STORES Magazine - July 2010 - (Page 50)

NUTS AND BOLTS / IT Testing Proves Testing Works APT helping Big Lots gain better understanding of results BY ED McKINLEY B ig Lots, the Columbus, Ohio-based closeout chain, credits sophisticated testing and analysis with helping cut costs for advertising, marketing, utilities, staffing, store operations, real estate and inventory. While it has nurtured a culture of testing for some time, the 1,361-store company has refined its processes with the help of the “Test and Learn” discipline of Arlington, Va.-based software vendor Applied Predictive Technologies (APT). Big Lots undertook a 16-week pilot of APT’s software and consulting services in October 2008. Most companies conduct two tests before deciding whether to sign on full-time, says APT CEO Anthony Bruce. Big Lots conducted three tests and also used the APT software tool to review approximately 20 previous tests for a comparison of the results, says Dan Yokum, the retailer’s director of strategic planning. “We wanted to get a good feel for the value the tool would offer, versus what we were doing internally.” In one test, Big Lots determined the correct number of print circulars to distribute to each store. The test took into consideration the fact that Big Lots was increasing the number of e-mail circu- lars it sends to its Buzz Club Rewards members at the same time it was reducing print-circular circulation, Yokum says. The retailer has achieved several million dollars in annualized savings as a result of employing the lessons learned in the test, he says. Another pilot helped Big Lots test the labor-management tool the chain was planning to use. In addition to the effectiveness of the labor-scheduling software, it wanted to learn how sales volume was affected by altering payroll hours. APT helped determine which stores to include in the “hold-out” or control group that did not receive the new scheduler. That second pilot laid the groundwork for Big Lots to “flex down” on payroll hours in response to the economic downturn, confident that the reductions would not harm sales volume, says Tim Johnson, Big Lots vice president of strategic planning and investor relations. The second pilot also helped determine which of several hundred store characteristics lent themselves to reducing payroll hours. Attributes the chain tested included the age of the store, sales volume, payroll as a percentage of sales, full-time versus part-time associate mix and management turnover. Merchandising, the subject of the third WWW.STORES.ORG 50 STORES / JULY 2010 http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - July 2010

STORES Magazine
Editor's Page
President's Page
Retail People
Corporate Leadership
Top 100 Retailers
Location Apps
Food Safety
Risk Management
ARTS Update
Point of View
NRF News
Retail Industry Calendar
End Cap

STORES Magazine - July 2010