RSR Research: Localize, But Not Empower? The Role of Today's Store Manager
Through a special arrangement, presented here for discussion is a summary of a current article from Retail Paradox, Retail Systems Research's weekly analysis on emerging issues facing retailers.
At a technology event last week, one "retail focused" CIO panel discussed advances in retail business intelligence (BI), and as usual the conversation was about empowering merchandise planners, financial analysts, and other "home office" types to gain visibility into the farthest reaches of retail operations. But when the CIOs were asked about making "actionable information" available in something approaching "real time" to store managers, the CIOs were in agreement; to paraphrase the collective sentiment, "We don't want the store manager to get distracted from his job on the sales floor."
But what precisely is that job? There can be no question that in the past 30 years, the role of the store manager as merchant has been minimized; retail companies sought to gain economies of scale and, as a result, developed centralized product-oriented strategies. For many retailers, this meant dumbing down the store manager function to the tasks of managing the workforce and executing the merchandising plan "just like the picture."
To be fair, the track record for average and under-performing retailers in executing the centralized model isn't exactly heartening. For example, fractured planning processes are a perennial top challenge identified in every merchandising study RSR has run since our inception - and that is a home office issue. The good news is that the needle is moving in the right direction. In RSR's just released study Retail Merchandising - Buckling Down In A Tough Economy, we note that "While it [fractured planning] remains the number one merchandising business challenge, for the first time since RSR began tracking this metric, less than 50 percent of aggregate respondents selected it as one of their top three." But the report goes on to note that "the best merchandise planners and optimizers cannot be successful unless support functions like supply chain and store operations bring the right product into the customers' hands." That's where the store manager comes back into the picture.
As RSR noted in its June 2009 study, Walking the Razor's Edge: Managing the Store Experience in an Economic Singularity,"in today's world, retailers want to emphasize the local relevance of their products and services as a way of winning customer loyalty. The store manager becomes the local customer satisfaction manager in this new environment. To that end, retailers see 'more specific/localized direction to store managers' and 'improve(d) performance reporting to store management' as important opportunities.
As the CIOs in the BI panel discussion alluded, the problem is that store managers shouldn't be tied to a computer in the back office. That's where mobile devices could come in handy, and as one might expect, the importance of delivering real time business intelligence to managers in the form of KPIs (Key Performance Indicators) and alerts via mobile devices has definitely risen in importance. (In RSR's 2009 store study, overall responses rate "KPIs and alerts to store managers on mobile devices" as "very valuable" 31 percent, up from 22 percent in 2008.) But this enabler has a long way to go to gain favor. It's clear that retailers have yet to grasp the importance of the empowered store manager.
Discussion Questions: How do you see the role of the store manager evolving? What are the pros and cons of delivering key performance metrics to store operators in near real-time?