It started
out with 4 pillars (or 4P’s): Product, Promotion, Price and Place. People did
not count for much back then. In early 1980’s with the revolution in management
fueled by such publications as “In Search of Excellence”, “Re-inventing the
Corporation” and many others, suddenly people woke up to the importance of
people and added that to the retail arsenal. We’re now able to talk about the 5th
pillar of Retail; People.
At
DMSRetail, we believe a strong contribution from all pillars of Retail is
necessary to achieve the success that any retailer strives for. We have seen
many examples of failed businesses when they neglect to keep an eye on all the
pillars or prefer to focus on one more so than the others.
The
objective of this short article is not to get into the nitty gritty of how we
should be looking after all the pillars - we have produced success guides and
tools to do that and you can find those on our website.
What we
want to do, though, is to announce yet another and very powerful pillar of
Retail. We call it the “Pixel” to remain in compliance with the “P” convention.
It stands for technology. Now, we talk about 6P’s of Retail.
Increasingly, technology is playing ever more influential role in retail
success. Information Systems, starting with customer records, inventory control,
loss prevention, supply chain, workforce management and business intelligence
changing the efficiency and effectiveness of retail operations to a point where
retailers who do not embrace the technology move to the forefront of businesses
that are doomed to fail.
So, this
is a little advice from your friends at DMSRetail to you, to acknowledge and
embrace technology as one of the pillars of retail and to view it as something
that will help your profitability immensely and overall success of your
business.
Three top reasons why
retailers do not succeed:
- They do not know how to
treat their people right, creating excessive turnover.
- They do not know how to
get the maximum benefit from compensation plans, rewards and incentives,
both monetary and non-monetary leading to the dreaded increase in wage cost.
- They do not know how to
utilize technology to their advantage, except for supply chain technology
which is just more about product and merchandising.
Even those retailers who
believe they understand the 6 Pillars of Success in Retail: People, Price,
Product, Promotion, Place and Pixel, still cannot reach the levels of success
they strive for because of their unbalanced focus on Product/Merchandising.
The biggest myth: Product
is everything and everything revolves around Product.
While it is true that a quality
product is very important, it is no more important than the people who sell it,
the pricing and promotion of it, the place where it is offered to the public or
the technology required to optimize operations.
Too much attention focused on
one pillar creates an imbalance. Think of the three-legged chair – remove one of
those legs and the chair falls over. Retail businesses must have a balanced
approach to all areas of their business. Failure to focus on all pillars with a
balanced approach causes the business to ‘fall over’ or fail to reach its
potential.
Most retailers are pretty good
‘merchants’. They are able to buy products, get them to their stores, display
them and track the sales. But when a retailer concentrates so much of their
attention and resources on product and merchandising other areas simply cannot
get the attention they deserve and require.
Consider these questions:
- How well do you think your
products are being represented to your customer by insufficiently trained
minimum wage earners?
- Are you inadvertently
eroding your profit margins by educating your customer to wait for markdowns
before they buy?
- How would you rate your
stores image and overall shopping experience delivered compared with others
in the marketplace?
- Are you operating with
inefficient and aging technology; unable to move ahead because of the
restrictions imposed by your systems?
Without due consideration and
action in these areas, maximum profits cannot be reached.
DMSRetail knows how to balance
the powerful contribution of all of the pillars. The solutions for increasing
profits by taking a solid, balanced approach to all of the pillars are within
your grasp.
In ‘The Retail Management Workshop’ (click
the link on the next line for dates and locations) DMS Retail experts unveil the well balanced approach to
achieving maximum profitability through the 6 Pillars. More info:
The Retail Management
Workshop
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