Using Lean Methods to Avoid Common Mistakes in Retail Sales
Chile | 14 December 2022 | Press LATAM | Originally published in Spanish
An expert in Chile in lean management, a Japanese philosophy that has been successfully applied in large industries around the world, provides the key to a more efficient and customer-focused operation.
Inflation and, therefore, the lower purchasing power of people generates a contraction in consumption. This is precisely what is happening in Chile for various reasons. The question is, is it possible to increase retail sales in this environment?
Gustavo Norambuena, Regional Director for Latin America of Shinka Management, a global lean management consulting company with a regional headquarters in Santiago, explains that the lean methodology provides tools applicable to approaching this scenario in a much more efficient and productive way.
“The processes in retail are well defined. The problem is in the implementation of the processes and in the flow of information. The lean methodology helps to avoid mistakes that not only lead to loss of sales, but can also generate additional costs for the company, leading to a negative impact on the bottom line,” says the expert.
What are the most recurrent problems in retailing that interfere with sales? Wrong or missing price labeling on products, overstock in warehouses, out-of-stock products, problems in the flow of information between product managers and sales managers, offers that are only known at checkout, absence of products on the sales floor that are in stock in warehouses, and so on.
“Lean management helps to increase sales by making the customer’s visit to the store more effective. For example, it converts the time spent by the customer in the store into a productive experience, by not wasting time waiting for the security tag of a product to be removed, to verify a price or waiting in a long line to pay. All this avoids losing a sale due to the product or associated service not being available at the time the customer required it,” Gustavo comments.
Focus on the customer
In addition, this methodology, emphasizes that the root cause of these types of problems, whether in retail or in other industries, is that the process was designed without the customer’s needs as the priority.
“It is vital to know your customers, to identify what they are looking for and what they value. In lean, the Just-In-Time concept is used to identify what your customer asks for, how they ask for it, when they ask for it, and in what quantity, and under what conditions they require it. This information is vital to apply in the retail operation – and not only in the marketing stage,” says Gustavo.
The design of the store layout is also vital to generate sales. “Here there is always a struggle between making the square meter profitable or making life easier for the customer. That is, having the concept that the more a customer moves around the store, the more likely he/she is to continue shopping, versus generating spaces designed to provide the customer with a fast and efficient experience during his/her visit to the store.”
An example of this is the location of the “in-store pick-up” module for online purchases, which, from the customer’s point of view, should be near the store entrance or right in the parking lot available via a window, but this is not always the case and sometimes the customer has to walk through the entire store to get there.
“Many times certain actions are implemented to facilitate processes, not for the customer but for those who work in the store. It is always important to review how you are really focusing on your customer’s needs, because if you don’t, someone else will do it for you,” Gustavo concludes.
About Shinka Management
Shinka Management is a global lean management consulting firm, with a regional office in Santiago serving Latin America. The company specialises in the transfer of Japanese management knowledge to industry worldwide. Shinka Management’s lean consultants support clients in over 60 countries with lean consulting, lean training and lean study tours to Japan.