Communication and proper execution of store programs and directives remains a pain point for retailers. As your business expands, the physical separation that exists between stores and head office makes engagement increasingly difficult. When communication breaks down, stores can become confused about how to comply with operational directives or execute merchandising promotions. What is more, head office may be unaware of store questions, concerns, and issues that need attention.
The good news is that there are strategies and tools to help you improve communication and execution. The ability to respond quickly to poor in-store execution matters.
The cost of poor communication
Poor communication results in poor execution and poor execution can have a major impact on your bottom line. Marketing is often responsible for driving revenue growth, and as a result, retailers spend between 10-24% of total company budget on marketing. That is a large investment of your resources.
An astonishing 90% of Consumer Goods companies report frustration with compliance (restock, promotional execution, employee product knowledge, correct pricing).
How to improve store communication and execution
Streamline your communication
Communication between stores and head office breaks down due to the choice of communication platforms. Retailers often choose familiar platforms such as email, WhatsApp, Skype, Facebook Messenger, or phone calls for communication with stores. Though widely accessible, these communication channels are not designed to be bi-directional, actionable or traceable.
Too many communication tools cause confusion; your employees need to know where to go for essential resource files, guidelines, tasks and feedback.
The first step is to streamline your communication process. While your processes should still include email and phone communication, your communication should not be limited by them. Make a list of communication essentials; e.g. a content management system to eliminate physical paperwork, task management software to assign and track completion, instant messaging for quick communication, dashboard KPIs to get everyone on the same page and focused on the same goals. There are numerous out-of-the-box software solutions made for retailer communication and collaboration (most with a free trial).
Whether you are communicating with one store, a group of stores, or all your stores, keep the process consistent. Predictability is essential and necessary to get the buy in from stores and set response expectations. For instance, use the same method every time to communicate tasks that require immediate attention (product recall, hazardous situation, essential system disruption).
Communication must be bi-directional
Communication must go both ways. We can’t emphasize this enough: your stores need to communicate with you. District or regional managers provide one link between head office and stores. However, district managers may only be in their stores once every three weeks. Without hearing from your stores, how can you know what challenges they face and what steps you can take to help?
Communication should be part of your company culture
According to a recent Gallup Poll, employee engagement averages less than 33%. Good communication is one of the most important factors for fostering engaged employees. Be specific about company goals, responsibilities, expectations, and organizational changes. Being clear cultivates trust.
When it comes to solving a problem or implementing policy change, solicit feedback, especially from your front-line employees. There is power in understanding what and how your employees think and soliciting their feedback helps them feel valued. Feeling valued is the number one driver of engagement and employee satisfaction.
Choose a platform your employees can easily access with your information all in one place. The same resources should be available on any device at any time. Doing so makes it more likely your front-line employees will engage.
Last, all employees should have access. If you choose a software platform for your store communication and execution, veer away from platforms that charge by the user; you don’t want there to be a cost avoidance to getting all of your employees on board. Employees that can’t access a platform miss announcements, essential information and are less empowered to problem solve on their own. This thwarts communication and works against compliance and proper execution. Remember, your customers do not care if an employee works 4 hours per week or 40 hours, every employee is a brand ambassador.
The standards you should communicate
Accessible and streamlined communication can have valuable returns for your business. Now let’s look at some essentials all organizations, whether you have two or 2,000, locations, should communicate. We have broken down our communication suggestions into two categories: merchandising and operations.
Technically, the category of retail merchandising comprises everything a customer perceives when they encounter your store: window displays, lighting, store layout, signage, product display, POS promotions. Your layout and merchandising operating procedures should be comprehensive: When should displays be updated? What type of lighting is expected in fitting rooms? How should products be placed on shelves? Merchandising is so important, we have an entire category dedicated to merchandising on our blog to help you with merchandising best practices. We also have how to’s and checklists to help you conduct merchandising audits or update your merchandising standards.
Here, we want to focus on two components that should be included in any merchandising policy and readily communicated because they are known revenue drivers: branding and promotions.
Retail expert Francesca Nicasio notes that a compelling brand “attracts great people to your company, promotes loyalty, and increases sales.” In fact, the average revenue increase attributed to presenting a brand consistently is 23%! Therefore, it is essential you communicate your brand guidelines and standards.
Companies spend an average of 19% of their total gross revenue on promotional campaigns. Successfully executing a promotional campaign encompasses numerous moving parts and departments. Getting everyone on the same page, out of their silos, and into collaboration mode can be a challenge.
This is where a store communication platform can really help. The right platform will give employees a place to easily access, share, comment on, give feedback, and check off tasks required to make your campaign a success.
Employees want to know what is going on within the organization. As noted above, sharing the organization’s KPIs with employees cultivates a culture of engagement. Employees want to know how the organization is doing, what the organization’s goals are, and what their role is in contributing to achieving corporate objectives.
Employees want training! In fact, 63% of employees believe learning new skills and receiving special training is essential to career advancement. Effective training is ongoing. Entrepreneur recommends optimizing development by setting achievable quarterly goals. Quarterly goals are easier to see and promote a sense of accomplishment. They can also help you identify weak areas more quickly for correction.
If you worry that quarterly goal setting would take too much time to set up and track, Entrepreneur recommends automating the process to track and measure performance. Choose a platform that offers you a smart checklist or task management. Employees can review goals, mark accomplishments, and give feedback. Managers can run reports to quickly see who is on track and what areas need attention.
Customer service standards
According to the Harvard Business Review, it is five to 25 times more expensive to acquire a new customer than to retain an existing one. Sixty-eight percent of customers will not return if the customer service is poor and the staff is perceived as indifferent.
Get to know your customers and tailor your service standards to meet their customer service expectations. Standards and expectations can change, so ensure your employees have ready access to the training and service standards they need to meet customer expectations. Unsure where to start? See our blog, “How to Improve Customer Service Standards.”
Loss prevention policies
Your employees are the ones who carry out your security policies. Clearly document and provide your LP policies and procedures to all employees. Sean Sportun, Security & Loss Prevention Manager at Circle K, observes, “if employees understand what is being asked of them and training remains relevant and relatable, the organization will experience an enhanced level of compliance. Proper training increases the odds of success and builds a lasting safety & security culture.”
Nicasio recommends telling and showing. “Let’s say you have specific measures for cash handling. You’ll want to verbally communicate them during training, but you (or an experienced member of your team) should also demonstrate the process to your new hires and supervise them during the first few times they carry out the task.” She also recommends printing your guidelines in places employees converge (stockroom, behind the counter, back-office). New threats come up so ensure updates are communicated clearly.
Health & Safety
The cost of non-compliance with health and safety policies and protocols is rising: increasing by 45% since 2011. Costs include settlements, business disruption, and productivity loss which means a loss in revenue. In a recent survey in the construction industry, 75% of respondents blamed lack a of knowledge as the reason for non-compliance. There are many hazards in the retail workspace, most of them are behind the scenes. Stocks rooms, loading docks, entry/exits, fire hazards, and broken pallets are common safety concerns for retailers.
Non-compliance has seen the number of food safety recalls rise by 22% between 2015 to 2016. The price tag per food recall averages $10 million. Additionally, employees need to know how to respond if they or a customer is injured in store or if a weather emergency requires attention.
Prevention is best, and Safety and Health Magazine estimates a return between $2-6 for every $1 invested in injury prevention! Avoid injuries, legal fees, and business disruption by communicating your health and safety policy. Use our sample checklist to update your health and safety program across your locations.
Communicate in person with retail audits
Using cloud-based software for store communication ensures your policies and procedures are available to all your locations at all times. However, there is still no substitute for being in your stores. Retail audits, also termed Store Visits or Store Walks, promote higher overall compliance with brand standards at the store level. How? The practice of sending a district manager/CPG field representative into a franchise/store demonstrates compliance is a priority for the brand: the company is committing resources to this endeavor.
Make no mistake, retail audits are a resource commitment. In a recent survey, district manages estimated they spend the majority of their time preparing, conducting, and following up on store visits (between 10-20 hours per week!). Automating your store visit processes including smart checklists and automated corrective follow-up can save significant time and money.
Audits engage the store. Retail audits are not a passive activity. They offer the opportunity for members of head office to talk with store leadership and employees. Ask questions, listen, and offer resources.
Last, being in your store is important because different stores execute in different ways. Stores have diverse priorities based on their experience. This is expected, but companies need to be certain that core programs and brand standards are implemented in full, on time, and across all locations. The only way to know if stores are really executing merchandising, operations, or loss prevention programs is to have a retail audit process in place.
Moving forward with store communication and execution
Miscommunication happens, but if you take the time to create and communicate organizational standards you can lessen non-compliance and poor execution. It is estimated that the cost of non-compliance is 3.5 times higher than the cost to invest in programs that promote organizational compliance.
Strong operational compliance leads to improved merchandising execution; solid merchandising execution can raise same-store sales by 3.7%!
Compliant IA is a complete retail execution and store communication platform. It runs on smartphones, tablets, and laptops. It combines task management, social collaboration, smart checklists, action plans and photo verification to ensure store programs are communicated and executed in time, in full, in all locations.
About the Author:
Chelica Hiltunen is the Director of Operations at Compliant IA. Compliant IA is a store communication and execution platform. It combines task management, social collaboration, smart checklists with action plans and photo verification to ensure merchandising programs are executed in time, in full, in all locations.