Supporting an Omnichannel Strategy Santiago Gallino – Tuck School of Business Toni Moreno – Kellogg School of Management January 2017 July 2013 – LBS – London, UK

Learning Modules 1. Demand forecasting 2. Inventory Decisions 3. Assortment Planning 4. Pricing Decisions 5. The omnichannel customer 6. Fulfilling omnichannel demand 7. Omnichannel journeys 8. Supporting an omnichannel strategy

M8.2 Retail Jobs don’t need to be bad 1 The retailer that want to remain competitive needs to offer competitive prices. Two main expenses at most if not all retailer’s are COGS and Payroll. To do that the retailer push to reduce it’s expenses: COGS and Payroll. These expenses are fundamentally different. https://nrf.com/advocacy/retails-impact

M8.2 Is there a real trade off? Is there a real trade-off between “bad Job” and “low prices”? https://nrf.com/advocacy/retails-impact

M8.2 Retail Jobs don’t need to be bad 1 Retail Jobs are challenging (Zeynep Ton) More than 40 Million only in the US. It is not uncommon that the offer includes: Low Wages Chaotic Schedulles No Training Poorly Design Work Lack of purpose https://nrf.com/advocacy/retails-impact

M8.2 Is there a real trade off? There are retailers that have broke this dilemma. Invest in People. See beyond the cost. The key is productivity. L.L. Bean: The outdoor apparel retailer gives employees 11 paid holidays. The company has a three percent turnover rate for full-time employees.  The Container Store: The retailer pays its front-line workers double the retail average, nearly $50,000 annually.  Sales per Sq. Foot are Double of Sam’s club or BJ https://nrf.com/advocacy/retails-impact

M8.2 The Productivity Link 1 The key is productivity. Strategic decision to reduce complexity Look for standardization Empowerment Training and Cross Training “Over Staff” https://nrf.com/advocacy/retails-impact

M8.2 The Productivity Link 3 The People, the employees, can make a dramatic difference in the Retailers execution Tempting to reduce since this give and immediate profit jump The culture can be an enabler or a barrier to success Resistance to change https://nrf.com/advocacy/retails-impact

M8.2 The Productivity Link 3 Labor Quantity and Quality Operation Execution Sales and Profit Labor Budget https://nrf.com/advocacy/retails-impact

M8.2 Knowledgeable Employees 4 CONVERTING DEMAND INTO SALES Customer are more knowledgeable today that ever

Can training can help increase knowledge? But can Online learning do the job?

Data Upscale department store chain in the United States, with more than 300 stores in 29 states. A sales and service solution company that partners with top brands to give retail sales representatives short online training courses. (+100 brands)

Data Hours worked for their sales associate Total dollars sales and number of units sold by brand, month and SA in-stock percentage by brand and store The date and a unique identification of Dillard’s SA that took a module. Description of the brand that the OTM was about: total time spent on a module and if the employee passed the test.

Non Linear Impact

Training and Tenure

Who benefit the most? 1 2 3 4 Passed a Module (0.006) 0.042 0.016 *** 0.016 *** 0.014 *

M8.2 Closing 5 See the labor budget as an Investment in People. See beyond the cost. The key is productivity. Home depot – Trader Joe’s Nordstrom – Banana Republic – The North Face