In this case analysis of the Ann Taylor Corporation, we will review the declining sales figures and generate some alternative approaches to help facilitate the increase of sales. It will lay out an idea to aid in a marketing action plan that Corporation should use to permit for increased revenue, profit, and sustainability with little if any outlay of cash.
The Ann Taylor Corporation
Introduction
The Ann Taylor Corporation was founded in 1954 by Richard Liebeskind. His designs encompassed the well-dressed woman of the changing times. By 1983 the organization had grown from an east coast regional market to national brand with stores across the country. Today the Ann Taylor brand is joined with the Loft. Both have traditional stores and outlet stores along with on-line shopping available (Ann Taylor Stores Corporation, 2009).
This research study lays out the down sides that the Ann Taylor Corporation has already established to cope with over the last few years and the guidelines to assist in an action plan that needs to be used to permit for increased revenue, profit, and sustainability with little if any outlay of cash.
Based on the results of the analysis, there are three advice that have to be addressed in order for the company to keep to grow and regain staying ability in tough monetary times and the recent changes in consumer behavior. The three advice are that the corporation: 1) invest in next-generation designs to enable streamlined processing and impact efficiencies throughout the business; 2) continue to spend money on innovation and redefined consumer favorites to combat erosion of their private label by other competitors; 3) redefine employee management to better meet customer needs and bolster confidence in the products offered by the business.
Problem Identification
In identifying the variables currently facing the Ann Taylor Corporations declining sales, a three-year review was conducted. The team found a 19% drop in sales, leading to a large number of job cuts, and 117 store closings across the country in recent years (Ann Taylor, n. d. ). After these initial findings, within another six months, yet another 56 stores were closed, ending the entire year with a total lack of $334 million (Ann Taylor, n. d. ). After eliminating more jobs, mostly at the corporate level, and closing 30 more locations, sales were still down 43% from the last year (Ann Taylor, n. d. ). The decreased sales numbers were related to the hard-hit, professional, working woman, which used to be the fundamental basis of the corporations luxury customer. Recent statistical data indicates that the existing type of clothing offered to get is off kilter with regards to their current consumer base. In-store observations and analysis, of the sales force at various locations, also raises concern as to its role in the recent decreased sales. There seem to be low morale and too much socializing by the sales employees. It appears the employees are experiencing their needs put before the consumer needs or the corporations needs and this much change.
Root Problem
In identifying the main problems to the decreased sales, the team must address three issues. First, they must remember the recent economical hardships facing the professional businesswoman; secondly, the increased expense of materials and last but not least, the efforts of the sales force itself (Ann Taylor, n. d. ).
Problem Components
In light of the recent recession, even the professional market is not spending the amount that these were a couple of years ago on fine clothing (Ann Taylor, n. d. ).
With regards to current changes in the federal government arena, changes to taxes and tariffs also have played a sizable role in the increased costs of materials used to manufacture the high-end, high quality garments that the Ann Taylor Corporation is famous for.
Finally, it would appear that the lack of determination, enthusiasm and concern by the sales team in stores is driving slower sales and therefore slower recovery (Ann Taylor, n. d. ). The sales teams do not realized that they are an investment too.
Generating Alternatives
Doing nothing is no option. Having experienced business for over 25 % century, the corporation can make it through this rough patch. There just must be considered a revamp and refocus of just how things are being handled. The issues should be addressed at every level of the corporation also.
In order to overcome the aforementioned problem components, the team must increase their unit returns on the current fashions that the stores are generally stocking. Upper management needs to place some aggressive ad campaigns to help increase sales and promote product awareness in the consumers. They need to discontinue the low priced items and reintroduce the prior line of upscale items that are more costly than the typical clothing that has been stocked recently which had yielded high returns. Although this was tried shortly before the recession, the timing of the same venture should now show a larger return. This can all be easily calculated by Return on Equity formula which is Net Profit / Average Shareholder Equity for Period = Return on Equity (Kennon, 2011)
The team must recruit a designer that can trim prices, but still deliver a great garment at a much greater value. They need to look for ways to lessen the expenses and lower the overhead of the items manufactured. A review of current fabric merchandisers must be visited and possible new vendors utilized.
Lastly, the team must determine when the stores are busiest, how long the consumers are shopping, in case current staffing is enough and accurate. Attitude of the sales team needs to be reviewed as well to see if it is driving shoppers away.
Evaluating Alternatives
Currently the in-store stock is running at an all-time high due to prior reduced sales. The team must drastically reduce prices and therefore reduce the current inventory in stores. Once this
goal is achieved, the reintroduction of an increased quality and higher price line could be the foundation for more sales. Discounts could be offered to customers with a company identification badge or via internet coupons wanted to various corporations that could want to be drawn into the stores (Cox, n. d. ).
By reviewing the existing vendors, the management team should be able to find areas to improve cost savings and negotiate fabric costs. By hiring a new designer, the Corporation can get a fresh new take on revamping the current image while delivering the product quality that the Corporation has been known for in the past 57 years.
Based on recent analysis, the management team should think about instilling customer counting and track shoppers throughout the day in 15 minute increments. For an acceptable cost, a person tracking system can be installed and continuous monitoring can be carried out (Generation3, 2005). Thus the sales staff can be optimized and scheduled accordingly. Better performing sales employees will be scheduled during busier shopping times while lower performers will be scheduled during off peak periods. Schedules will be computerized and follow consumer shopping patterns, not employee convenience.
Choose an Alternative
The Ann Taylor Corporation should immediately instill customer counting and have associates to put forth increased efforts. The consequences of the recent recession are apparent based on the evidence of recent analysis and action must be studied swiftly and forcefully to ensure continued growth, profitability, and sustainability of the organization. The upper-management team must increase sales effectiveness in order to help drive consumer returns. Without addressing these issues, continued sales declines and job losses would result. Also, the final result could be disastrous and bring about the closing of the whole Corporation.
Implementation Plan
In order to really have the sales team makeover work, the complete management team from CEO to front-line manager and team leads must all be on a single page. The sales team must also be willing to intensify and help out with the plan of action (Ward, 2011). After an strong three-month data analysis of the customer counting is compiled, the upper-management team will implement a communication arrange for the new sales program.
The new sales program will be damaged from top managers down through the sales force, with each level having accountability to the organization as a whole. The very best management level will be charged with the timelines of changes to be instilled to bring about the necessary changes in their financial outlook. Middle managers will be accountable for the quarterly sales goals of the organization. The first line managers will train all lower-level employees, and nonmanagerial salespeople via monthly departmental meetings. And last but not least, team leaders will be accountable for reaching daily customer satisfaction goals and employee target goals. The sales force will be charged with increasing their sales results on the weekly basis. The brand new sales program will be in place within 90 days of the completion of the data analysis. There will be sales staff reviews every two weeks. The below table will help to outline this data (Williams, 2011).
TEAM
GOAL
TIME LINE
REPORTS TO
TOP MGMT
Change time line
Immediately
Stock holders
Profitability
12 months
MIDDLE MGMT
Increased Quarterly Sales
Quarterly
Top Management
FIRST-LINE MGMT
Training
Monthly
Middle Management
TEAM LEADS
Customer Surveys
Daily
First-Line Mgmt
Employee Targets
Weekly
First-Line Mgmt
SALES STAFF
Improved Sales
Weekly
Team Leads
Alternative Choice
After both week review of the sales team, the schedules will be built around their sales results. Another schedule will be adjusted accordingly based on the last weeks sales results, with lead sales staff getter preference for peak sales hours (Ward, 2011). There will be a six-month window for improvements. While this is being implemented and established, a revamp of the designers and vendors will be addressed as well, using the same timelines. Thus the corporation will desire a top notch sales team when the new lines are released next year.
It will be beneficial to employees, whatsoever levels, to ensure success of the corporation. It will be rough initially, as change always is, but those dedicated will accept the challenges and lead just how for the changes that are needed. The ones that do not will be handled on a case by case basis.
A possible sales incentive may be instilled also (Ward, 2011). If a worker can continually strive to meet or exceed the goals placed, that employee will get five tops, five bottoms, one group of shoes, and $50 for accessories (all items being from the Ann Taylor line of course) to be worn throughout their shifts. This may be an annual benefit to the sales teams. Managers by any means levels will be given bonus dollars based on their respective goals and $1, 000 in Ann Taylor products, also with an total annual basis.
As an alternative solution choice, at quarterly reviews, if employees havent met their new goals, the contingency planning will be instilled. The contingency plan will change at each level, and may include but not be limited to: pay restructuring, job placement restructuring, scheduling changes, or possible termination. Every effort shall be designed to retain current staff first as it is costly to employ and train new staff. Some of the other measurements and controls will be month-end reviews of the front-line managers to think about the training of most lower-level employees and progression towards those goals. Monthly reviews will be processed for middle managers to monitor the status of the profitability and financial goals as outlined by top managers. Top managers will be reviewed monthly by the CEO and his team. The CEO and team will be held accountable by the stock holders. New goals will be set monthly as changes progress or as needed if sooner.
Conclusion
With a competent review of the options explained above, the team can easily see that in just a years time, the Ann Taylor Corporation should be well on its way to improved employee communication and client satisfaction. If monthly and quarterly targets are met, then your annual fiscal revenue should be substantially higher. This will also be apparent to the many degrees of employees through the new incentives and bonus plans that would go into place.
