In addition to increased competition and price pressures, the retail industry continues to be concerned about the general economy (weak housing market, the current credit crunch), and rising costs - especially labor and energy (fuel). Retailers need increased visibility into all the levers of the business.Some of the common levers, by function, include:
- Merchandising: Return on Sales/Operating Margin, market share, average inventory/DII, FGI Days of Supply
- Purchasing: Supplier on-time delivery, supplier service level, COGS, Invoice Accuracy Index
- Distribution: transportation & warehousing costs, inventory turns, cycle time
- Marketing: Customer Satisfaction index, revenue, margin, campaign effectiveness
- Sales: Forecast/Budget variance, Sales per square foot (by day/month/quarter), average ticket value, sales per hour

xPM Initiatives that measure, plan/model, and analyze these levers can include promotional effectiveness reporting (by lines/category), price & promotion planning, location modeling & planning (by store/region), merchandise planning, and inventory analysis.

"While retailers plan to spend 3% more in 2007 on IT capital than in 2006, they are failing to target three vital areas: replenishment and inventory optimization, lifecycle pricing, and fresh item management."
Mike Griswold, AMR Research.

BROADSHEET SNEAK-PEEK: RETAIL

POTENTIAL INITIATIVES THAT CAN BE STARTED FROM THE DISCOVERY ANALYSIS

PEER BENCHMARKS: RETAIL PERFORMANCE MARKERS