You're the Senior Graduate Accountant at AIS Technologies. You've received an email from Shabnam, General Manager Retail Operations, who oversees all physical store operations. Shabnam has requested a meeting.

To: Senior Graduate Accountant

From:Shabnam

Subject: Store Performance - Management Report Key Performance Indicators (KPIs)

Hello,

I have been reviewing monthly management reports and am concerned about store performance. Customer numbers visiting our stores are showing signs of improvement; however monthly sales revenue per square meter, one our most important KPIs for our traditional bricks-and-mortar operations, is not showing any signs of improving.In addition to this, those new customer satisfaction survey devices located at the exit are showing increases in unsatisfied customers. This is concerning. We stock a wide variety of products tailored to our customers' needs, and we have experienced sales associates who are there to help them. Our business model has worked in the past, so it is unclear what is causing these results.

As you know, our costs are largely fixed for our stores, and lower revenue will further impact our margins, which are already down in the current environment.We know the in-store experience is also a large contributor to our online sales, as customers will often attend a store before ultimately buying their goods online.

Can you please review store performance to determine the key cause of these issues? When we meet can you please come prepared to discuss this along with your recommendation on how we might be able to reverse this trend?

I recently attended an online conference where the key message was 'if you aren't already implementing automation, you're falling behind'. I don't feel we are doing enough to meet the changes in our customers' requirements, and this is placing increased pressure on our margins. Can you please focus on automation options when considering your recommendation?

Regards

Shabnam

You've noticed the trends identified by Shabnam, and through your investigation you've identified the following:

1. Store foot-traffic has been increasing steadily as the effects of negative global events have eased and the customer base is more able to travel to AIS Technologies stores.

1. Revenue per square meter hasn't returned to historical levels in line with increased foot traffic. An analysis of this suggests that the company is achieving a lower conversion rate (sales per store-visit) since stores reopened.

1. To identify customer satisfaction levels, electronic survey devices called 'feedback kiosks' have been installed at the exit of all stores. Using these devices customers can indicate their level of satisfaction from 'unsatisfied' to 'satisfied'. Customer use of this technology has been strong since it was installed, and since stores re-opened the level of unsatisfied scores has increased.

1. Interviews with store managers and sales associates have uncovered the following:
   1. Stores have been generally busy, which is supported by the foot-traffic statistics, but sales have been down. Foot traffic has been at its highest in the middle of the day (which is typically a busy time).
   2. Most customers prefer to self-navigate the store, but there are some who prefer the assistance of a sales associate. The increased traffic at busy times makes this challenging to manage. Staff levels are generally lower than usual as the stores try to combat lower margins and increase store profitability.
   3. Social distancing has become the norm and has increased the number of customers looking to self-navigate the stores. Customers are also less likely to ask for assistance.
   4. The company stocks a large range of goods and without employee assistance, customers often get overwhelmed by choice or can't find what they're looking for and give up.
   5. Lower staff numbers have resulted in sales associates experiencing increased pressure. This is having a negative effect on employee satisfaction and culture.
   6. Although most customers are more comfortable with self-service, this is only if the appropriate technology is available.
   7. Store managers find it difficult to identify appropriate products to promote. Advice is provided by head office, but each store has a unique customer base, and there is no store-specific information available to managers.

Question: Determine the four major problems of the stores that could be causing the issues raised by Shabnam using research. Give a brief description of each problem.