Large chain retailers can boost their near-term revenues by 5 to 8 percent with a new, more refined approach to sharing best practices. Such a retailer arranges its stores into peer groups based on factors including location, size, and customer demographics. The remaining performance differences are related mainly to store-level management, so the chain develops detailed metrics to compare each store with its peers. Last, it identifies the top-performing stores’ best practices and disseminates them throughout the peer group. Thanks to this approach, stores adopt proven performance tactics, and retailers set realistic, bottom-up performance targets for individual stores while encouraging the best managers to share their knowledge.
About the Authors
Betsy Joseph is an associate principal in McKinsey’s Chicago office, and Harry A. Kemp and Shubham Singhal are consultants in the Detroit office.