Introducing the 6th Pillar of Retail:
It started out with 4 pillars (or 4P’s): Product, Promotion, Price and Place.
People did not count for much back then.
In early 1980’s with the revolution in management fueled by such publications as “In Search of Excellence”, “Re-inventing the Corporation” and many others, suddenly people woke up to the importance of people and added that to the retail arsenal.
We’re now able to talk about the 5th pillar of Retail; People.
At DMSRetail, we believe a strong contribution from all pillars of Retail is necessary to achieve the success that any retailer strives for.
We have seen many examples of failed businesses when they neglect to keep an eye on all the pillars or prefer to focus on one more so than the others.
The objective of this short article is not to get into the nitty gritty of how we should be looking after all the pillars – we have produced success guides and tools to do that and you can find those on our website.
What we want to do, though, is to announce yet another and very powerful pillar of Retail.
We call it the “Pixel” to remain in compliance with the “P” convention.
It stands for technology.
Now, we talk about 6P’s of Retail.
Increasingly, technology is playing ever more influential role in retail success.
Information Systems, starting with customer records, inventory control, loss prevention, supply chain, workforce management and business intelligence changing the efficiency and effectiveness of retail operations to a point where retailers who do not embrace the technology move to the forefront of businesses that are doomed to fail.
So, this is a little advice from your friends at DMSRetail to you, to acknowledge and embrace technology as one of the pillars of retail and to view it as something that will help your profitability immensely and overall success of your business.
Three top reasons why retailers do not succeed:
They do not know how to treat their people right, creating excessive turnover.
They do not know how to get the maximum benefit from compensation plans, rewards and incentives, both monetary and non-monetary leading to the dreaded increase in wage cost.
They do not know how to utilize technology to their advantage, except for supply chain technology which is only one part of the equation.
Even those retailers who believe they understand the 6 Pillars of Success in Retail: People, Price, Product, Promotion, Place and Pixel, still cannot reach the levels of success they strive for because of their unbalanced focus on Product/Merchandising.
The biggest myth: Product is everything and everything revolves around Product.
While it is true that a quality product is very important, it is no more important than the people who sell it, the pricing and promotion of it, the place where it is offered to the public or the technology required to optimize operations.
Too much attention focused on one pillar creates an imbalance.
Think of the three-legged chair – remove one of those legs and the chair falls over.
Retail businesses must have a balanced approach to all areas of their business.
Failure to focus on all pillars with a balanced approach causes the business to ‘fall over’ or fail to reach its potential.
Most retailers are pretty good ‘merchants’. They are able to buy products, get them to their stores, display them and track the sales.
But when a retailer concentrates so much of their attention and resources on product and merchandising other areas simply cannot get the attention they deserve and require.
Consider these questions:
- How well do you think your products are being represented to your customer by insufficiently trained minimum wage earners?
- Are you inadvertently eroding your profit margins by educating your customer to wait for markdowns before they buy?
- How would you rate your stores’ image and overall shopping experience delivered compared with others in the marketplace?
- Are you operating with inefficient and aging technology; unable to move ahead because of the restrictions imposed by your systems?
Without due consideration and action in these areas, maximum profits cannot be reached.
DMSRetail knows how to balance the powerful contribution of all of the pillars.
The solutions for increasing profits by taking a solid, balanced approach to all of the pillars are within your grasp.
In ‘The Retail Operations Management Workshop Online’ (click the link on the next line for dates) DMS Retail experts unveil the well balanced approach to achieving maximum profitability through the 6 Pillars.