The Monday Morning Meeting

Part 1 of a 2-part piece on how technology can help you make insightful decisions every day – not just on Mondays.

Every Monday morning, when the rest of the business community swaps weekend stories over Starbucks and Aquafina, retailers are focused on their weekly ritual: the Monday morning meeting. Retailers long ago institutionalized a Monday morning meeting to monitor progress and uncover opportunities and problems throughout the organization. Preparing for these meetings consumes a considerable portion of the week for buyers, planners, merchandise executives, and managers alike – some of the most senior-level people in the organization.

The resources required for this weekly marathon meeting raise some important questions:

• Is the typical Monday morning meeting a productive management process?
• Does it uncover the best opportunities, identify the most pressing problems, and lead to corrective actions?
• Are many Monday morning meetings run as a relic of a past era when information access was severely limited and retailing was far simpler?

This article takes a close look at the processes and pain points involved in today's Monday mornings and raises the question, "Is there a better way?" We'll answer that in due time, but first let's take a look at the status quo.

Monday Mornings—and the Long Weekends That Precede Them

Retailers go to extraordinary lengths to prepare for Monday morning. The process starts early Sunday, after the last sales are rung in at close-of-business on Saturday night. Powerful computer systems create snapshots of weekly sales and inventories, develop totals for each SKU-store combination, and calculate sales totals at every conceivable level in the merchandise and store hierarchies.

This information is then used for three purposes:

1. To churn out dozens or hundreds of varied reports to have on-hand at the meeting.
2. To feed other information systems such as open-to-buy, promotion, price optimization, vendor performance, allocation, replenishment, assortment planning, and space management, among others.
3. To condense the information and download it to specialized reporting applications ranging from departmental solutions (e.g., Excel and Access) to enterprise-wide data warehouses such as QuantiSense.

While the weekend process is essential for Monday morning meetings, there are a number of potential problems. The data processing is usually flawed. The weekend process might not be completed in time, or a weekend operator may forget to run a process. Some stores might not be polled. These frailties are typically overcome by information and systems analysts who work heroic hours to manipulate information from multiple sources.

Against the odds, if everything works correctly, each buyer, planner, allocator and merchandise manager will find a thick stack of printed reports waiting in their mailboxes when they arrive at work on Monday.

All well and good? Not exactly. We'll examine the problems of Monday morning after a brief history lesson.

Monday Mornings: How Did We Get Here, Anyway?

Where did the Monday meeting practice come from? In the early days of computers, retail buyers provided their managers with a recap of the previous week's sales for their departments every Monday morning. Legions of unit control clerks aided by computers tabulated sales from tickets detached from garments at the cash register. Hardlines buyers prepared for the meeting by requesting stock counts from stores at the end of the week and used this to infer weekly sales. Buyers brought the reports to the meeting to update executives on the week's results.

Clerks created lists of fast and slow sellers, and buyers used the information to persuade management to increase open-to-buy and to authorize markdowns. Buyers were in a strong position as the information provider—they owned the unit control. Meanwhile, the merchandise controller would tabulate open-to-buy based on dollar sales and the week's receipts. This put the merchandise controller in a powerful position as the source of the dollar information; he or she knew the extent to which buyers were over- or under-bought. The Monday morning meeting was highly important and productive in the early days, because it was used to resolve the deadlock between two powerful positions – unit control vs. dollar control.

Retailing was a far simpler business then. Few chains operated nationally, and the merchandising mix was much less complex. Brands rarely spanned over departmental boundaries, and fashion trends were usually confined to a small group of departments, as customers were much more homogenous. "Cross-channel" wasn't even in the retail lexicon yet. The business was also far less promotional, and most of the vendors were domestic. In short, you could look at information for a single department and have a pretty good idea of what your customers wanted. Not so today.

The Problem with Mondays

Despite huge investments in technology, today's Monday morning meeting is still dominated by two issues: open-to-buy and clearance markdowns. As IT departments harnessed the capabilities of computers—thanks to enormous capital spending—the power equation at the Monday morning meeting shifted. In addition to buyers and merchandise controllers, executives now rely on IT to keep them informed about performance and sales.

However, as we discussed earlier, IT has its limitations in preparing for Monday mornings. Looking past the vast resources required and the loss of productivity, there are three primary problems with the typical Monday morning meeting:

1. The focus is too limited to deal with the complexities of retailing today, with too much emphasis on open-to-buy and markdowns.
2. Merchandise category remains the primary focus at the expense of more fruitful analysis; there is a world of decision-making beyond this that shouldn't be ignored.
3. No one has enough time to analyze the details, so decisions are made with incomplete top-down views.

As a result, tactical decisions are limited to simple actions such as ordering more/less, or driving sales with markdowns, thus leading to a never-ending cycle of margin erosion. Retailers struggle to get the right merchandise mix across categories because they're limited by their current bag of tricks and their view of the business, and because they lack the time that's needed to uncover cross-category opportunities and problems.

"Why compress decisions into Monday?" says Ken Morris, President of LakeWest, a top retail strategy consulting firm. "They should be taken all week long. Retailers are focusing too much on a particular department when they need to see how the department is doing in relation everything else in the merchandise mix. And if they see something needs to be fixed on Tuesday, why wait six days to do something about it?"

So back to one of our original questions: "Is there a better way?" At QuantiSense, we think the answer is a resounding "yes." In our next issue of Retailing With Insight, we'll examine the best techniques for taking advantage of Business Intelligence to drive action, and how some retailers are capitalizing on their Monday morning processes to turn a previously time-intensive and laborious routine into an opportunity to make positive changes to their business – and the bottom line.

About the Author:
As a Senior Advisor and Strategist for QuantiSense Bill draws from his 35 years of experience in providing technology-based solutions to retailers. Prior to joining QuantiSense, Bill served as Vice President of Marketing for STS Systems, a leading provider of retail technology solutions with more than 300 clients. Throughout his career Bill pioneered successful applications in all areas of retailing including Point of Sale, Business Intelligence, and Supply Chain Management. Bill's passion for the retail industry guides QuantiSense in delivering results-oriented business intelligence and data warehousing solutions for retail organizations. Bill is based in Baltimore, MD, where he pursues his passions of jazz piano, gardening and golf. Bill is also a Professor of Marketing at Towson University in Towson, MD.

Questions?
Questions, comments, or thoughts about our newsletter? Contact Bill and the rest of the QuantiSense team at retailinsight@quantisense.com.

2008 has gotten off to a quick and exciting start for QuantiSense. We were pleased with the positive feedback we received after NRF—AMR called retail Business Intelligence "all the rage" and noted our successful 100-day implementation strategy, while RIS News named QuantiSense one of the Top 10 highlights from the show.

We have a lot more in the works, so be looking for our quarterly Retailing With Insight newsletters for all the latest news from QuantiSense, industry insight from our retail guru Bill Robinson, and more. In this edition, Bill discusses the typical Monday morning for retailers - and in our next edition, we'll come back to how retailers can make the most out of this weekly ritual. Enjoy the newsletter! We'd love to hear your feedback, so please send it to retailinsight@quantisense.com.

Cheers,

Jeff Buck, CEO

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QuantiSense is the leading provider of business intelligence and data warehousing applications exclusively for specialty retailers. The company was formed in 2001 by a team of experienced data warehousing professionals who recognized the need for a retail-specific data warehousing and BI solution that was low risk, cost effective and could be quickly implemented.