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1. Retail Gross Profit Recovery

2. We Expand Our Shrink Definition to Include All Loss
Profit Recovery $$$
Shrink Other Lost Gross Profit
$ $$
 Inventory Loss (Store Reported)  Cash Over / Short
 Physical Inventory (Adjustment)  Check Loss
 Damage  Credit / Debit Card Loss
 Return / Customer Service  Price Change / Exit Strategy
 Donation  Employee Purchase Discount
 Close-out  RTV / Vendor Credit Loss
 Shipping Error  A/P-A/R Losses
 Warehouse Loss / Swell  Coupon Abuse
 Void Loss  Other Store Discounting
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3. An Effective Shrink Organization
Steering
Committee
Key Participants Primary Purpose
• IT • Lead / Guide Shrink
• Merchandising Cross Functional Improvement through the
• Human Resources Shrink “Roadmap”
• Operations Leadership Team • Approve / Monitor Cost-
• Loss Prevention Benefit and Allocate
• Accounting Resources
Individual Project
Analysts and KPIs
Teams
The root causes of shrink exist throughout the organization and it will require
all functional areas to improve and maintain it
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4. Pricing Optimization Manages Pricing Through the Entire Lifecycle
DECLINE
INTRODUCTION
What’s causing the decline?
What’s the right introductory price?
Should we fight it?
Do I need to grow market share?
How do we flush the inventory?
Should I couple that with other
incentives?
Are we opening new stores as well? SUPERSESSION
MATURITY Will new intros cannibalize the category?
Demand is flattening, what now? Should we rationalize a category?
Why am I promoting products? Can we get more for less?
Should I reduce price, or just advertise? Is the product performing as I expected?
Is the product performing as I expected?
Promote Promote
Markdown Markdown
Shelf Price Shelf Price Shelf Price Shelf Price
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5. High-Level Price Optimization Work Flow
Price Optimization Solution
Merchant Approval
Profit
Units
Price
Recommend
ations
Price Sales
Sales History
Optimized Retails
Product Info
Store Info
POS, Corporate & Data Storage Systems
ERP & Data Transaction Data
Warehouse
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6. Each organization will approach benefit realization from different perspectives
depending on their starting point
Value • Complex strategic metrics
• Dynamic incrementality and
transfer of volume
• Behavioural based segmentation
Leading • Space considers supply chain
• Metrics aligned to strategy
• Some fixed indicators of incrementality
Advanced • Segmentation based on demographics, life style and
stage
• Considers visual merchandizing in space plans
• Simple metrics and ranking
Foundation • Limited format, market, customer segmentation
• No incrementality
• Space to sales and inventory
Journey
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7. Our Point of View of Workforce Management
Task Management Workforce
Compliance Analysis
Business Intelligence Best Practices
KPIs, Dashboards Standard Operating
Workforce Procedures
Optimization
Workload
Labor Scheduling & Development
Time and Attendance
Labor Standards, Labor
Labor Budgeting Drivers, Attributes
Bottom Up,
Top Down Analysis
We understand the components of Workforce Management that will enable Cost Plus World Market to begin
the store operations optimized scheduling journey
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8. Workforce Management Components – Workload Development
Leading Practices Task
Workforce
Management
Analysis
 Forecast developed with labour standards Compliance
consistent with the budgeting tool Business Best Practices
Intelligence
Workforce Standard Operating
 Comparisons of last year to this year trended KPIs, Dashboards
Optimizatio Procedures
for current business needs n
Labor Workload
 Always have ability for management to adjust Scheduling & Development
Time and Labor Standards,
based on their best knowledge Attendance Labor Budgeting Labor Drivers,
Attributes
Bottom Up,
Top Down Analysis
Benefits
 Forecasts will more closely reflect the budgets
 Forecasts will better represent the business needs of each individual store
 Buy in at all levels will be greater allowing focus on the business and not the metrics
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9. Workforce Management Components - Time and Attendance
Leading Practices Task
Workforce
Management
Analysis
Compliance
Web based self service allowing employees
access to key employee benefit information such Business Best Practices
Intelligence
as personal days, vacation days, and other KPIs, Dashboards
Workforce Standard Operating
Procedures
Optimizatio
benefited time
n
Workload
 Ability to “clock in” at electronic collection device Labor
Scheduling & Development
– POS, PC, Time Clock – with badge, ID and PIN, Time and Labor Standards,
biometrics… Attendance Labor Budgeting Labor Drivers,
Attributes
Bottom Up,
 Automatic feeds to labour scheduler for time off requests Top Down Analysis
through an he employee portal
Benefits
 Real time capture of actual hours work on time clocks or PC’s located throughout the business unit
 Integration with scheduling system to control early punches and monitor tardiness and absenteeism
 Integration with HR to decrease key entry workload and ability to migrate to employee self service
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