COMPARISON OF STORE OPERATIONS

 

 

 

 

 

  

    

  Claire Dillow, Lindsay Schutter, Lacey Jensen,

Vanessa Segura & Heidi SpechtOctober 28th, 2010

Store Operations

Midterm PaperAs a whole, the companies interviewed took a strong stance of

efficiency and of ensuring that their stores reached their highest

earning potential. The policies discussed are developed and enforced

to ensure absolute guest satisfaction and profitability. The companies

interviewed were: Club Monaco, DSW, Zara, Romy and Sur la Table.

The following pages will give a brief company overview for each

company interviewed.

 

DSW opened its first store in July 1991 in Dublin, Ohio. In

1998,Value City Department Stores, Inc. purchased DSW. In

December 2004, Retail Ventures, Inc. consolidated several brands.

Until July 5, 2005, DSW operated as a wholly

owned subsidiary of Retail Ventures, Inc. who continues to hold 60%

of the outstanding shares of DSW.  Months prior to the Initial Public

Offering, DSW changed its name from Shonac Corporation to DSW

Inc, which stands for Designer Shoe Warehouse.Today, DSW operates

300 stores in 37 states.

In 2006, the IT departments from Retail Ventures Inc. and

DSW Inc. were split off into a separate LLC called Brand Technology

Services LLC (BTS). In early 2008 DSW launched its e-commerce

website www.dsw.com.

A Passion For Shoes, DSW is the shoe shopping destination for

style-conscious women and men who appreciate value. With

thousands of shoes, great prices, and an ever-changing inventory, the

brand captures the imagination of shoe lovers nationwide.

Encouraged by the award winning loyalty program DSW Rewards,

these passionate shoppers return time and again to a treasure-filled

environment they call “addictive.”

Club Monaco is a dynamic, international retail concept that

designs, manufactures and markets its own Club Monaco clothing,

accessories and home collection. Each season, Club Monaco offers

men’s and women’s updated classics and key fashion pieces that are

the foundation of the modern wardrobe. Products range from clothing

and accessories to eyewear, watches, sunglasses, and cosmetics for

men and women. The brand’s signature clean and modern style gives

classics an update through great design and current sensibility. Club

Monaco is the lifestyle destination for today’s urban

professional.           The company was founded in 1985 and is based in

Toronto, Canada. As of May 5, 1999, Club Monaco Corporation

operates as a subsidiary of Polo Ralph Lauren Corp.Currently Club

Monaco operates 66 stores throughout North America and has

recently opened stores in Hong Kong Seoul, Korea and Dubai.

Zara is owned by Inditex. Inditex is a global specialty retailer

that designs, manufactures, and sells apparel, footwear, and

accessories for women, men and children through its chains around

the world.  Zara is the largest and most internationalized of the six

retailers that Inditex owns:  (Zara, Massimo Dutti, Pull & Bear,

Bershka, Stradivarius, and Oysho).  By the end of 2001, Zara operated

507 stores around the world, including Spain.

Zara was able to make major investments in manufacturing,

logistics, and IT, including establishment of a just-in-time

manufacturing system and a 130,000 square meter warehouse close

to its corporate headquarters.  Zara manufactured its most fashion-

sensitive products internally and its designers continuously tracked

customer preferences and placed orders with internal and external

suppliers based on this information.  Due to its unique needs, Zara

chose to internally develop its business systems.  Zara is now able to

originate a design and have finished goods in stores within weeks for

entirely new designs and take even less time for modifications of

existing products. 

The first Sur La Table store opened in Seattle's Pike Place

Market in 1972 selling hard-to-find kitchenware imported from

France. Since then the company has expanded to more than 75 stores

nationwide, a direct-mail business distributing millions of catalogs

each year, an e-commerce site, a gift registry, and a cooking class

program. Sur La Table continues to carry many of the same products

from France that it carried when it opened, but now offers tools from

around the world to prepare any cuisine. Sur La Table remains

committed to its roots by continuing to provide exceptional customer

service and a broad assortment of premium-quality products. Sur La

Table headquarters are located in Seattle, Washington.

Mission Statement: “We are the culinary destination for artful

entertaining and cooking. Three decades of dedication to the culinary

legacy.”

Romy started in 2005 with owner Michael Witz naming the

individual store after his daughter. Originally from South Africa his

extensive retail background includes helping a large retailer called

"mr Price" grow from 30 stores to over 300. Working with his partner

Danny Chu they've grown the company to now include over 19 stores

through Washington, Oregon and Arizona. The idea of Romy was to

have a lower price point store with styles similar to those of

anthropologie and other romantic like style stores. The thing that sets

Romy apart from other stores is the asian and European influenced

pieces and a more personal store experience. Boutique like styles and

service without the prices.

Motto: “Luxury for Less”

 

            The following sections summarizes the various answers

received from interviews. As many answers were similar, they were

compared. If any answers varied, they were highlighted and contrated

with the other companies.

 

Hiring, Training, and Dismissal techniques

 

            Hiring for all five companies starts at the bottom, with entry

level positions. No experience is necessary to be a sales associate in

any company, but strong customer service skills and passion for the

products are the things sought after most frequently. Zara also

requires flexibility for their associates due to their variability in

products and fast fashion mentality. Romy invites all potential

employees to fill out applications online with an area for inputting

their resume, but like all of the other businesses accepts paper

applications and resumes. When foot traffic for applicants is slow in

the store, ads are placed in local papers for Sur la Table,

craigslist.com for Romy, and via the website for Zara. Interviews for

sales associates are conducted for all stores by managers: assistant or

general. Romy starts with a phone interview and follows up with a

one-on-one meeting, while Zara hosts two in person interviews with a

offer for employment made after the second interview conducted by

the store general manager. 

            Training for all stores is increasingly structured and clear

goals are placed for each employee. Basic customer service skills are

also taught to new employees if the skills are not already possessed,

but it is assumed that each individual understands the basics of

handling customer interactions. DSW focuses on three main parts to

their two week training process: stock on the floor, back stock, and

register training. Sur la Table has rigid employee evaluations at 30,

60, and 90 days to make sure the goals discussed in training area are

reached by those time frames. Zara creates an environment that is

welcoming and straight forward for each new trainee. They genuinely

want daily duties and responsibilities to be clear and concise with

variations to be handed down by management. Each training shift at

Zara starts and ends with a review and re-group session to maintain

unambiguous standards.

            Dismissal procedures are consistent across all five companies,

with documentation of past infractions posted in the employee’s file as

write-ups. These write-ups provide accurate documentation or proof

of inappropriate behavior. Sur la Table upholds a three strike policy,

three negative evaluations or write ups results in immediate

termination. Evaluations are the opportunities for having tough or

uncomfortable conversations with employees about their

performance, in order to choose one of two paths: the right track or

dismissal. Zara finds termination to be rare inside the company, due

to the positive work environment. Club Monaco evaluates employees

and uses scheduling to reflect their performance. If an employee is

performing sub-par then their hours are cut until improvement is

seen, the individual quits, or is terminated.

Inventory and Loss Prevention Procedures

            Physical inventory counting is conducted at least yearly for

every business. Zara has a high inventory turnover in each store;

therefore inventory is taken every three months, in essence quarterly.

Romy and DSW take inventory twice a year where shrinkage figures

are computed. Sur la Table uses an outside agency to count physical

inventory once a year, due to a slower inventory turnover rate of 2.5

times a year. DSW uses a computer system to keep track of inventory

levels in stores across the country, with physical counts done twice

yearly. Club Monaco takes inventory figures and calculates shrinkage

into a percentages as well as dollars lost per day in order to look at

their loss in real time to assess solutions.

            Loss prevention is handled differently for each business. Sur la

Table has a wide price point for their products and finds that theft is

not an issue from external sources, but rather has had a significant

issue with internal theft. They therefore have learned from past

incidences and has a strict zero tolerance policy for theft by

employees of any kind. As a company, shrinkage rates are relatively

low, and take a stance of not offending their customers by having

security guards and realize that theft is just part of the business.

Zara’s clothing has a relatively low price point and they, like DSW,

use their employees as the first line of defense against external theft.

DSW finds that having active sales associates located for visible

safeguards is their best line of defense to ward of potential loss.

Store Maintenance Policies

            Light janitorial services are executed by sales staff daily to

ensure the cleanliness and appearance of all of the stores. These

duties include garbage maintenance, dusting, sweeping and

vacuuming, window cleaning, bathroom sanitation, and overall

organization and stocking of the products. DSW, Club Monaco, Romy,

and Zara all have corporate liaisons that will help with any larger

issues of building maintenance like construction, repairs, and

emergencies. Sur la Table relies mainly on an outside janitorial staff

to ensure the cleanliness of the store, not their direct sales associates.

In turn, their associates are required to maintain all working displays

as to not compromise their effectiveness. It is the job of the manager

on duty, for all businesses, to check the execution of all the in store

cleaning policies.

Crisis Management

            First and foremost, DSW and Club Monaco had no plan for

dealing with the unknowns of a business. Zara has a unique stance on

crisis management, because of their vertical integration, and their

lack of using a wide variety of external sources for product, they are

able to maneuver ways around any crisis they have seen so far. They

produce the majority of their products themselves, and the business is

almost seen as a service industry because of the way they are

structured. There is no rigid corporate structure explaining what

products need to be stocked, so there is great flexibility in the way

they are allowed to merchandise their items, is essence giving them

paths to avoid shipping, manufacturing, or unforeseen crises. Romy,

as a company, understands that there are times where problems are

out of their control. They train their employees on reaction, versus

prevention, of crises, and how to remain calm and rational. Sur la

Table has developed strong relationships with vendors and

manufacturers, to be able to negotiate ways around shipping errors,

or defects with merchandise. They also invest in insurance to help

with shipping damage or lost items.

Daily Duties

            Because of the variety of the job titles of each person

interviewed, their daily duties have obvious differences. The store

managers of Zara, Sur la Table, and DSW, are responsible for sales

associate time management, overall customer satisfaction, execution

of visual merchandise orders, stocking levels, theft, cash tracking and

totaling, and interactions with district and regional managers. Club

Monaco’s district manager works directly with their store managers

to obtain status reports of all locations. It is their job to discuss

weaknesses, strengths, and responsibilities inside each store to

improve profitability. Romy’s operations and human resource

manager wears many hats inside the company and their daily duties

are often markedly different from day to day. Overall in any given day,

they may deal with numbers driven conference calls with area

managers, marketing promotions, visual merchandising, store visits,

updating policies and procedures, training, but always copious

amounts of paperwork.

Employee Scheduling

            Employee scheduling for all stores is done at the retail level.

These duties are carried out by the store or assistant managers and

are executed with the input of last year’s sales levels, holiday or

promotion consideration, strengths and weakness of each employee,

as well as budget and profitability of the store as a whole. Individual

employee needs are taken into consideration, but are not the ending

factor for deciding staffing levels.

Supply Chain Management

            All of the stores, except Zara, have a traditional supply chain

for their goods. Corporate planners and merchandisers direct the

season’s image to the buyers. Buyers, determine the product depth

and breadth for the stores, including working with manufacturers,

traditionally overseas, and vendors for shipping. Store and regional

managers keep track of the product placement and selling rates to

help plan for the amounts of product needed inside each location.

Merchandise is then ordered, and manufactured, traditionally from

international sources and shipped either directly to the store or to a

warehouse for distribution. Zara has a unique supply chain, not

traditionally seen in retail markets. Unlike their competitors, Zara

starts with in house designers that create the vision of the next

product of the company, from there they work with their own

manufacturers, either in house or contracted, to produce their own

goods traditionally in Italy. From there, lead times are extremely low,

and products are shipped directly to their international stores or to a

warehouse for their United States stores awaiting quick distribution.

 

WORKS CITED

http://www.surlatable.com

http://www.clubmonaco.com

http://dsw.com

http://romystyle.com

"INDITEX Group - Timeline." Grupo INDITEX - Inicio. Web. 04 Nov.

2010. <http://www.inditex.es/en/who_we_are/timeline>."Zara News and Facts History - Columns - News - Fashion News, Jobs, Fashion Career, Directory, Job Board FashionUnited, Network, Design, London, UK." Fashion News, Jobs, Fashion Career, Directory, Job Board Fashion Jobs, Network, Designer, London, UK. Web. 04 Nov. 2010. <http://www.fashionunited.co.uk/News/Columns/Zara_news_and_facts_history_200809286206>.