Departmental Store Chain

I: Your client is a departmental store chain who are facing decline in profits, figure out why and provide recommendations

C: Sure. I have some clarifying questions. Could you please tell me about the quantum of decline and since when we have been facing this issue? Is it an industry-wide issue or client specific?

I: We are facing a decline of 20% since last 6 months. The issue is client specific.

C: Okay. What all shops are present in our store? Apart from shopping do we also have eateries and parking facility that contribute to the revenue? Do we have both white label and brown label shops?

I: We have various shops like electronics, apparel, sports equipment etc. Yes, apart from shops, parking and eateries are the other two revenue streams. Yes, we have both white and brown label shops.

C: Where are our departmental stores located? Who are our customer segment?

I: Our departmental stores are located PAN India, and our customer segment are middle class and lower middle-class families, college students and office goers.

C: Are all the stores facing the issue or is it specific to a geography or store?

I: No, it is specific to a single store in Delhi.

C: Okay. The decline in profits could be due to two broad reasons, decrease in revenues or increase in costs. Have we seen any changes in these aspects?

I: The revenues are declining.

C: Understood, among the revenue streams we established i.e., parking, eateries and shops is there a particular revenue stream facing the issue?

I: Yes, we are seeing a decline in revenue for the shops

C: The revenue from shops can be represented as product of number of customers, number of items purchased and their respective prices. Would this be the correct approach? Are we seeing a change across any of these three parameters?

I: Yes, this looks good. We are seeing a decrease in the number of items purchased.

C: I would like to deep dive further into this by analysing the customer journey involved. There will be pre-shopping process, in-store shopping process and payment and checkout process.

C: Would you like me to elaborate further on these buckets?

I: Yes. Please elaborate.

C: Pre-shopping process would include the process of customer making the decision to come to our departmental store, travelling from their home to our store, and all the steps taken till they step into our store. During shopping process would include the overall experience of adding items to the cart and going for checkout and finally the payment and checkout process will include the overall process of customers checking out their items in the billing counter and making their payment. Have we seen a change in experience across any of these three?

I: Yes, the in-store shopping process seems to be affected. People are spending less time in the shops and the department store in general. Why would that be?

C: To further analyze the root cause of this, I would like to analyze the in-store shopping experience using the five senses framework. Namely, sight, hearing, smell, touch, taste. Have we seen any change in store that would bring about a change in any of these five aspects?

I: Yes, there seems to be an unpleasant smell in the departmental store which is driving the crowd away and affecting the shopping experience? What could be the reasons?

C: It could be due to change in any toiletries or fragrances used, internal or external pollution, improper waste disposal etc.

I: That is correct. We have had a change in the cleaning liquid being used which is giving out bad odour. Please provide recommendations.

C: Short-term: 1. Quickly switch back to the previous cleaning liquid to eliminate the odor issue and maintain customer satisfaction.

2. Continuously monitor customer feedback to identify any emerging concerns and address them promptly.

C: Long-term: 1. Implement a structured pilot testing process for new products to detect and resolve issues like odors before widespread use.

2. Prioritize cost-effective alternatives without compromising the quality of cleaning solutions to prevent similar incidents in the future.

I: Fair enough. Let’s close the case here.