Store Operations

-Managing Human Assets

-Store Design and Layout
-Managing Profitability of the store
Managing Human assets
A study of Sears’ employees found a 5%
increase in employee satisfaction resulted
in a 1.3% increase in customer
satisfaction. This led to a 0.5% growth in
sales.
Human Assets
Human
Assets

Talent
Transformatio
n

Talent Talent
Retention Acquisition
Gaining Competitive Advantage through
Human Resource Management
Why does human resource management give
a sustainable competitive advantage?
Labor costs account for a significant
percentage of a retailer’s total expenses
The customer experiences are determined
by the activities of employees (selecting
merchandise, providing information and
assistance, etc.)
These potential advantages are difficult for
competitors to duplicate
Objectives of
Human Resource Management
Short Term
◦ Increasing Employee Productivity
◦ Productivity = Sales/ Number of Employees

Long-Term
◦ Employee attitude  customer satisfaction and loyalty
 long-term performance
◦ Increasing Employee Satisfaction  Reducing Turnover
◦ Employee turnover

= # of employees leaving their job during the year

# of positions
Human Resource Management
Challenges in Retailing
Work Environment H
Open i
Long Hours g
h
Peak Sales Periods
T
Emphasis on Cost Control u
r
Employees n
o
■ Unskilled v
e
■ Part-Time r

■ Diverse Backgrounds
Downward Performance Spiral
Triad

Line Managers
TRIAD
HR Professionals

Employees
Organisation Chart at Raymond Retail

Customer

Store Staff

Store Managers

Area Managers

Operations Head

VP

President
Tasks Performed in a Retail Firm
Attracting Talent – Employment Marketing

Employment marketing (branding)

Marketing programs that

attract “best and brightest”
potential employees
◦ Starbucks – “Love What You Do”
◦ Southwest – “Free to Actually
Enjoy What You Are Doing”
Attracting Talent – Employment Marketing
JCPenney
To build its employment brand, JCPenney
uses the tagline “A Perfect Fit” on all
correspondence and advertising directed
toward potential employees
Developing Talent –
Selection and Training
Selective Hiring:
◦ Recruit “the right people”
◦ Simply seeking the best and the brightest may not
always be the most effective approach
Training:
◦ Increasing investments in management training
programs and developing leaders
◦ Increasing attention to college graduates - Generation
Y
Motivating Talent – Aligning Goals
Policies and Supervision
◦ Indicate what employees should do
◦ Behavior Enforced by Managers
Incentives
◦ Commission, Bonus, Stock Options
Organization Culture
◦ The set of values, traditions, and customs of a firm
that guides employee behavior
◦ Behavior enforced by social pressure
Operating stores profitably
 Understanding Transaction

matrix (T- matrix)

◦ Components of transaction
matrix
 What drives the top line

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What is the T-matrix
 The transaction matrix is used to measure performance of the
business on a store-2-store, day-2-day basis. Monitoring the
transaction matrix, indicates the extent to which the store
potentialises customer entry.
 The parameters measured in the matrix are meant to be used by
ALL retailers - whether small or big.
 Key variables to be measured for the matrix include:
◦ Conversion Rate,
◦ Average transaction size,
◦ Items per ticket.
 All these are measured with reference to a specific time frame.

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Conversion Rate
 How many customers out of 100 who enter our store
leave with a purchase
 Measures how well we convert “Shoppers to Buyers”
 the higher the conversion rate the better

 Conversion Rate = (Total Cash memo / Total Traffic) *

100

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 Average Transaction size (Cash Memo size)

 How much does the average customer spend in the store

 Critical number as its measures our ability to sell more of
what we have to customers we already have
 It should always be improving

 Average transaction size = Sales / Number of transactions

(cash memos)

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Items per Transaction (cash memos)
 Measures how many items the
average customer purchases
 Tells us how we are performing in
suggestion selling
 Should be increasing

 Items per Transaction = Total

Items sold / Total transactions
( no. of cash memos)

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Thank you!