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When consultant Toni Yacobian visits a selling floor, she sees the good and the bad.
This story first appeared in the July 7, 2009 issue of WWD. Subscribe Today.
“This doesn’t look like a recession,” said Yacobian, scoping a shoe area in a Manhattan department store bustling with shoppers one recent afternoon. But with a turn of her head, she spots a problem. “Look — that woman is carrying three pairs of shoes and those two guys don’t see it. No one even offers to help,” she said, referring to the seemingly oblivious sales associates.
Next, Yacobian visits a fashion specialty store and instructs her colleague Sally Allen to peruse the racks and appear frustrated at not finding her size. As she inspects garment after garment, Allen eases closer to a sales associate, who is folding and hanging clothes. “She didn’t even turn to Sally,” Yacobian observed. “Her job is to ‘fluff and puff.’ To merchandise, merchandise, merchandise.” But with the associate’s single-minded focus, Yacobian suggests, a potential transaction is overlooked.
Yacobian’s store tour is designed to illustrate what she considers to be one of the industry’s great failings — untapped consumer traffic. In their efforts to cope with the recession, she contends, retailers have applied the scalpel to personnel, prices and costs, and scrutinized all assets, except perhaps their most important one — the customers who enter their stores.
The Yacobian Group LLC, a 20-year-old Maynard, Mass.-based consulting practice with a reputation in training to motivate retail staffs and devising operating models to improve the customer experience, has begun offering retailers a new system called CIMS, or Customer Interaction Management Operating System. “It’s like an X-ray into the in-store experience to see where it is not being properly delivered, and then it provides a means to set clear goals, from individual sales people right up to the chief executive, to increase productivity from existing traffic,” explained Yacobian, the ceo of Yacobian Group.
CIMS, she added, is an integrated approach encompassing:
• Patented software that tracks stores and associates hourly and measures the rate they convert shoppers to buyers and the size of transactions.
• Setting new goals based on historical sales data and algorithms.
• A curriculum to train associates in selling and engaging customers. Techniques such as keeping associates moving on the floor, not stationary, i.e. restocking and tidying merchandise and giving “pass-by” greetings to shoppers to see if they need help or create an opening for a second approach later.
• Empowering store managers to become business drivers by providing them with tools to analyze business opportunities and develop staff.
• Traffic counters to monitor stores for peak shopping periods and lulls to adjust staffing.
In addition, CIMS uses a metric coined by Yacobian called “return on visits,” or ROV. It’s defined as the conversion rate multiplied by the dollars per transaction (basket size) and is an alternative to metrics retailers generally use. “ROV brings everybody together — marketing, merchants, store operations — so they no longer operate like silos,” Yacobian said.
“For many years, people have looked at sales per square foot,” said Marvin Traub of Marvin Traub Associates, which has a partnership with Yacobian to roll out CIMS to retailers. “In this era of difficult business and declining traffic, what percentage of shoppers are converted to buyers and how much they spend is a very important tool for management. It’s about applying e-commerce metrics to the brick-and-mortar channel.”
For example, if two similar-sized stores in a chain generate similar sales volumes but one gets twice as many visitors, the store with the greater traffic needs to increase its ROV, Traub explained. “Goal setting based on the track record is hugely important.”
By having a record of each associate’s contribution in terms of their ROV, “it helps me identify a developmental approach to people,” said David Butler, general manager at Rochester Big & Tall, a division of Casual Male, which utilizes CIMS. Lord & Taylor and Delia’s are also CIMS clients.
Yacobian and Traub said they hope to sign more retailers on to CIMS and are in negotiations. According to Yacobian, it takes about six weeks to install the software, and results can be seen within three months. However, the CIMS program is not cheap, making it challenging to get retailers on board, particularly these days when they are concentrating on cutting cost. Costs depend on the size of the retailer and include a deployment fee and a licensing fee for the technology. Yacobian said pricing options can be arranged, and retailers can phase in some or all of the elements of CIMS to make it more affordable.
Casual Male said the increased sales productivity stemming from CIMS offset the investment in about four months. Casual Male also said aside from increasing productivity, CIMS can change how personnel work. “The district management role has shifted from policing and compliance with visual standards and taking markdowns, to being more engaged in the store, coaching and mentoring sales productivity activity,” observed Dennis Hernreich, Casual Male’s chief operating officer and chief financial officer. “That’s one of the keys of the program.”
“It’s a matter of putting systems and processes around the in-store experience,” explained Christopher Lanning, president of Yacobian and a former executive vice president and director of stores at Victoria’s Secret, where he had extensive experience with similar store performance systems. “Stores have been scientific in the supply chain, but very little has been done on disciplines to insure consistent in-store experience across all the stores,” Lanning said. “CIMS is designed to reduce variability in performance across stores and focus on how to capture the millions of people leaving stores empty-handed. Eighteen to 25 percent of those entering a store are actually buying. That means almost 70 percent leave without buying. The highest return on investment in your portfolio is your customer in the store.”