a Publix and knowing where what I want is located. I don’t want to search the store looking for the product that might have been moved since my last visit.
This is a tough question for merchants looking for some consistency from store to store, especially in a cookie-cutter format like Abercrombie & Fitch. Yes, it’s important to give store managers limited autonomy as they see what’s selling — but it’s at least as important for a retailer’s “big ideas” to be given the space and location that headquarters intended when the buys were made. (This is spoken as an ex-merchant, if you couldn’t tell.) Customers need and want some direction about what to buy, too, so the store managers’ changes ought to be data-driven and in collaboration with the merchandising team.
Are we discussing “autonomy” or “permission?” They are quite different. “Autonomy” means “independent, living by one’s own laws.” Permission means someone else is in control but they’ve allowed another to take an action.
“Empowerment” is what’s needed, but that’s not the topic here.
There are, I assume, certain immutable cultural principles that define Abercrombie & Fitch. These provide the broad framework within which a store manager must manage. The “laws” if you will. Those are not to be violated. So now we read about this breakthrough idea of giving store managers “greater autonomy to make changes within the stores.”
I have two reactions neither of which add to my admiration of Abercrombie & Fitch. First, this isn’t autonomy; at best it’s permission. There will be a limit on just how far a store manager can exercise this new power. Above the store manager is a district manager or similar. What new “autonomy” have they been given? And what happens if their autonomy clashes with the store manager’s autonomy? And then below the store manager are associates. What new power have they been given? It doesn’t work to give one link in the system a new level of autonomy or power. Power (I prefer ‘energy’) must be an aligned factor that permeates the whole or it ultimately creates conflict.
You can see this from the get-go: “They have some latitude, for example, which is a kind of warning that no one should get carried away with this new autonomy. And who has already made all the store changes of removing props and fixtures, turning up the lights and turning down the scents and music? New management!
Second, I am gobsmacked and aghast that this is considered breakthrough thinking. Isn’t an Abercrombie & Fitch store manager responsible for a pretty substantial operation? Don’t they have to be pretty intelligent and talented people? And just now they have the power to adjust things in their own store to make for a better customer experience and to increase sales? Thanks goodness new management is there to look after things like turning down the music.
Depends on the operation, the nature of the customer base, the managers and the degree of autonomy we are discussing.
In general, some autonomy is better than none, so I would expect to see the Abercrombie experiment yield big dividends.
Customers of the same retailer are not one-dimensional. That means that the mix of customers may be different at different locations. If that is true, offering the same merchandise with the same atmosphere in identical locations may not be equally effective everywhere. On the other hand, brand image depends upon consistency. Every retailer needs to balance the need for a consistent image with the need to adapt to customers. Doing that well leads to success.
In answer to the question of how much autonomy should store managers have? The answer is simple. As much as they are capable of handling.
I will sum up my feeling in one of my favorite quotes by Dilbert: “80
% is hiring great people and 20% is leave them alone to do their job.”
Only caveat is, give them the training and direction they need.
Ah, but will they have “latitude” to turn the music down—I don’t think it’s possible to turn it higher—that’s really the question, isn’t it?
Optimistic as I’d like to be on this, I suspect it will end up being like a Dilbert cartoon where people are told to make moves that work out, but avoid those that don’t (if not explicitly before hand, then implicitly, after-the-fact in reviews), and the result will be a great deal of…nothing much changing. Probably better to leave “try new things” to the tech world, where the real world doesn’t apply.
The answer is, it depends. The manager must be educated on all the aspects of the impact such moves may have, know how to monitor the impact, etc.
Here is a formula I learned a long time ago: empowerment before education equals chaos.
Without the proper guidance and oversight, giving broad store-level autonomy will erode consistency of the shopping experience. Not every store line manager is a good merchant, and balancing merchandising and operations decisions will prove problematic.
Too many suffer from the quandary of the last sale lost syndrome—as in, “we never have enough 40 short suits in chocolate brown.” Unless the players have a firm grasp of the use of data and take emotion and personal bias out of the decision making, how can a chain control open to buy and maintain a good mix of products?
A prominent national “men’s store” has three locations I frequent and I can literally name my own price in any of them, because the store line personnel have carte blanche to override system prices and offer upsell incentives. The days of old look great until you stop and consider POS, UPC and EDI didn’t exist plus the manufacturing cycles were much longer.
Some local decision making is to be encouraged, but it should be reinforced with a good vision and a well thought out plan of execution.
When the stores distance themselves from purchasing and merchandising, the disconnect usually results in an assortment of inventory issues. Markdowns, clearance and slow turns may increase to unsustainable levels in a short period of time. The company may be desperate to find a means to connect to the market for these are desperate measures.
It is wonderful that the company has decided to permit store associates to make changes to both improve customer experience and personalize the store to the local environment. Given how poor store associate morale is in retailers across the country, this empowerment will help not only improve store design and layout, but will cascade over to improved customer service, retention and sales.
When store managers are permitted to get involved in purchasing, that is usually where things become much more complex. It is difficult for the home office to keep track of inventory that is varying at the individual site location, and to understand trends of multiple versions of similar products. That is the one place that the company will have to be careful not to over empower store managers.
Aside from that, however, this is a welcome change for the better.
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I am a big supporter of additional autonomy at retail. First, all retailing is local and the staff at the individual store have the potential to know their markets and customers better than someone miles away at corporate. Second, greater autonomy transcends a store manager into a merchant, like the days of old when stores were individually or family run. The local merchant with his or her store on Main Street knew the customers and their needs, and built an assortment of goods and services accordingly.
I think autonomy is great — as long as the retailer has processes in place to share what is working well in one store with other stores, so that the entire chain can benefit from local ideas and successes. Without that kind of mechanism in place, Abercrombie & Fitch will undoubtedly find that it will have to invest a lot in training around branding, so that stores don’t wander too far from the corporate brand story overall. When stores don’t have any insight into what other stores are doing and what’s working for them and what’s not, that is the risk the company runs — that stores look too different and the brand overall loses some of its power.
More autonomy for store managers in making display changes in-store is great for morale. But for a consistent brand message, retailers will want to establish a protocol for making these changes.
Smart and rapid changes to store displays can maximize a local trend. But these changes must be data-driven and within protocol to ensure an effective and consistent brand image.
Really depends on the stores and the labor model of the company. Hy-Vee has always given store managers autonomy however I would consider a Hy-Vee store manager a step up in class compared to most grocery managers. If you have executive quality managers then you have people who can make executive decisions. I get the feeling Abercrombie & Fitch has more managers that need training than managers who can provide training.
Store autonomy is good for the staff and can lead to lower turnover. I think this makes more sense in smaller footprints. As an example: I am used to going into a Publix and knowing where what I want is located. I don’t want to search the store looking for the product that might have been moved since my last visit.
This is a tough question for merchants looking for some consistency from store to store, especially in a cookie-cutter format like Abercrombie & Fitch. Yes, it’s important to give store managers limited autonomy as they see what’s selling — but it’s at least as important for a retailer’s “big ideas” to be given the space and location that headquarters intended when the buys were made. (This is spoken as an ex-merchant, if you couldn’t tell.) Customers need and want some direction about what to buy, too, so the store managers’ changes ought to be data-driven and in collaboration with the merchandising team.
Are we discussing “autonomy” or “permission?” They are quite different. “Autonomy” means “independent, living by one’s own laws.” Permission means someone else is in control but they’ve allowed another to take an action.
“Empowerment” is what’s needed, but that’s not the topic here.
There are, I assume, certain immutable cultural principles that define Abercrombie & Fitch. These provide the broad framework within which a store manager must manage. The “laws” if you will. Those are not to be violated. So now we read about this breakthrough idea of giving store managers “greater autonomy to make changes within the stores.”
I have two reactions neither of which add to my admiration of Abercrombie & Fitch. First, this isn’t autonomy; at best it’s permission. There will be a limit on just how far a store manager can exercise this new power. Above the store manager is a district manager or similar. What new “autonomy” have they been given? And what happens if their autonomy clashes with the store manager’s autonomy? And then below the store manager are associates. What new power have they been given? It doesn’t work to give one link in the system a new level of autonomy or power. Power (I prefer ‘energy’) must be an aligned factor that permeates the whole or it ultimately creates conflict.
You can see this from the get-go: “They have some latitude, for example, which is a kind of warning that no one should get carried away with this new autonomy. And who has already made all the store changes of removing props and fixtures, turning up the lights and turning down the scents and music? New management!
Second, I am gobsmacked and aghast that this is considered breakthrough thinking. Isn’t an Abercrombie & Fitch store manager responsible for a pretty substantial operation? Don’t they have to be pretty intelligent and talented people? And just now they have the power to adjust things in their own store to make for a better customer experience and to increase sales? Thanks goodness new management is there to look after things like turning down the music.
Depends on the operation, the nature of the customer base, the managers and the degree of autonomy we are discussing.
In general, some autonomy is better than none, so I would expect to see the Abercrombie experiment yield big dividends.
Customers of the same retailer are not one-dimensional. That means that the mix of customers may be different at different locations. If that is true, offering the same merchandise with the same atmosphere in identical locations may not be equally effective everywhere. On the other hand, brand image depends upon consistency. Every retailer needs to balance the need for a consistent image with the need to adapt to customers. Doing that well leads to success.
In answer to the question of how much autonomy should store managers have? The answer is simple. As much as they are capable of handling.
I will sum up my feeling in one of my favorite quotes by Dilbert: “80
% is hiring great people and 20% is leave them alone to do their job.”
Only caveat is, give them the training and direction they need.
Ah, but will they have “latitude” to turn the music down—I don’t think it’s possible to turn it higher—that’s really the question, isn’t it?
Optimistic as I’d like to be on this, I suspect it will end up being like a Dilbert cartoon where people are told to make moves that work out, but avoid those that don’t (if not explicitly before hand, then implicitly, after-the-fact in reviews), and the result will be a great deal of…nothing much changing. Probably better to leave “try new things” to the tech world, where the real world doesn’t apply.
The answer is, it depends. The manager must be educated on all the aspects of the impact such moves may have, know how to monitor the impact, etc.
Here is a formula I learned a long time ago: empowerment before education equals chaos.
Without the proper guidance and oversight, giving broad store-level autonomy will erode consistency of the shopping experience. Not every store line manager is a good merchant, and balancing merchandising and operations decisions will prove problematic.
Too many suffer from the quandary of the last sale lost syndrome—as in, “we never have enough 40 short suits in chocolate brown.” Unless the players have a firm grasp of the use of data and take emotion and personal bias out of the decision making, how can a chain control open to buy and maintain a good mix of products?
A prominent national “men’s store” has three locations I frequent and I can literally name my own price in any of them, because the store line personnel have carte blanche to override system prices and offer upsell incentives. The days of old look great until you stop and consider POS, UPC and EDI didn’t exist plus the manufacturing cycles were much longer.
Some local decision making is to be encouraged, but it should be reinforced with a good vision and a well thought out plan of execution.
When the stores distance themselves from purchasing and merchandising, the disconnect usually results in an assortment of inventory issues. Markdowns, clearance and slow turns may increase to unsustainable levels in a short period of time. The company may be desperate to find a means to connect to the market for these are desperate measures.
It is wonderful that the company has decided to permit store associates to make changes to both improve customer experience and personalize the store to the local environment. Given how poor store associate morale is in retailers across the country, this empowerment will help not only improve store design and layout, but will cascade over to improved customer service, retention and sales.
When store managers are permitted to get involved in purchasing, that is usually where things become much more complex. It is difficult for the home office to keep track of inventory that is varying at the individual site location, and to understand trends of multiple versions of similar products. That is the one place that the company will have to be careful not to over empower store managers.
Aside from that, however, this is a welcome change for the better.