What is a retail performance management system and why do you need one for 2024?
A retail performance management system is a platform that allows you to consistently review the performance of your store and your employees so you can easily see the patterns, trends, and pitfalls that are keeping your retail store from performing at its best.
It’s like having a crystal ball for your store, telling you everything you need to know to ensure you’re taking the right actions to drive real results. Whether it’s the faulty queuing system, which slows sales and has a direct effect on your profits, or perhaps the afternoon employees who have less energy and, as a result, aren’t interacting with as many customers.
With a retail performance management system, you’ll easily be able to spot those sneaky emerging patterns which are playing havoc on the performance of your store.
Why is a retail performance management system important for 2024?
Even with the surge in online shopping, traditional brick-and-mortar stores maintain a significant presence in the market. Consumers heavily depend on them to make their purchasing decisions. Ultimately emphasising the importance of optimising your store's performance to effectively attract and convert visitors making purchasing decisions in-store. Take a glance at the statistics below:
72% of consumers say they ‘showroom’— they visit a retail store to experience the products and purchase it elsewhere or online.
73% of Gen Z customers in the U.S. visit brick-and-mortar stores to discover new products.
These statistics underscore the enduring importance of physical stores as key drivers of consumer engagement and purchasing behaviour. They reaffirm the necessity for businesses to prioritise optimising their store environments to cater to the evolving needs and preferences of today's shoppers.
Improving retail performance
When it comes to retail, performance is key. Whether you're a small boutique or a large chain, optimising your retail performance can lead to increased sales and customer satisfaction. Here are the key areas which you should always focus on to drive optimal performance in your retail store;
Employees - Your frontline staff are the face of your store and play a crucial role in shaping the customer experience. It's essential to ensure they are aligned with your ideal customer sales journey, from greeting customers warmly to providing knowledgeable assistance and closing sales effectively. Regular training and performance evaluations can help keep your team on track and continuously improve their skills.
The visual appeal - The look of your store significantly impacts customer perception and purchase decisions. Evaluate whether your store meets your desired standards in terms of cleanliness, organisation, and aesthetics. Are your displays eye-catching and well-maintained? Are signs and promotional materials strategically placed to guide customers and highlight promotions? Ensuring there's adequate and appropriately stocked inventory on the shelves is also critical to meeting customer expectations.
The ambience - The atmosphere and overall vibe of your store can greatly influence the customer experience. Consider factors such as lighting, music, scent, and layout to create a welcoming and conducive environment for shoppers. Pay attention to details like cleanliness, temperature, and comfort to enhance the overall ambience and encourage customers to linger and explore.
Operations - Efficient operations are essential for delivering a seamless and satisfying shopping experience. Identify any bottlenecks or inefficiencies in your processes that may be slowing down operations and frustrating customers. Likewise, recognise and reinforce practices that contribute to smooth operations and positive outcomes. Regularly reviewing and refining your operational procedures can help streamline processes and optimise performance across all aspects of your retail store.
A good retail performance management system will make it easy to collect insights in all these areas and more, so you can easily spot the gaps which are holding you back from maximising your store’s performance.
How do you measure retail performance?
In assessing retail performance, a retail performance management system stands out as a game-changer.
By integrating audit capabilities, this system allows for quick and efficient evaluation of key performance indicators within the store environment.
With customisable audit templates, managers can seamlessly capture real-time data on store cleanliness, product availability, merchandising compliance, and customer service standards.
With automated scoring and grading features, your retail performance management system should provide standardised assessments, facilitating easy comparison of performance across multiple locations or time periods.
The generated reports and dashboards offer actionable insights, highlighting areas of strength and opportunities for improvement. Through trend analysis and integration with other performance metrics, retailers can gain a holistic view of their operations, identify trends, and prioritise strategies to drive continuous enhancement and ultimately achieve success in their retail stores.
Why do you need a retail performance management system?
A retail performance management system is indispensable for driving success in today's competitive retail landscape.
By leveraging features such as in-the-moment observations, store visits, and retail audits, they make it easy for your frontline retail sales team to consistently deliver exceptional customer experiences, maintain compliance, and optimise the sales journey.
With customisable templates tailored to your ideal customer journey, they ensure that your sales team focuses on meeting customer needs from the get-go, improving the overall sales experience.
By providing structure and guidance during store visits and audits, retail performance management systems help uncover critical insights and enable you to spend your time effectively, addressing issues that matter most and driving sales growth. Additionally, retail performance management systems facilitate in-store retail execution by streamlining processes and ensuring that employees are equipped to meet store needs promptly.
Through real-time scoring and analytics, they offer invaluable insights into performance trends and areas for improvement, allowing you to make data-driven decisions and implement targeted action plans. Ultimately, retail performance management systems close the loop on performance management by facilitating task assignments and action plans, ensuring continuous improvement and success in the retail environment.
If you don’t have a retail performance management system, here’s what should be included in your manual retail performance management process
Clear goals and expectations meetings
Resources and tools to help your employees develop their skills and knowledge
Regular performance reviews
Action plans
Recognition and feedback
Learning and development to strengthen knowledge
Set crystal clear goals and expectations
Before you can start your performance management process for 2024 you need to let your employees know what is expected of them and what you are hoping they will achieve. The more specific you are the better the outcome.
We recommend that you go back to the employee’s job contract or advertisement and work through the bullet points which are listed. See an example below:
Experience:
Chef: 1 year (Required)
Job Duties:
Prepare all food items as directed in a sanitary and timely manner
Follow recipes and presentation specifications
Operate standard kitchen equipment safely and efficiently
Maintain a clean working station whilst adhering to health & safety standards
Assist with the cleaning and organisation of kitchen and equipment
Restock items as needed throughout the shift
Adhere to all food hygiene & safety standards
Additional Duties:
Menu planning
Food shopping
Recording food temperatures
Preparing reports
From here, you can break down what they need to do, to effectively complete these tasks, paying attention to high standards and time frames. Once you have written these up communicate them clearly with the staff member so they know exactly what is expected of them.
Resources and tools to help your employees develop their skills and knowledge
Next is ensuring your employees have the right tools and materials they need to get the tasks done. It’s useless listing out goals if your team member doesn't have the tools they need to complete them. If we take the example above, it says “Maintain a clean working station whilst adhering to health & safety standards.” If you haven’t given the employee the knowledge of what the health and safety standards are, then how are they going to this task done?
Most companies have paper files tucked away in cabinets which hardly ever get looked at. This is usually because they don’t know they exist, they don’t know where they are and they don’t have the time to look for them.
Give your employees the resources they need on any mobile or tablet device as this will ensure that they stay knowledgeable and get the information they need to perform tasks up to your standards. An employee knowledge platform is a searchable database like Google which helps your employees find everything they need whilst on the go.
Keep your eye on behaviour and habits
You’ve set your goals, you’ve communicated them to the employee and now you leave them to it. Wrong!
You need to carry out regular performance reviews to ensure that they are staying on track with what they need to get done. We recommend monthly reviews where you observe their behaviour and make notes on what they are great at and what they seem to be struggling with.
A great way to speed up this process is by using a digital employee observation tool such as Oplift. The platform makes it effortless to review employees on the go from a tablet or mobile device. Simply build your review template for each employee and swipe your way through the different observation checks creating tasks for the employee as you go. At the end, you can create a personalised action plan for your employee along with tasks for them to complete which will show up in their section of the app.
Create the ultimate action plan
To guide your employee along their performance improvement journey it’s essential that you regularly provide them with an up to date action plan. Ideally, these should be generated monthly to keep them fresh and relevant.
What constitutes a good action plan?
A great action plan is one that is generated off the back of your observation, as we discussed above, if you use a digital employee observation tool you will get one generated for you automatically so you don’t have to waste time making one. However, if you use a pen and paper you should create your action plan based on your review. It should include;
Skills/behaviours which need to be improved
Action which needs to be taken
Tools or materials which can be used to help
Date to be completed
How success will be measured
Give your employees some well deserved praise
All too often, performance management systems focus too much on the employer and not enough on the employee. They are focused around what the business needs from the employee which is great, but they forget that the employee is a human and they need and deserve recognition for the hard work which they are putting in to achieve their goals.
A good performance management system should incorporate employee recognition. This is a process where managers or colleagues are encouraged to applaud their teammates for the work they are doing.
A record should be kept of these on file so that they can be reviewed in your next goals and expectations meeting.
Virgin Media and Next use Oplift to send digital achievements to their staff. These are stickers and trophies which can be handed out from the app on a mobile or tablet device. They can leave feedback on these explaining why they gave the achievement this is great for giving positive feedback. These can then be stored on an employee’s digital profile so you can easily see how others think their performance is improving.
Supercharge knowledge with relevant learning and development
A performance management system is useless without a solid learning and development strategy. The backbone of your system should be based around improving knowledge and helping employees strengthen their skills.
In your action plan, you should guide the employee to the relevant learning modules which will help them succeed and access to these should be easy and trackable so you can be sure that the learning gets done.
We recommend microlearning or just-in-time learning as these are quick and easy methods of learning which are most effective for memory retention.
A performance management system example
One of our big retail customers wanted to improve and track the performance of their sales teams. They started using our quick and easy review tool. It allowed them to carry out staff assessments right on the shop floor. They simply tapped to collect insights on the iPad to mark when employees had completed certain behaviours. The behaviours they included were offering different upsells.
They soon started to realise that their staff weren't offering the upsells at all. Since they could carry out reviews so easily, they started to carry them out more regularly. Off the back of this, they were generating hundreds of action plans for employees which all included the need to upsell when they closed the sale. The action plan guided employees to relevant sales guides on the app and different microlearning playlists to boost their confidence and help them sell to customers more easily.
After 3 months they reviewed their figures and the results were astonishing...they saw a 300% increase in sales because of additional upselling that wasn't being done before.
The benefits of a performance management system are increased employee engagement, better customer service and a rise in profits. Any company looking to propel the success of their business forward in 2024 should seriously consider creating one. If you need help with yours or are interested in a digital performance management system please get in touch.
