As the retail climate continues to change so rapidly, corporate level executives must do their best to adapt and adjust their business strategies. I have written much about what some of the steps are that can be taken both at store level and corporate level to insure your company stays ahead. The intent of this article is to educate employees as to some of the "whys" corporate makes certain decisions.
The most common frustrations at the store level are usually focussed around pricing strategy and floor moves. The typical scenario in both cases is changing something Monday to change it again on Wednesday, only to put it back on Friday. Corporate has to look at the company as one giant store. When your store sold $2000 on Monday and the best selling item was funky shirt, but the company sold $2.2 million and that funky shirt performed very poorly, the company needs to take that information and make a move quickly.
Every single item that is sold in your store was purchased with a target profit margin. On one side of that margin is the on-hand inventory of that product (which influences the merchandising decisions), on the other is the pricing strategy. Those two sides have to keep the needle as close to that target profit margin as possible for the store to be successful. It is very difficult at the corporate level to make a large purchase of an item only to have it not perform. They need to react both quickly and intelligently to protect their profit and minimize potential loss.
Another common source of frustration lies in payroll. Anyone that has ever run a business knows that payroll is the #1 controllable expense. It is very easy for any company to hack away at the payroll given to stores to control expenses. It is also very easy to quantify those savings when reporting to shareholders and investors. Shareholders like to be told what is going to happen, unfortunately when it comes to payroll it is much more difficult to actually produce the desired result. At the store level, it just appears that employees are constantly being asked to do more with less.
Corporate will always be a source of mystery as the store line employees are left to constantly wonder why. It is much more profitable for a company to train people on HOW to make them money, not WHY they took a discount on what seemed to be a very popular funky shirt! I personally encourage people to look for the whys though. Having a deeper understanding of your business will arm you with a knowledge that will help you make better decisions, and allow you to be a better leader in times of change
Every single item that is sold in your store was purchased with a target profit margin. On one side of that margin is the on-hand inventory of that product (which influences the merchandising decisions), on the other is the pricing strategy. Those two sides have to keep the needle as close to that target profit margin as possible for the store to be successful. It is very difficult at the corporate level to make a large purchase of an item only to have it not perform. They need to react both quickly and intelligently to protect their profit and minimize potential loss.
Another common source of frustration lies in payroll. Anyone that has ever run a business knows that payroll is the #1 controllable expense. It is very easy for any company to hack away at the payroll given to stores to control expenses. It is also very easy to quantify those savings when reporting to shareholders and investors. Shareholders like to be told what is going to happen, unfortunately when it comes to payroll it is much more difficult to actually produce the desired result. At the store level, it just appears that employees are constantly being asked to do more with less.
Corporate will always be a source of mystery as the store line employees are left to constantly wonder why. It is much more profitable for a company to train people on HOW to make them money, not WHY they took a discount on what seemed to be a very popular funky shirt! I personally encourage people to look for the whys though. Having a deeper understanding of your business will arm you with a knowledge that will help you make better decisions, and allow you to be a better leader in times of change
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