Ten Laws For Retail Today

Ten Laws For Retail Today

Are You Lost In The Abyss?

https://www.linkedin.com/pulse/you-lost-abyss-will-roche?trk=prof-post

I DO NOT GET IT!

https://www.linkedin.com/pulse/i-do-get-will-roche?trk=prof-post

Nothing New Under The Sun!

Ecclesiastes 1:9 (NIV) What has been will be again, what has been done will be done again; there is nothing new under the sun. This has always been for me a very interesting quote from the Bible. What does this have to do with retail you ask? Retail was forever a service business not a product business. A change occurred somewhere shortly after WWII with the huge economic boom that followed and the commoditization of retail in the form of lower product prices over service. Everyone can now be “rich”! At least that was the dream.

The switch from service to product was subtle and took a number of years to fully catch on. It was a race for who could get big enough to control product price. In retail the focus until late has always been about operational optimization in the form of product costs vs price sold. Nothing about customers or service was focused on because the value proposition was the lowest price. Hence retailers like Wal-Mart grew to be gigantic and the good old great service companies I remember like Sears became a shadow of what they once were or gone. The problem is most companies followed this model which they were in many ways forced to and found themselves in a death spiral. We know who they are, JC Penney, Sears, Kmart, Montgomery Wards, Circuit City, Borders and soon to be Barnes and Noble for example.

Barnes and Noble is a very interesting study. They did it all you might say, online, in store experience (remember Starbucks), customer service/brand loyalty and even gadgets like Nook! One word, gives us that answer, Amazon. It took 10 years or so but with the advent of electronic books easily downloaded at a great price along with Amazon’s personalized and convenient way to purchase, market share then moved away from Barnes and Noble like a vacuum. But what about omni-channel, mobile, customer experience theory that many retailers are being told to go run off and do? Would mobile phone applications or tablets for the store employee have stopped the flow of red ink? What was it Barnes and Noble should or could have done differently? Were they just collateral damage from a market change unable to re-invent themselves?

There is no simple answer to this question and no silver bullet to the problem. The answer does lie in understanding your customers and doing something that makes them feel good about spending money with you on a regular basis. How do you do it? First you are not going to out “Amazon” Amazon and the fight for lower product prices is a non-starter. What does Amazon have? I can tell you from my point of view. It is selection (you name it they have it), reviews and trusted advice, convenience (one button shopping a great 2 day free delivery on most items) and many other things such as movies, tablet devices, etc. Amazon’s Prime is very sticky!  

You must think like a customer. Why buy from you? Why would I go to a store to purchase anything? The biggest reason is I want it now. That means you better have inventory that I can see and acquire on-line and quickly get into my hands without a hassle. The shopping experience is a very social thing and still very sticky as well. I am motivated by many things when it comes to shopping. The Brand, are you in or out? The location, is it convenient and clustered with other stores/brands I go to? Are your products unique and satisfying to me and my social network? Do you know me and treat me special when in your stores? Do you give me preferential treatment (This is a big one)? Do you give me deals or services that let me know you are thinking about me? If you do these well, then you can give me all of these neat things for my phone and on the web but not before.

Technology is critical to execute in such a fashion. You must have real-time operational access to all this customer information for delivering that great service at that glorious point of impact. Remember you are selling a service the generation of revenue from the sales of an item is just a by-product.  Focus on how you can provide a unique and differentiated experience and then look how technology can serve you.

Item-level RFID Is The Cure For Out Of Stocks

http://www.retailsolutionsonline.com/doc/item-level-rfid-is-the-cure-for-out-of-stocks-0001

The Time Has Finally Arrived! Top Five Retail Technology Predictions for 2014

Item level RFID

Where I see the real driver of need for RFID item level tagging is with serving the demanding omni-channel requirements. How are you going to be customer focused providing great experiences with an inventory accuracy of 60 to 80%? I see many opportunities for retailers to turn well-meaning customer serving initiatives into customer satisfaction issues. You must have near 100% accuracy of your inventory if you are expecting to source from your stores for your omni-channel experience. If you say you have it in the store and I drive over to get it and you do not have it in your hand waiting for me you are toast! Even more if you offer same day delivery to combat online competition you must deliver and on time. This need for knowing real-time what you have and very specifically where it is may be one of the biggest underpinnings of being a successful retailer in this new customer-centric world. The technology is here and has been proven.

In-store tracking

The idea is that tracking in a store 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. What if a retailer could connect you and all of your personal shopping data? You could opt-in or out at your convenience. You now become a valuable customer walking around the store not a series of numbers. What if you had a trusted relationship with this retailer 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. Apple and a number of other retailers are doing this very successfully using a number of different technologies.

Customer analytics

We have all talked about CRM and “big data” ad nauseam. What I believe most will agree it is not size of the data it is the quality of the data and what you do with it. What if as a customer you could also share your likes and dislikes with a trusted retailer that cooperatively helps the retailer provide the best service and offers. It is the combination of many different kinds of data, but ultimately providing relevant and valuable experiences that makes all the difference. Retailers will stop stocking the items they think customers might want and start stocking the items customers do want. This can only happen if they are armed with as much information as possible about those customers. This view of the customer can only come from merging the buying and selling processes into a single, fully integrated cycle. By collecting customer data at multiple touch points and including salespeople, demographics, and POS figures in that collection process, everything from what initially captures a customer’s attention to what prompts them to make the final transaction can be discovered if you have that trusted relationship. This technology is also ready and you will see lots of it a NRF 2014.

Mobile – personal offers

Now that you have the mechanisms to know what you have and where, stocking what customers want to buy and knowing where your customers are in your store you can unleash the customer analytics to provide the right offer at the right time and at the right place. This is where the smartphone will shine as a selling tool if done well. Many companies are now making offers on smartphones, but doing it so you make significant improvements in customer retention and basket size has been a problem. Having all these pieces will enable the retailer to finally measure their marketing investments much more precisely giving insight to making the appropriate investments. These systems are in place and we will see solid results from progressive retailers in 2014.

Replacement of the Mag Stripe

As we have seen recently at Target our credit card technology in the US is out of step with the rest of the world. We are too vulnerable to theft and I believe real actions will be taken either because of liability or force by the government. There are many different approaches out there, but this will be significantly pared down in 2014. This will be a hot one to watch!

We Need More Customer Surveys!

I am joking of course, sort of. Customer surveys do not work as they are deployed today. That is a generalization that I am sure a bunch of people will challenge, but when you are presented with an opportunity to participate in a survey what is your first response? Mine is to hit the delete key unless I had a really great or terrible experience. Even then after I answer the sixteenth question with a next button at the bottom of the screen, I bail. Does this resonate? Why are these retailers surveying me anyway? I have never seen feedback from any of them on the isolated few survey’s I have completed or any substantiated change of behavior that came from my input.

First I don't see how the data could be representative statistically of the retailer’s customer base. I received a survey today (which drove me to write this) from Overstock.com. I actually had a great online experience with Overstock and wanted to share that with them, but after fifteen to twenty questions I hit the bail button. So there will be no data for Overstock.com. I was only motivated by the great deal I got and would not normally have answered. Howto.gov - “Online survey response rates vary greatly, with a carefully targeted email survey typically getting a 10-15% response rate. Pop-up surveys response rates tend to be significantly lower”. If you do a great job with targeted email surveys you will only be lucky to get 10-15% and these will most likely be your best and worst customer responses and I assert without real value as to how you can improve? Is this useful information to take action against better yet make strategic investment decisions on?

So let’s back up for a second. Why do retailers want to do surveys? The answer is you do surveys to measure your effectiveness against the execution of a vision and strategy. So if you are on a strategic path to become a customer-centric company with a vision that all of your channels look and feel the same a customer survey may be a good measuring stick. The problem is you do not want to make it a “rat hole” for complaints without statistical and generally holistic data.

There are a number of companies out there like Qualtrics, Loop and now Urgent Insights who claim to have a system that customers will use as a quantitative mechanism for feedback. The concept is with the ubiquity of the smartphone and only having a few very precise easy to answer questions (like 1 minute or less)  with a very friendly UI, people will use this survey tool in a more objective way providing real-time feedback to retailers on how they are doing against their vision and strategy. A word of caution here, you better be prepared to handle problems quickly, provide feedback to your customers and generally show how this information is helping the customer experience.

What do you think? Can you handle another survey and on your smartphone?