Retailing 119: Using ‘Benchmarks’ to Improve Your Specialty Retail Business
In January, we talked about the TIA Retail Business Assessment, which is a great way to get a check-up for your specialty retail business and receive valuable input for your business planning process.
Taking the TIA Retail Assessment is easy; it’s all done online and takes only about 20 minutes. The assessment is kept confidential — it’s evaluated and scored by independent retail consultant Gluskin Townley Group, which does not share the results with anyone, including the TIA itself. (To find out more about the TIA Retail Assessment, contact Marty Mohar at email@example.com or 866-686-3036 ext. 704.)
The Retail Assessment investigates eight critical areas of your specialty tennis retail business, all of which are important elements to your store operations and annual business plan, including: Business Technology & Reporting, Financial Benchmarks, Store Operations, Staff Recruiting & Hiring, Ownership & Management, Store Environment, Marketing & Promotions, and Customer Service.
After you take the Retail Assessment, you will get back a complete strengths and weaknesses analysis. You’ll also get recommendations for what aspects of your business to focus on during the year so that you can eliminate the identified weaknesses that threaten your business, and move up the neutral operating areas.
Your store’s strengths and weaknesses analysis will include a chart similar to this example, which looks at each of the eight critical areas of a retail business. Strengths receive 65% or higher marks; neutral areas are 40% to 64%; and weaknesses in your business receive marks of 39% or below.
After you have read the whole report, go back and review your store’s weaknesses, which are the immediate threats to your retail business. This is where “benchmarking” comes in. Benchmarking simply means setting the standard for your retail store performance and operations by which you can measure or judge improvements.
In the example below, Store Operations and Ownership & Management should be benchmarked against the four neutral areas, and improved to an assessment score between 40% and 64%. The benchmark this owner should then establish in the store’s business plan for the neutral areas is improvement to an assessment score of 65% or higher, into the strengths area.
Drilling into the detail of benchmarking, in the assessment we are using as an example, let’s say this store owner has several part-time employees, but his answers on the Retail Assessment indicate he does not have a store operating manual. An operating manual would state how the owner expects the business to be run and makes sure there is consistency in the level of customer service delivered whether the owner is present in the store or not. In benchmarking an assessment score between 40% and 64% for Store Operations, this owner should commit to writing down how the store is be run and the level of customer service the owner expects part-time employees to consistently deliver.
Also, in this example, the owner indicated on the assessment that he has a passion for tennis, but not an equal passion for the retail business. In benchmarking an improvement in Ownership & Management, he should commit to work on and develop a passion for the retail business, and project this passion to employees.
For instance, at store closing time there are two shoppers still in the store. The part-time employees have had a long day and grumble that they wish the shoppers would leave so they can get to the court and play some tennis. The owner has a golden opportunity to tell them: “We’re in the specialty retail business first, and customers make it possible for us to enjoy our sport. Our job is to deliver an extraordinary retail shopping experience each and every time by making sure they can enjoy the tennis lifestyle, too!”
In your annual store business plan, you need to spell out how you are going to correct your store operating weaknesses, who is going to do it, what the expected results will be and when you are going to make the improvements and what the anticipated cost will be.
How do you measure improvements to the assessment benchmarks you set? Simple: Set up another online Retail Business Assessment in six months or a year, after you’ve implemented recommendations that can move up the weak and neutral areas.
|(65% or higher)||(40%-64%)||(39% or lower)|
|Staff Recruiting & Hiring||Financial Benchmarks||Store Operations|
|Store Environment|| Business Technology & Reporting
Marketing & Promotions
|Ownership & Management|
The April TIA Webinar is “Merchandising Your Specialty Tennis Store for More Sales.” Visit TennisIndustry.org/webinars for details and to register.
This is part of a series of retail tips presented by the Tennis Industry Association and written by the Gluskin Townley Group (gluskintownleygroup.com).