retail is tough, and growing tougher. how do we improve margins?

9/15/2014Supply Chain Insights Global Summit #ImagineSC September 2014, p.1

Retail Is Tough and Growing Tougher.

How Do We Improve Margins?

Clay ParnellParker Avery Group


You’ve got to start with the customer experience and work back toward the technology – not the other way around.

Creating a Foundation for Transformational Growth

Transformation, Innovation, & Change

Blood, Sweat, & Tears

Creating a Foundation for Transformational Growth

Transformation, Innovation, & Change


Who Is Belk?


Belk outperformed competitors three years in a row

0.2

0.5

3.0

5.3

4.0

5.5

-25.2

0.3

2.7

3.7

4.0

6.3

-7.4

-1.2

-0.4

1.9

1.0

2.9

FY14

FY13

FY12


Total Online Sales and Online as a % of Total Sales


Digital Journey

Phase 1: Grow eCommerce

Phase 2: Fix the Foundation

Phase 3: Omnichannel


29 Month Journey

Q3FY14Q2FY14Q1 FY14 Q4 FY14Q3FY13Q2FY13Q1 FY13 Q4 FY13

August 2012 – May 2013 November 2013

Demand Forecasting

Merchandise Planning

Master Data

DataWarehouseESB/ ETL

Replenishment

Size Optimization

Allocation

Purchase Order

Pack Optimization

Inventory & Stock Ledger

Q2FY14

Invoice Match


The Initial 5 Lessons Learned…

Assess the organization’s maturity

Are you prepared for the costs?

Do you have the IT team in place to deliver it?

Do your partners have Skin in the game too?

Change Management

1

2

3

4

5

http://www.google.com/url?sa=i&rct=j&q=Maturity&source=images&cd=&cad=rja&docid=rLciybjlAY82FM&tbnid=MneS_w6zHF2zZM:&ved=0CAUQjRw&url=http://depositphotos.com/6590958/stock-photo-Capability-Maturity-Model-Integration-maturity-levels.html&ei=6QViUe-FCYLE9gTmjIGYCA&bvm=bv.44770516,d.eWU&psig=AFQjCNHXQ_530HmpLaA_k21IZBCTIX6KBw&ust=1365464829925038


Roadmap to Omnichannel

Transform theeCommerceexperience

Transform theIn-Store

experience

ExpandMobile at every

touch point

IntegrateCustomer

Data

EstablishEnterpriseInventory


Omnichannel Vision


Typical Retailer Activity - Tactical


Foundation Execution

What CAN I Do?

What Do I WANT To Do?

CAPABILITIES:• Item • Price• Size Opt• Pack Opt• Plan• Buy• Replenish• Allocate• Receive• Flow to Stores

DIFFERENTIATORS:• How do I view My Consumer• How My Consumer views us• What is My Assortment• How do I consider My Inventory• How do I Serve My Customer

(options)(requirements)


The Next 5 Lessons

• New and significant, or• Deeper manifestation of earlier learning• More complex• Perhaps more subtle in some areas


The scale of change is big, and differentPerhaps not truly a larger change, but

touches so many, impacts so much


There are significant organizational and incentive challenges

Sales and compensation models impactedStore behaviors need to change


Customer Service Expectations ExpandIt used to be…compete on price, service or assortment

(or two of these)Now consumers expect exceptional service everywhere


Partner capabilities critical for foundation


Less about monolithic, more about continuous improvement

Consumers will learn more, want moreTechnology will change ever faster

The cheese will keep moving

On social networks

In stores

On the go Online


Shifting from discrete commerce channels….

…to a truly engaged and delighted consumer


You’ve got to start with the customer experience and work back toward the technology – not the other way around.


Thank you

Clay ParnellPresident and Managing Partner

The Parker Avery Group

retail is tough, and growing tougher. how do we improve margins?

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