STORES Magazine - January 2008 - (Page 118)

CONSIDER THIS/ POINT OF VIEW New Approaches to Value Creation BY DUNCAN ANGOVE It is no secret that retail is undergoing a dramatic transformation. With greater access to information and increasingly fragmented tastes, consumers are more demanding on price, assortment and in-store service: a “one-size-fits-all” approach is no longer an option. to be able to act upon this insight and tailor their assortCombine the transformation ments to meet demand and generate sustainable brand of customer expectations with loyalty. Target, for example, has generated tremendous the current state of the econoloyalty by providing quality discount goods that are distinct my and the stakes have never and trendy in design. been higher for retailers to respond quickly and precisely to demand for products and servThink like a marketer, act like a merchant ices. By blending the art of retailing with science, retailers can Still, it is in exactly this type convert knowledge about their customers into incremental of environment where the margin in sales and effectively think like a marketer and act greatest opportunities arise for like a merchant. American Eagle Outfitters has leveraged retailers to differentiate and inthis strategy to analyze data across stores in different renovate to create value for their gions to look for similarities in merchandise performance customers and shareholders. and to plan assortments accordingly. We have seen three primary Another path to growth exists in a retailer’s ability to innoDuncan Angove is general strategies, employed in varying vate with fresh product and service ideas. To be successful manager and senior vice degrees, by retailers in their on this path, the retailer must demonstrate agility and president of Oracle Retail. pursuit of growth and sharespeed in every aspect of the culture. holder value: operational excellence, customer intimacy For example, the “fast fashion” model that Zara has deand product and service innovation. veloped injects excitement and freshness into its assortOperational excellence focuses on efficiency improvements while also capitalizing on margin improvement. This ments that positively impact productivity, generate faster approach has had far-reaching implications, as department inventory turns and increase sales per square foot. Retailstores and even grocery retailers are looking to leverage ers began to adopt technology to help automate these iminventory turns to create innovative approaches to deliverprovements and take full advantage of the data collected to ing products and services. positively impact strategic business decisions. Pursued exclusively, however, operational excellence will Tesco in the U.S. quickly reach diminished marginal returns. As a result, reNo retailer has been more successful at creating and detailers are now confronted with the need to redefine themlivering value in this space than Tesco: It understands the selves and to discover new paths for creating value that economics of its business, knows its customers and has are no longer based on scale, but rather on breaking the made strategic investments in technology, all of which convery economic models that brought historical success. tributed to the development and launch of innovative conRetail has historically operated around a product-centric, cepts like Fresh & Easy Neighborhood Markets in the Unitmerchant-driven culture: Translating customer preferences ed States. into increased intimacy has Retailers that emulate these not been common practice. paths of intimacy and innovaRetailers can convert knowledge about To achieve customer intimation will be poised to take adcy, retailers must first acquire vantage of opportunities to their customers into incremental margin insightful data that helps decreate value, transform their in sales and effectively think like termine who their customers businesses and build the founa marketer and act like a merchant are and what they want. dation for future growth in the More important, they need retail industry. 118 STORES / JANUARY 2008 WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - January 2008

STORES Magazine - January 2008 Contents Executive Editor's Page President's Page Build a 'Bot Sneak Peek at Fashion Trends What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Cover Story: Fishing for Talent Retail CEO Compensation Research Concept2Watch E-Commerce Payment Solutions Online Merchandising POS LPInformation LP Vantage Point Newsbeat Industry Watch Cover Story: Making LP PCI-Compliant Mall Security Video Surveillance Industry Perspective Forum RFID Business Intelligence Data Management Logistics Turning Green into Gold Love of – and for – the Outdoors Loeb Retail Letter ARTS Update Point of View NRF News Retail Industry Calendar Last Laugh

STORES Magazine - January 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.