Bold Retail Leadership


Leading retail CEOs are not shy about explaining what makes their companies successful and their over-riding business philosophies. CEOs also have become more knowledgeable about what's happening in their IT departments, as IT continues to prove itself as a primary contributor to everyday and long-term success.

In this candid 2007 roundup, four retail CEOs tell RIS News about the other retailers who have influenced them in a positive way. They also open up about the most pressing questions they would like answered by their CEO peers. And, they speak openly about their greatest achievements of 2006, their latest IT projects, their business culture and the effect of the economy and the
upcoming presidential election.

RIS News: Which other retail company or executive do you look to for business thought leadership?

Ken Sully: Howard Schultz, founder of Starbucks comes to mind for his ability to create a new culture around a cup of coffee. He has created a brand that stands alone and makes the public feel good about
paying three dollars for a coffee because it's wrapped around the Starbucks experience.

Mike Stanek:
American Eagle is a great company that has certainly used IT tools and assortment planning to drive consistent and significant comp sales increases. I think it is an extremely well-run company from every aspect. I also like the improvements that have happened at Nordstrom, driven by solid merchandising and complimented with a variety of analytical tools.

Rex Mehta:
Target and Chairman Bob Ulrich of Dayton Hudson and Target. He has maintained Target as a premier discounter which has held its own against a major discounter like Wal-Mart. Its on-trend merchandise at affordable prices has launched a new era in discount retailing.

Brad Parker:
I tend to look at the leading catalog companies out there. Home Depot for example just got into the catalog game pretty big and seems to be selling goods not shown in their stores. This is intriguing as our own model has a limited selection and I am always looking to grow alternate sales channels. I also find that good catalog companies can demonstrate top-notch merchandising and interesting mixes that we can learn from.

RIS News:
What strategies do you employ to maintain a positive and productive company culture?

Stanek: Positive communication and aligning the organization with common goals and objectives are the main drivers at Northern Reflections to maintain a positive and productive culture. We also are experimenting with things like "Six Sigma" to increase productivity. We believe in hiring good people and then let them do their jobs and support them in every way possible to achieve success.

First we pay well so as not to allow that to be an issue. We tend to have a lot of fun together as a team which helps. We put our employees first in most cases above our customers since happy employees tend to make really happy customers. We also train, train and train. By spending the time and money on developing people we find that most are more fulfilled employees. Lastly, we work hard to listen to our people and do what we can to de-hassle the organization to make their lives easier.

I have employed some of the most basic values with our staff of being open and honest with our employees and our franchisees as we work together in our quest to change the world. We believe we can help change the way people think from hording items to a culture of temporary ownership. In the future they will see the value of the service offered by our drop-off stores which use the secondary liquid market place of eBay to re-sell their items.
Mehta: I would like to see My Dollarstore as a deep discount retailer which can offer the consumers of the world value for their money and offer variety and mix better than other discounters. Right now we are living in a global market. And we would like to give the world an opportunity to see what it's like to save and have a better lifestyle. We have made our stores fast, fun and friendly.

RIS News:
What was your company's greatest achievement in 2006?

Sully: 2006 was our third year of operation and we ended the year with 180 stores open nationwide and $46 million in sales on eBay, becoming the number-one seller on eBay.

Expanding My Dollarstore concept in over 12 countries.

Last year was a tough year sales wise for us. By far our greatest achievement was a drastic reduction of our breakeven point while at the same time launching a full inventory replenishment system as well as an e-commerce initiative.

RIS News:
What are your most significant IT projects planned for 2007?

Mehta: We would like to streamline the operation so that there is more saving at the end. And we are looking at Radio Frequency Identification (RFID) implementation services for supply chain (Gen2 open loop standards) and asset tracking (closed loop) systems.

Stanek: For Northern, 2007 continues to be about improving assortment planning and using the data we have captured over the past five years more efficiently and effectively. Our major project for 2007 is leveraging our e-commerce platform in stores to assist with out-of-stock merchandise.

We have entered into a strategic relationship with a complete on-demand e-commerce solution suite for our online sales and retail operations. Our expectations are high for 2007. We are converting all 180 stores from our in-house software platform to an on-demand multi-market system which will position our network as the only retail network that offers public access to the Internet to sell products and services on most major Internet marketplaces such as eBay and Amazon.

We recently launched a full e-commerce initiative with a direct marketing element to it. We are hopeful for a nice increase in pure plus business from it this year. Our plan this year is to simply build out the full scope of the marketing triggers and messages that we plan to employ with our new system.

RIS News:
What is the role of the IT department in your company?

Sully: Our IT department has written and supports the software platform that manages our online transaction business. Since we sell items on eBay for the public it is imperative that our franchisees and corporate staff work closely together since we are all intertwined. This is end-to-end, from the moment we check in a customer, to launching auctions, successfully closing 45,000 auctions, shipping 45,000 items to writing 25,000 seller checks each month.

Parker: The IT department plays the role of hero and villain. When things work as well or better than planned they are heroes. When stuff breaks or doesn't work they are villains. In the last year we have been automating tasks and mistake-proofing processes at a break-neck pace. The IT staff has been on a big learning curve to understand our business as well as anyone. By doing this they are really looked at as an aid to everyone right now. This is a much more consultative role now than in the past when they more often just made the gear work right.

RIS News:
What steps has your company taken to ensure customer data security?

Stanek: At Northern Reflections, we have a privacy committee that is responsible for assuring all of our customer data, as well as employee and corporate data, is cared for in the most confidential methods possible. We have a privacy handbook and perform regular audits of our processes and handling of confidential information to assure best security possible for our customers and the Northern Reflections team.

We have locked down all customer information past the point of data entry except to our accounting staff. We also recently installed
conversion equipment to allow us to give checks back to customers after scanning them.

RIS News:
What steps has your company taken to prepare for natural disasters?
Parker: We have few in our area and really can't control the effects from afar. As far as steps taken we have an extensive disaster recovery plan in place for losing our systems, including hot backups and a redundant database offsite.

RIS News:
How will the economy affect your business in 2007?

Parker: We are optimistic that it will treat us better than 2006 and 2005 which were very tough in home furnishings. The cooling of the housing market helps in that people tend to stay put and look at improving their home rather than play the real estate game.

At this stage, I see the economy having a positive to neutral affect on our business. Given our middle-income consumer, lower energy prices certainly helps but interest rates
and a potential significant decline in
housing values may have a looming negative affect.

In our dollar store industry the challenge is going to be maintaining single price stores with the inflation at around two to three percent a year. I tip my hat to both Dollar Tree and 99cents Only stores for maintaining single price of one dollar or 99 cents.

RIS News:
How will the upcoming presidential election affect your business in 2007?

Parker: It will make our advertising more expensive. It also puts a lot of purchases on hold as people wait and see what is going to happen.

Health cost is the main contributor in making U.S. companies less competitive. Hopefully the
upcoming presidential election will address this issue.

RIS News: If you could ask any question of other retail CEOs, what would it be?

Mehta: How are they keeping the expenses down, especially health costs and how are they competing in the global marketplace?

How do we build our business while still protecting our country, our natural resources and our children from all the new influences they face in this modern world?

What avenues are you taking to generate new business this year that you were not taking prior to this year?

How do you drive continuous improvement in every facet of your organization?
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