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Recently, I read a publication with a feature story on the top "Fifty People Who Drive the Food Industry". One may disagree with individuals in the top fifty and their ranking, but there can be no disagreement with their number one power driver, "The American Consumer". The dilemma retailers and suppliers face is the imbalance in who is responsible to keep the American Consumer satisfied. Time and again it comes down to store management being the ones who must solve over 70% of the problems at store level.
Most retail suppliers have multiple teams of technologically gifted personnel dedicated to supply chain and marketing activities. These teams are constantly analyzing the details of consumer activity via POS data and are responsible for formulating tactical and strategic responses. It is my observation that these teams do not act in harmony and fail to understand the multitude of challenges a store management team faces to exceed the expectation of the American Consumer.
As a third party observer to supply chain meetings regarding store-level sales and inventory opportunities, I often hear statements that have the same familiar ring:
- "We showed sales in these 50 stores the last six weeks and now no sales, yet we still show inventory on hand".
- "Our new product launch is still showing zero sales in 30% of stores 3 weeks after the set date".
These comments inevitably lead to the following generalization: "If only the store management team would do their job".
As we all know a lot has changed in the last decade in retail. Nowhere is this more evident then in the roles, responsibilities, legal and environmental obligations a store management team faces. Let's just review and highlight a few.
- Store Hours: 7 days a week, 24 hours a day in supercenters, and at least 7 to 11, 7 days a week in supermarkets.
- Store Personnel: Average supercenter employs 400 to 600 people, with average yearly turnover of 35-40% for full-timers and over 65% for part-timers. Average supermarket has fewer store personnel, but due to work rules has limited flexibility to respond to missed opportunities. In metro markets, store training and development is hampered from a growing minority work force whose first language is not English.
- Store Policies: Managers today are constantly under the threat for compliance standards as it relates to hiring policies, sales to minors, environmental laws along with local, state and federal laws relating to fire exits, work schedule changes, fire arm sales and company directed execution policies.
- Store Standards: With the advent of so many types of retail formats selling food products, the struggle to maintain a clean store has now been elevated to maintaining a "Sanitized" store, including hygiene standards enforced for store personnel dealing with food processing.
- Store Technology: Managers today are skilled power users of a host of highly technical devices that are supposed to make their life simpler, until something goes wrong and then they intuitively react to fix it.
I hope this helps to explain what store management is doing on an hourly and daily basis.
The solutions for suppliers, especially the teams dedicated to supply chain activities, are as follows:
- Get out of offices and into stores and seek to understand challenges facing store management, especially on the weekends.
- Drill down to the item and store level for analysis. Do not be satisfied with only analyzing supply chain issues at category or chain wide level.
- Retailers have invested in technology to transmit real time POS data to suppliers. Suppliers must also invest in technology and dedicated resources to analyze and implement corrective actions to store opportunities in a collaborative relationship with retailers.
The American Consumer is the "Power Driver" of the retail economy and supplier teams must take up the challenge to respond allowing store management to serve the American Consumer more productively.
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