The Dawn of the New Monday Morning Meeting: There is a better way

Final part of a 2-part piece on how technology has changed the Monday morning meeting to help you make insightful decisions all week long

In our last edition of Retailing with Insight, we looked at the retail industry's ritual Monday morning meeting, where it came from, and what purposes it serves. To recap, the Monday morning meeting originated to review figures from the previous week to determine corrective actions for the upcoming week. The long and laborious process begins at close-of-business Saturday and often requires employees to spend hours on Sunday creating thick reports and sifting through them to try to find the most important numbers for Monday morning.

Many retailers latched onto 1990's technologies and have yet to budge from spreadsheets marked up with color-coded highlighters. This means that come Monday, the entire merchandise team from executive down will spend half their day uncovering which numbers to look at and what they mean. The top down approach often obscures the real problems and opportunities, which makes it difficult to initiate corrective action.

We left part-one of this series with the question, "Is there a better way?" At QuantiSense, we believe the answer is a resounding "Yes!" In this second and final part of our examination of retail's Monday morning, we point out why the current processes are obsolete, then discuss the dawning of the new Monday morning, which we believe should be built around three core topics:

• Recognizing outstanding performance
• Examining the results of innovation
• Expanding the playbook

Why the Current Monday Morning Processes are Obsolete

If the Monday morning meeting was created to inform participants about performance, the first step is to establish a trusted repository of performance information (read: a data warehouse.) The good news is that, according to a 2007 AMR study of data warehousing and Business Intelligence in retailing, 60 percent of respondents indicated that they are already taking steps to expand, improve, or replace their current method of analytics and data warehousing.¹

Once this important bedrock is established, the next step is decoupling hundreds of Excel spreadsheets that clutter a typical retailer's management reporting. Be ruthless in eliminating Excel, as these homemade reports:

• Do not use consistent calculations from report to report
• Do not drill down to the details where your decisions must be made
• Are incredibly expensive to maintain
• Are typically departmental in nature, obscuring "big picture" perspective

The final building block for a better Monday morning is Business Intelligence. Most retailers with data warehouses have also deployed a BI tool. The question is, have they have fully adopted the technology to its best potential? Business intelligence should deliver real-time, accurate information to users efficiently through a role-based dashboard.²

With data warehousing and Business Intelligence systems in place (and Excel relegated to the sidelines where it belongs), it's time to rethink the Monday morning meeting. There is a better way.

The Dawn of the New Monday Morning Meeting

With the capabilities and technologies that are so widely available now, today's Monday Morning meeting is screaming to be re-engineered. Its purpose should no longer be to merely inform, nor is there a need to arbitrate markdown money or to free up open-to-buy. This gives rise to a new higher purpose for the Monday morning meeting: How to consistently improve your business. Ideally, there should be three major areas of focus:

1. Recognizing outstanding performance
2. Examining the results of innovations
3. Expanding the playbook

Outstanding Performance

Reviewing outstanding performance involves identifying those areas of the business that are outperforming the others, and then understanding the reasons behind these successes. Business Intelligence teases out this kind of insight. In isolation, conventional metrics like Comp Store, Sales against Plan, Gross Margin, and Sell-Through don't provide the full picture of balanced performance. Traditional metrics must be considered and given weight along with more dynamic calculations that combine related metrics, such as Lost Sales, Sales at Full Price, and Contribution. These complex calculations do a better job than conventional metrics alone at finding balanced performers – from stores, merchandise and classification to vendors and customers.

Once outstanding performers are identified, it is vital to understand performance in a broader context – across regions and channels, over time, and by customer segments – then make the necessary supply chain adjustments (accelerating production of best-selling SKUs, for example) to take full advantage of opportunities.

Innovation

Retailing is, at its heart, about innovation. The most successful retailers are always pushing their merchandising and store operations to try something new. This is an embedded and important part of the culture. Yet, many retailers still employ primitive tools for measuring the success or failure of these innovations.

With the dawn of the new Monday morning, this can change. A major focus of the meeting should be on assessing the impact of recent innovations and discussing new ones. Innovations can include almost anything: changes in pricing, product, visual display, sales techniques, signs, promotions, and more.

Business Intelligence is the primary tool for measuring the success of innovation. The first challenge is to set up a controlled environment for a test, since it is imperative that retailers test all innovations before rolling them out to the enterprise. This could be a single store, a small group of stores, or a certain department over a set period of time – all compared against a sample of stores without the innovation, or against the entire chain. With BI, you can see if and how the innovation affected the merchandise mix, percentage of items sold at full price, traffic, average transaction, staffing, and much more. After the various impacts are examined in detail, you can intelligently determine the value and viability of rolling out the innovation across the enterprise.

When innovations create positive results, best-in-class retailers move into them with great skill and dispatch. The entire organization will learn about the success of the trials as anticipation builds to see the impact of the innovation enterprise-wide, and everyone will be excited to brainstorm the next big thing that could grow the success of the company.

Expanding the Playbook

The third leg of the new Monday morning meeting is to expand the retail playbook. As we pointed out in part one of this series, retailers have limited themselves for decades to two basic plays: Markdown and freeing up Open-to-Buy. However, to return to one of our favorite analogies, football teams with a limited number of plays – no matter how well executed – will ultimately lose the game.

In working with our retail customers, QuantiSense has developed our signature Playbooks™ – in essence, exception reports that are built to recognize particular signatures of data and flow the user to a specific action to either capitalize on an opportunity or correct a problem. For example, when sales are high and merchandise is on order, the "Accelerate" Playbook will suggest to the user (in this instance, a buyer) to ship earlier.

As the playbook expands and more plays are incorporated into the routine, we suggest that retailers concentrate on two things:

• Staggering the work throughout the week instead of trying to do everything on Monday
• Monitoring the results of all Playbooks.

Retail productivity can be transformed when users are consistently informed and reviewing their Playbooks to make insightful decisions all week long - instead of only on Monday. For example, all buyers could work through two of their playbooks every Tuesday and Thursday, while store managers could take on three of their playbooks on Wednesdays and Fridays. The chart below shows a sample week for an allocator at a specialty retailer.

Then on Monday morning, the senior managers and executives will review how effective users were in executing the plays. Are out-of-balance stocks now balanced? What was the success of a new store's grand opening? Was end-of-season stock consolidated? Is there sufficient merchandise ordered for an upcoming promotion?

With advent of successful BI implementation in the retail world, the climate is ripe for rethinking and engineering the Monday morning meeting to make it more effective and less painful for everyone involved. With the dawn of the new Monday morning, this important meeting can shift to focus more sophisticated recognition of top performers, tracking of innovation, and expanding the retail playbook. The payoff will be a much more responsive merchandising and channel organization that is capable of sustaining and growing competitive advantage simply by taking action on what it learns about itself.

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.

There is a widespread embrace among retailers of business intelligence and the tremendous value it can provide, including a real effect on the bottom line. However, many retailers still struggle to achieve true cultural adoption: the process of weaving the usage of the technology into the everyday lives of users for the benefit of the whole organization. This is easier said than done; it takes serious leadership, organization, and at least one key executive who knows both the technology and the business very well. Cultural adoption, beginning with this executive and a core group of users, is key for starting the BI revolution and enacting positive changes in day-to-day activities that any new technology brings.

In this issue of Retailing with Insight, we're going to discuss a retail ritual in which the cultural adoption of BI technology is crucial – the Monday morning meeting. A follow-up to our previous newsletter piece, this article by retail guru and QuantiSense Senior Advisor Bill Robinson aims to shed some light on how business intelligence, coupled with widespread cultural adoption of the technology and processes, is at the core of the new Monday morning meeting. Enjoy the newsletter, and we'd love to hear your feedback – please send it to retailinsight@quantisense.com.

Cheers,

Jeff Buck, CEO

QuantiSense Plays Key Role in Developing New ARTS Data Warehouse Design for Business Intelligence

Burlington Coat Factory Selects QuantiSense's Retail Specific Business Intelligence and Data Warehousing Application

Casual Male Wins Apparel Top Innovator Award (PDF) Apparel Magazine (May 2008)

Casual Male Rapidly Adds BI Solution Chain Store Age (April 2008)

QuantiSense Helps Retailers Make Sense of Retail (PDF) Fashion Retail Magazine (March/April 2008)

QuantiSense
Web Site
Ph: 866.880.4200
Fx: 928.832.9798
info@quantisense.com

Atlanta Headquarters:
3330 Cobb Parkway
Suite 17-317
Acworth, GA 30101

Sales
sales@quantisense.com

Support
support@quantisense.com

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.