Shop and Drop Ltd (SAD) is a large clothing retailer with +200 branches situated in all the major towns and cities in Australia. On 1 July 2019, the beginning of the previous financial year, SAD anticipated an increase in sales revenue resulting from more in-store visits by its target customers; 20 to 40-year-old females in full-time employment.

The shopping experience dimension and after-sale treatment of customers were considered extremely important in getting the customers to visit the stores. Key strategies planned for 2020 were:

1. Refurbishing stores to be appealing and stocked with the newest fashions

2. Clear communication of new fashion releases through online newsletters

3. A 10-day return, no questions asked, policy

4. Employing and retaining sales personnel with good fashion knowledge

5. Developing staffs personal skills in welcoming, thanking customers and an invitation to return soon.

6. Rewarding frequent shoppers with tickets to fashion shows

As a result of the Covid-19 pandemic, and the country-wide lockdown, store visits and sales collapsed. The company lost a large number of its customers to online retailers and management believes this trend will become entrenched. Management is of the opinion that they will not be able to attract the majority of their target market back to their stores, and consider the expansion of their online sales development programme (which is at an early stage of development) to be critical to their survival. Current sales personnel could potentially be trained as online sales consultants. Management believes the majority of their stores will no longer be financially viable after the Australian Federal Governments Job keeper programme ends at the end of 2020. SAD rents all of the premises in which their stores are located, with a large number of lease agreements due for renewal in early 2021. Management is very concerned about potential job losses when closing stores and increasing online offerings.

As a result of the Covid-19 pandemic, inventory of new fashion releases increased dramatically. Management is very concerned about the environmental impact of disposing unsold new fashion releases to landfill. They are also very concerned about the negative publicity it may create and are looking for ways to avoid such publicity.

You are a Management and Cost accountant specialising in developing Balanced Scorecards (BSCs) to support turnaround strategies. SADs target and actual performance for the financial year ending 30 June 2020 is presented to you (Table 1).

Table 1: SAD - Target and Actual performance for 2020.

Objectives	Measures	Target performance	Actual performance
Financial perspective
Increase shareholder value	Operating profit changes from increased in-store visits	$1,000,000		$(400,000)
	Operating profit changes from improved service	$1,500,000		$(600,000)
Customer perspective
Increase market share	Market share in sale of female clothing	65%		16%
Internal-business-process perspective
Improve fashionable impact of stores	Number of stores	82%		85%
Communication of new fashion releases	Days notice	5 days		2 days
Learning-and-growth perspective
Develop product knowledge skills	Percentage of employees trained in fashion knowledge	90%		92%
Enhance customer service	Percentage of employees trained in in-store customer service	85%		87%

Required:

1. Critique SADs BSC for the year ended 30 June 2020 with reference to the Financial perspective and by reflecting on common criticisms against Balanced Score Cards.

Analyse the case and explain what other measures you will add under the Customer perspective for the 2020/21 financial year and why.

2. Evaluate the Internal-business-process perspective. What problems, if any, do you see in continuing with the objectives in 2020/21? Propose new objectives and comment on possible measures to address social responsibility and sustainability issues.

Assess the Learning-and-growth perspective. Do you think employee training and satisfaction are critical for SAD going forward? Why or why not? Explain fully what type of training you may wish to measure in 2020/21.