Branch analytics – insights to help lay new foundations for performance management
17 June 2016
Many suppliers to the construction industry in the UK operate a large network of branches across the country. Most will show variations in performance from branch to branch. Understanding why one store is doing better than another is, of course, critical to manage the overall performance of the network. But achieving a clear picture of the reasons behind the differences is far from straightforward. And the growth of digital channels makes it even more complex.
Of course, comparing branch performance on the basis of raw numbers such as sales per square foot is the simplest way. But it won’t provide any insights into what is really behind the superior results that one branch delivers. Without the ability to strip out contextual factors that may influence sales volumes, it’s impossible to tell how well a specific branch is managed compared to any other. What’s more, the development of digital channels for retail makes analysing branch performance even more complex as the role the store plays is changing dramatically. For suppliers to the construction industry, the advent of online means a builder who may have previously developed a relationship with a particular branch no longer has any need to interact in-store. They can order what they require online, drive to the loading bay and collect their supplies. What’s required of the branch is changing. But how its performance is assessed is stuck in the analogue world.
Assessing and managing branch performance using the traditional regional approach is also no longer sufficient. In order to understand relative performance, and glean the insights that can support the right interventions to improve sales, requires considering a much broader range of factors. That might include store layout, ease of access, the extent of local competition, local spikes in activity in terms of large construction projects boosting demand and so on. All these external factors will have an impact on branch performance but are invisible to traditional analysis. Branch analytics takes data from all these influences – and more – into account to create peer groups of branches that enable comparisons based on actual performance, stripping out the contextual factors that would otherwise distort an effective comparison.
Having that clarity in place enables a business to start examining the data from any specific branch to understand the drivers of performance and then use the resulting insights to start making targeted changes that can improve sales and grow profits within any individual branch. Armed with those insights, it’s possible to create individual programs of coaching and training that can help branch managers make the changes that will deliver results. The wealth of insights generated from advanced analytics enables attention to focus on key relevant details. For example, how pricing can affect profitability or the changes that could be made to the customer experience that will drive new ways to cross-sell. Analytics can also reveal new patterns of consumption. A branch’s declining sales, for example, may appear at face value to indicate a drop in management performance. However, that conventional analysis may overlook the fact that in the same period the volume of goods ordered online and collected from the store has risen considerably. By understanding that this specific branch has evolved into something with a closer resemblance to a fulfilment centre, it’s possible to manage and resource it in new ways that make the most of changing customer behaviour.
Digital is reshaping how, where and when customers buy. Branch analytics offers the opportunity to ensure that physical suppliers can adapt and evolve their store networks in line with those changes – setting a new course that maximizes the combined impact of assets online and on the ground.