BUSI 446 Week 4 Retail Management Project Report 2 Example

Retail Management Project Report 2: Store Staffing, Supply Chain and Customer Relationships at Harvest Lane Market

Store Staffing

Harvest Lane Market's six stores employ about 420 people, two-thirds of them part-time. Turnover among part-time clerks reached 78 percent last year. Levy et al. (2019) note that turnover raises recruiting and training costs, but for a grocer that competes on fresh food and service, the larger cost is in execution. Ton and Huckman (2008) tracked the stores of a large retail chain and found that stores losing more staff performed worse, though the damage shrank where employees stuck closely to standard procedures. For Harvest Lane, a new clerk who does not know how to rotate produce or answer a question about a local farm weakens the very advantage the stores rely on.

Recommendation: offer part-time clerks fixed weekly schedules posted three weeks ahead, and pair each new hire with an experienced clerk for the first two weeks. Fixed schedules address the most common reason departing clerks give for leaving. Levy et al. (2019) describe how retailers motivate and keep store employees through scheduling, training and recognition, not pay alone, and many of Harvest Lane's clerks are students and parents for whom a predictable schedule is worth more than a small raise. The pairing period also teaches the store's standard processes, such as produce rotation and checking dates in the dairy case, which the turnover research suggests will soften the effect of the departures that still occur.

Supply Chain and Information Systems

Harvest Lane buys from about 40 regional farms, most of which deliver directly to stores. Store audits found local products out of stock on 9 percent of checks, compared with 4 percent for products from the wholesaler. Corsten and Gruen (2003) found that most out-of-stocks originate in store ordering and replenishment rather than at the supplier. That matches Harvest Lane's case, where department managers place farm orders by hand.

Recommendation: share daily point-of-sale data with the eight largest farm suppliers and move them to vendor-managed replenishment, in which the supplier sets order quantities within limits the store approves (Levy et al., 2019). The eight farms supply about 60 percent of local volume, so the change covers most of the problem without burdening small farms. The smaller farms will keep their current ordering but receive a weekly sales summary by email, so they can plan harvests around what actually sells. Store managers will also set a minimum display quantity for each local item, a level at which the shelf is refilled from the back room before it empties, since some out-of-stocks occur when product is in the building but not on the shelf.

Customer Relationship Management

About 70 percent of sales are made with a loyalty card. Reinartz and Kumar (2000) showed that long-lived customers are not always the most profitable ones, so loyalty should be measured by profit, not visits alone. Harvest Lane should rank members by gross margin over 12 months and build a customer pyramid (Levy et al., 2019). The top tier, about 15 percent of members, should receive offers on fresh and prepared foods rather than the general coupons sent to everyone. A first look at the data shows why visits alone mislead: some members shop four times a week but buy mostly sale items and milk, while others visit once a week and fill a cart with meat, produce and bakery goods that carry higher margins. The middle tiers can receive offers designed to move them up, such as a discount on a first purchase from the butcher counter, and the bottom tier, members who buy only advertised specials, should stop receiving costly mailed coupons.

Connecting the Three Changes

Stable staff, reliable stock of local products and better targeting of top customers all support the prepared-meals counter proposed in Report 1. The counter will need experienced staff, a dependable supply of the farms' meat and vegetables, and a list of the customers most likely to try it. Report 3 will set its prices and promotion.

References

Corsten, D., & Gruen, T. (2003). Desperately seeking shelf availability: An examination of the extent, the causes, and the efforts to address retail out-of-stocks. International Journal of Retail & Distribution Management, 31(12), 605-617. https://doi.org/10.1108/09590550310507731

Levy, M., Weitz, B. A., & Grewal, D. (2019). Retailing management (10th ed.). McGraw-Hill Education.

Reinartz, W. J., & Kumar, V. (2000). On the profitability of long-life customers in a noncontractual setting: An empirical investigation and implications for marketing. Journal of Marketing, 64(4), 17-35. https://doi.org/10.1509/jmkg.64.4.17.18077

Ton, Z., & Huckman, R. S. (2008). Managing the impact of employee turnover on performance: The role of process conformance. Organization Science, 19(1), 56-68. https://doi.org/10.1287/orsc.1070.0294