In this interview, moderator Keith Jelinek, co-leader of Ankura's Performance Improvement Advisory Practice, engages with Richard O'Brien in a discussion aimed at equipping retailers with strategies to excel during the critical fourth quarter. Richard O'Brien shares valuable insights into the challenges store managers and field leadership face during the holiday season and outlines key focus areas for success.
Keith: Black Friday is almost upon us, and with it the official launch of the 2024 holiday shopping season. Retailers have been in the planning stages now for months as they look forward to this critical sales period. A great deal of turbulence has been felt from geopolitical unrest, inflationary pressures, shipping challenges, the increasing cost of labor, a rocky economy trying to mend itself, and to top it off, a presidential election cycle.
We all know that these last two months of the calendar year can make a difference from being in the red or being in the black from a profitability standpoint. Slight adjustments now to strategies and tactics can make all the difference, especially since this year presents a shorter selling season.
With final preparations underway, our expert retail team has prepared a holiday readiness checklist spanning across five key functional areas: supply chain, marketing, store operations and labor planning, digital commerce, as well as inventory replenishment and allocation.
Blending years of retail experience with shopper feedback from our recent consumer holiday survey, we are excited to share our holiday checklist, which provides a fresh perspective on what is most important to your customers this holiday period.
Today, in part three of our series on the holiday shopping season (see part one here and part two here), I will be talking with Richard O'Brien, a Senior Director with deep expertise in store operations and labor planning.
Let's jump in …
Keith: Rich, thank you for joining us today - let's talk a little bit about stores. Store operators have a lot on their plate right now, especially with the dramatic changes we have witnessed of late and the large and ever-increasing role of technology. Seasonal products are flowing into the stores to be set, seasonal hiring is well underway, labor budgets have been planned, and the intersection of stores with the digital consumer for buy online, pick up in-store, and ship from store, is going to ramp up quickly. With that in mind, what should store managers keep top-of-mind to ensure they have a successful holiday period, and don't disappoint customers coming into the stores?
Richard: Thank you, Keith. Store managers are under immense pressure during the holiday season. They're juggling numerous priorities and wearing many hats, making it an especially hectic time. To truly 'win the holidays,' store managers must excel in three key areas.
First, as you mentioned, holiday hiring is in full swing. However, it’s crucial to maintain diligent labor scheduling to ensure adequate coverage for all key shifts and in-store tasks, such as stocking, replenishment, and customer service. At the same time, having backup plans for potential schedule gaps or call-outs is essential. Leveraging overtime for your top performers can be a strategic move to ensure timely execution of critical tasks like planogram implementation, store setup, receiving, and stocking.
Second, store management leadership will be a key driver of holiday success. Managers should be on the floor as much as possible. This isn't a time for them to be managing from their office. They need to be on the floor interacting with associates and, more importantly, with customers. They should be on the floor coaching their team and troubleshooting to ensure that shoppers can find what they need and get their questions answered. It is critical as well that their team members have the support they need to succeed.
Third, and equally important, is managing the influx of incoming inventory. Stores have been receiving a steady stream of merchandise for some time, and this flow continues unabated from one holiday to the next. Store teams must be ready to receive it. They need to stock it, organize it, replenish it, and make sure that as they move through certain holidays, anything that's left over is moved to clearance quickly. They should mark it down to maximize sales and margin and get it out the door.
Keith: Rich, that's helpful. We talked quite a bit about some of your points focused on store managers, and I think that's critical. But something that's often overlooked is field management, district managers, and regional managers. They play a critical role. How should they focus their effort this holiday period to support their stores?
Richard: Field leadership needs to increase the number of visits they make to their stores. Stores are dealing with a lot. There is considerably more merchandise flowing into stores and significantly more customer traffic. This is the time to make sure that everything is executed properly. It's time to roll up their sleeves and dig in where they're needed most, especially on weekends and evenings, during power hours, making sure that the teams are aligned, and everyone understands what needs to happen. They need to execute the playbook. The holiday season isn't going to be won by sitting in the office.
With district leadership, there are three areas where they must focus this holiday season. The first is around coaching and facilitating the movement of merchandise. Planograms and promotions need to be aligned, set up, and ready for customers when they walk in the door each morning.
Second, this is a time to manage KPIs closely, making sure that they are acting as problem solvers for their stores. Are the stores deploying labor efficiently? Are they analyzing how to best redeploy any hours that may shift or any additional hours they may get to support the holidays? Leaders should be coaching their store managers and store leadership on how to best use those hours to succeed and ensure that customers are set up, and quite frankly, their team members are set up for success.
Third, work to minimize disruptions to the stores. We know the stores deal with a number of demands from the field and the home office. The field should be shifting any activities they can away from the stores so they can execute on the task at hand, which is winning the holidays. That means things like additional calls, meetings, and any audits should be limited to those that are most critical to the holiday season, ensuring that they're freed up to work on what's most important.
Keith: Thanks for these great insights. When I think about this and listen to what you're sharing, a big takeaway for me is to remember that still in this country, 80% of all the sales that are going to take place during the holiday are going to come from the stores. Digital gets a lot of attention, and it's really important, but I think it's important that you're pointing out that retailers need to focus on the stores and take care of their store managers and field leadership to support customer service. Thank you for your time.
We appreciate you joining us today and hope you will find our holiday checklist of benefit. Along with the experiences shared from our team, as a reminder, you'll find a link to our checklist at the bottom of the page, and you can download it for your use.
Our Ankura performance improvement team has a proven track record of executing strategic plans to achieve sustainable performance improvement and targeted operating results to help maximize EBITDA, cash flow, and shareholder value. Our expertise extends to all critical aspects of the retail enterprise. We work alongside clients to reduce costs and improve efficiencies. Ankura leverages its vast internal resources to assemble the perfect team for each client's unique challenges, guaranteeing optimal outcomes for complex problems.
Let us know if we can be helpful to you, and happy holidays.
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To assist retailers in preparing for this crucial holiday sales period, Ankura’s Performance Improvement team has developed the 2024 Holiday Readiness Checklist. This checklist outlines key focus areas to ensure your organization is aligned and ready to deliver on the essential drivers of sales success in the coming weeks. By adhering to the provided guidelines, retailers will be well-prepared to delight shoppers and gain a competitive edge.
Click here to access the 2024 Holiday Readiness Checklist.
© Copyright 2024. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
