Businesses face important decisions regarding what to sell, when to sell, to whom to sell, and for how much. Managing revenue over the annual sales cycle will naturally see high and low season swings and require targeted revenue management efforts.
Retail environment
While the end of year holiday season is a busy time for retailers, there is the adjacent pressure of the shift towards online digital sales away from the traditional sell-through revenue. As pressure mounts retailers will need to look at investing in multichannel capabilities. One such example is how US-based Best Buy is using its store space to partner with Samsung in more than 1 000 Samsung Experience Shops, using a store-within-a-store format housed within Best Buy locations.
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For some locations, it might mean looking at how core size and space allocations will evolve in the next five to ten years and what will be required to enable new multichannel experiences. For technology based retailers this will include considering how to integrate the shop front and how employees engage customers for example, will they need to look at future store layouts to encompass greater customer learning and experimentation or will stores become fulfilment and return centres for online orders?
Business will also need to get more adept at targeted marketing, tailored assortments, and effective pricing and promotions. The business of gathering and analysing data will go a long way to understanding the needs, preferences, and attitudes of growing consumer segments, as will understanding individual consumers and customising offers on a one-on-one basis. For example, discounts to consumers who have “liked” a product on Facebook. Consumers will be driving how and when they want to engage and retailers will need to be accessible at all
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- Is the company eliminating waste?
- Are production / operations designed to support what the end consumer needs?
- Can savings be made by consolidating suppliers.
Value creation
- Does management understand where value is being created or destroyed?
- Can product or service costs be accurately identified? What is the true profitability of key products or product groups?
- Why is the business wasting money on loss-making or low value-adding products?
Business structures
- How is the company organised to supply the customer in the lowest cost way?
- How much is spent on business support? Is this appropriate?
- How much overhead creates value (from the customer point of view) and how much is just pure overhead?
- Would it be cost effective to outsource a business function, or share it with other businesses?
Managing people costs
- Are my people in the right place at the right time to maximise profit and minimise