The changing of the way we work

There is a well-worn saying about change and that is certain is that there will be change. In talking about change it is unusual to understand what is unlikely to change and there are elements that will not change in the near future.

Included in these elements are items such as certainty where we know we need assurance that it is possible to avoid pain and gain pleasure. A basic need is also that we need variety to keep up the levels of stimulation through continuous change as well the desire to feel significant through recognition and develop a feeling of belonging or being loved and respected. The need to continually wishing to grow and expand our capacities and capabilities will never change and the contribution that we make will satisfy the sense of delivering to the best of our ability. Building a feeling of trust amongst all those with whom we interact is a major factor. All these elements will remain static while the environment wherein we operate will without doubt keep on changing on a continuous basis.

The way we work in the longer term is highly likely to dramatically change. There is no dispute that the manner in which tasks are completed is rapidly adapting to suit a totally new environment. The advancement of technology, connectivity and the expectations of both employers and employees are demanding that the economic activities be radically reviewed.

There is an ever increasing trend to relocate resources from the traditional high density centres such as Hong Kong, Tokyo, London, Paris and the like because of high living costs, fast increasing rentals, and salaries which are being outpaced by costs. As a result the purchasing power of residents is being severely diminished and therefore this tendency is forcing organisations to relocate to areas where it is cheaper to live and conduct business. Technology has aided this process as it is easier to operate from remoter areas and still have access through tools such as Google, Dropbox, Skype and the like which makes it just as easy to service customers as effectively no matter where the base location is. The base link ups could also be temporary in that desks could be rented with all the required technological facilities, boardroom or conference facilities supported by the appropriate equipment and catering requirements thus saving investment in permanent structures.

Apart from being able to conveniently work from different sites the necessity for a substantial portion of the workforce no longer have to negotiate the traffic or use public transport daily and therefore the surplus time saving can be productively utilised. There are instances  that those firms who find it difficult to adapt to this newer culture and stubbornly maintain a level of mistrust have experienced a depletion of suitable staff and productivity as the workforce prefer to pursue a flexible option. It is important that the mind shift of acknowledging that the quality delivery of tasks should be the measure of productivity and not the actual time spent in the office. 

The trend has evolved that an incumbent is no longer a specialist in one field all their life. With the ongoing development of new processes, technologies and systems in order to be successful there is a continual need for education and re-education. One big degree for a lifelong job at one corporation is being replaced by a culture of a repeatable cycle of learning then work, then learn again and work to sustain competitiveness in the labour market. It is fact that where in the past job hopping carried a considerable stigma, this is now more than ever becoming the norm.

In days gone by, the evidence of consistent job hopping on an applicant’s resume hinted that in all likelihood presented a negative perception that the candidate probably had a people issue and did not get on with others, could not hold down a job, was disloyal and could not commit to a long term relationship.

The reality is that the opposite is becoming the actuality especially with regard to advancing through a continual learning and relearning process and the new job hopping millennia’s are now perceived to possess a higher learning curve, perform better and deliver above expectations as they pursue the drive to make a favourable impression and assert themselves in a shorter time period with each employer.

Because such employees are continually challenging themselves outside their comfort zones they are typically over achievers who deliver a significant contribution to the bottom line which stands them in good stead before they move on to new opportunities every two to four years. It is believed that the learning curve tends to flatten after three years so in fact regular job hopping has become crucial to ensure a stable career growth.

It nevertheless can remain a concern for companies as there is a continual requirement to invest in new staff but the upside is that the rapid growth of the organisation and the worry of the loss of intellectual property to competitors is less threatening because the swift change makes the impact of the loss of such intellectual assets soon to be outdated. 

The world is also seeing an exponential growth of entrepreneurs who with their specialised knowledge, offer their services on a short term basis simply by working as freelancers or contractors. With a wide-ranging exposure they enhance their skills and are thereby able to raise their rates or acquire additional freelancers to assist them and consequently grow their personal wealth.

Store range profiling

The differing customer profiles of individual stores is not limited to the size profiles but requires a skilled knowledge of the stores in order that complete customer needs are optimally serviced.

In the main the responsibility rests with the planner while in some organisations there may be dedicated location planners who will study the key attributes of stores in conjunction with the sales and management staff within the stores. This is often a point that is overlooked as it is easy to be too defensive as to the reasons why certain products have not performed to expectation. An objective separate view from those who interact at the coalface with the customer places the reality of the situation in perspective.

Not all stores will be able to stock everything and the catalogues need to flex to best meet the demand for the customer that is served by the particular store.

What is important to note is that the sum of the location plans from individual store to total company need to be in line with the total merchandise plans which are reconciled to the overall buy.

In terms of the forward cover requirements of stores they are dependent on the rate of turnover that the stores enjoy. In principle the high turnover larger stores will tend to have lower forward covers as they need less stock in relation to the volume of sales to maintain effective levels of display whereas at the other end of the scale the smaller low turnover stores which require more stock in relation to their sales to maintain the availability of all sizes and colours all of the time and thus will be replenished less frequently. The typical relationship would be that the larger stores will require in the region of five weeks forward cover whereas the smaller stores may need ten weeks of forward sales to present full availability to the customers. For this reason and the physical constraints it is likely that the smaller stores will carry a lesser number of styles in the catalogue in comparison to the larger units.

The catalogue of the store will be influenced by the demographics, income bands and cultural factors. The process that the location planner will follow when assessing a store is firstly to review the sales levels of the various categories of product and examine those areas where there have been unacceptable levels of markdown and probe the reasons why this has occurred which may result in a decision to remove certain categories. Conversely missed opportunities need to be identified and action plans drafted to ensure that these are optimised going forward.

It is unlikely that the sales shape across time for every store is going to match that of the overall company. A prime example is a coastal resort store will experience seasonal peak sales during holiday periods while they will be extremely conservative outside these times or conversely stores will experience depressed sales in university towns where there is an exodus of students during the holiday period.

The frequently recommended approach is to plan each store as if it is your only store. This is however easier said than done particularly where some chains may have hundreds of stores. In many cases the control of stocks at micro level can be extremely time consuming and complex but the use of technical software packages have made it possible to accurately measure sales performance and determine stock requirements to the finest detail based on historical sales patterns.

New stores need to be reviewed as the sales shape may be distorted by the initial opening hype or the fact that it may have been only partially open for the period under review. A common approach that is adopted to plan the range selection for new or refurbished stores is to mirror them to a similar profile store and base the quantities on a comparable turnover size store.

Where sales are disappointingly low it might require the de-cataloguing of certain lines or certain sizes of a specific offering in order to minimise  markdowns without disappointing a large section of customers and enabling the freeing up of more space to expose good performing ranges more forcefully.

A scenario could exist where stores require a wider assortment of product in lesser quantities. The obvious influencing factors in the main will be space constraints, the changing demographics of the town, the store may have been modernized or a new mall may have opened or closed all of which would justify a wider assortment.

The effective utilisation of space in a store is determined by the percentage sales contribution of each product category. Strategically this may be deviated from, examples of which are where a possible focus is required on a new range launch or because of a younger customer age demographic who have more children will inspire a thrust to aggressively feature children’s ranges. In principle these deviations must be carefully considered so that the other product groupings are not placed in danger of being stifled entirely.

The measurement of space is translated into facings or opportunities for the customers to choose from with relevant appropriate values attached for shelves, rails, pegs, table displays in conjunction with the equipment positioning. In other words, a rail in the darkest back corner of the store will carry less value to that on the entry aisle at the front door of the store which enjoys the greatest traffic flow. The placement of total departments will follow the same principle where the highest turnover departments will enjoy the more prominent positioning with greater exposure.

The layout of the store should facilitate a journey through the store from one area to another interlaced with coordinated displays suggesting to the customer options to consider for a complete wardrobe option including apparel, accessories and impulse products before they reach the pay points. Layouts that are static straight up and down rows fail to entice customers to other areas of the store.

Volume and choice balance

The creation of the initial range plan reflects the quantities that have to be bought at item level by colour, in the correct size ranges, at the target mark-ups and retail selling prices. It is essential that the monetary buying amounts of the plan are aligned to the merchandise  plan intake values.

The buying plan should reflect the strategy which guarantees the correct amount of selection within the stock parameters while still providing the right spread of products in the required quantities that will best serve the target customer in both style, form and function at any point in time of the season.

During the construction of the plan, the principle that needs to be adhered to is that the merchandise plan must guide the buy with the customer top of mind. Lessons learnt from previous seasons need to be analysed and equally applied to both the basic continuity lines as well as the high end fashion products. Fundamentally it is also important to get the right balance of the correct number of choices in quantities that enable the guarantee of basic lines in depth without impeding the introduction of newness.

It happens often that too much emphasis is placed on the fringe or peripheral lines, or there is excessive similarity in characteristics and price offerings that can disrupt the balance. The emotional wishes of the buying team and suppliers can also have an influence on a distorted balance being achieved and should be guarded against.

The range plan which represents the assortment of products developed within specific categories must represent the organisation of the business and therefore should be balanced across the width and depth of the structure.

The width represents how broad the choice of product is while the depth represents the quantities required to cover the number of sizes and colours including the amount of price points within the product categories. It is probably easier for niche retailers that focus on a narrower customer segment of the market to best be able to serve the both the depth and width demands of their market.

The difficulties that retailers are faced with in striking the right balance of width and depth of ranges is that of presenting real customer choice while at same time optimising the return on investment. In other words, there is the need to attract customers by maintaining a level of newness and fashionability without compromising the traditional or core customers and especially the high volume sellers. It is therefore critical that the buyer has a clear vision of the marketing position and understands the target customer though continuous research which provides the confidence to determine as to what should or should not be kept in the range.

The other challenge of having a too broad choice of styles is that the decision making process becomes an effort to select a product and diminishes the pleasure of the shopping experience.

The volume and choice balance emphasis that the customer expects to find new styles in their size in a variety of colours can be illustrated as follows.