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It seems that lately, my conversations with both retailers and retail industry technologists arrive at the same basic question. “With the explosion of hot new technologies, which of these will really provide value?” Obviously retailers are concerned about the disruptive consumer-based apps that are about to dramatically impact their businesses — but for most retailers, the decision on which social, local, mobile, loyalty, clienteling, digital marketing or CRM solution to pursue is seldom guided by a well-defined customer engagement strategy.

So, how does a retailer cut through the noise? My recommendation: start by going back to the basics…

First:
Retail is about people. Knowing people, solving their problems and taking responsibility for their satisfaction throughout the entire want-it, buy-it, and use-it experience. Finding ways to create that satisfaction and delivering engaging customer journeys is the foundation of a well- executed customer strategy. It’s about knowing who you want to be and what will differentiate your business. I’ve identified over 150 retail best practices that can differentiate your customer experience and drive profitability. While it may sound heretical, it’s not about the technology… it’s about the people! Start by selecting a half dozen best practices/initiatives that matter most to your customers and have the greatest likelihood of improving the business. Find the “easy wins” and build upon those with future initiatives.

Second:
Consider how any new initiative is likely to impact corporate KPI’s. Retail math is pretty simple. Revenue = (Traffic) x(Conversion) x (Transaction size). While everyone knows that these KPI’s determine the health of a retail business, it is amazing to me how often technology decisions aren’t first run through these KPI filters. Any online or store-level solution is likely going to affect one or more of these metrics. Analyze and identify how the solution is going to move the metrics and consider the investment based on those projected results. Just because everyone else is jumping onto the latest hot trend, doesn’t mean it fits your customer strategy or the KPI’s that matter most to your business.

Third:

Select/build solutions with functionality that maps to the desired practices and strive for little or no “friction” in adoption. Inducing a sales associate to use a new tool can be a formidable task if there is even the slightest mismatch with established workflows. Most consumers won’t try new technologies or download a retail app unless there is immediate perceived value in doing so. Be clear on which behaviors you trying to influence and bring multiple disciplines together in gathering requirements. Always build or buy technologies that are intuitive and designed from the user point of view.

With the customer in mind, I would like to share a recent article written by Will Roche of Microsoft. Mr. Roche has spent his career working with some of the worlds largest retailers and technology vendors. I think Will really understands the intersection of technology and “people-centric” issues. With his permission, I have included it below.

Enjoy!

Bryan

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The Business of People…

Guest Post by Will Roche – Retail Solutions Executive, Microsoft Dynamics

It is interesting how we use words like customer and consumer to refer to people who purchase goods and services from our companies. I recently heard the term “B to P” vs “B to C” which really caught my attention. The quest to have a closer more relevant relationship with people who purchase goods and services from us is about understanding human behavior. I can see how retailers are chasing the hype of social networking, mobility and such things as clienteling to get ahead of competition not really understanding the core drivers. At the core people
generally behave on fairly predictable terms so it is important to understand what levers you have as a retailer to drive these behaviors and to whom you choose to do it with.

I use this example often when I talk about observing customer centric initiatives (maybe it should be people centric?) with retailers. I have a grocery store close by which a number of years back spent a lot of money re-inventing themselves as a high end food competitor. One big problem was they thought they could automate service and bypass employee costs via automation. As I walk into this store I am immediately presented with the option of joining their “loyalty card” program via a nice looking kiosk. I walk by as I am not interested in spending my time typing on a computer. As I enter the start of my shopping experience with my shopping cart I am immediately presented with a wall of  “personal shopper” devices that I can use if I had a “loyalty card” and the desire to figure out what they were for?

Entering the fresh produce area there is a large flat screen with someone talking which I can’t quite understand and frankly not interested in hearing. As I choose some fresh produce I see that I have the opportunity to weigh and print out a label which can be scanned at the checkout. Interesting, why would I want to do that I ask myself?

As I go through the store I see additional attempts to add value such as touch screen devices on certain isles to locate a product I could not find. Usually it was out of order or when usable difficult and frustrating to navigate.  To cut to the chase of this experience, when I went to finally checkout I was forced to go through a self-checkout because there was only one lane open for full service and it was full? I am not sure whether the thought was how to improve service or just cut costs for employee’s, but in either case I dreaded going to this store even though they did a reasonably good job merchandising their products and providing the products I wanted. I actually would drive a few miles out of my way not to go there. Consequently I never really saw any traffic at this store and they are no longer a brand in business.

Morale of this story is to understand what real value means to the people you want to serve!

Technology is a wonderful thing and provides many improvements to our lives and even how we purchase things. Understand though that technology is a tool and as retailers you need to first understand and know who your customers are and what makes them tick as it
pertains to your offerings. So before running off and buying some expensive new gadget for your stores, think hard about how it will help drive your core mission and value proposition. You should never waiver from this; it is easy to get caught up in the latest “shiny thing”. However as a person that has spent over thirty years in technology for retailers I do have some insight that I would like to share.

The first is data. You cannot know your customers without data. Not being a local corner store and with constant turnover of employees you cannot depend on (for the most part) long established personal relationships to drive value if you are a typical chain retailer. Data
about your customers and more importantly what you do with this data is critical to the development of relevant relationships with the people you serve. Most everything in this world fits into Pareto’s Principle – The 80-20 Rule. Twenty percent of your customers will or should statistically provide 80% of your profit. So your first mission is to understand who these people are and manically treat them special. How do I know how to treat them special? Part of that is what makes you unique and is required for you to be in business, the other is to have predictive analytic tools that can help you sort and model out signal indicators helping to pinpoint those human behaviors you wish to influence with that twenty percent. This is the real “secret sauce” and you need to really look hard at the many options you have as a retailer in this area. Many companies want to sell you large complex storage eating monsters, you don’t need that! What you need is a comprehensive solution that acts as an engine using this data in many ways and channels to better serve the people you have chosen to have a relevant relationship with. This engine is typically called CRM. CRM is the repository and delivery mechanism of customer information which allows you to operate real time with your customers providing consistent and relevant experiences.

Let me use this example. You have a Facebook page with many people signed up. You know certain affinities about those chosen twenty percent on your Facebook site. You could for example make an offer on Facebook to one of these special people creating a coupon on their
phone for redemption at their favorite store. When they arrive the sales associate using their clienteling application connects with the phone offer pulling up all the data on this customer along with the coupon to really create a “I know you” experience. This engagement should be a well thought out sales process and executed consistently throughout your organization. By the way, executed well friends of this person will see on Facebook (if he/she elects) that they bought this item and had a great experience. Make sense?

There are many business processes and technology tools including, emails, events and texting that also are part of this comprehensive system, but one fact needs to happen. You need to increase the frequency of visitation and dollars spent per visitation by that twenty percent or all of this is money for technology is down the proverbial toilet. If done well making sure you have metrics and a feedback loop to your process you can then expand to a new frontier, the 70-30 rule.

Will can be reached at will.roche@microsoft.com

 

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