START is RSR’s newest methodology. It promises to help us help retailers through a time of great transformation and that transformation must start now. Holiday season 2016 was a serious slap in the face for the industry. Store-based retail traffic and sales continue to wane, while eCommerce (particularly mobile) sales continue to rise. These events occur even as most retailers acknowledge they lag in the processes they need to support demand coming in less predictable ways.

This cannot continue. If we didn’t know it before, we know it now: The time to change and transform the retail enterprise is NOW.

As most of you know, RSR has used The BOOT Methodology^© since our inception to help put retailers’ use of technology in a business context. This model is deceptively simple, but it continues to teach us a lot about how Retail Winners think, and finally, how they win.

While The BOOT Methodology helps us expose retail’s issues, it doesn’t get down in the weeds enough to help solve them. We certainly highlight the differences in Retail Winners’ thought processes, and that’s useful, but we felt a need to take another step.

We know that every part of the retail enterprise needs at least some degree of transformation. From stores, to logistics, to merchandising and demand planning, to marketing, Product Lifecycle Management, and on and on; just about every part of the business is ripe for some kind of change.

However, we’re realists. We know there is no infinite pot of money to support transformation, so we’ll be doing a lot of work figuring out what’s most important to a retailer’s business model. This will help us find places to take money away FROM, along with finding areas to add money TO.

Enter START^SM. We’re really excited about this new model, and will be tackling one area of the enterprise at a time over the course of the coming years. So what is START^SM, exactly? Let’s take a look.

We begin with a look at the current state, and then through some pretty sophisticated analytical tools, help determine what the “will be ” state should look like. The current state is established in the first two letters: ST.

S=Strategy. We ask the question, what is your business strategy? Particulars include, what you perceive your competitive advantage to be (why do you exist?), where you fall out on the Volume/Touch continuum (high volume, low touch like a mass merchant, or low volume high touch like a higher end specialty retailer), and also take a look at revenue bands. It’s hard to look solely at “products sold ” since so many retailers are crossing over into multiple segments, but if appropriate, we’ll make it part of the mix, along with the question of imported vs. domestically sourced product.

T=Tactics. We ask the question, what tactics support your business strategy? We examine current processes and how you measure the success of the tactics you use. Processes differ depending on the area we’re covering. So, for example, if we’re looking at the store, we might ask about the use of self-checkout, the average number of employees on the floor at any given time, the frequency of DC/store deliveries, or fulfillment of orders across stores. If we were looking at merchandising, we’d look at a whole different series of tactics like frequency of replenishment, use of different size pre-packs or go into depth on the merchandise planning cycle.

Before we move on to the “will be, ” we’ll apply analytics to the current state to help us determine which tactics are critical, and which ones are not so much. This will help drive the second part of the model, and that’s the ART.

A=Action Plan. We help decide which tactics should stay, and which ones should go. The analytics from the first part of the exercise helps us determine this. Our goal is to find money for the things you need by finding the areas that just aren’t relevant anymore.

R=Rework Processes. It’s imperative to understand the process changes implied in the action plan. Change can’t occur in a vacuum. This part of the model helps us understand the implications of the changes being made. What does the new world look like?

T=Technologies that matter most. Again, retailers simply don’t have infinite pots of money. We’re talking about the equivalent of changing the tires on a truck while it’s barreling down the road. Once we have an action plan in place, and have defined the new world, it’s time to prioritize the technologies that will really make a difference. They might not be the ones you think of today.

We’re starting with the store. That’s where the most pain is, that’s where the biggest losses are, and frankly, for most retailers, they are the single largest point of contact with consumers, and single largest fixed expense. Something has to change. Aptos is underwriting this first, very critical study.

You will shortly receive an invitation to take a survey called Store Omni-Channel Readiness Assessment. That’s the long way around saying “Are your stores prepared for the next generation of retail? How should you transform them to be ready and relevant? ” Please, please participate in this survey. It will really help us help you. Note that we will be only doing one or two of these assessments per year. The BOOT Methodology^© remains relevant, and will still drive the majority of our work. START^SM is a large undertaking, and there’s only so much you or we can absorb in a short period of time.

Next week, I’ll be introducing the rest of the model – an opportunity for us to really “dig in the dirt ” with you to support transformation – a retailer engagement model called STARTER. You can probably figure out how that part will work, but I’ll fill in the blanks then.

In the meanwhile, please, don’t hesitate to drop us a line at research@rsrresearch.com if you have any questions at all on the subject. We’re all very excited about this, and think it will help make the overall industry healthier.