Why retail success is more about lifecycle than location

Retailers that employ store lifecycle management can optimize efficiencies across their entire business to unlock value.

In brief

• Identifying impactful opportunities can streamline retail operations.
• Purpose-driven design can transform retail layouts into seamless shopping experiences.
• Adopt a data-driven approach to stay agile and adaptable to market changes.

What is store lifecycle management?

SLM takes an integrated and holistic approach to improving the efficiency of the many moving parts of a business, as well as the ways they work together. That means taking the often-fractured processes of store operations and finding efficiencies and strategies to radically reduce friction. SLM frameworks — the strategic and systematic processes that identify and implement the changes required for success — tackle a diverse service ecosystem covering technology, finance and accounting, data analytics, supply chain management, procurement and real estate.

How to get started with SLM

Successful SLM will help ensure that all facets of a store’s operations are aligned and optimized. Leading-class frameworks begin with addressing two key objectives: First, identifying the right opportunities across operations, technology and departmental functions to create process change. And second, creating real and actionable data-driven insights to enable strategically sound and informed business decisions at every level of the business. Done right, this creates efficiency that can drive strategic growth in the most impactful areas and give retailers the adaptability and data-backed nimbleness to anticipate and respond to market changes and maintain a competitive edge.

Three-step SLM methodology

As your business considers an approach to SLM, look for an external resource that can work alongside you and guide your operational leadership in these three key ways:

Implementing a comprehensive SLM framework

The three-step methodology for transformation sets the foundations for effective SLM, but it is just the beginning. Implementation of the framework recommendations fall into six stages: strategize and plan, design and construct, prep and launch, operate and maintain, redesign and renovate, and closure and exit. Together, these optimized processes can deliver comprehensive value and drive sustainable growth for your retail business.

1. Strategize and plan stage

Here, selecting optimal store locations is informed by in-depth market research into consumer behavior and a competitive analysis. This phase reshapes the store’s presence to resonate with important target consumers. By reconsidering consumer shopping habits to plan store layouts, product assortments and services, stores can more accurately cater to shoppers’ expectations and enhance their overall store experience. Budgeting for long-term capital investments will help ensure financial resources support the brand’s strategic goals. According to the National Restaurant Association’s Restaurant Success Report, 2022, thorough market research for new locations makes it 60% more likely for location success in the first three years.

2. Design and construct stage

The design of the store is meticulously crafted, at this stage, to reflect the brand’s identity, with an emphasis on creating an environment that optimizes operational efficiency for store employees while fostering a positive customer experience. The construction phase prioritizes sustainability and cost-effectiveness and is designed to meet consumer-centric goals, including easy navigation, interactive displays and technology-enabled services to engage shoppers and create convenience. Locations designed with optimized layouts and processes can save up to 15% in labor costs.¹

3. Prep and launch stage

Preparing for the store opening involves staff training in customer service excellence and operational readiness, supported by marketing initiatives to generate consumer excitement. In this stage, soft launches can be conducted to gather consumer feedback, allowing for fine-tuning of the store’s operations, layout and offerings before the grand opening. This process helps ensure the launch will meet consumers’ expectations and instantly begins to help build brand loyalty. When locations incorporate soft launches into their opening plan, operational costs can be reduced by 25%.²

4. Operate and maintain stage

Smooth store operations can be achieved through ongoing maintenance, efficient inventory management and a commitment to continuous improvement. Collecting and analyzing customer feedback is integral to this phase, giving the store the data sets and insights to respond proactively to consumer needs and preferences and helping ensure a consistently excellent shopping experience. Data-driven approaches to inventory management can reduce waste by up to 30% and employee turnover can be reduced by 40% with enhanced training plans.³

5. Redesign and renovate stage

Periodic updates and renovations keep the store environment fresh and in line with evolving consumer trends. This phase is an opportunity to reinvigorate the brand’s appeal by introducing new concepts, services and technologies that enhance the shopping experience and maintain the store’s relevance in a dynamic retail landscape.

6. Closure and exit stage

Strategic planning for store closures focuses on recovering investments and managing transitions with minimal impact on the community and brand reputation. Effective communication and a well-managed exit process help preserve goodwill and support the brand’s broader business goals, while insights gained from the closure inform future strategic decisions. Up to 40% of initial investments can be recovered with well-planned exit strategies.⁴

Conclusion

In modern retail, where so much of a retail operator’s attention can now be focused on the importance of e-commerce, it’s important not to forget that the right brick-and-mortar operation can create an exceptional experience for consumers who still crave real-world retail. Properly implemented SLM frameworks can help an organization and retail brand build these experiences in three ways.

By streamlining operations and automating inventory management, SLM can free up store staff to focus on customer experience needs and efforts, while real-time analytics can facilitate quick decision-making and help optimize everything from store location to performance. Behind closed doors, SLM can also create effective back-end processes in finance and tax operations from store construction to supply chain enhancement and tax strategies that improve the bottom line. And by implementing cost optimization strategies from the location selection to procurement, distribution, store design and workforce management, it’s possible to drive significant ROI from reimagined retail models that are designed to create value for this year and far beyond.

Vishal Gupta, Sunny Bhalekar, Emily Pisano, Adam Akram, and Krutarth Mayilvahanan also contributed to this article.