The basic need of those who manage a retail chain is to have access to current information about the situation in the shops which they oversee. Sales figures and information about stocks are very important and it is relatively easy to obtain them from POS sales systems. In order to gain the full picture of the “life of the shop” a lot more data are needed.
In our practice, we often use an evaluation sheet for assessing the quality with which a shop operates. The form includes 152 questions. The answers reflect how smoothly a shop functions and point to the areas which require special attention.
In the note “potential of the shop” we indicated that our long experience shows that a shop equipped and run in an optimal way produces 40% better results than a shop that is not properly run. We will assume that each of the 152 questions in our quality evaluation sheet concerning operation of the shop has equal importance. This means that if we satisfy one of the expected elements, we should get an increase in the turnover by 40/152%, which is, more or less, 0.25%.
Is it much or not?
The questions include the following:
· Are all of the personnels’ nails clean and neat?
· Is the floor near the skirting board clean?
· Is the shop manager’s desk top tidy?
· Are mirrors in the changing rooms clean?
If we change these four values from NO to YES, it will translate into an increase of the statistical result by 1%. For a model shop with an annual turnover of 2 160 000, 1% amounts to PLN 21 600!
This is a tip on how to acquire extra funds through the introduction of organizational changes without any investments. It might be worth spending some of these funds, later, on technological development.
The importance of introducing a strong tool which provides managers with up-to-date information is much greater than the example above. Our experience shows directly that after the introduction of effective IT solutions which the users applied, business profitability grew.
Business is done in order to gain profits which, to put it simply, constitute the difference between revenues and costs. Revenues are regulated by the rules of free market and price offers of the competition. Therefore, cost optimization becomes particularly important. The impact on the costs of purchase of commercial goods is small, because they depend on free market operations, too. So, the largest potential can be found in lowering on-going costs and increasing revenues through incentivizing employees and customers in a skilful way.
When it comes to the management of a chain of shops, when a direct supervision over the operation of shops is not possible, it is essential to develop rules of objective and effective management.
The observation of sales results, stock replenishment levels, customers’ interest in commercial offer, examination of the purchasing power and analyses of weather conditions allow for drawing valuable conclusions.
The application of an IT system, with clear advantages of a SaaS solution which allows the customer not to be familiar with IT, facilitates fast analysis of data supplied and informing the users in real time of results and indices obtained. This makes it possible to manage successfully and shorten the state of paralysis in unfavourable situations. Receiving an alert report in a timely manner allows for taking an immediate decision, which, many times, may contribute to alleviating the negative consequences.
Sharing information, to a limited extent, on a general scale is also an interesting element. This solution will give the entrepreneurs who plan investment operations an analytic and comparative tool which will contribute to taking justified decisions.