The importance of value engineering for your business
The integration of value engineering into your physical store is imperative, now more than ever. Every day the rise of online shopping threatens the existence of physical stores.
In 2017, the Australian Postal Corporation reported that while $267.4 billion was spent within traditional retail stores in Australia, $21.3 billion was spent on goods online. This is an increase of 18.7% in online sales since 2016. The figures will only increase as online shopping introduces new methods of making shopping online easier. Virtual reality has been introduced allowing consumers to try on things before buying – without actually trying it on. This is expected to drastically increase sales as more and more stores jump on the bandwagon.
Retail businesses need to remain competitive and implement strategies within their retail store to attract customers back inside. This is where value engineering can help.
Value engineering is an approach that should be taken by all retail businesses. This approach refers to the strategies and techniques applied to a project plan to minimise avoidable costs, increase functionality, and increase the value of a product. In simple terms, value engineering is all about increasing efficiency, improving your value and lowering your costs.
Value engineering is a powerful process that needs to be undertaken early in a project plan. If this approach is executed early, its results will peak efficiency and meet its goals. If value engineering is conducted later in the process, it then becomes frantic and focused on cost reduction, rather than improving functionality, productivity, and product visibility.
So, how does value engineering actually work? Imagine that a wall needs to be built. The initial material suggested to build this wall, may not be the most efficient and cost-effective option. A project manager will then implement the value engineering approach by finding a comparable material that will not compromise quality when cost is reduced. A project manager needs to consider the value in resources and find alternate and comparable resources that can reduce the total cost of a project to maximise efficiency.
Value engineering is an important concept for retail companies to consider as improving efficiency to attract customers back into stores. This approach and other strategies may be the difference between the survival of traditional shopping and their extinction.