As the approaching holiday shopping season casts its shadow across the land, business intelligence (BI) geeks toss and turn in their sleep, dreaming of sugar plum fairies and innovations in electronic merchandising retail solutions. However, with the recent global demise of consumer confidence, these dreams may not be sweet ones. Retailers have been left with no choice but to squeeze extra value from their existing IT systems and infrastructure - or to invest wisely on brand new electronic solutions.
While big wholesale and retail conglomerates have reaped the advantages of enterprise CRM systems for years, storefront retail applications, operating “in the trenches,” have a much greater user base. Though these storefront applications may be much smaller in functionality and footprint than their big-brother CRM systems, they retain a lot of the features of their more sophisticated brethren.
Today’s smaller retail systems are able to fluidly tie together widely divergent data sets and related business processes, wrapping around them a visually appealing and intuitive dashboard or control panel which provides a real-time visibility into the showroom and stockroom. As retail climates turn more unexpected and consumers become more fickle, even mom-and-pop retail operations are employing dashboards and information canvasses throughout their sales cycles and supply chains.
There is no such thing as a one-size-fits-all retail management solution, but for purposes of evaluating retail management technology, we can break down the business into six discreet topical areas:
- Merchandise and Inventory Management. This will include a varying array of tasks, everything from inventory control to vendor management; the just-in-time procurement of goods; generating purchase orders; receiving goods; and attaining return authorizations from suppliers.
- Revenue Management. Promotional management, price management, price optimization and modeling are all vital members of revenue management. Retailers will rely on a BI application that logs and anticipates market trends so that more pricing and discount models can be enacted.
- Operations Management. Comprised of general cash-flow management, profit and loss tracking, general ledger tasks and the like, operations management will often be the glue that melds the functional segments of a retail dashboard together.
- Customer Management. Anything that keeps the customer experience on the positive and profitable side will be driven by this retail management silo - for instance, returns management, customer loyalty programs, special orders, catalogue distribution, and order management and sales flows.
- Performance Management. This area consists of work traditionally associated with retail analytics and consumer demographics as well as associated business intelligence and data mining.
- Human Resources Management (HRM). The electronic optimization of employees - from clerks, to store managers, to security staff - is a top consideration for merchants. Labor scheduling, time and attendance, and payroll are some of the more important pieces of human resources management for retail outlets.
The Holistic Functional Palette For Retail Dashboards
Retail dashboards are about so much more than offering a common interface for store owners to conduct sales and keep inventory on their wares. They are about helping businesses react to constantly changing conditions and trends in the market; identifying customer segments that have the most potential for profitability; improving their purchasing clout with vendors by banding together with other branch locations to demand better wholesale pricing concessions; as well as improving on-shelf availability in order to provide consumers with the most choices. Everybody will be a collaborator: planners, buyers, designers, wholesalers, manufacturers and beyond.
The current generation of retail dashboards are sporting some mighty impressive features:
- Wirelessly enabled and interoperable with a multitude of operating systems and hardware platforms (PCs, laptops, PDAs), which are accessible anywhere and anytime.
- Empowered to apply performance metrics and indicators to individual stores and groups of stores across any variety of product line, geographic region or period of time.
- Support for the most vital data processing standards which emanate from the Association for Retail Technology Standards (ARTS).
- Green awareness. Recently JCPenney announced they were discontinuing their "big book" catalogue. The moral of the story is that sending out hard-copy mailings to customers may not have the same return on investment that it did before the explosion of the World Wide Web. Better understanding of customer buying habits and demographics will save stores considerable money in printing costs, not to mention make their businesses more environmentally friendly and eco-sustainable.
- Synchronized buying and procurement that keeps up with customer demand in real time, ensuring that shelf space is optimized and used to its fullest potential. In tandem, lead times for merchandise will be cut considerably.
- Means to immediately distribute inventory, forecasting and sales performance reports to key vendors and employees.
- Comparative reporting that can analyze and mashup data from multiple sales channels (brick-and-mortar stores, Internet shopping baskets, street bazaars, etc.) in order to more holistically analyze sales and marketing efforts. Reports should reveal emerging trends and highlight strategies that are resulting in excess profit or loss.
- Handle the idiosyncrasies and nuances of various retail industries. For instance, selling cars and selling sporting goods will have very different opportunities and business challenges when it comes to things like seasonality, time to close a sale, tax compliance, and upselling possibilities.
Punching In, Punching Out
While large-scale CRM and ERP software geared toward retail establishments often tackles human resources business processes, smaller retail applications and customer information systems often avoid this important turf. Yet, even for single-location establishments, workforce optimization by itself can be justification enough for purchasing new IT solutions. For example, shift scheduling based on projected store traffic and seasonality trends can be matched with areas of specialization and availability of staff, making for true demand-driven resource (employee) allocation. Automated time tracking and employee timesheet generation will also be a vital part of any retail dashboard that touches on human resources. Ambitious systems will add mechanisms for employee performance reviews (tied to predefined productivity KPIs for sales and attendance) and make it easier for stores to dole out commissions and incentives. Employees will be thrilled when they can receive richly visual reports that intuitively chart their progress towards reaching sales quotas.
Retail knowledge management does not begin and end with pure business analytics. For a retail dashboard solution to be considered state-of-the-art, it must be tightly coupled to a store’s point of sale (POS) system, especially when it comes to processing customer credit card payments. There must be one-hundred percent compliance with the latest standards in data security, most prominently those from the Payment Card Industry Security Standards Council. Their comprehensive set of data security standards (PA-DDS) provides both vendor and client with protection against fraudulent payments and risky customer transactions. (PA-DSS explicitly spells out the requirements for credit-card processing security and the management of various network architecture and software-design principles that aim to protect the data of all card-using consumers.)
The functional dynamics and workflow utilities of retail dashboards are exploding with a big bang. Small to midsize retailers now have at their disposal tools that can provide new competitive advantages virtually overnight, resulting in better choices and value for their customers in the long term. Managing the performance of a retail organization will never be an easy task, but with the right dashboard and data access, it can become profusely more rewarding.
About the Author
William Laurent is one of the world's leading experts in information strategy and governance. For 20 years, he has advised numerous businesses and governments on technology strategy, performance management, and best practices�across all market sectors. William currently runs an independent consulting company that bears his name. In addition, he frequently teaches classes, publishes books and magazine articles, and lectures on various technology and business topics worldwide. As Senior Contributing Author for Dashboard Insight, he would enjoy your comments at email@example.com
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