Retail Industry KPIs that Matter

SL Associates

Retail Businesses Run Better on NetSuite.

Retail Industry KPIs that Matter

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360o Visibility & Actionable Insight

Increased 30% - 50%

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Improved Results from Businesses Like Yours

Financial Management

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Business Agility

Improved 20% - 30%

Reduced 30% - 50%

Gross Margin Performance Improved 2% - 5%

Time to Close Financial Books

Reduced 40% - 60%

Audit Time

Reduced 10% - 40%

KPI improvements are estimates based on discussions with NetSuite customers

Increased 30% - 60%

Accounting Staff Productivity

Reporting Time and Resources

Business Visibility


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Customer Loyalty – Sales Growth

Online Conversions

Increased 10% - 35%

Repeat Customer Sales

Improved 30% - 60%

Customer Visit Frequency

Improved 10% - 20%


Improved 3% - 5%

Cart Abandonment Rate

Reduced 10% - 20%

Time to Process Online Orders

Reduced 30% - 50%

Store Experience

Marketing and Campaign Planning

Enhanced ecommerce and Web Experience


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IT Support Resource Costs Reduced 30% - 50%

Cost to Purchase and Maintain Servers

Reduction 100%


Business Continuity/Disaster Recovery Costs Reduced 50% - 75%

IT Resources Re-deployed to ecommerce site development

Increased 25% - 50%

IT Management and Resources

Automated Inventory Markdowns Reduced 20% - 40%

Inventory Management – Out of Stocks

Reduced 5% - 25%

Merchandising and Inventory Planning

Faster Resolution of Customer Issues

Improved 30% - 50%

Customer Service and Experience

Cloud-Based Business Solutions Suite Delivers Key Performance Improvements Real-time business visibility and end-to-end business management

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Many firms—including those in the retail sector—have achieved more efficient and agile business operations by using cloud-based ERP

Executive Summary

The retail sector has a well-earned reputation as one of the most challenging industries for participants to navigate successfully. Retailers

– be they traditional brick and mortar companies, online sellers or, often, a combination of the two – must manage complex supplier

relationships and inventories while also catering to the sometimes mercurial wants and needs of their end customers. For retailers,

“supply and demand” is more than a trite catchphrase. Rather, it encapsulates an ever-shifting and intricate relationship that demands

real-time data, accurate forecasting and efficient operations if the retailer is to generate profits in a business characterized by razor-thin

margins.

In short, retailers truly need a 360-degree view of their business, encompassing suppliers, consumers and the many processes that

connect the two. With little room for error, retailers must not only track critical operational metrics closely, they must continually strive

to make their processes more efficient and effective.



Addressing Retail Industry Challenges Aligning business operations to meet these challenges

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Average Deal Size Reduction in DSOs

External Systems Customers

CEO CFO SRP ERP

PROJECT MANAGEMENT

WAREHOUSE MANAGEMENT

CORE BUSINESS

CUSTOMER MANAEMENT Sales Rep/ Manager

Shipping Manager ORDER MANAGEMENT

INVENTORY GLOBAL FINANCIAL MANAGEMENT RESOURCE MANAGEMENT MANAGEMENT

BILLING MANAGEMENT

REVENUE MANAGEMENT

TIME & EXPENSE

MANUFACTURING

Ecommerce Manager

Support Manager SUPPLY CHAIN

MANAGEMENT PROJECT ACCOUNTING

Vendors Partners

Unlimited Expansion Revenue Growth

Intelligent Order Orchestration


Supplier-side Challenges

• Product availability and pricing: All but the largest of retailers are at the mercy of their suppliers, who can set prices close to retail selling prices and whose products may not always align with changing customer demands.

• Incoming inventory management: Retailers need to maintain inventory levels and mixtures aligned with the current and forecasted consumer preferences, which aren’t always the same as the suppliers’ preferences and product lines.

Challenges

Buyer-side Challenges

• Outgoing inventory management: Retailers must have good visibility into inventory levels and purchasing trends to ensuring that inventories are stocked to meet both current and future demands, while limiting overstocking and forced discounting.

• Customer satisfaction: In addition to ensuring that they have the right product selection and price points, retailers must work to engender customer loyalty while also increasing the number and value of products each customer buys.

• Ecommerce operations: As higher percentages of retailers enter the online selling realm, they must deal with everything from cart abandonment rates to rapid and accurate processing of orders and shipments.


Business Visibility Business value for company management

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Before NetSuite With NetSuite



Increase in 360o visibility and knowledge of operations

30% - 60%

Improved business agility

20% - 30% Reduction in reporting time and resources by

30% - 50%

• Siloed applications and data provided an incomplete view of business and customers

• Errors due to lack of automation and integration between applications

• Inability to quickly assess and respond to all aspects of a business in response to various customer opportunities due to siloed applications, lack of integration and data latency

• Different applications required to support different channels impact opportunities

i

• Difficulties in getting reports in a timely manner, often days after they are needed

• IT required to develop custom reports

• Significantly improved real-time visibility into all aspects of the business, allowing faster strategic decision making and continuous year-over-year improvements

• Much greater visibility into customer purchases and interests through multiple channels

• Availability of 360o view of customers and operations

• Integrated approach to run business using different sales channels – stores, online, etc.

• Significantly improved ability to scale and support company growth without adding staff

• Business managers can now run their own reports and analysis much more quickly without depending on IT

• Real-time drill down to the lowest level of detail increases ability to act in a timely manner

• Users able to build their own custom reports


Financial Management (1 of 2) Business value for revenue analysis and management

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Improved accounts receivables

Improved gross margins over time

2% - 5%

Improved budgeting, financial planning and forecasting

• Excessive time required to identify and post collections data

• Error prone Excel spreadsheet-based operations

• Lack of ability to monitor product margins due to lack of real-time information, campaigns and analytics

• Varied sources of information and metrics and lack of integrated planning processes

• Disparate business solutions made it impossible to tracks sales and do forecasts

• Inefficient, manually intensive Excel processes

• Significant increase in accuracy for accounts receivables

• Automated and timely invoice generation and mailing to customers

• Integrated POS and credit card solutions

• Ability to monitor product margins through integrated marketing and campaigns for various channels

• Integrated EDI capabilities help with getting better wholesale prices

• Reduction is discounting through capabilities to do better marketing and campaigns

• Ability to track sales by SKU numbers

• Integrated ability to do forecasting and analytics


Financial Management (2 of 2) Business value for accounting department

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Reduced time to close the financial books

40% - 60%

Reduced audit time

10% - 40%

Increased accounting staff productivity

30% - 50%

• Extensive time spent on reconciliations, especially with multi-channel, multi-region and multi-currency

• Difficulty in translating web-sales related currency between regions lead to errors and time consuming financial consolidation

• No central repository for the information required to support audits

• Inefficiencies as a result of manual work and processes

• Use of spreadsheet based accounting

• Earlier availability of financial results through faster period-end processes and more accurate reconciliations

• Ability to do monthly/annual financial book close and analysis due to availability of real-time data

• Since all the information required for audit is available in NetSuite, companies see significant reduction in audit time required

• Real-time information and analysis to lowest level of details provides transparency and accuracy for audits

• Increased efficiency through integrated and automated reconciliations and reporting

• Support 2-3X company growth with fewer or same accounting staff

Improved store performance


Enhanced Store Experience Business value of integrated and real-time store experience

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• Analytics provides ability to monitor real-time store performance vs. plan (by store) to meet revenue goals and sales quotas

• Identify variances through drill-downs and remedy issues

• Real-time access to inventory by store and warehouse helps optimize on-shelf availability

• Enables much better inventory management to reduce out of stock items and backorders

• Reduced need for promotions and improved margins

• Siloed applications and latent data makes it difficult to have full visibility into store performance and take corrective action

• Lack of efficient way to monitor on-shelf availability at different stores

• Lost sales opportunities and reduced customer satisfaction

Optimized on-shelf product availability

• None or separate customer loyalty solution that is not integrated

• Lack of integrated customer forms solution or through Excel

• Ability to do customer loyalty program from within NetSuite with loyalty cards, customized emails campaigns

• Use of contact forms reduces errors by getting information directly into NetSuite reducing need to duplicate data

Improved customer loyalty program related sales growth

3% - 5%

Reduced time to process online orders

30% - 50%


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• Improved checkout experience with integrated shipping information and shopping cart enhancements

• Integrated back-end allows orders to be directed to correct warehouse and shipping services

• Availability of complete purchase information (including inventory, shipping costs, etc.) to make purchase

• Customer information and cart history easily available to follow-up with automated emails

• Increased sales potential

• Ability to increase the number of online SKUs without additional resources

• Reduction in errors even with increase in number of SKUs

• Different channels and products required separate systems leading to inefficiencies

• Lack of integrated shipping systems lead to poor checkout experience

• Lack of complete information to make purchase

• Lack of complete customer information • Complex checkout processes

• Lack of integrated front-end and back-end systems led to increase in errors, especially as the number of SKUs available online increases

Enhanced eCommerce and Web Experience Business value of integrated eCommerce and back-office solution

Increased online conversions with checkout enhancements

10% - 35%

Reduced cart abandonment rate

10% - 20%

• Access to accurate customer information, demand, sales trends along with analytics

• Targeted marketing programs and promotional offers


• Integrated marketing and campaigns to increase additional transactions/customer

• Highly targeted promotions based on purchasing history and buying preferences

Marketing and Campaign Planning (1 of 2) Business value of integrated cross-channel marketing management

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Improved repeat customer sales

30% - 60%

Improved customer visit frequency

10% - 20%

• Difficulty in understanding customer demand and buying patterns

• Lack of real-time information prevented timely response to customer preferences

• Lack of integrated solutions • Latent data leads to campaigns that are

not effective

• No loyalty program or separate programs that weren’t integrated

• Lack of integrated customer forms solution or based on Excel

• Ability to do customer loyalty program from within NetSuite with loyalty cards, customized emails campaigns

• Use of contact forms reduces errors by getting information directly into NetSuite reducing need to duplicate data

Improved customer loyalty program

• Development of mobile app linked to front-office and back-office solution (e.g., to allow customers to interact with salesperson and place an ecommerce order in the store through the mobile app)

• Targeted marketing programs and promotional offers through mobile app


• Marketing campaigns for store customers to buy on the web

• Integrated marketing and campaigns to increase cross-channel sales and fulfilment (i.e., sell online and ship to store, etc.)

Marketing and Campaign Planning (2 of 2) Business value of integrated cross-channel marketing management

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Improved customer interactions through mobile apps

Improved cross-channel sales and fulfilment

• On support for mobile apps linked to ecommerce solution

• Lack of flexibility to do development, customizations and workflow changes easily

• Lack of integrated cross-channel solutions with a single back-end ERP solution

Improved upsell and cross-sell programs

• A 360o view of customer enables new marketing campaigns

• Ability to do customer loyalty program from within NetSuite to increase revenues

• No loyalty program or separate programs that weren’t integrated

• Lack of integrated customer forms solution or based on Excel


Merchandising and Inventory Planning (1 of 2) Business value for customer segmentation and product planning

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Improved customer satisfaction

Reduced automated inventory markdowns

20% - 40%

• Lack of integrated solution and data lead to inefficiencies and disgruntled customers

• Lack of flexibility to make customizations through easy-to-use scripting

• One integrated customer record that is updated in real-time

• Faster response to customer inquires and support calls due to the ability to have a 360o

view of customer

• Ability to use scripting to create rules to automate and minimize unnecessary markdowns

• Ability to automate discontinued item mark-down without need for manual price adjustments through use of scripts

• Enablement of automated fraud control to flag suspicious orders without manual intervention

Improved inventory planning and customer management

• Difficult to monitor real-time status of customer orders and related inventory

• Inventory availability, utilization and expertise based on gut feel

• Streamline omnichannel and resources

• Ongoing monitoring of customer orders, inventory and resource required


Merchandising and Inventory Planning (2 of 2) Business value for customer segmentation and product planning

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Improved inventory management

Improved inventory turns

• Lack of real-time data lead to inefficiencies • Limited capability to add and manage SKUs • Out of stock items had impact on company

performance and customer satisfaction

• Lack of integrated solution and real-time data, limited ability to get products to customers in a timely manner – impacting sales and customer satisfaction

• Inventory orders based on NetSuite data and market trends not gut feel

• Enables much better inventory management to reduce out of stock items and backorders

• Reduced need for promotions/discounts and improved margins

• Integrated solution helps plan and deliver targeted products across different channels

• Real-time insights by product and channel help improve customer service

Reduced out of stocks

5% - 25%

• Difficult to monitor real-time status of inventory

• Lack of integrated front-office and back-office solution make it not possible to offer merchandizing alternatives

• Enables better forecasting due to drill-down capabilities into categories and sub-categories

• Enable detailed orders of price points, size, color, etc. in an automated way

• Ability to easily substitute alternate brands


Customer Service and Customer Experience Business value of integrated front-office and back-office execution

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Improved customer service and operations

Improved resolution of customer issues

30% - 50%

Improved accuracy of customer transactions

• Lack of integrated solution and data lead to inefficiencies and disgruntled customers

• Long response time to customer issues

• No good way to track customer questions/issues and their resolutions

• Lack of availability of real-time customer data leads to higher percentage of systematic errors

• Customer service queries implemented through NetSuite case process

• Workflow scripting solution help automate and direct request to the appropriate person

• Single customer record with purchase history and issues helps track and resolve customer satisfaction issues

• Faster resolution of customer queries and issues such as shipment or returns

• Elimination of systematic errors with single customer record

• Improved customer experience and higher customer satisfaction


IT Management and Resources Business value for company operations

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Reduced number of IT support people, IT cost savings of

30% - 50%

Eliminated the need and cost to purchase and maintain servers

100%

Reduced need for business continuity / disaster recovery solution

50% - 75%

• IT resources needed to implement, maintain and update on-premises ERP solutions

• IT resources needed to install and maintain server hardware and software

• Separate ecommerce and ERP systems

• Capital expenditure required to acquire and maintain servers for on-premises ERP application

• Ongoing management and maintenance costs

• IT resources and infrastructure needed to support business continuity/disaster recovery

• Implementation is complex and costly

• Cloud-based solutions eliminate need for internal IT staff to support ERP application, on-premises servers

• Faster to implement for productive use of ERP solution

• IT resources re-deployed to ecommerce site development and support

• No need for IT capital expenses as NetSuite is a cloud delivered solution

• Greatly reduced management and operational costs

• Business continuity/disaster recovery are a “built-in” benefit of the NetSuite SaaS solution

• NetSuite has redundant data centers to support business suite and data availability at no additional cost to customers

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Retail Industry KPIs that Matter