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More management presence 'cuts staff turnover'

Dubai, June 28, 2010

A new study shows that when field and regional managers spend more than 75 per cent of their time in the stores, employee turnover falls by 10 per cent and stores are more likely to conform to initiatives.

The Achieving Excellence in Retail Operations (Aero) Study by management consulting firm AT Kearney, also found that 88 per cent of leading retailers pilot more than 50 per cent  of their new initiatives, and that these leaders pilot for a much shorter duration than other retailers (typically a short burst of four weeks).

Piloting more programs allows retailers to focus on implementing “high potential” initiatives. When implementing new initiatives, leaders concentrate on ensuring the correct training methods are in place and they concentrate on fewer initiatives (one to two per quarter) to ensure program execution effectiveness.

Thirty-eight per cent of leading retailers use an official set of pilot stores to optimise new initiatives prior to store roll-out compared to only 18 per cent of other retailers.

“Store operations issues are always important, but in the unprecedented economic conditions experienced over the last 18 months, these issues become critical to survival,” said Dean Hillier, AT Kearney partner and Aero study leader.

The Aero Study included a comprehensive survey completed by 53 leading retailers in the apparel, electronics, grocery, hard goods, do-it-yourself (DIY), drug, health and beauty, and mass market and hypermarket sectors.

“The study looked at what retailers are already doing well, and identifies considerable opportunities to achieve peak performance and lasting results. The study provides retailers with a blueprint for achieving an operational competitive advantage,” he added.

Other findings in the AT Kearney Aero Study:
• The survey found that five critical factors emerged for retailers setting in-stock goals – product gross margin, sales velocity, sales variability, product cost, and product value to customers. The study showed that retailers that consider all five factors are able to lower their out-of-stock percentage by 27 per cent.
• In the area of employee satisfaction, those retailers that regularly communicate with store employees about store objectives, goals, and store performance, and those that recognise high performing employees have lower turnover rates compared to other retailers.
• The survey found that 76 per cent of retailers had at least one cost overrun in the past three years in at least one of the following areas: interior décor, fixtures, construction labour or exterior construction. A strategic store planning process can reduce construction cost overruns by more than 25 per cent.-TradeArabia News Service




Tags: Shopping | AT Kearney | retail management | employee turnover |

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