Retail veterans often say that retail is all about execution. Let’s find out what they mean and why execution is so important.
Vision vs. Reality
Albert Einstein once said “In theory, theory and practice are the same. In practice, they are not.” While he referred to science, this adage applies to many other fields, including retail.
Theory is what head office envisions. We often call it the “vision” or the plan. The vision hopes to deploy merchandising initiatives and operational programs to produce a certain outcome such as higher sales, lower costs and/or higher customer satisfaction.
The vision is the new signage that marketing has developed, training that “ought to be delivered” and operations/merchandising/health & safety/cash handling standards that “need to be followed”. The vision is the combination of all those things that retail brands work hard, and spend considerable time and money, to develop.
Practice is what actually happens at store level. We often simply call it “reality”. In reality, signage is not always put up, staff is not always trained and seasonal programs are not always executed consistently and on time.
What is in-store execution?
In-store execution reconciles the vision with reality. In-store execution makes it happen. With it, you have a store environment that delivers on the brand’s vision and promise. Without it, you have wishful thinking and a false sense of achievement.
Execution Aligns the Vision with Reality
Assuming you have more than a handful of stores to manage, you do not know how stores really execute unless you have processes and auditing software to help you with this. Operators execute differently. District managers may have different inclinations and priorities based on their own experience and sensibilities.
There is nothing wrong with that, but you need to make sure that the core standards and programs that are the backbone of the brand’s strategy are implemented in full, everywhere and every time. Execution aligns the vision and expectations of head office with the reality on the ground.
The Stakes are High
Of course, this is not just “theory”. In practice, there is ample evidence that improper/incomplete merchandising execution costs retailers 1%+ of sales annually. You also have to factor-in “shrink” (often tied to in-store execution), which costs retailers, on average, 1.5% of sales annually. Lastly, you need to account for other costs and missed opportunities such as substandard customer service and health & safety, which are costly and can affect a brand’s reputation and goodwill. No retailer wants to leave 2.5% of gross sales on the table, not when brick and mortar retail margins are so thin.
Retailers have a sizeable opportunity to do more with less by focusing on in-store execution for programs they already pay for. Get the right processes and the right auditing tools in place, do more with less by focusing on store execution.