Ian, a very insightful analysis of why retail leaders focus so much on store hours. A couple of extra thoughts: Firstly more sophisticated retailers will have a staff planning model, which should at least reduce some hours as sales fall. Getting this model more accurate is generally a good investment, typically many of the activities observed and time measurements were made several years ago and probably need a refresh.
Secondly on margin, most retailers measure entry margin (i.e. the margin if goods are sold at full price) and exit margin (the margin actually made after markdowns and stock losses). The difference is related to the proportion of sales made at full price, a critical measure for all fashion retailers. I remember talking to one newly installed chief exec of a fashion retailer, and it took him over 3 months of concerted effort to get this number! And once he started focussing on it, then margin improved without selling price rises or buying price reductions.
Both great points, Will - in particular, many retailers leave a lot on the table when it comes to optimising the difference between input and net margin, I totally agree.
Ian, a very insightful analysis of why retail leaders focus so much on store hours. A couple of extra thoughts: Firstly more sophisticated retailers will have a staff planning model, which should at least reduce some hours as sales fall. Getting this model more accurate is generally a good investment, typically many of the activities observed and time measurements were made several years ago and probably need a refresh.
Secondly on margin, most retailers measure entry margin (i.e. the margin if goods are sold at full price) and exit margin (the margin actually made after markdowns and stock losses). The difference is related to the proportion of sales made at full price, a critical measure for all fashion retailers. I remember talking to one newly installed chief exec of a fashion retailer, and it took him over 3 months of concerted effort to get this number! And once he started focussing on it, then margin improved without selling price rises or buying price reductions.
Both great points, Will - in particular, many retailers leave a lot on the table when it comes to optimising the difference between input and net margin, I totally agree.