Setting the Stage for the Holidays
Retailers Hone Systems and Work with Local Cultures to Make the Most of the Holiday Season
Holidays are a time to see family and friends. But for global retailers, they’re a time to reconnect with customers—and bring in serious money. The stretch between Diwali, Hanukkah, Christmas and the Chinese New Year (October through February, roughly) is payoff time after organizations have scrambled to stock warehouses, recalibrate store staffing levels and perfect online ordering systems. Before the rush begins, retailers need to complete projects covering everything from neutralizing cybersecurity threats to designing and installing front-window displays at flagship stores.
Sales and profit figures can hinge on on-time project completion. In the United States alone, holiday-related consumer spending reached US$626.1 billion in 2015, a 3 percent increase over the previous year, according to the National Retail Federation. When things go wrong—such as when shipping delays last year kept some packages from reaching U.S. shoppers by Christmas—retailers can lose a customer for life.
The holiday logistics game is fraught with risk. “Transportation is a critical and sensitive area to our business,” says Fabricio Corrêa, PMP, senior project analyst, Wal-Mart Brasil, São Paulo, Brazil. His IT projects focus on the retail giant’s logistics and supply chain in Brazil, where Wal-Mart has nearly 500 stores.
Prior to last year’s Christmas shopping season, Mr. Corrêa managed an eight-month, BRL1.3 million project implementing software to standardize Wal-Mart Brasil’s freight management system. Its goal was the ability to audit 100 percent of the organization’s shipments to guarantee freight payment according to its contracts. There was a can’t-miss deadline: The project had to be finished before the start of October to avoid disrupting Christmas sales.
“It was a complex project, so users and processes had to be very aligned in order to support the holiday distribution and avoid impact on the stores’ supply,” Mr. Corrêa says. To ensure alignment, he deepened the involvement of stakeholders from the organization’s finance department beyond what initial communication and integration plans stipulated. This proved valuable for validating accounting requirements.
Another challenge stemmed from Wal-Mart Brasil’s geographically dispersed stakeholders; its three business units each have their own freight management processes. It was important not to impose a one-size-fits-all solution, so Mr. Corrêa spent time talking with stakeholders in each unit. His team ultimately created a freight-management process that used a single tool, sharing the same database. At the end of the project, payment errors on freight shipments were reduced by 90 percent—freeing up resources to better serve customers during the holiday season.
A Ramadan Risk
In-store projects can deliver big benefits as well. At global organizations, success can flow from understanding the nuances of each region’s holiday customs—and knowing when it might be worth nudging people in a new direction. Jonathan Thoms, country co-worker care center manager, IKEA, Jeddah, Saudi Arabia, learned this last year when he suggested keeping his store open during the day throughout Ramadan.
Traditionally, most retailers in Saudi Arabia are open only at night during the monthlong Muslim holiday, which is marked by fasting from sunrise to sunset. But with IKEA setting aggressive sales goals for Saudi Arabia last year, Mr. Thoms, then a sales manager, decided to propose a project to change the norm. Grocery stores remain open throughout the day during Ramadan so people can buy food for the evening meal, known as iftar, which brings family and friends together to break their fast. Three or four months before the holiday began, Mr. Thoms proposed that the IKEA store in Jeddah should also open for shoppers looking to buy pots, pans or cutlery.
This is where stakeholder management skills came in handy. The store’s local managers resisted, saying that employees wouldn’t be willing to work before sundown. They also said Mr. Thoms didn’t understand the local culture of customers. “It was already a negative vibe in the meeting room with the local managers,” he said. Based on the managers’ feedback, the store management team decided to make the new daytime shifts voluntary. Many employees were willing to work during the day, if it was their choice to. Slowly but surely, local store managers bought into the change.
The next challenge involved food: At sundown the IKEA store would need to feed not only its own employees but also customers. So the store’s restaurant manager contracted with an airline food supplier to provide boxed meals that could be served to several thousand customers in just 40 minutes. “By having a super-low-cost iftar meal, people stayed in the store and shopped,” he says.
The benefits to the organization were resounding: The store broke sales records. This year, the other two IKEA stores in Saudi Arabia also opened during the day. Mr. Thoms’ main lesson learned? To win over critics, “listen, empathize and probe for suggestions that will give employees options. And don’t accept the naysayers’ excuses.” —Amy Merrick
NOVEMBER 2016 PM NETWORK
PM NETWORK NOVEMBER 2016 WWW.PMI.ORG