The Issue Running a retail business is hard. Like, really hard. You do it because you love it, and if you're still swinging after 2020, you're clearly in it to win it. The thing is, you may think you know what's driving your profits (and what's leeching them), but basic retail metrics often hide incredibly important insights. And now that pretty much everyone is getting on the customer experience bandwagon, selling and servicing across multiple channels, it's imperative to have every shred of ammo available to gain a competitive edge.
Retailing today is about managing the big picture…and and having the tools to do it with very little sweat equity. The challenge is that even if you’re technically omnichannel, unless you have a retail tech platform thats integrated, you’re dealing with individual black holes.
To get a grip on the holistic health of your retail business, many strategic frameworks can be used. The 5C is a great place to start.
One of the most popular and holistically helpful frameworks for understanding both the internal and external environment you’re swimming in is the 5C Analysis. It is a technique used to conduct situation analysis. Done right, it serves as a comprehensive check-up of all the key areas of your business and helps you adjust your strategy based on what’s working– and what isn’t. Here’s a breakdown of the big 5.
This is the study of your retail company’s vision, strategies, capabilities, product lines/merchandise, technology, culture, and objectives. It’s great for getting a good grip on the existing and potential problems within your business.
Understanding customers is a critical piece of your situation analysis. It involves knowing your target shoppers, their behaviors, expectations, market size, market growth, buying patterns, average purchase size, frequency of purchase, and preferred retail channels.
Getting intimate with what your competitors are offering is one of the most important things you can do. If you don’t, how could you possibly know where you have space to stand apart from them? This analysis involves knowing their strengths, weaknesses, positioning, products, market share, and marketing initiatives.
Collaborators are the external stakeholders who team up with your organization in a mutually beneficial way (like us!) Agencies, suppliers, distributors, and business partners are typical collaborators, and it’s really important to understand their capabilities, performances, and issues so that you can enlist their support to fill the gaps in your existing team.
Climate analysis is the evaluation of the macro-environmental factors affecting your business. A common filter for this one is called PESTEL analysis, and it means you’re looking at the political, economic, social/cultural, technological, environmental, and legal factors that may be affecting your retail company’s place in the world.
As great as it is, the 5 Cs just went through a tech transformation, and it has created a MAJOR stress on the average organization. The outcome? Yet another ‘C’ to consider–Change Management.
When any retailer makes the conscious choice to dive into big picture strategy–and big picture Business Intelligence–change management invariably shows up. Roles need to be tweaked, new responsibilities, KPIs and processes will need to be identified and tweaks to your retail technology will need to be employed. Regarding the technology, it often falls on the shoulders of one person, and MANY times they are experts at some things on their plate but clueless about others. They have to sift through a myriad of service providers, secure the right software and take full accountability for the learning curve and surprises. It causes a lot of stress for them as well as all stakeholders that are affected by the change in software and systems–but it doesn’t have to be that way.
When you get ready to go down this path, the best thing that you can do is pull in some help. Call it a consultant, navigator, tech guru, whatever…just be open to using one.
Here’s what you get with a great outsourced resource:
- The ability to help you set up your processes and reports based on your unique situation
- Familiarity with the many systems out there so that you can hone in on a shortlist quickly
- ‘Knows what good looks like’, meaning they can pull from established best practices of others that have gone before you
- Insight on what software and systems play well together (and which don’t)
- Knowledge of the realities versus the sale pitches (so that you don’t buy from a snake oil salesman)
The right resource can also help you identify the right investment scenario, in which there will be two options: (1) Legacy, where you will invest in one upfront nut, including migration fees and SaaS fees; and (2) Creative, which offers multiple unique ways to skin the cat and help get you to the ROI you’re seeking.
The investment needs are also going vary. You may require something small, such as an intelligent video system to better track shrink and employee theft and maximize product placement or a big one, which would include a full system migration, including POS, OMS and ERP.
Another point a seasoned expert can help with is how to create the right dashboards and reports. Canned, generic dashboards are an incredibly ineffective ways to manage retail performance.
You are a unique business and you are going to need dashboards and reports that easily adjust to changing business priorities, but also lasso all the data together in a unified way. Fragmented dashboards present only part of the picture, making you and your team waste time investigating across multiple business functions to consolidating the data. A truly effective dashboard will only show user-specific KPIs, but the analytics in the backend must fully account for data across the entire business. This can only happen if you have the right retail technology platform.
Main point here is that this stuff is complex, but there’s no reason to go it alone. A ‘Ninja On Demand’ can help you manage it all and avoid the most common trials and tribulations based on real-world, hands on knowledge.
Tips From the Trenches
√ Pull your power from the navigator
A psychologist helps you see things happening in your life from a different perspective, then gives you the tools to make the changes. When it comes to big picture business planning and future proofing, a seasoned consulting resource can do the same thing for your retail company, creating peace of mind while also saving you tons of time and stress.
√ Hold your software people accountable!
Software is the backbone that makes big picture planning and business intelligence possible, and you have hold your resources’ feet to the fire. They are inside of your business ecosystem because they made promises on what they can and can not do for you. That means they need to make good on it.
√ Don’t kid yourself
This is akin to signing up for the gym membership when you’re aiming for that hot summer bod. A trainer will help you do what you have to do to get you to your dream state, but you have to commit to do your part and lean in on the process.
√ Consider the cost
It’s important to consider the the true TCO (total cost of ownership) of this as well as the the expected return on your investment, which can show up as monetary or operational/business efficiencies. This then needs to be bumped up against the different ways to pay for it, and which one is right for you. Again, this is a standard task for a seasoned resource.
√ Build up your business intelligence
When you have multiple systems running your retail business, you simply must first figure out what data you’re going to need to pull, where to pull it form and what reports need to be delivered to which stakeholders. This may require a BI tool, and an ‘evolved’ platform can provide it with an easy plug in.
Why Is This Worth Your Time?
Look, it’s 100% WORTH the effort to invest in a platform that can give you a true, real-time accurate picture of your business while also giving you the ability to make quick pivots.
An integrated retail platform with advanced analytics and customized reporting is like a team of analysts working behind the curtain. By building out the right reports, investing in the right systems and leaning on business triggers, you can sweat more profits without breaking a sweat.