The online retailer has spent nearly $300 million acquiring three shipping software vendors over the past nine months.
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The graphical, drag-and-drop interface of planograms makes them relatively easy to use by store managers and corporate merchandise managers, who typically attend corporate demonstrations on how to check inventory and planned sales data to configure a picture of how products will appear on store shelves, Waldron says. These demonstrations help store managers learn, for example, how to alter planograms initially designed by suppliers. Once planograms are completed, designated store personnel can view them online or print them out as easy-to-follow guides for displaying products, Waldron adds.
Learning the drill
Store managers and employees also must learn how to use planograms as part of execution management systems. Headquarters staff, via demonstrations to managers, and managers, via demonstrations to staff, show how to have employees, for example, check boxes online to indicate products have been displayed in the correct location and on schedule, and managers check online to confirm assigned tasks were completed as planned.
Borders has implemented a web-based execution management system from RedPrairie that controls the distribution of merchandising and operating plans across the chain. Rather than relying on a patchwork of phone calls, faxes, e-mails and meetings, a process that could result in missed or delayed instructions as well as difficulty in confirming compliance at stores, Borders now uses the RedPrairie execution management system to distribute a single version of merchandising and operating policies across its chain.
By having store employees check off completed tasks in the online task management system, corporate managers can confirm over the web store compliance with plans and get a chainwide view of how well all stores are meeting schedules. They can view, for example, if certain stores missed product launch deadlines because display fixtures didn’t arrive or because of insufficient staffing, and determine which stores may be ready for additional product launches and promotions.
Efficient use of store personnel is key, experts say. “The whole philosophy is to give 10% of labor costs and time back to the retailer by making store personnel more effective,” says Neil Goggin, vice president of execution management solutions at Red Prairie. In most cases, he adds, retailers will re-invest such savings into improved customer service. Borders says increased productivity from its execution management system has boosted sales, primarily from customers given extra service.
Matching planograms and other directives from headquarters with an individual store’s particular merchandising needs, however, can require multiple steps to arrange for the right mix of products and promotions. Having a web-enabled management communications tool accessible to all participants through web browsers on desktop computers and handhelds makes this a more efficient process, experts say.
The RedPrairie execution management system deployed by Borders, for example, is designed to organize store tasks into several steps and provide ongoing communications within a single portal between store and headquarters personnel. Formerly known as StorePerform, which RedPrairie acquired in early 2007, the execution management system is designed to make the distribution of planograms and other store operations information more effective in a task management environment that facilitates the assignment of that information to store personnel according to schedules that support planned promotions and product launches.
“We break down every step that needs to be done ahead of the scheduled date for a product to go on sale, ensuring stores have all the necessary products, signs, lights, labor and training,” Goggin says.
Execution management systems can be effective in all kinds of store categories. Food Lion, a chain of grocery stores throughout the eastern U.S., uses the web-enabled RetailAction execution management system from Reflexis along with a planogram application from Galleria Retail Technology Solutions to get corporate merchandising policies carried out across 1,200 stores.
The Reflexis system enables Food Lion executives to optimize workloads in stores, monitor store-level compliance with assigned tasks and provide store employees tools to increase efficiency in store operations, says Greg Finchum, director of retail productivity and standards at Food Lion. “It enables Food Lion to ensure the consistent execution of promotions and new product introductions,” he says.
Technology alone, of course, isn’t enough, says Steele of Borders.
One of the ongoing challenges for retailers deploying execution management systems is applying them to the most differentiated product groups within stores, he says. At Borders, most stores share about 80% of products, but the other 20% is usually geared to the local interests of each store’s customer base. And figuring how to best serve that 20% involves a long learning curve, he adds.
“We’ll upgrade the system to make it more personalized, accounting for each store’s customer demographics reflected in the space we give to product displays,” Steele says. “We’re still learning how to use the system better.”