Walgreens Boston Store redesign

Walgreen Pharmacies Getting a Makeover

Many implications of the Affordable Care Act are permeating into drugstores across the country. Walgreen CEO Greg Wasson is rethinking, reimagining, and redesigning nearly 8,300 Walgreens and Duane Reade stores in the United States alone.

Walgreens Boston Store redesign

CNN Money sat down with Wasson to discuss the ACA’s effect on his retail strategy, and what the role of the pharmacy will be in the years to come.

From the article:

There’s an opportunity for the corner drugstore to play a much greater role. Pharmacists have been extremely well respected — they’re one of the top two or three most-trusted professionals in opinion polls year after year. There’s an opportunity for the pharmacist to play a much greater role in health care, especially with what we have going on in this country with the shortage of primary-care physicians. Plus, we can also involve the front of our store, being the first source for health and daily living, continuing to make sure we’re relevant in today’s society.

A good example would be flu shots. Five years ago or so, a pharmacist was not certified to give immunizations and vaccinations. In Denver one of our pharmacy supervisors decided to get his pharmacists certified to do that. And we found quickly that the public values and trusts the pharmacist to do more than just dispense their medications, so we can do immunizations and vaccinations, health screenings, cholesterol testing, blood pressure — everything that’s focused on wellness. Today we’re No. 2 to the U.S. government in the number of immunizations and vaccinations we administer.

Now just about every other community pharmacy has since certified their pharmacists. The industry has stepped forward. And today people absolutely believe that the community pharmacy is the place to go for immunizations and vaccinations.

RIS News, RBM Technologies, Known Problem Management

What is Known Problem Management?

RIS News recently issued a custom research report (available here) exploring the pain points associated with in-store merchandising. The research uncovers compelling evidence that now is time for retailers to tackle the problem. Over the course of our recent blog series, we examined a number of issues currently preventing retailers from becoming more compliant, and the situational factors bringing about changes for the better.

In this post, we look at the macro-level trend of Known Problem Management being adopted by retailers nationwide, a trend that seeks to address and alleviate many issues facing retailers today.

RIS News, RBM Technologies, Known Problem Management

In retailing, KPM is a new acronym (as if we needed another!). KPM, which was coined by the author of this report stands for Known Problem Management. While you may have never heard the term before, if you work in retail IT, you certainly know what your KPMs are. For some, it’s cumbersome legacy systems that prevent your organization from applying the latest technologies and techniques. If you’re reading this blog, your KPMs likely include ineffective merchandising strategies.

For complicated reasons that go far beyond the scope of the IT department, KPM issues are rarely fast-tracked for resolution. Things like shrink, heterogeneous databases and legacy systems in the tech stack linger year after year with no end in sight.

Adding to the KPM list is inaccurate planogram knowledge. Without precise planogram accuracy down to the fixture level, in-store merchandise planning and execution is a crapshoot that produces high levels of waste and lost revenue at the very least, and disappointed shoppers at the very worst.

The RIS News custom research report explores the KPM of in-store merchandising and uncovers compelling evidence that it is time for retailers to address the problem head on. With the right visual merchandising solutions, campaign planning, execution and compliance becomes easier; communication with corporate headquarters is clear and precise; and most importantly, retailers save valuable time and money.

When the right product and messaging is delivered to the right store, at the right time, and placed on the right fixture, retailers can drive the customer experienced envisioned – addressing a key known issue in the process.

What are some of the KPMs within your organization? And, what are you doing to address these issues? We would love to hear from you in the comments section below. Please feel free to also reach out to us on @Merch_Matters.

A free copy of the full RIS News research report is available here.

Barnes and Noble, Inventory Management

Barnes & Noble Still Profitable Thanks To Better Inventory Management

Fortunately Barnes & Noble is not facing the same demise as their tablet device, Nook. According to the New Yorker, B&N has remained profitable thanks to efficient operations and inventory management. As a result, the bookseller is limiting waste and superfluous inventory and ensuring effective compliance of all campaigns.

Barnes and Noble, Inventory Management

From the article:

To begin with, B. & N.’s retail business still makes good money, and, though its sales fell last year, its profits actually rose. Its operations, thanks to better inventory management, are more efficient: it can make more money while selling fewer books. The Nook is the only part of the business that’s losing money. Being a book retailer isn’t easy—thanks, above all, to Amazon—but Borders’ bankruptcy, in 2011, left B. & N. without a major national competitor. “In this market, you could actually pick up market share simply because you’re the only major bookseller left,” John Tinker, a media analyst at the Maxim Group, told me. And B. & N. has generally avoided the expensive, long leases that can drain a retailer’s cash flow; many of its leases are short—which gives it flexibility in terms of moving or downsizing—and, since its stores generate foot traffic (which is good for surrounding stores), it has considerable leverage with landlords. B. & N., which still has more than six hundred retail stores (and six hundred and eighty-six college bookstores), also retains considerable leverage with publishers. As a recent report from the Codex Group showed, browsing in stores is still a far more common way of finding new books than either online search or social media. So publishers have a stake in B. & N.’s survival.

There are plenty of things B. & N. could do better, of course. Its Web site could be sportier. Its stores, publishing people gripe, are too cluttered, often with non-book merchandise, and don’t do a good enough job of showcasing its key product. (The demise of the Nook should help in this regard, since those giant Nook display booths took up a lot of floor space.) It might also be time for the firm to embrace more innovative ways of pricing and selling books; Peter Olson, the former C.E.O. of Random House, has suggested that B. & N. could bundle e-books and print copies, or offer volume discounts. Motivated, personalized customer service would also make a difference. The obvious model here is the experience at Apple’s retail stores. But B. & N. could also look closer to home. Independent bookstores are now thriving, thanks in large part to their close ties to both publishers and customers. “Stores that can help you not just find what you’re looking for but also help you discover books you haven’t heard of are still very valuable to readers,” says Daniel Raff, a management professor at Wharton who’s written an in-depth study of Borders and B. & N. This suggests that, instead of succumbing to the temptation to reinvent itself, B. & N. should focus on something truly radical: being a bookstore.

RBM Technologies, RIS News, Mannequins

Optimizing In-Store Merchandising – Part 3: Measuring the Costs and Making the Change

RIS News recently issued a custom research report (available here) tackling the issues surrounding in-store merchandising. The research uncovered compelling evidence that suggests now is time for retailers to tackle the problem. Over the course of this series, we will examine a number of issues currently preventing retailers from becoming more compliant, and the situational factors bringing about changes for the better.

In this post, we look at the costs associated with improving in-store merchandising and solutions to making that change.

To get at the heart of what is clearly a challenging problem for retailers, RIS News asked senior-level retail merchandisers to estimate the percentage of lost annual sales they attribute to non-compliance of in-store merchandising.

RBM Technologies, RIS News, Mannequins

Thirty-seven percent said that up to three percent of annual sales are lost due to non-compliance. That means, for a company with a billion dollars in annual sales, up to $30 million is lost as a result of holes in in-store merchandising practices, and a key factor in justifying a corrective investment. The scariest part is that for nearly 15 percent of respondents, the percentage lost was upwards of 14 percent.

In addition to lost sales, waste is another problem that arises from inaccurate in-store merchandising practices. For the purposes of the research report, waste was defined as over shipping of product, over printing of materials, and cost of shipping materials that can’t be used in some stores. Nearly half of all respondents estimated their waste to be between six – 16 percent annually.

When you add the amount of loss incurred from waste to the dollar figure associated with lost sales caused by non-compliance, it is apparent that a great deal of corporate revenue is within grasp for those retailers willing to reach for the low-hanging fruit.

In the five-year period from January 2008 to January 2013, retail store sales have grown 8.5 percent while online sales have grown 72 percent. Yet brick-and-mortar stores continue to be the centerpiece of the retail industry and source of the lion’s share of revenue.

As a result, many retailers are focusing on customer-centric strategies that put digital capabilities inside stores, converting them into omnichannel hubs that expand and improve the shopping experience to attract and keep customers.

However, this strategy is only half of the solution. The other half is to solve known problems in the store that produce a measurably negative impact on sales. Chief among these is the low-hanging fruit of inaccurate in-store merchandising campaigns.

Today, the bulk of the retailing industry is operating with known data gaps, inaccuracies at the store level and workaround tools that are sorely in need of upgrading. Merchandising plans and forecasts are based on historical or aggregated averages that are essentially guesswork instead of hard science.

The ultimate solution is to tie customer-centric improvements in the store with in-store merchandising improvements that increase sales, conversions and customer satisfaction while enabling efforts to reduce waste and lost opportunities.

Does your company currently implement visual merchandising solutions to ensure campaign compliance at the fixture level? We would love to hear from you in the comments section below. Please feel free to also reach out to us on @Merch_Matters.

A free copy of the full RIS News research report is available here.

RBM Technologies, RIS News, Research report, blog 2

Optimizing In-Store Merchandising – Part 2: The Store Compliance Challenge

RIS News recently issued a custom research report (available here) tackling the issues surrounding in-store merchandising. The study uncovered compelling evidence that it is time for retailers to tackle the problem. Over the course of this blog series, we will examine a number of issues currently preventing retailers from becoming more compliant, and the situational factors bringing about changes for the better.

In this post, we look at the challenges retailers face in their efforts to remain compliant.

RBM Technologies, RIS News, Research report, blog 2

It is important for retailers to measure how well stores do in managing merchandising execution and report their compliance back to headquarters. As we noted in Part 1 [URL] of this series, only 3.7 percent of retailers report having accurate planogram knowledge down to the fixture level.

According to RIS News, a quarter of retailers say they do not measure store execution and compliance regularly. Seven percent only measure it once or twice a year and a much larger group (18.5 percent) say they never do it at all. However, three in ten retailers report measuring store-level compliance frequently enough to catch problems and correct them.

So, what do those retailers find when they measure store compliance for merchandising campaigns?

Only one in ten say that more than 90 percent of stores are compliant across the chain for the average in-store merchandising campaign. Compliance of 90 percent or higher indicates strong store discipline and leads to increased campaign results. In short, that’s where you want to be!

With a proven model of campaign compliance leading to increased revenue and accurate execution, why are more retailers unable to attain a high-level of compliance across all stores?

Aside from budget constraints, which are always a high-wire act of balancing competing priorities, the biggest inhibitor to solving non-compliance problems is a “disconnect between merchandising, marketing and store ops,” according to nearly 54 percent of respondents. This familiar organizational challenge was by far the top obstacle cited. Other top challenges cited were increasing pace of change (34.6 percent) and labor limitations (30.8 percent).

RBM-technologies-RIS-News-post2
Figure 1: Challenges preventing organizations from getting stores to be fully compliant

Of the top three challenges cited for achieving greater merchandise campaign compliance by stores, the one with the best chance of success is streamlining differences between merchandising, marketing and store operations. Like all the challenges on the list, this is a tough nut to crack, but not an impossible one.

Sadly, the king of in-store merchandise planning, communication and compliance tools today is Excel. By a landslide majority, Excel (63 percent) was named the solution most retailers use for in-store merchandise planning. Clearly, there are reasons to support this finding, chief among them is that Excel is ubiquitous in most companies and helps meet marginal expectations for campaign compliance.

However, one of the major takeaways from the RIS News report is that use of Excel in merchandising operations is a known problem in compliance efforts at the fixture level. Other culprits on this list include inaccurate planograms at the store level, weak chain-wide compliance during merchandising campaigns, infrequent measurement of campaigns at the store level and outdated planogram surveys.

The silver lining is that these problems are solvable once a comprehensive solution is adopted, and will result in significant sales and margin benefits once compliance is met.

In our next post, we will examine the situational factors that are contributing to retailers adopting more accurate campaign compliance processes and how to measure the cost of doing so.

Does your company currently implement visual merchandising solutions to ensure campaign compliance at the fixture level? We would love to hear from you in the comments section below. Please feel free to also reach out to us on @Merch_Matters.

A free copy of the full RIS News research report is available here.

Office Depot, omni-channel

Office Depot’s New Omni-Channel Initiative

By the end of the month, Office Depot employees will carry mobile devices to provide added insight into products including reviews and availability, according to Chain Store Age. This, in an attempt to increase their omni-channel offerings for their customers.

Office Depot, omni-channel

The mobile devices will also allow employees to check customers out anywhere in the store.

From the article:

Designed to launch in tandem with the back-to-school push, the mobile technology will also allow associates to order out-of-stock items from Officedepot.com (with free shipping) via their mobile devices.

The office supply retailer is also rolling out in-store touch-screen kiosks and workstations to allow customers to research the full assortment of items available at Office Depot and order for delivery. Consumers can also download the Office Depot App to scan any barcode in-store to read reviews and additional product details, or use the company’s free Wi-Fi service in-store.

“Technology is constantly changing the way people shop,” said Christine Buscarino, VP customer experience, Office Depot. “We are continuing to refresh our services and our omni-channel offerings to ensure customers get what they need, when they need it. It’s about shopping for and receiving products at a time and in a way that is most convenient.”

Best Buy turnaround, shopper marketing

Best Buy is Back

After a slew of less-than-optimal earnings reports and dismal sales, Best Buy was all but dead to investors a year ago. Their main issue, they were being undercut in every regard by ecommerce sites offering more products at a lower price than even Best Buy could, according to an article in TIME.

Best Buy turnaround, shopper marketing

Now, a year later, Best Buy seems poised to make a comeback, spurred by new CEO Hubert Joly’s turnaround plan announced last winter.

From the article:

Credit Suisse retail analyst Gary Balter maintains that Best Buy is turning its massive store base — until very recently viewed as a liability — into one of its biggest strengths. The first step is to move away from the “bigger is always better” philosophy that has long dominated the retail industry. Best Buy is closing many of its locations and moving into smaller spaces with a more focused selection of products.

Joly is also leveraging his store space through partnerships with Samsung and Microsoft to create “stores within a store” across the country. Under these agreements, Samsung and Microsoft rent out space within a Best Buy to prominently feature their most popular products. The strategy should improve profitability not just through rent receipts, but also by driving sales of products elsewhere in the store.

Best Buy is also beginning to leverage its more than 1,000 locations by increasingly shipping merchandise from stores to online customers. This strategy can improve chances that an online customer will find an item in stock, and allow stores to sell returned items to online customers, two outcomes that should help the firm improve its profit margins.

Finally, Best Buy is investing in improvements to its Web business more broadly, with the hope of making its website more user-friendly and improving search functionality. Best Buy’s website receives more than a billion visitors per year, but only 1.3% of those end up purchasing a product. Balter explains that if these investments bring that conversion rate up just one percentage point, it would mean roughly $250 million more per year in operating income.

In-store merchandising, rbm technologies, RIS News, research report

New National Study Finds In-Store Merchandising is a Broken, Outdated Process at Most Retail Chains

RIS News Research Identifies Keys for Optimizing In-Store Merchandising

In its newest custom research report, RIS News examines retailers’ in-store merchandising practices, identifying that this process is a broken and outdated one for a majority of today’s national and regional retail chains. The study, which is available for download, was sponsored by RBM Technologies.

In-store merchandising, rbm technologies, RIS News, research report

“After surveying and speaking with these retailers, and learning more about their current practices, it became clear that in-store merchandising is a very broken process. Too many retailers are still relying on spreadsheets when they really need a comprehensive solution for managing their in-store merchandising campaigns and measuring execution.”

Optimizing In-Store Merchandising,” which is based on survey responses from senior executives across national and large regional retail chains, identifies a new industry term – Known Problem Management (KPM). While the terminology might be new, anyone in retail IT can tell you what their KPMs are. For some, KPMs include shrink and, for others, heterogeneous databases and legacy systems that linger year after year with no end in sight. A major KPM in retail, and the focus of this report, is inaccurate planogram knowledge.

Key findings from the report include:

  • A quarter of retailers have up-to-date store surveys, yet only 3.7% say they have accurate planogram knowledge down to the fixture level for all of their stores.
  • A major part of the problem is that 63% of retailers are still using Excel spreadsheets for in-store merchandise planning, communication and compliance.
  • A quarter of retailers do not even measure store execution and compliance regularly. In fact, a miniscule 7.4% say they only measure it one to two times a year and a much larger group of retailers – nearly 20% – say they never do it.

Joe Skorupa, RIS News editor-in-chief and the author of the report, comments, “After surveying and speaking with these retailers, and learning more about their current practices, it became clear that in-store merchandising is a very broken process. Too many retailers are still relying on spreadsheets when they really need a comprehensive solution for managing their in-store merchandising campaigns and measuring execution.”

The report also found that the bulk of the retailing industry is doing workarounds when they create merchandising plans and forecasts. They are working with historical and aggregated averages; using guesswork instead of hard numbers.

“Retailers have lost confidence in their stores’ ability to execute localized campaigns quickly and effectively,” said RBM’s Chief Operating Officer Dan Wittner. “Retail executives need access to real-time information in order to carry out directives from headquarters. This level of compliance ensures that every customer walking into their stores – regardless of store location – is seeing the right marketing messages and the right merchandise, exactly how it was envisioned to be placed within the store in order to create the optimal customer experience.”

To download a free copy of the report, visit the Research section on the RIS News website.

from Business Wire

RBM RIS News Research Report

Optimizing In-Store Merchandising – Part 1: The Revolution of Brick-and-Mortar Stores

RIS News recently issued a custom research report (available here) tackling the issues surrounding in-store merchandising. The study uncovered compelling evidence that it is time for retailers to tackle the problem. Over the course of this blog series, we will examine a number of issues currently preventing retailers from becoming more compliant, and the situational factors bringing about changes for the better.

In this post we introduce many of the issues retailers are facing to remain campaign compliant and the revolution in brick-and-mortar stores that will bring about change.

RBM RIS News Research Report

First, the bad news. As retailers labor to meet customers’ needs with omnichannel strategies, and the complexities of brick-and-mortar retail continue to grow, campaign planning and forecasting has deteriorated.

The RIS News research report examines how many retailers have a problem with in-store merchandising accuracy. Anecdotal evidence from discussions with merchandisers indicate the problem is large and is supported by the research report that found only 3.7 percent of retailers have exact accuracy of planogram knowledge down to the fixture level for all their stores.

RBM-RIS-News-accuracy-planogram

Retailers have lost confidence in their stores’ ability to execute localized campaigns quickly and effectively. Campaign intricacy is accelerating with products, POP, kits and creative being shipped to stores on a more frequent basis. In addition, communication from headquarters to stores typically lacks timeliness and relevance.

These inefficiencies not only waste time and lead to confusion, but also impact profit margins in the form of overprinting, shipping costs, and lost sales due to untimely and inaccurate product mix and messaging.

Now the good news. With the right suite of visual merchandising management solutions, an accurate merchandising planning process is attainable. With these tools, communication becomes clear and precise, and retailers save time and money. Visual merchandising management solutions enable retailers access to real-time information needed to carry out accurate localized campaigns to their stores.

When the right product and messaging is delivered to the right store, at the right time, on the right fixture, retailers can drive the customer experience envisioned in the original planning process.

Over the course of this series, we will examine some of the specific issues holding retailers back from becoming more compliant, the factors causing them to change their approach to in-store merchandising for the better, and finally how Known Problem Management (KPM) can help retailers identify problems and work toward a long-term solution.

Does your company currently implement visual merchandising solutions to ensure campaign compliance at the fixture level? We would love to hear from you in the comments section below. Please feel free to also reach out to us on @Merch_Matters.

A free copy of the full RIS News research report is available here.

barnes-and-noble-nook-and-books

Did Barnes & Noble truly fail at multichannel?

In short, yes. It is hard to think that once arch-rival Boarders went out of business, Barnes & Noble would have had a hard time capitalizing on the market share. The truth of the matter is that while their physical stores are holding on, if only by a thread, their attempt to merge eBook’s with physical sales has ended up being their largest revenue drain, according to Storefront Backtalk.

barnes-and-noble-nook-and-books

From the article:

It wasn’t for lack of trying. The whole point behind putting Lynch in the CEO chair was that he had been running the chain’s online operation. That didn’t work out, in part because Lynch really, really didn’t like physical bookstores—so much that he moved out of the chain’s Manhattan headquarters to work in the dot-com offices a mile away, and the CFO and other top executives followed him.

So much for merging the channels.

But that wasn’t the only lost omnichannel opportunity, and if Riggio actually convinces his board to sell him the stores and E-Commerce operation, as he proposed in February, Barnes & Noble still has a deep omnichannel problem.

No, the Nook turned out not to be the answer—having a bookstore in your pocket is nice, but the Nook wasn’t as nice a pocket bookstore as the Kindle or the iPad. Barnes & Noble was used to getting books from publishers and selling them, not engaging in back-alley knife fights over pricing and exclusive rights.