Optimizing Operational Processes

Rack Room Shoes

 

Founded in 1920 in North Carolina, Rack Room Shoes has grown to operate over 450 stores in 34 states.  In 2002, the brand acquired Atlanta-based Off Broadway Shoes who continues to operate 30 stores independently after the acquisition. Since its inception, Rack Room has established a high degree of professionalism coupled with their signature southern charm to become a sustaining force in the retail footwear space. Rack Room Shoes, with its strong tenured employee base, always aspires to give back to their employees and their communities by offering various rewards, discounts, and charitable programs.

 

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Rack Room Giving Back

Shoes that fit Rack Room gives Rack Room-1
Rack Room Shoes extends their charitable outreach through their partnership with Shoes That Fit, providing more than 150,000 pairs of shoes to children in need and supporting local fundraising opportunities and initiatives. To honor the men and women who serve, Rack Room Shoes proudly offers a ten percent military discount every Tuesday (also honored on Memorial Day, Independence Day, and Veteran's Day) to military personnel and their family members. Rack Room Shoes also offers one of the most generous employee discounts in the industry and allows employees and their immediate families to apply the discount in addition to existing promotions.

Their Opportunity

The Loss Prevention team identified an opportunity to better balance their core values of giving back and the desire to build profitable brands that will sustain and grow into the future. While the discounts are very important to the Rack Room Shoes mission, there was significant margin erosion that was hurting the company's profits. Unfortunately, their bottom-up approach starting at the transaction level wasn't revealing the full scope of the opportunity at hand. They needed a more comprehensive, top down view of exceptions to pinpoint and address problem areas.

 

Quick Facts

Cash

By addressing operational processes regarding discounts, Rack Room will have an opportunity to add nearly $1.3 million back to the bottom line annually.

Team-2

The Loss Prevention team has positioned themselves as data experts who can be looked to by other departments for data driven insights.

Upward-Trend

Upsell metrics are now being explored for new opportunities to increase sales across the enterprise

The Solution

Using 20/20 Retail, the Rack Room Shoes Loss Prevention team was able to start at the enterprise level and work their way down to identify exceptions and gain a holistic perspective of the impact on enterprise profits.  With the help of Agilence's team of Analysts, they were able to pinpoint operational policies associated with both the military and employee discounts that were eroding margins.

With the creation of a hyper-targeted Discount Dashboard, Rack Room Shoes team members have been able to pinpoint problem areas within their policies and procedures that needed to be altered or clarified. For example, employee discounts were being extended well beyond the immediate families of their employees and military discounts were stretching out well beyond the program plan and budget.

The Results

With this information in hand, the Rack Room Shoes Loss Prevention team was able to advocate for processes to be put in place or updated to ensure that out-of-policy discounts were minimized moving forward. The quick successes in these areas helped position the Loss Prevention team as data experts and encouraged other departments like Operations, Finance, and Marketing to turn to them for data-driven insights. They have already developed some new upsell components to add to a sales dashboard that will help Operations explore new metrics that can be tracked to individual cashiers. These new areas and data points will be utilized to enhance further profit and growth opportunities within the Rack Room Shoes data.

“Agilence helped our team to become more efficient, profitable, and we are well on our way to becoming a more data-driven organization because of their help. We couldn't be happier with 20/20 Retail and the expertise of the Agilence team!”

– Kim Auman-Fanning, Director of Loss Prevention, Rack Room Shoes

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