Applying Lean Six Sigma Principles to "Five Points of Transition" in a Retail Environment
Source: Guidon Performance Solutions
By: Guidon Performance Solutions
Retailers are increasingly finding opportunities to improve the customer experience through the application of Lean Six Sigma principles. By reviewing the customer’s primary “points of transition” within the retail environment, retailers can incorporate efficiencies and improvements that increase customer satisfaction and boost sales.
The five points of transition where Lean Six Sigma principles can be applied include:
When the customer enters the store, seeking particular products, merchandise, or information, it’s important that they understand immediately how to get to the area where the items they are hoping to find can be located. Unfortunately with the litany of advertising, it is sometimes difficult to clearly understand where to go. This leads to delays, frustration and misdirection – types of wasteful activities from the customer’s perspective. To improve these areas it is important to simplify direction-finding by focusing on the customer’s vantage point as they enter and not the vantage point of the retailer’s suppliers and assets. Put yourself in the place of a customer who has never been to your store. Trace their actions to get started with their shopping experience, and simplify to the minimum amount of information possible to trigger action from the customer.
Store layouts need to be effective for the customer’s purpose. Lean Six Sigma principles can be applied to floor plans and workspaces to ensure that the customer can “flow” through the store in the fastest and easiest manner. Identify the points of waste by observing customers as they move through the store seeking the area where their targeted items are located. Often we find a lot of stopping, leaning, reading, false starts into aisles and other wasted steps that consume time but do not add any value to the customer’s ability to get to the goods they want.
When customers need help finding products or information, it’s important to have an appropriate staffing level to reduce wait times. Lean Six Sigma principles can help retailers adapt their staffing levels to accommodate peak traffic times, allowing your employees to give customers a greater level of service, even when the store is busy. In one case, a retailer identified that only about 10% of the effort of their store staff was actually interfacing with the customer. In addition, they noted that even though the customer was clearly looking for a particular brand, store staff did not offer to help – even when available. By eliminating tasks or reducing the time for tasks the staff was performing – restock, inventory, backroom push, etc. – they could free up over two hours per associate per work shift to allow them additional time to work with the customer.
After the customer finds the products or information he or she needs, the next step is selection from the options that are available. By tracking buying patterns and the impact of in-store product placement on sales, the retailer can more appropriately tailor inventory levels. By keeping inventory lean, the retailer has more liquid financial resources, while avoiding the risk of stock expiring, becoming obsolete, or being damaged. Lean Six Sigma principles can also help the store identify merchandising opportunities that can lead to cross-selling, increasing the per-transaction level.
After the customer finds the products or information and makes his or her selections, the payment process should be flexible, fast, and easy to navigate. Lean Six Sigma principles can help decrease wait times through both effective staffing and removing traffic bottlenecks. Improvements here may include incorporating better technology, such as a robust point-of-sale program to enhance service, offer loyalty program services, and find opportunities for sales suggestions and better service. Process improvement teams can examine the entire transaction process to make the task of checking-out easier for the customer.
While retailers have focused on shopability for a long time, it is not until recently that tools from other industries have come into play. Introducing the concept of examining the shopping experience from a value-add perspective, identifying the seven types of waste as the customer goes through the various transition points of shopping, and then leveraging creativity to eliminate the wasted activities provides a simple and common sense approach without spending any capital to make the customer’s experience outstanding.
To learn how other retailers are using Lean Sigma,
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