The Chicken-or-Egg Dilemma in Retail: Which Comes First — People or Product?

By Noel Goggin, RedPrairie SVP & General Manager – Retail
Click here to listen to an exclusive interview with Noel Goggin.

Noel_Goggin_capFollowing the 2011 NRF Big Show, a question a lot of people were asking is still lingering in my mind – When you get down to it, which matters more at the store level: People or product? It’s obviously a tough one to answer. We’ve harped about having the right employees in the right place at the right time, to sell the right product the right way, but the specifics can still get a bit vague. As 2011 gets rolling, and customers start spending their projected increases, it will be important to have a more concrete idea of where your company needs to be, and when.

The first concept to keep in mind is that more than any year prior, the customer will control their own experience in 2011. Mobile technology in particular will alter where customers go, and will all but guarantee that those customers will find the lowest price – It’s not a matter of “if” anymore.


So perhaps it’s best to start by examining what makes a customer buy something in a store, and what makes them leave without a purchase, disregarding cost. Statistics show that during promotions, when lower prices pull more customers into a store, out-of-stocks can influence nearly 16% of shoppers; and averages show that after about 2.3 negative experiences – like an out-of-stock – shoppers won’t return to a store.

On the other side of the equation, labor influences between 10% and 12% of sales, and significantly impacts the conversion of shoppers into buyers. So the best way to put it, at least in the beginning, is that while product brings the customer in, it’s important that employees make sure they leave with something in hand.

That conversion comes as a result of high-touch service, meaning that retailers this year will need a single view of the customer across every channel – online, in the store, through the catalog, over the phone, in the smart phone, and more. Making sure that retailers meet the price guarantees that their customers expect through those channels necessarily results in a very complex process that personnel both in the store and in the supply chain must execute. Keeping the cost of that process down is important to maintain low prices that customers will expect in 2011.

But maintaining low prices is only the first part of the battle — merging product and service is just as significant. Offering that same service through multiple channels can be difficult, especially with complex transactions that can involve gift cards, coupons, discount codes, and a number of other variables. But customers still expect their experience to be personalized — so more and more this year, the average retailer will have to focus on the intangible aspects of a sale rather than the mere price and delivery, in an increasingly impersonal, automated variety of operation.

It’s a lot simpler than it sounds, really… All customers really want this year is for their expectations to be met. Consumers expect the music to match the dance, so stores need to execute competitive strategy in a cost-effective manner. It is a great time to heighten visibility, tighten up forecasting, and re-imagine how product moves from supplier to shelf. It’s also a great time to take a hard look at the in-store workforce, and evaluate both productivity and compliance. Taking both into account means that retailers can gain control of service not only in their stores, but in every channel throughout 2011.

Full Podcast with Noel Goggin:


Noel Goggin is SVP and General Manager of Retail for RedPrairie ( which provides productivity solutions for top retailers.  He can be reached at

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