In these tough times, cutting prices is not necessarily going to deliver a better performance, so to improve the bottom line fashion retailers need to maximise every asset.
Our research shows that sale conversion rates can double if contact is made with a sales associate within 30 seconds. Equally, if no contact is made within four minutes, half the customers will leave without buying anything.
A 10% increase in customer-facing hours can be achieved by rebalancing hours across the week – if the most experienced sales staff are freed from admin tasks at key times to be on the shop floor, this would make a significant impact on sales.
Just as important an element of service is product availability. Consumers have high expectations and ever-diminishing loyalty and if they fail to find the chosen article three times, they may be lost for good. A general rule is that every 1% improvement in availability generates about a 0.5% improvement in sales, and it’s usually not a question of increasing inventory to achieve it. We find that a 10% to 15% improvement can be delivered through redistribution of stock already in the business. High availability typically comes from improved processes and communication – not from higher densities of product.
A review of sourcing and management of suppliers could also reduce costs. While moving to lower-cost countries may yield a 5% reduction in landed cost price, reducing lead times by two months can deliver 2% on final margins due to improved decision-making and flexibility.
The core retail preoccupations of right product, in the right environment, at the right time and at the right price have never been more important.
Helen Mountney is UK partner at Kurt Salmon Associates