Recently I completed the VP Knowledge Matters Retail Simulation. I wrote a few months ago about completing the practice version (read here) which I passed quickly and easily. I thought through everything that I have learned over the semester that I would be fully prepared to ace the final simulation. I was not.
The concept of the simulation is to own and operate a grocery store with the objective of having a $17,500 weekly profit. Fairly straightforward. You begin by choosing one of the ten available grocery stores, which are several sizes with a diverse mix of customers and surrounding areas. Each store has a different weekly rent based on square footage, location and interest. For my sim, I chose a midsized store in the middle of the city, because it was relatively low cost and the surrounding area had a high population density.
Once you choose a store, you have to staff and stock it. Due to size limitations, I put in 2 checkouts and had store hours between 7am and 11pm. The store is opened based off of when you have cashiers working. I had 1 work through the morning and early afternoon, with 2 cashiers in the evenings. The sim allows you to poll consumers, so I found out what items customers buy regularly and based my store layout off of that. I tried to place impulse items near the checkouts. I set my base profit margin at 35% and adjusted individual products based off of customer comments and feedback.
Once the store is operating, there are several promotion options. There are billboards, radio ads, newspaper ads and email promotions. For my sim, I focused on billboards to try to bring in customers from around the area that may otherwise go elsewhere. Billboards are expensive, but I rarely saw a drop in weekly profits when adding a new billboard because of the additional customers they bring in.
I tweaked things based on customer comments and feedback and ultimately after 5 simulation years, I was still unable to meet the $17,500 weekly profit goal and threw in the towel. My best week was over $13,000 in profit but I was unable to duplicate that success or capitalize on it further.
In the days following taking the simulation, I went back and tried again based on what I had learned the first time. I was still unable to hit the weekly goal. If I had another shot at it, I would have done more initial planning to set my store up for success. My biggest downfall was adjusting things too quickly on the fly without analyzing the effectiveness of different approaches and marketing tactics. Thankfully, it was just a simulation and I don’t have to actually run a grocery store.
The simulation was challenging, stimulating and fun. I would recommend anybody who wants to someday manage or own a retail business to try it. I believe it was a beneficial exercise for me and caused me to think a lot on the complexity of what goes on behind the scenes at stores we visit daily or weekly.