fashion managmet report

3.1 Evaluate the impact of new technologies on organisational change in a fashion retail organisation

In this report I will be evaluating the impact of new technology on organisational change in the high-street retailer River Island. I will be talking about how new tech is used in River Island stores and how it is used to help KPI’s in store (key performance indicators). I will be writing about all aspects of new tech on River Island especially how it affects organisational change. River Island is a middle-market high street retailer and has 350 stores across the United Kingdom, it sells clothes and accessories for women, men and children. I will be looking at how store operations work as well as lots of other things.

Technology is used for retailers to see what their KPI’s are (key performance indicators). KPI’s are important within retailers they measure how well a company is performing and its makes it possible to compare retailers e.g. river island might be compared to Topshop. Some examples of KPI’s are- sales growth, accounts opened, Foot flow, staff turnover, profit, and stock loss and mystery shopper results. KPI’s can be measured with technology and KPI’s are very important to tell if a store is doing well or not. River Island will use KPI’s on a daily basis to check how well their store is doing. Technology is crucial for KPI’s for example technology is used to work out how much money a store is making and also can be used to see how many accounts are opened as well as any stock loss can be checked with tech and on till systems. Tech can track how many accounts/store cards are used in store which is crucial to seeing how the store is doing. Technology can prevent stock loss by keeping track and count of stock and how much has been sold etc. so it will be able to track how much stock is lost that has not been sold. KPI’s can be used to plan, forecast and replenish stock loss also with the help from technology, it can help to replenish by tracking what has sold and what is needed for a particular store so that head office can be notified and replenish the stock that is needed for a particular branch of River Island. Tech and KPI’s can be used to forecast stock, by figuring out the type of products that sell well in store to know the kind of thing their customers are after, tech can help this by keeping a track of best-sellers and what customers love. It can help ‘plan’ stock by seeing what sells in River Island branches and what customer’s need/like. KPI’s help all these factors as it’s a way for River Island to make sure their stores are performing well and it helps indicate how stores are doing. Stock management is also important to River Island it provides the details about the amount of stock they have and the condition of it e.g. faulty stock etc. River Island and other similar retailers have new stock control systems have improved retailers ability to control and operate better stock control. Having too little stock can affect River Island by the merchandise will not be able to reach its full potential, and the gross margin of the business will be affected resulting in affecting customers perception of the business. The other extreme of having too much stock can also affect River Island, the interest of the stock will end up reducing gross profit/net margins. This is a bigger issue if the stock runs late, the stock will also most likely end up in the sale resulting in ‘margin loss’.

River Island will use technology to gain sales within the store, I will be talking about the type of technology River Island uses to increase their sales in stores. River Island stores employees have head-sets on at all times to be able to communicate to each-other. For example if a staff member on the shop floor had a customer ask for something that is in the stock room and there is already a staff member in the staff room, they can radio them to get the stock for them to ensure time effectiveness and the customer is happy. Also head-sets enable staff members to communicate when the store needs replenishing to ensure there is the upmost chance of getting sales. The use of I-pads are also common in stores now, I-pads can enable River Island to be able to check stock levels quickly and help customers with query’s quickly and efficiently to ensure the loss of service in stores. Also I-pads can be used for in-store orders to enable sales stay within stores. Technology is also used for them to get their information into store to use, for example tech could be used for stores to see how other branches are doing so that there is a sense of competition within stores to get stores to increase their sales. Also it can be used to track how many people come in and out the store, to see how many people that come in end up purchasing something compared to people leaving without making a purchase to ensure River Island can try and entice customers to purchase. Technology can also track what products are selling well in store and which ones aren’t selling very well and then the store can try and figure out why.

Stock loss is a KPI as it affects the profit. Stock loss is the loss or shrinkage of products that are lost either through damage, theft or human error. The loss of stock is a cost to River Island, the more losses the less profit that particular store will make. River Island could reduce stock loss using tech and other things e.g.

-        Tagging

-        Fitting room controls

-        Aware staff

-        Staff trained to be confident when dealing with thieves

-        Security

-        CCTV cameras

-        Mirrors

-        Alarm system

River Island should do certain things to reduce stock loss in their stores,

-        Take care when storing stock

-        Return faulty lines promptly

-        Conduct necessary stock admin

-        Regularly check faulty rails.

-        Keep accurate records of stock movement (recalls, off-site and sale prep)

-        Query any anomalies with head office.

Sales is another KPI (annual turnover, transaction history, basket spend, footfall). Sales as a KPI can help River Island to increase sales. Sales per hour can be tracked and statistically compares one sale person to with another and determines who is efficient at selling so it sees who is ideal at selling. Sales growth is important to River Island they need to track it and it tracks the retailer’s performance.

‘Accounts opened’ is another KPI River Island need to track the number of new store card holders they get. It is a KPI because customers that obtain store cards are loyal to the brand and spend lots of money in River Island stores. The more customers with store cards, the more sales your store will potentially make. River Island stores should strive to promote store cards to their customers and may set targets for employees to obtain for getting store cards.

ATV and ATQ is another KPI in retail,

ATV= is the average money spent per transaction

ATQ= is the average number of units sold per each transaction

They are KPI’s because the more a store sells to each customer, the better the sales assistants are at selling and the higher your sales are.

ATV (total sales divided by total number of transactions)

ATQ (number of items sold divided by number of transactions)

Foot flow (how many customers enter the store) is an important KPI as it indicates how popular your store is and how effective your store window is at attracting customers into the store. It can be monitored by manual counting or software such as sensor devices.

Conversion rate compares the foot flow of a store with sales, the amount of browsing consumers that end up buying. It is an important KPI because the more customers that are persuaded to buy, the better the sales team are performing and therefore the higher the sales at the end of the day. (100% if everyone buys, 10% if one in ten buy)

Staff turnover is another KPI that businesses need to keep an eye on. It is the number of employees to leave per annual year as a percentage of the total number of workers. It is a KPI as it is important that River Island has a stable team that likes their workplace and does not want to leave. If the staff turnover was high it could mean that they struggle to keep staff due to management practise etc.

It is important for River Island to keep stock levels in check, too much stock can cause just as many issues as too little stock, if there is too little the customer feels they are not getting what they require so their opinion of River Island will change. Whereas too much stock shows that the goods are not selling which may give customers the perception that they are not doing well. They also need to make sure there is a good availability of products, River Island will use systems to monitor stock loss, and the system will have a ‘PAR or ‘DISPLAY’ per products, per each store. Having availability of stock is key to retailers as it keeps consumers interested, if they didn’t have much availability it may lose sales and customers, retailers now have ways for customers to check availability before they go in-store they can do this online to save wasting time. River Island can use technology to know when to replenish stock/what to replenish.

-        EPOS system

-        Stock management

-        Reporting and WSSI

-        Planned/forced markdown

If River Island has a poorly performing store they can use KPI’s to improve the store and get it too perform better. For example if the store suffers from ‘low footfall’ the store can monitor the footfall and try to entice people into the store, also if the store particularly suffers from ‘theft’ they can use KPI’s to monitor it and also can improve staffs awareness and keep everything monitored. Overall KPI’s can help monitor a poorly performing store and can help River Island to keep an eye on what the root of the problem is. They can use KPI’s to find out what is causing the store to not be succeeding and can try and figure out what the store can do to improve.

Technology is always advancing and River Island will use lots of tech to improve and also tech and customer service will eventually be affected by technology. In the past just sending and getting information to and from stores was a nightmare. Nowadays tech is constantly advancing for example, River Island now has apps and websites so people can always shop with River Island any time. Also now each product in store is coded with a barcode which can be scanned and is individual to every product. Now almost everything River Island does is doe via smartphone and computers. There are a lot of tech in retail that’s useful to River Island. EPOS- they generate lots of info such as PLU, the ability to store and record sales of items individually, also tills now can automatically send info to head office. EPOS has a load of benefits- labour saving, correct pricing at checkout, automatic replen and better stock flow.  Electronic data interchange is another system River Island will use in store, it enables the automatic replenishment of stock and stops missed sales. It enables retailers to share info with the supply. Bar coding is another crucial system retailers use, it is made up with a series of bars retailers can scan. It enables speed and efficiency.

Systems like the ones above are created to enable speed and efficiency in stores. As technology advances people have more and more option to shop online and use apps, people now can buy anything from anywhere and have it delivered the next day. This can affect stores as it may stop as many people coming in-store. Customer service will also change as there may gradually be a less of a need to have people working in store if there is a lower demand for customers. Social media has also become a huge way for River Island to promote their products and people now talk about brands online so it is important for River Island to have a positive online presence to increase sales. For example River Island has an instagram account which enables them to interact with the brand on a new level. Retailers can use tech to help gain them sales in store and also when stores are shut tech enables them to continue making sales 24/7. Stores are constantly competing to have the latest tech advancement’s in store to outdo each other as technology advances there will be more and more tech in stores so customer service might become less about people facing roles but tech might come into it on a new level.

New advances such as notifications from stores when you’re close to them and virtual mirrors seem to be the future of retail and will completely change the high street and will make marketing and tech a major point in stores.

In conclusion tech is ever-changing and River Island and other retailers need to constantly learn and adapt new tech into their stores and causes organisational change. KPI’s are crucial to retailers and are important for monitoring them and enabling retailers to use them to improve their underperforming stores and overall help their business to thrive, develop and grow.