Reinventing retail performance – part 4

The courage to experiment

There is a basic assumption in marketing that you need to experiment with A/B testing. Do you get more conversions through the web page with the green “buy now”, or a red “compare price” button?

No experienced marketer ignores data that can improve campaign effectiveness.

A/B testing was popularized through advocates like John Merriam in the early 20th century, when mail-order catalogs were common. Advertisers then paid by word count and ad size. Sound familiar? Their focus, like with google adwords or sponsored facebook stories today, was to maximize effectiveness at minimum cost.

When it comes to planning, it is unwise to assume that investing money, time, and effort on new initiatives will automatically achieve the expected outcome.

That may be fine when your organization and people are doing things they’ve successfully done many times before.

When you’re innovating, trying new things, you have to be ready to sometimes fail. Marketers understand experimentation well.

So do modern IT departments where traditional highly structured ‘waterfall’ based projects have evolved into business-driven projects which agilely iterate towards achieving business goals. They expect to ‘learn’ while they ‘do’.

But strategic planning and annual budgeting often seems to continue planning more reminiscent of a 5-year centrally planned economy, than a dynamic retail environment.

There is the top-down planning, by the people who are paid to lead; the bottom-up planning by the people who are paid to do – and some kind of uncomfortable merging to make these fit.

It’s no wonder that they disconnect, when they don’t even start with the same value drivers.

Apparel retailer C&A use driver-based cost planning and variance analysis to measure performance against the actual value drivers – not just financial metrics.

900 suppliers from 40 countries and 37,500 staff provide for over 2 million customers daily across 1,500 stores in 21 countries.

Their key to success was to make it clearly-defined for store managers to understand in operational terms, through an on-demand, and easy way for stores to quickly communicate changes to management.

Management use the value-drivers to construct a compelling narrative for the organization to believe in and align around.

A critical consideration was empowering technology. C&A employed Jedox because it unified planning, forecasting and reporting so anyone could review KPIs and seamlessly adjust plans in one place. Critically, Jedox was easy to use. The modern platform available from any mobile device meant minimum training and support.

C&A stores are empowered to understand how they directly contribute to corporate performance. They communicate to store support and back office services with common language.

 

 

 


This is Part 4 in a series on retail value-drivers, how companies use them in planning, reporting and analysis and lessons for mid-sized retailers to punch above their weight and better share information.

Part 1 here
Part 2 here
Part 3 here


The gap between how a retailer (tries) to present itself, and how a consumer actually perceives it comes down to alignment. To provide a consistent experience to the customer, you must ensure business departments align with each other, and with your strategy.

While business divisions exist for different reasons, how they report, analyze and plan is very similar. By unifying these activities using and agile platform, departments can collaborate using common value drivers on shared data.


 

 

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