Inside This Issue - News
Family Dollar’s Flur named Merchant of the Year
January 9th, 2012
MATTHEWS, N.C. – As Dorlisa Flur points out, there is a certain irony in her being named MMR’s Merchant of the Year because, although she was until recently chief merchandising officer for Family Dollar Stores Inc., she is not by training a merchant.
For that very reason, however, her impact on Family Dollar has been far greater and has touched many more areas of the company.
In many ways, her leadership of the retailer’s merchandising function was the logical next step after her wide-ranging activities since joining the company in 2004.
Ironically, when she came to Family Dollar after a consulting career with McKinsey & Co., the retailer had not been one of her clients.
Nonetheless, there was a natural fit. In early discussions Flur learned that Family Dollar prided itself on its ability to execute but did not have a systematic framework for strategic thinking or discussion. As senior vice president of strategy and business development, she would provide that framework.
To chairman and chief executive officer Howard Levine goes credit for recognizing the potential value of adding someone with Flur’s credentials and expertise to his management team and for allowing her, in her words, to write her own job description.
Flur was intrigued by the retailer’s neighborhood focus, but at the same time she was aware that she was entering uncharted waters. "It sounded like a high-risk role: I was going to be the strategy start-up, reporting directly to the CEO," she recalls. "And I was coming into a company that didn’t have people like me in the management ranks or even in their consulting ranks."
Acting as strategic integrator, Flur led regular strategy discussions that quickly produced three major initiatives during the course of her first year at Family Dollar. They would profoundly change Family Dollar’s positioning and go-to-market strategy.
"Consumer research was really my personal grounding, and the company didn’t have proprietary customer data but instead relied on our suppliers for category-level insights," she recalls. "So I convinced Howard to let me spend some money on focus groups so we could build some hypotheses and use them as the foundation to gain a holistic understanding of our customer and of what it would take to get her in the store more often."
That research yielded insights of immediate importance that led to two major initiatives. The data revealed that Family Dollar was the retail destination for its customers’ household needs. The downside was that such a role only required a shopping trip every two or three weeks.
However, the research also showed that the same shoppers were making fill-in grocery trips two and three times a week. And that insight triggered a momentous decision to introduce an expanded food assortment, including refrigerated goods, across the chain.
Not surprisingly, the merchandising and operations teams brought different perspectives to the project. And at that point, Flur’s management approach began to have a real impact, resolving organizational differences first by prompting a joint definition of success and then breaking down the process of achieving it into what she terms work modules. "I said we need this module of work that’s focused on the merchandise assortment and the suppliers and how product is going to be delivered to the stores," she explains. "A different module had to be focused on how we clear out the space in the store and get electrical in to power the coolers so they would be ready when the product arrived."
During this process, Flur introduced to Family Dollar some fundamental disciplines she had brought from McKinsey: perhaps most important, cross-functional team-based collaboration and what she terms process skills. In the years to come, they would be applied to several more major projects and begin to change the company’s culture.
With the expanded food offering initiative, Flur became “the cooler queen,” she recalls wryly. The project was to have a huge importance for the company and for her personally. "Getting that five-door refrigerated unit into the stores, defining the whole program and rolling it out across the entire store fleet was my first hands-on initiative," she says. "It showed that strategy isn’t just think-tank; Strategy can be activist."
A second major initiative that resulted from the consumer research was a format development project called Concept Renewal that began in 2005 with a single test store that opened in August 2006 but really flowered and evolved in the following years. The second generation of that format work culminated in the 2010 decision, dubbed Project Fastbreak, to renovate all the chain’s stores, equipping them with a new layout, assortments and decor. The project, which encompassed physical plant enhancements and developing customer-centric store teams, virtually amounts to a rebranding of the retailer.
In 2005, Family Dollar was expanding rapidly, opening 500 stores a year without the benefit of a comprehensive site selection process that could ensure optimal returns from each store. Levine asked Flur to partner with the real estate team and evaluate the entire process for choosing sites.
For the next three years, Flur filled a dual role that combined strategy work that included Concept Renewal with operating responsibility for the real estate function. And, not surprisingly, some significant cross-pollination began to occur. "I had a strategy team that was focused on cross-functional initiatives, and I got them to help us think cross-functionally about the store-opening process," Flur says.
As a result, site-selection standards began to take on criteria for what makes a good store, not just from a customer’s perspective but from an operator’s as well. "There’s such tight linkage between the box you select, the merchandise quantities that go in it and the staffing model," she remarks. "It’s essential to have the managers in those functions work well together if the broader good of the company is going to be achieved."
In the process of analyzing and evaluating the real estate process, however, Flur and her teams concluded that the company needed to slow the pace of expansion until it had invested in the infrastructure and completed the processes needed to maximize the return on invested capital. That allowed her, with Levine’s encouragement, to get involved in marketing, and she was promoted in October 2008 to executive vice president of strategy and marketing, a role that included responsibility for private brand development.
The private brands work constituted another “start-up” business for Flur since there was neither budget nor staff for it; private brands up to then was handled at the category level by the buyers and category managers.
This move also was a natural outgrowth of the consumer research undertaken in her first year at Family Dollar: The retailer had a much clearer idea of who its customers were, so creating more effective communications was well within reach. Moreover, with the economy plunging and gas prices surging, the chain’s hard-pressed shoppers were consolidating their trips and economizing more.
Like other retailers in its trade class, Family Dollar had achieved success without hefty marketing budgets. When Flur took on the chief marketer’s role, the retailer was issuing just 10 ad circulars a year; by 2010 that had increased to 23. "We drove a major expansion of our print advertising to compete for those scarce shopping trips," she recalls. "And we introduced our first digital marketing programs."
Her strategy and customer insights work provided the springboard for Flur to become increasingly involved in Family Dollar’s strategic merchandise planning and category management. The company had been making major investments in merchandising and supply chain capabilities as part of an initiative called Project Accelerate. Those investments had provided the merchants with tools for merchandise financial planning, category management and assortment planning — tools that would pay off in the future when store clustering and tailored assortments would start to become a reality.
Consequently, less than a year after taking over marketing, she was named chief merchandising officer. "Howard obviously knew I wasn’t a merchant," Flur says. "But he decided we needed to coalesce the merchant team, with knowledge of where we wanted to go, while leveraging some of the tools we’d been investing in with Project Accelerate."
Flur’s role as chief merchant was, in essence, to advance the transformation of merchandising at Family Dollar while keeping it aligned with the company’s strategic direction. It involved creation of a three-year strategic merchandising vision that was integrated with global sourcing and private label development initiatives as well as with marketing strategies and real estate operations.
In addition, Flur’s brief included building a senior merchandising team that would incorporate a strong and talented succession pipeline at multiple executive levels. Notable additions included such seasoned merchandising executives as Paul White, formerly of Goody’s LLC and Shopko Stores Inc., as senior vice president of apparel, home and seasonal; and Trey Johnson, formerly of Walmart, Supervalu Inc. and Albertsons Inc., as senior vice president of food.
Beyond that, she had the goal of simplifying and integrating the merchandising framework and aligning the merchant organization behind it in order to maximize the return on Family Dollar’s investment in Project Accelerate.
In addition, Flur naturally integrated the merchandising vision with the broader organization in order to ensure that it was aligned with the chain’s overall business model.
"Howard let me write my job description for the EVP of merchandising role, too," says Flur. "So I wrote it around defining a customer-centric vision and establishing the team and how we link to the rest of the organization and a merchandising framework from a business process perspective."
In September the pending retirement of Family Dollar president and chief operating officer Jim Kelly resulted in Flur’s most recent promotion, to the new position of vice chair for strategy and chief administrative officer. In part, her new role marks a return to her roots in strategy, except that she never quite relinquished that focus even while leading merchandising.
Moreover, both Flur and Family Dollar have changed a good deal since 2004. Her involvement in the real estate group and in merchandising, she says, have given her a deeper grounding in the retailer’s geographies and in its merchandise categories. And, she says, she is more pragmatic now.
Family Dollar, meanwhile, continues to be transformed. Unlike the days in 2005 when Concept Renewal was tackled as a bootstrap operation with minimal resources applied, the company now has what Flur describes as "incredible capabilities."
Those capabilities are available to her in her new role as chief administrative officer. "I have the key resources of technology and talent," she says, "so it’s much more about how we scale and how we sustain and how we can make sure a strategy isn’t just a neat idea, but can be institutionalized."
Reflecting on her seven years at Family Dollar — a tenure that has been transformational for the company — Flur takes pride in the customer focus that now permeates the company and which is the product of the consumer research that was her first project. She is equally proud of the management team that she has helped build not only in merchandising but in marketing, strategy and real estate as well.
Looking ahead, though, there remains much to do, even with the huge accomplishments of the last few years. "Howard does tease me that this is my fifth job in seven years," Flur says. "But I haven’t gotten bored yet."