Keeping on Task
The Pantry has advanced it goal of providing “fast, friendly, clean” service across its network of convenience stores by implementing a task management solution. The solution, which is designed to help the chain deliver consistent task messages to its store managers and prioritize tasks based on importance, will support the chain’s efforts to better serve its shoppers.
The new task management system is a far cry from the e-mail messages the chain was using to communicate store-level tasks and deadlines. Under the old system, it wasn’t uncommon for managers to receive up to five messages weekly, all containing task details, deadlines and other proprietary information such as surveys, operational updates and reminders. The abundance of information also made it difficult for store managers to decipher which tasks were paramount or ancillary.
The Pantry did its best to slash the amount of e-mails and within three years had reduced the five messages to one all-encompassing weekly message. However, these weekly e-mails did not help managers prioritize their workloads.
Eager to get on the right path, The Pantry’s management team instituted a new philosophy to help set the tone for its managers to complete tasks and still provide its shoppers with “fast, friendly service and clean stores.”
The chain first created a set of corporate standards and accompanying guidebooks and policies to support these operations. But the key ingredient was adopting technology “that could point us in the right direction and enable consistency across the chain,” explained Michael Ursini, director of operations and support, The Pantry, Cary, N.C., which operates 1,642 convenience stores (the majority under the Kangaroo Express banner).
Since the retailer was eager to improve guest relations and ensure it had the best associates on the front line ready to serve customers, The Pantry began evaluating time and attendance and labor scheduling systems. As Ursini began to learn more about task management solutions, however, he shifted his focus.
Task management software measures productivity and plans and communicates business objectives and store-level operations across the enterprise. The Pantry’s ideal solution had to meet a rigorous set of prerequisites, such as ease-of-use and flawless integration within the chain’s labor scheduling solution. The chain also wanted to monitor store progress through a Web-based portal. After reviewing its options, The Pantry selected Task Manager from Dedham, Mass.-based Reflexis Systems.
Here’s how it works: As store managers log on to the portal at the beginning of their shifts, they receive a message illustrating all tasks planned for the day.
“Messages are weighted by importance, allowing managers to focus on priorities first and allocate the best resources needed to complete these operations,” Ursini explained. “When nothing is filtered, everything seems to be a priority. That was the problem with our e-mails — managers had trouble distinguishing critical projects. Too many would struggle to complete as many tasks as possible.”
As tasks are completed, managers input this information into the portal, and data is transmitted to the company’s support center at corporate, where all information is monitored on an hourly basis. While the process may suggest a “Big Brother” undertone, Ursini reported that the solution is purely to make its associates’ jobs easier.
“Our goal is to gain better control of the consumer experience and generate more service and store sales,” he said. “If our managers and associates spend their time on paperwork and manually monitor whether tasks were completed, then our customer experience suffers. We believe this [technology] provides better visibility into the operations sent to stores, and we have a benchmark to determine if they are truly adding value to our operations.”
The chain has been piloting the solution since October 2010 and plans to go live with the solution chainwide later this month. The Pantry is currently working on the next phase of the project, which encompasses the addition of labor scheduling and time and attendance modules.
Focus on: Compensation Outlook
Economic forecasts for 2011 are a mixed bag for senior executives in retail companies. Executive compensation packages and salary increases are expected to be healthier than in the last two years, but the overall economy is, at best, in a state of stagnation.
The Society for Human Resource Management, or SHRM, based in Arlington, Va., projected median salaries across all industries would rise 3% this year, compared with the more modest 2.5% increase that was the median in 2010.
Similarly, a recent survey of more than 1,450 large companies conducted by AON Hewitt, a human resource consulting firm headquartered in Lincolnshire, Ill., predicted a 2.9% salary increase for executives in 2011, a moderate uptick from last year’s 2.4% increase but an impressive spike over the 1.4% increase that was the norm in 2009.
The 2010/2011 U.S. Compensation Planning Survey conducted by New York-based Mercer drilled deeper into specific industries and concluded the retail industry would experience average salary increases of 2.8% in the coming year.
The real opportunity to increase earnings, according to many in the industry, will be through bonuses and incentives — perks that will likely extend from the most senior executives into middle management.
The Hay Group, which has its global headquarters in Philadelphia and does management consulting for some of the largest retailers, including Wal-Mart Stores, The Home Depot and Macy’s, reported that 39% of companies have already increased or have plans to increase the proportion of variable pay in compensation packages.
For example, Sears Holdings Corp. awarded its CFO a 16.7% merit increase, from an annual salary of $600,000 to $700,000, but the executive’s total targeted cash award increased by 26.7% because the incentive plan was raised from 75% of the fiscal 2010 salary, a targeted bonus of $450,000, to 90% of the fiscal 2011 salary, a targeted bonus of $630,000.
Incentives are typically defined as “targets” because, as the Hay Group stressed, there is a renewed focus on performance-based criteria. The company conducted a survey of more than 1,300 companies and analyzed detailed data from an internal database of more than 14,500 organizations to arrive at its assessments.
Performance-based pay is definitely on the rise, agreed Bob Cartwright, president and CEO of Austin, Texas-based Intelligent Compensation and a member of the Total Rewards/Compensation and Benefits Special Expertise Panel for SHRM. The difference, Cartwright noted, is that in the current environment, incentive compensation will be based largely on the individual’s contribution to the company’s performance.
Research by the Hay Group supported this thesis, with 51% of the companies surveyed indicating they would rely on “hard” financial metrics such as revenue, profit and sales to evaluate the performance of individual contributors.
This approach presents a slippery slope for retail executives, many of whom face an uphill battle if they are to exceed expectations for the new fiscal year. One issue is that year-over-year improvements will be harder to achieve this year than in 2010, when retailers were competing against back-to-back years of dismal comp sales in 2008 and 2009. From this perspective, some may view retail executives as victims of their own successes.
Truthfully, however, the stalled economy remains the real culprit. Performance-based pay usually takes a hit when a company is unable to grow its bottom line, and the domestic market looks bleak with the U.S. GDP expected to decline from 2.6% in 2010 to an even more sluggish 2.2% this year.
This IS the Next Big Thing
Smart phone Mobile Apps! Just like the accessibility of airplane travel for the masses revolutionalized the travel industry, smart phones will revolutionalize the retail industry. Although I may use hyberbole on occasion (but only to make a point), this is not one of those times. They will truly change the industry as we know it. 2011 will be the tipping point — the point where the line on the penetration chart crosses over. More than 50% of cell phones in the United States will be smart phones versus functional phones, according to Nielsen. That means massive penetration of mobile app capability for consumers.
Oh yes, those iPads are quite nice, and Boomers especially love them. They, along with notebook and netbook computers, are not going away. But can you put them in your pocket? Will you carry them to the movies on date night or to the Red Sox (my Boston roots are showing) game? Consumers want to buy the dress they just saw Sarah Jessica Parker wear in the movie and order the “We’re Number 1” logo shirt after the series-winning run before they leave the venue. The college crowds don’t think they need an iPad if they have a laptop and a smart phone. A netbook doesn’t fit in a fashionista’s little clutch when she is out on the town. Companies can restrict access to outside Web sites on your office PC but not on your personal cell phone. So smart phones are it for portability and usability, as consumers will let their thumbs do the job with mobile apps in a variety of daily activities.
Whether you are a department, big box, drug, specialty, food, off-price or convenience store, wake up and see the thumbs moving. E-commerce has grown exponentially over store growth in the last few years. Consumers will never stop visiting stores altogether, but they have radically changed their buying habits forever thanks to highly functional Web applications for price checking and shopping. smart phones can now put all that functionality in their hands every minute of the day, wherever they are. It’s in a retailer’s best interest to capitalize on mobile apps to further decrease information processing and advertising costs, as well as find new opportunities for sales growth.
Rather than write 10 or 11 prognostications for 2011, because mobile apps are the next big thing, I give you 11 mobile apps that retailers need to consider implementing to stay competitive in this revolutionary new retail world:
1. Price checking — Make sure you put your best offer forward when you know consumers are competitive checking.
2. Shopping — Enable product purchases anywhere using a product code.
3. Advertising — Send an ad based on the time of day or when the consumer hits the mall.
4. Market research — Collect immediate feedback.
5. Payment processing — Verify and process credit and debit cards.
6. Advertising effectiveness measurement — Get immediate feedback on when and where your broadcast, print and outdoor ads are seen.
7. Coupon and credit redemption — Save the paper; send and process these.
8. Self checkout — In-store app to cut the checkout lines.
9. Product directions and care — Make information and assistance readily available from the product code.
10. Customer service — Give immediate responses and gain customer satisfaction.
11. Pre-order food and drinks — Yes, even at your snack or Starbucks counter, this will increase sales and convenience.
Final words of encouragement to all retailers: Join the mobile app shopping revolution to reduce operating costs and increase sales.
Final words of doom: If you don’t join the revolution, within the decade see your business crushed by the pounding thumbs finding your competitors’ mobile apps.
Cynthia Cohen is president of Strategic Mindshare, a retail strategy consulting firm. Follow Cynthia’s consumer trend findings and retail reviews at twitter.com/strategydiva or friend her at facebook.com/cynthiarcohen.