Retail Remedy is a hands-on retail consultancy, bringing our combined experience to the retailer, diagnosing the problems and then guiding the business through change to deliver results.
We work with all kinds of retailers all over the world with turnover upwards of £1m. This case study follows the path of one such retailer; a small business that had grown organically, picking up skills as they went but with very limited retail knowledge. However, sales had been in a slight decline for the previous three years.
This is the story of how we grew their turnover by 40% and increased margin by 3 percentage points.
Getting under the bonnet
When we arrived, we found a very passionate team with enthusiasm that far outweighed their retail skillset. The team were long-standing with management that were highly involved in the day to day running of the business. Their combined dedication and hard work had helped them firefight their way through to create a credible presence, albeit very inefficiently to that point.
Fortunately, they had the foresight to implement software systems for stock and inventory but without core retail practices in place, it was far from optimised. The tools helped the team find a way through the day to day problems they encountered but like with most systems data does not add value without the skill to convert it to information and knowledge.
When we start a project with a client we have a pre-determined set of areas to review, governed only in part by the objectives of the brief. We often find that the retailer only knows a small part of what they need. No-one knows what they don’t yet know. We will always expand our review to cover areas of the business that the owner may think is irrelevant but where we can identify a seam of opportunity to support the business to grow.
In this case, we reviewed all areas of the instore retail operational practices, all aspects of stock handling including management processes, ordering and stock holding levels, product merchandising and pricing, buying, category management including OTB and range review disciplines, staffing, pay and benefits, incentive programmes and e-commerce processes.
Answer the Why
With the information that we gathered we devised a phased programme of change that started with buy in from the top down. Like in any business, change does not happen because you say it must, change happens because people can see the benefit to them of doing so. We answered the why.
A three-day visioning workshop helped the team establish “What the brand is” and importantly “what the brand is not”. From this any questions that were raised were held up against the brand values and if they supported it, great, if they did not, then they were challenged. The foundations must be solid and defendable, not by us, but by the teams.
This groundwork can feel over done, but from our experience and what we have delivered for other retailers, we know that it is a valuable use of resource, that in the long term, saves time and helps to facilitate a smooth transition. It gives the business the “Big Plan” to work to and helps to measure progress particularly when you are in the thick of change and results still feel a long way off.
Right decisions, right time, right place
The retail and buying teams were restructured to give the right level of decision making to the right people at the right point in the process. A dedicated buying team was created founded on best practice principles, retaining the existing team’s knowledge and passion for the business and product, but also recruiting the skill and experience that was previously lacking.
We put in place and re-platformed a new ERP system and together with the new resource, we enabled the business to implement and embed core buying processes such as OTB, continuity ranges, range reviews, category management and aged stock processes.
Basic retail practices and processes were reviewed and improved to current lead practice, to deliver a better customer journey and experience.
Immediate and sustainable results
The results of this overhaul were immediate and sustainable. Turnover of products increased; cash flow improved leading to an increased buy; aged stock moved out of the business further improving cash flow and the website made transactional.
With the systems in place, the skills to interpret the data presented, and the processes established, the business could work more efficiently and effectively to grow sales from £1m to £1.4m over 12 months. Not only that, gross margin improved by 3 percentage points too from better buying decisions and less aged stock in the business.
The business is now in a much stronger position to further support its own growth as it adds space in new locations in the coming year. The ability to scale from the practices and processes that have now been embedded into the culture of the business, mean it has the potential to further grow sales and improve margin and the legacy that we have left will benefit the business for more years to come.
This case study is not unusual, in fact it is quite typical of the sort of results we are able to bring to a small or medium sized retailer. It might be that you have reached a tipping point in your growth and need to build stronger foundations to continue to grow. So if you find
- Your sales have flat lined, or are in decline
- Your margin or profit are in decline
- The customer experience that you want is not being delivered
- Your retail processes and procedures are not as good as you experience elsewhere
Please get in touch with one of our experienced team.
So, if you need support re-focussing to navigate a new path and kick start your business growth get in touch. With our knowledge and experience we can work with you to build a more profitable future, so what are you waiting for?