RocheonRetail - Top Three Blogs for September

Is Traditional Advertising Soon to Be Dead for Retailers?

Why do People Hired to Serve Customers Oftentimes Neglect Those Customers?

“Loyalty? If you want loyalty buy a dog!” Part ll

In-Store Tracking is it the Same Thing as the Internet?

I have become very intrigued about the latest technology which tracks your smart phone in a store without you knowing it. This technology captures your phones MAC address off the wireless network and then with specialized devices keeps track of that MAC address (you!). This is not just on this occasion but any occasion there after it knows it is you or at least your phone. All of this information is then consolidated and analyzed to provide very interesting information like:

•         Number of visitors per day
•          Avg. time spent per visit
•          Number new visitors
•          Number repeating visitors
•          Number of visits
•          Avg. time spent by area (zone)
•          Number of days from last visit
•          Walk by traffic vs. walk in traffic

The idea is that this tracking is no different than what happens when you are on the internet and using Google analytics. Your IP address is exposed, used and analyzed for all sorts of things that you know and don’t know about. So is your reaction to this technology that it is a good thing, a bad thing or just another version of what is already being captured about your movements? My first reaction was that this is intrusive and I should be told this tracking is happening! Really, that would mean all of these video cameras placed everywhere now including retail stores should notify me and give me a choice as to whether they can record me. I am actually only giving my MAC address without any personal information like my IP address on my computer. What if a retailer could connect you and all of your personal shopping data to this MAC address? You then become a person walking around the store not a series of numbers. What if you had a trusted relationship with this retailer and could opt in allowing the retailer to offer you direct promotions based on your particular wants and desires? The retailer could even begin to map your travels in their store and better understand where and what you spend your time doing. Is this something you would opt in to receive or do you believe it is just too creepy?

Amazon does this on the internet and is forever refining what they offer or suggest for me to purchase. They have now gone so far as to ask me to give them additional information about the what and why of the items I purchased. BTW, I really like Amazon and the value they bring me! So is this location based tracking with real-time offers in the store significantly different than what Amazon is doing today on the internet?  Is this in fact the “next turn of the crank” in technology to significantly improve the customer experience? I think these sorts of technologies ride on a slippery slope, but as I stated earlier we are all ready “pregnant”.  As long as the retailer uses your information to provide you with better product offers and services while never betraying your trust, I believe it might be just the thing to bridge the omni-channel world. Please give me your thoughts.

The Yin and Yang of 21st Century Retail

“In Chinese philosophy, the concept of yin-yang which is often called "yin and yang” is used to describe how seemingly opposite or contrary forces are interconnected and interdependent in the natural world; and, how they give rise to each other as they interrelate to one another.” Wikipedia. The “yin and yang” in retail today are the forces of technology driven to automate everything pitted against the need for the human touch and relationship. Both are much interconnected and absolutely required in this staggering logistical and operational quagmire of ecommerce married with hundreds maybe even thousands of brick and mortar stores flying the same flag.  In fact you cannot expect to succeed and grow as a retailer if you don't completely understand both of these forces and learn how to make them “give rise” by their interconnectedness.

This is where many retailers are challenged because of their conventional organizational structure trying to accomplish something unconventional. Most retail companies are siloed by how they operate organizationally. Traditionally, you have The CEO, CIO, CMO, VP of this and that all looking at their world with a lens focused on their point of view and goals. There is a lot of talk these days about the CMO becoming more of a quarterback than the traditional “advertising” role paid to promote the brand. I have even recently been seeing this new title, Chief Customer Officer.  “A chief customer officer (CCO) is the executive responsible in customer-centric companies for the total relationship with an organization’s customers. This position is relatively new addition in the CxO hallway, and was developed to provide a single vision across all methods of customer contact. The CCO is often responsible for influencing corporate activities of customer relations in the call center, sales, marketing, user interface, finance (billing), fulfillment and post-sale support. The CCO typically reports to the chief executive officer, and is potentially a member of the board of directors.”  Wikipedia. So things are in motion to evolve the traditional hierarchical organization creating a new “thread” that runs through the entire company focused on the customer experience. This is a very important step forward if you desire to be a leading brand.

This new role can provide the leadership, vision and change in culture required to bring together these potentially opposing forces of technology and humanness. Technology is so much more than it was just a few years ago where your primary goal was to reduce cost in the supply chain so you could maximize profit. That was the world of product retailing. The customer in many ways was an inanimate object that you marketed to and competed on price for growth of your business. Today in this new era of the customer, traditional organizations and business strategies built on domination through getting the lowest price does not hold much favor for long term success. You must as in Chinese philosophy learn to use the “yin and yang” of technology and humanness to work in an interconnected and complimentary fashion. This is customer-centric retailing! What are you doing?

Is Traditional Advertising Soon to Be Dead for Retailers?

“A tradition is a belief or behavior passed down within a group or society with symbolic meaning or special significance with origins in the past.” Wikipedia.  “When asked to identify how they are funding their digital marketing activities, two in five marketers said they realized savings from digital marketing compared with traditional techniques, and they are taking that money and reinvesting it into their programs. On average, 28 percent of marketers say they have reduced their traditional advertising budget to fund digital marketing activities.” Gartner, March 2013. Only 28 percent have reduced their traditional advertising spend? Does that mean the other 72% are continuing to do the same old thing? Maybe the other 72% are plowing money from traditional advertising into store operations like training, tools and increased compensation for their “top shelf” frontline employees?

 How exactly does a retailer today reach their target audience and motivate these customers to spend money with them? Is it a well thought out strategy or just doing the same thing with a few extra twists like Facebook and Twitter and hope it all works out? According to another Garter study in 2012, retailers projected spend for 2013 was 10.6% of their total revenue on marketing operations. That is a lot of money and for what? Traditional advertising is very hard to measure ROI and 10.6%? Yikes! I would like to suggest as others have astutely pointed out that the world of the customer is upon us and people want to be treated special and feel they are getting a deal of some kind. I realize many retailers are diverting traditional marketing budgets to this thing called digital marketing in their quest to keep up, but what is digital marketing anyway? Is that marketing on social networks, large video monitors in the store, email campaigns, and mobile coupons? What does that do to drive retention and spend? I think there is a balance needed with a thoughtful understanding of exactly how you win and keep customers in this dizzying world of ever advancing technology.

Let’s start with people, which would be the employees and the customers. Technology, specifically real-time information about your customers and your inventory is absolute. But are we putting too much into “digital” and not enough into the “human factor”. I also believe as others that customer service is becoming the new marketing. Spending more of the massive 10.6% on ensuring you know your customers while treating them special will create the marketing buzz much better than the Sunday paper or an email campaign.

I believe there is a movement that is growing like a tsunami towards serving and creating a great experience for the customer. You can call it omni-channel or whatever the buzzword is next week, but it is all about treating your customer special and making them feel like they just won first prize! This is customer-centric retailing. What are you doing?

Why do People Hired to Serve Customers Oftentimes Neglect Those Customers?

First there are many awesome customer service stories out there that prove delivering a great customer experience is not dead. I have my thoughts about why people providing customer service become calloused to their job of delighting the customer. The reasons are always found in the boardroom.

It is all about motivation! I believe we can all agree that money is a poor motivator however it has been proven that until you reach a base point money does effect attitude. There are raging debates currently going on about increasing the minimum wage to reach that estimated base point or somewhere at least in the neighborhood. I have seen statistics stating 89% of consumers say they will pay more for better service (RightNow Technology 2010 Customer Services Report). Does that mean getting a McDonald's hamburger too? So if your employees have that base point salary how do you then get them motivated to focus on great customer experiences? People generally do what they get measured against. Are you measuring your people on how delighted your customers are or attainment of your weekly sales goals? Do you even go farther to demonstrate through a recognition program the best employees based on customer feedback? Rewarding employees for the behavior you want to see is how a culture is created. It first starts however with leadership demonstrating by doing not just mandating the desired behavior. Remember the saying, “Do as I say not as I do”? “Lead by example” is the proven way to get your people to behave the way you want. The first place to look as leaders is in the mirror and then to ensure everyone in the company is on the same page.

Which brings me to the next point, what page are we on exactly? Having a vision and charter are absolutely necessary, but having a way to train and constantly reinforce how you deliver that vision is even more critical. Having the vision on a poster in headquarters is of no value if everyone is not bought into the passion of delivering that vision. With all the advances in today’s technology I personally believe the tools you need to hire, train and communicate with your frontline people is THE most important investment you need to be making. Having order on the web and pick up at the store capabilities do you no good if your people do not have the education and tools to make sure when that customer comes into the store all is ready.

When employees are properly led, compensated, educated and rewarded they will be motivated and passionate. They will also feel that magic of helping people and making them feel special! All of these things then begin to feed on themselves perpetuating the culture of delivering great customer experiences.