Payless Shoesource Strategy & Operations Case Study

Let me tell you a Strat/Ops story about when I transformed Payless Shoesource’s store operating model. 

In 2005, Payless Shoesource (PSS) was facing declining same store sales, and declining customer satisfaction scores.  At the time Payless sold one in four pairs of shoes in the US. An incredible achievement in terms of operational footprint and market coverage. 

A good comparison is the great American brand, The Coca-Cola Company, whose operational footprint goal of being available for sale at literally every point-of-sale (POS) where beverages are sold globally, is an operational distribution masterclass. 

The complication was that PSS operated a network of >5,000 stores across the US, Canada and Mexico, employing over 30,000 people. The problem would not be easy to solve and the impact of my recommendations would impact that large and diverse frontline employee workforce who perform the physical labor each day. 

Store operations of this scale include complexities such as full-time vs. part-time employees and scheduling, recruiting at scale, hiring and training at scale, management hierarchy leadership and communication at scale, compliance and execution. 

For example, if you change a policy, how do you get 30,000 front-line, hourly employees to execute precisely and consistently

All of the above only applies to the frontline employee store operations, we didn’t even include the supply chain in our problem scope. 

Problem Statement: How can PSS increase same-store sales without increasing labor cost, thus improving same-store profitability?

We broke up the problem into two sub question workstreams:

1). How can we save store Associate time?

2). How can we best re-deploy store Associate time to increase sales?

I owned workstream #2 and got to work intensely studying the Customer Journey (CJ) through the store. I spent 60 days traveling across the network including Dallas/Ft. Worth, Atlanta, Chicago, Ft. Lauderdale/Miami, & Rancho Cucamonga, CA, observing customer journeys with a clipboard and stopwatch. 

I made spaghetti diagrams of customer journeys through the store. I analyzed and categorized customer journeys into the 4 archetypes of shoppers that I concluded. I synthesized those archetypal behaviors into characteristics that store Associates could identify and then apply specific techniques, or ‘plays’ when approaching customers. 

The key insight for sales conversion was to get the customer to touch the shoe with their hands and try it on. Observation concluded that when a shopper picked up a shoe and tried it on, they were 7x more likely to make a purchase. Those insights were turned into sample scripts and gestures to encourage shoppers to pick up and try on a shoe. I made playbooks for each archetype of shopper. 

The next piece of the problem was to solve how to communicate these new playbooks and store operating models to a network of >5,000 stores and 30,000 frontline hourly employees. 

I had to consider many variables within the problem, the role & responsibilities of Regional Managers, District Managers, Store Managers, Store Associates, hourly employees, full-time employees, and the variations in labor laws and scheduling across 50 states, cash management and security, receiving shipment and conducting inventory in the backroom.

I came up with a cascading comms plan across 5 layers of hierarchy for ~25,000 employees. I developed the training material using powerpoint to make diagrams of store layouts and draft the plays and scripts that frontline employees would run. 

I created the store Operating Model and developed the training material for Store Mgrs and District Mgrs and how it would be rolled out. I had my ppt slides printed and laminated at Kinko’s printshop. I led Train-the-Trainer sessions in 3 US states, guiding people twice my age on how to more efficiently and effectively operate their stores based on 6 months of intense observational study. 

In the end, I presented my recommendations to the CEO, COO, CMO and various SVPs of Operations and Finance. My recommendations would impact every store in PSS’ operating footprint with implications for all frontline employee roles and financial impact for a Fortune 500 company. 

I was 23 years old at the time. 

I don’t just call myself a business strategy and operations expert because it sounds official. I earned that description from on the ground operating experience like this. 

Let me leverage that experience and learning to help your business grow. Reach out today.