In any store network, there are differences in store performance, in terms of both sales and profitability. An assortment of factors drive this variation — location and demographics, merchandising and marketing support, and staff quality and local promotions. To improve overall corporate performance, it’s necessary to identify store differences, describe best practices, and disseminate those best practices across the store network to standardize and improve operations.
The first step is to use agreed-on metrics to compare store performance. This transparency facilitates analysis, highlighting each store’s strengths and weaknesses. Once a best practice has been identified, it must be codified and described in a way that all store managers can understand and replicate. Finally, the company must disseminate that best practice through publications and face-to-face gatherings, and support it with any necessary changes in store processes and technology.
For example, it’s useful to analyze clusters of stores that are similar in terms of size, demographics, traffic, competitors, and so on. This analysis might reveal that a certain store in the cluster excels in some key performance indicators, such as conversion, basket size, or average price per item. If this is the case, it’s critical to understand why. Has the store manager had some fantastic idea that’s improved basket size? Maybe he or she has designed a new floor plan that prompts customers to purchase more impulse items? Whatever the cause, management needs to describe that best practice so that stores in the same cluster can replicate it.