Web-Based Planning

In theory, it should be simple. In an effort to differentiate its stores from the ever-more intense competition, a retail chain`s headquarters draws up plans for unique store promotions, then distributes bundles of displays and instructions in guidebooks and loose-leaf binders to stores with details on displays, pricing and schedules. The goal: consistent promotions across the chain carried out fast enough to push sales up but efficiently enough to keep costs down.

But the reality can be far different. Display materials and promotional instructions get delayed or lost, store employees and headquarters exchange messages that go unrecorded and may get misconstrued, promotions wind up being late for or inconsistent with marketing campaigns. So chances are a store`s promotions don`t coincide with corporate marketing campaigns, putting a crimp in the expected sales-to-costs ratio, as sales opportunities are missed and extra costs are incurred through poorly planned staffing.

No visibility

Managing tasks directed from headquarters can require executing 20 or 30 interrelated tasks to carry out a single planned promotion, such as taking down old displays, moving products to different shelves, deploying new display materials and reading a training manual. "A store might have to have a whole new product re-set based on a single promotion," says Rob Garf, retail industry analyst with AMR Research Inc. "But headquarters has no visibility into what`s actually happening in the store."

It doesn`t help that stores may have directions coming from multiple corporate departments, leaving store and district managers struggling to keep up with the individual parts of a broad corporate strategy, experts say. "Stores are overwhelmed and confused," Garf says, adding that the average shopper will abandon a retailer for a competitor after an average of 2.5 negative shopping experiences, such as out-of-stock products or unhelpful store associates.

Moreover, without a central view of store activity, senior management at headquarters is unable to step in and regulate the flow of tasks required of stores and match them to adequate staffing levels. "Headquarters not only has no visibility into what is happening in stores, but doesn`t know all the tasks each corporate department is asking stores to do," Garf says.

Better control

But a growing number of retailers is better controlling store operations through a new breed of web-based task management systems that provide several benefits: the systems provide a central and single means of distributing instructions to stores, they provide a single source of information for store personnel, and they give headquarters the visibility it needs to monitor and confirm how assigned tasks are being carried out.

Borders Group Inc., one of the early users of the technology, is boosting sales from in-store customers greeted by employees who, thanks to a web-based task management system, have more time to serve shoppers, says William M. Edwards, director of store operations.

The technology is still in its early stages of deployment among retailers, but recent developments are making it more appealing, experts say. Over the past year, for example, headquarters-to-store management technology has started to offer a wider range of integrated services that tie task management to workforce management. "It`s a hot market," says Paula Rosenblum, director of retail research for Aberdeen Group Inc.

Adding labor management

The leading providers of integrated task management systems are Reflexis Systems Inc. and Store Perform Technologies Inc., each of which has several retailers using the technology. Reflexis counts among its retail clients Allied Domecq PLC, the parent company of Dunkin` Donuts and Baskin-Robbins; The Pep Boys - Manny, Moe & Jack; Target Corp.; and the U.K.`s Marks & Spencer. StorePerform`s retail clients include Sears, Roebuck and Co., Menard Inc., Albertson`s Inc., and Best Buy Co. Inc.

Other vendors, notably BlueCube Software Inc. and Workbrain Inc., are also entering the market, though with less ambitious offerings, analysts say. BlueCube introduced its Workforce Management application suite in January. "Our task management integrates with labor scheduling, offering the ability to forecast labor scheduling appropriate for a task," says Tom List, vice president of marketing. He says the system also provides task confirmation reports for senior management.

The combination is a step forward for the technology, Garf says. "The most significant evolution of task management initiatives over the past eight months has been the convergence with workforce management," he says. "Retailers are using the granular task information, combined with understanding how long it takes to accomplish certain tasks based on labor standards, to fuel labor forecasting systems. This enables more accurate forecasting of demand by balancing both customer service priorities and home-office driven mandates."

The ability to deploy these systems over the web is also helping to make them financially appealing, because that makes it possible to coordinate a chainwide task and workforce management system without expensive infrastructure costs, experts say.

In a study conducted in September 2004 of how retailers are working to improve in-store operations and customer shopping experiences, "The Empowered Store Benchmark Report," Aberdeen found that a large majority of retailers, or 81%, cited their biggest challenge as creating differentiated service offerings cost-effectively, and nearly the same percentage, 78%, said the best response to that challenge was through new web-based task management systems that supported employee training and monitoring. "They felt this was critical to creating differentiated service offerings, consistency in execution across broad geographic areas and doing it all in a cost-effective way," Rosenblum says. "The key is zero deployment of new infrastructure at the store level; that`s a big deal."

Early stages

The technology is still in early stages of deployment and success, however. The Aberdeen study, based on a survey of 100 retailers in July and August 2004, found that 61% of respondents had been focused on improving in-store operations for more than a year. It found that 51% had yet to improve in-store operations, but it noted that 71% of best-in-class retailers found that these efforts had contributed to their improved financial performance.

Aberdeen warns in the study that retailers who delay implementing improvements to in-store operations will fall behind competitively. "The 9% of respondents who will wait at least a year to work in this area will find themselves at a distinct disadvantage going forward," Aberdeen says.

Most retailers are keeping the benefits they`re realizing from web-based task management close to their vests, due to their competitive positions and the newness of the technology, though a few have been willing to share basic information. Using the Task Management system from Reflexis throughout its 1,400 U.S. stores, office supplies retailer Staples Inc. is saving store managers 7-12 hours per week through real-time access to a central view of instructions from headquarters, producing $1.5 million a year in soft or indirect savings resulting from more productive store employees. The system is also producing direct savings related to the electronic distribution of surveys to stores, the retailer says.

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In addition, Staples field managers are saving 10 hours per week thanks to their ability to manage inconsistencies in store operations through web-based alerts. Store managers and employees check off the completion of assigned tasks into the Reflexis Task Management application. When tasks aren`t completed according to schedule, the system automatically sends an alert to the computers or cell phones of field managers or headquarters personnel.

The Home Depot Inc. is also using Reflexis Task Management to streamline communication of nearly 250 projects per month to its 1,700 stores and has reported a sharp reduction in the level of task overload at the store level through improved workload and labor planning.

13,000 store walks

"We integrate task management and labor management to send the right tasks to the right person with the right skills," says Raju Sharma, director of marketing at Reflexis. "If a task takes four hours, we say that, for example, it requires one each by a store manager, an assistant manager, a department manager, etc."

In addition, Home Depot has deployed the complementary Reflexis Risk & Audit Manager, which has enabled it to conduct 13,000 store walks within the first six months of deployment. Field managers conduct store audits with web-based tablets that let them check the status of assigned tasks against the original instructions and schedules, and record how well each task was completed.

Reflexis Task Management is an enterprise application designed to sit on a company`s corporate intranet. Costs range from $1 million to $1.5 million for each of the three applications of task management, compliance management and labor scheduling, Sharma says. Deployment takes from eight to 16 weeks.

Borders Group, which presented early results of its web-based task management system at a trade show in January, began using the web-based Task Manager system from StorePerform in August, rolling it out to 450 stores within three weeks. The system replaced a method that relied on e-mail to distribute instructions on how to merchandise products and perform other store operating tasks.

But where the old system forced store managers and employees to spend a lot of time compiling and figuring out the scope of required tasks, the StorePerform system presents instructions from headquarters in a way that both saves time and provides assurances that the tasks are actually carried out, Borders says.

"StorePerform puts the information in front of employees in an easy-to-understand manner," says Edwards, the director of store operations. "Before, store employees had spent a tremendous amount of time to figure out their tasks."

More sales

The new system`s ability to carry out instructions faster, he adds, cuts to one of its major advantages: extra time that employees have to serve customers. "We see a 7% increase in sales from people who get directly helped by store employees," Edwards says.

In addition, the new system is designed to help store employees get the proper promotional material on display on time, making it easier for customers to find advertised products, adds Srikant Vasan, CEO and co-founder of StorePerform.

Borders executives say the new system is helping both headquarters and store personnel to get better control over what can be tight deadlines to roll out new pricing and merchandising displays, improving relations with suppliers as well as customer service. Now, if a supplier questions whether Borders priced a product according to an agreed-upon level, Borders can show actual price and other information from vendor promotions scanned into the web-based store management system, says Paul Kundrat, Borders` project manager for the StorePerform project.

StorePerform`s Task Manager is the core product in the integrated Workbench suite that also includes two complementary products, Feedback Manager and Workflow Optimizer. Feedback Manager is designed to let retail executives gather comments from individual stores throughout a retail chain on how well promotions and other store activities occurred, such as whether customers requested additional products that could have been made part of the same promotion, then mix up the responses by products or regions to run analytical reports that can help plan future promotions. "Getting that information has always been a challenge for retailers," says Manav Misra, director of corporate development and co-founder of StorePerform. "Retailers would e-mail 1,000 stores asking how a promotion went, and get back a flood of e-mails that they couldn`t get around to opening and analyzing."

Up to date feedback

Now, Borders store managers can immediately respond through the web application if, for example, their store didn`t have promotional signs to go with a planned promotion. "Field feedback in the past was two to three weeks out of date," Kundrat says. "It was nice to have, but no longer actionable."

The Workflow Optimizer is designed to let retail executives match the expected time of carrying out in-store tasks to the amount of labor that has already been scheduled for other tasks. "It allows retailers to see the impact of sending additional work to stores and how many man-hours are still available," Misra says. "If headquarters already sent 35 hours of work, it might decide to move another project to the following week."

As retailers` use of web-based task management systems evolve, it will begin to involve not only more of their internal operations but those of their trading partners as well, experts say. "Eventually, you`ll see retailers using these applications to drive workflow further up the supply chain," Garf says. "For instance, retailers will extend the process templates to not only govern store tasks, but the interactions and hand-offs between merchants and marketing, and even with supplier partners."

paul@verticalwebmedia.com