The Top 10 ways AI can improve Retail Store Operations.
The Top 10 AI use cases that Retail Operators at every level told us would transform their daily work. AI for Retail Operations is...
To be the simple solution to a
big business problem
This article is taken from our 2023 Retail Trends Report, Retail Store Productivity: The next generation.
Better use of current data in the field is one of the retail’s biggest opportunities to drive more output and reduce excess work.
Companies send out 40 – 150 reports and 100s of tasks to Managers each week. Despite spending up to 50% of their time on admin, performance is only improving at random and workload is only increasing.
In the last 12 months Quorso has interviewed retailers responsible for >358k stores and >$3.66trn of sales to diagnose the issue, “what’s stopping retailers being more productive?”
Most retail headlines have been focused on the need for automation to reduce store labor – robots to help re-stocking, cashierless “just walk out” technology, etc.
There is, however, an opportunity closer to home…your data.
Retailers have more data than ever before, more ability to understand scientifically, where to improve their businesses and drive productivity. But so far they aren’t doing it, why?
As the amount of data and tasks in retail has exploded, the standard response has been to send it all to the field and ask them “figure it out”. The range of reports in the companies we surveyed averaged 57 with a range from 40 – 150.
As the Chart above shows, Store and District Leaders can be spending up to 50% of their week trying to understand where to focus and what to do. Time that’s not spent coaching teams or helping customers (the things we employed them for).
But data can help both drive more output and reduce excess work when used right.
Quorso analyzed how many different opportunities, (defined as performance of an actionable KPI being below expectations), an employee could potentially tackle each week, based on the data they’re sent. The answer is a staggering 130 – beyond anything one person could be expected to work on.
But not all opportunities are created equal. The core challenge to driving output is picking the right opportunities to fix from all this data.
The Chart above shows the value of prioritizing the right information. Data from our customers shows that the top 10 issues in each store have 3.5x – 7.5x more value than the next 50. So the top 10 account for 36 – 52% of the potential value that store can work on.
To see any improvements in performance, prioritizing and fixing the right things in each individual store is key.
Given how valuable prioritization is, why do retailers continue to send out 100s of reports and communications per week?
A core reason is that every individual field leader has different priorities. All the information is useful. However, it is only useful to certain individuals, some of the time. The red (versus gray) dots in Image 1 show where, in a ~2,000 store retail chain, an inventory issue needs to be addressed for a certain category in a given week. Everyone will get the report for all categories, but it will only be relevant for <5% of recipients, and that 5% will be different every week.
Helping field teams with the analytical challenge of prioritization is essential and would unlock 15-50% of their time depending on your current status quo. It is also critical to retaining these employees. As noted in our article “Why Field Leaders should be your focus in 2023”, experienced employees are leaving at an alarming rate.
But there are a number of processes in retail that remain highly manual and verification based.
The greatest opportunity in retail will always be how to make processes in the store more efficient and less timeconsuming. As the Chart at the top of this article shows, the labor executing these tasks is ~85% of your total field labor cost.
The most radical, data-driven transformation is process simplification. We’ve seen, for example, how changing inventory processes to exception-based, or verifying promotion compliance with data, can help unlock millions of dollars for retailers (covered later in this report).
Analytics and data can ensure even the most mundane retail processes – the ones few, if anyone, enjoys – still drive performance every day. We’ll take a look at how data can help in areas like inventory, sales and compliance. But first, how can you distribute information to the field in a smarter way, improving prioritization and reducing excess work?
