Techblog
CASE STUDY: Boosting Retail Productivity
In today's competitive retail industry, retailers must differentiate themselves by raising productivity and providing their customers with a unique shopping experience.
Besides being a major contributor of economic growth and job creation, the retail sector also plays a key role in shaping Singapore's image as a leading travel destination and an attractive place to live and work.
Yet, despite registering some $37 billion in operating receipts in 2010, productivity growth in this sector is still inching along at a snail's pace. The productivity, or value added (VA), per worker in the retail industry currently stands at $37,000, which is only 40 per cent of the VA for the economy as a whole. Recognising that productivity is the key differentiating factor for achieving success in a competitive sector, the government committed $86 million in 2011 to help retailers tap a range of tools and schemes to enhance productivity over the next five years.
Improving business processes with technology
As part of the retail productivity plan, SPRING Singapore aims to drive technology adoption in the sector to improve business processes and raise the VA per worker by about 25 per cent by 2015. Technologies such as enterprise resource planning systems, integrated point-of-sales systems and customer relationship management systems can help retailers streamline their operational processes.
For example, department store Robinsons developed an automated system that has improved the efficiency of its procurement process. The system, which allows its suppliers to process all orders and invoices on a single interface, has resulted in a reduction in processing and invoice matching times by 33 and 95 per cent, respectively. Meanwhile, supermarket chain NTUC FairPrice has implemented electronic shelf-labelling systems in some of its outlets. These systems have eliminated the need for staff to manually slot printed price labels onto the shelves, saving the store at least
50 man hours per month.
Developing highly skilled workers
Besides technology adoption, retailers can also raise productivity by enhancing the capabilities of their staff.
"The high-touch nature of retail requires human resources that cannot be easily replaced by technology. The natural solution is, therefore, to enhance staff productivity," says Mr Tan Jek Min, Director at the Singapore Institute of Retail Studies (SIRS). For home-grown footwear and accessories retailer Charles & Keith, staff training is an important aspect of its operations. The company aims to train every employee on the role that they can play in improving work productivity.
"To enhance the retail process, the company will be introducing measurable KPIs and compulsory training to equip all frontline staff with the skills and knowledge to boost productivity," shares Mr Tan.
Companies can take advantage of the wide range of productivity programmes offered by SIRS, including Retail Workforce Skills Qualification (WSQ) modules and the Productivity Manager Programme, to upgrade the capabilities of their staff.
Improving service standards
Providing a positive customer service experience is another key ingredient of success.
"In retail, the difference between a ‘transactional’ service and one with the ‘wow’ factor depends heavily on the service
delivered," notes Mr Tan.
Spearheaded by SPRING, the National Trades Union Congress, Workforce Development Agency, Singapore Tourism Board and the Institute of Service Excellence, the Customer-Centric Initiative (CCI) offers assistance for retailers to upgrade their service standards. Retailers can receive funding support of up to 70 per cent to develop service strategies, leverage technology innovation and conduct service audits under the CCI.
The Soo Kee Jewellery Group is one company that has seen an improvement in profits and productivity after embarking on the CCI. The company, which has implemented a customer relationship management system and organises frequent focus group sessions to gather customer feedback, saw its productivity rise by 20 per cent and its sales increase by 33 per cent.
Take action to boost productivity Despite the potential benefits, Mr Tan believes that productivity may not be at the top of the agenda for many retailers due to a lack of resources and knowledge.
"Many retailers are slow to embrace productivity because of a misconception of what it entails. The lack of resources is also a challenge for them. Retailers need awareness, knowledge and know-how," says Mr Tan.
To help businesses to "Be Aware, Get Trained and Take Action", enterprises can make a first stop at the Productivity@Work portal. On this website, businesses can use the Integrated Management of Productivity Activities (IMPACT) assessment tool to identify gaps in productivity management. They can also get advice from advisors at five Enterprise Development Centres (EDCs) who can assist them in productivityrelated matters and projects.
To find out more about productivity training programmes offered by SIRS, call 6222 7477 or email upskill@sirs.edu.sg.
For more information on IMPACT, log on to www.productivity.business.gov.sg or visit any of the Enterprise Development Centres (EDCs) today.
Reproduced with permission from SPRINGnews September 2012 Issue. Published by SPRING Singapore.