Looking Ahead | Emerging Trends in Retail and Digital

A future looking perspective on Retailer's world in coming years and me making sense of the technology events around us.
Source: eMarketer Report by Ethan Cramer-Flood-Feb2023

Globally, the retail industry went through an interesting shakeup in the last three years. The share of digital retail revenue in total retail revenue saw a sharp climb in 2020, rising from 14.3% in 2019 to 18.5%. However, it later settled at 20.2% in 2023.

Investments in digital skyrocketed during the pandemic and many real estate deals were renegotiated or exited. Supply chain disruptions also brought Retailers on its knees. Now, the overall outlook for retail looks slow with a projected growth rate of only 3.9% in 2023. It is likely to grow at slower rate in the next four years (around 4% or lower).

In 2019, everything from Meta to Web3 and IoT were considered promising technology. Meta was expected to impact the sphere of customer experience, blockchain in the sphere of supply chain and so on. Then, last year, Generative AI caught the imagination of all businesses and retailers across the globe. As of today, it is known to impact digital retail through its ability to change marketing operations, customer experience management, and many more areas. McKinsey says the overall impact will be about $400 to $660billion a year. 

If you are a retailer and looking at this rebalanced and stirred-up world of digital and physical retail and wondering what new paradigms to consider while building plans and strategies based on everything (digital) around us, here is a little something I would like to share.

Three ideas to consider as you build your future digital and retail enterprise.

1. Think of media in its new avatar: 

Among all the business functions which are impacted by Generative AI the most obvious one is media and content because, well, it is ‘Generative AI’. The technology could increase the productivity of marketing function with a value of 5%-15% of total marketing spending says McKinsey

I believe about 50% of digital assets I call media (images, product data, styled photos, social posts, consumer engagement, email templates, web content, videos, audio etc.) would be supported by Generative AI in 2 years and therefore must be much impressive creatively.

If this was the case, all the current vehicles of production which develop this media (collectively referred as agencies) will have two key threats.

  1. Impact on commercial model: Commercial models will have to change when a high productivity and generative tool is available at every agency’s disposal.
  2. Accountability to generate real sale: Greater accountability will have to be introduced for all the marketing, media, and engagement. The function will be under pressure to justify the marketing ROI. The generative tools will not come cheap and not using them will not be an option and above all creativity will be commoditised for a while. Although, true creativity will outshine all. 

The older models of developing broadcast media, digital media and having your trusted entities to build, engage and broadcast will be significantly challenged. (Yes, there are many businesses still running on older models where high level of inefficiencies exist in marketing operations.

Generative AI will indeed introduce a new avatar of media that will be either truly creative or just mediocre and it will have new hybrid methods of developing it. 

One unit fully aligned to brand’s purpose and business objectives should ideally have all the capabilities to develop all this media (across channels) in its new avatar. 

2. Make store as your technology powered asset.

The massive re-balance of customers coming back to the stores after the pandemic while maintaining their new online activity highlighted the X factor of physical stores.

Of course, the focus on omnichannel capabilities increased during the pandemic. Only 8% retailers had omnichannel capabilities in 2018. It reached 52% in 2020 according to a 2021 survey. 1

Yes, some retailers (e.g., Canada Goose, Story, Neighbourhood Goods, Camp, Nike etc.) have excelled at the store experience2 but the experience is possible by technology powered convenience factor. To elevate the X factor requires retailers to re-focus their technology linked efforts in re-inventing the role of stores. For example, the use of dynamic pricing displays, catalog extensions, use of Generative AI to create virtual try-on of a product and making them available when they visit the stores and Generative AI enabled concierge staff to provide a superior experience to the customers are all examples of technology enabled convenience.

All such technology powered solutions will impact hard business metrics across ALL channels and not just stores and that indeed re-asserts the irrelevance of channel centric thinking in building action plans and strategies.Store is the best asset (and not a channel) to be powered through technology because it represents your business like no other entity does. 

3. Redefine customer service.

Elevated customer services begin with empowered employees.

Although Gartner predicts that 1 out of 10 workers in customer support will be replaced by AI by 2026 the essential action for businesses is really in retraining and empowering the remaining 9.

In an era when every customer begins to get massive amounts of synthesised level of information with a click of a button, the expectations from all businesses who provide their support/services for the goods or services they sell will have to be significantly information rich.

Businesses will be expected to operate at the same level of efficiency and information as the customers are used to in their personal and professional lives.

All businesses that have been working on initiatives to personalise customer experiences or build more effective marketing campaigns will have to do away with creating campaign calendars and think of constant communication in real time with your audiences.

All businesses that depend on large amount of customer data and run post facto analysis and hold control within their hierarchies, will have to empower customer service and support reps with real time synthesised knowledge about the customer and their services to address customer queries, complaints and literally every form of engagement.

It may appear daunting to stay on top of the technology trends and ignore the hyperboles but building practical action plan and strategy is possible. Being bold and knowing what is of the highest value to you and your customers alike is an essential part of it. The ability to deliver the technology benefits should be based on what value you want to deliver to your customers and not what the technology can do for you. Putting it simply at a visceral level – technology linked advantages as promised will only be realised when it significantly impacts (1)human experience (2) capability (3) convenience, and most importantly brings business benefits as a consequence of all three of them.

References

1 – Digital Commerce 360 Report in 2021

2 – Store is Media by Doug Stephens

Other Posts

Digital Minimalism | Exceptional Retail | Digital Retailer’s Litmus Test

Exceptional Retail | Stores and spaces that inspire

For many many years Google (as a brand) was that minimalist and simple search bar which got me whatever I wanted. Like me whoever chose to go further with the brand found themselves in this virtual candy land of possibilities (i.e. products they launched and experimented with). I did go further with the brand just like others.

But ‘hey Google’ 🙂 launched its first retail store at 76 Ninth Avenue in New York City last week . I was curious and I was tempted to feel a lot more humanly connected to this omnipresent brand we know as Google. Not even the launch of Google phones and Nest devices created such a human connection before.

So I got myself to read about the news story and as I looked further into it, I felt WOW ! When a technology company which is more futuristic and future ready than any other company in the world consciously decides to create an engaging physical retail space with warmth and character, it is exciting for anyone in the Retail industry. Especially at a time when 25%-50% of all enclosed malls in US are expected to cease operating in 3-5 years and at a time when Nike reached its target of online sales (30% of total sales volume) 3 years earlier than planned. [Reference: Coresight research in Washington post for mall closures].

Source: Surfacemag.com

So, let’s talk about it from Retail perspective.

  • It’s not about selling

  • It’s definitely experiential

  • It’s about having that play but not heavily futuristic

  • It shows how Google products neatly integrate into everyday lives

    • AND

    • It has a very warm ambiance
    • Its a rich and vast expansive space (5000 square foot)
    • It’s modern era/Scandinavian design aesthetics still reminds me of art deco style architecture and spaces (courtesy pale wood as a color element)
    • It’s got interaction zones
    • It’s got fused channel experience (I don’t know about this but…’hey google??’ )

    The retail of the future is here somewhere. A world where retailers provide spaces which allow you to decide if you want to build any kind of affinity for the brand. If not – you just walk out and have fun. Get back to fun (i.e. your virtual metaverse if that’s what you mean) Important to say that this choice will be exercised more than ever. This is possible because customers can buy products any day anywhere and any how but engage them as a community and they might love you more. Who knows you might(and that’s a big MIGHT) win their loyalty for a short while.

    Source: Surfacemag.com

    You might say – brand management was always about stories. Advertising just did that, isn’t that true? Yea but stores were transaction points, weren’t they? When stores engage the customers with the products customer care about, it has a stickiness to it like no other. It makes you want to own the products. Months of lockdowns and separation from true human connections has made us think about the connections we really care for. Human Connections! Connections which inspires us, connections which makes us take that leap of faith and bring a product home. This will indeed make a material impact to entities like a retailer. The retail spaces of the future have to allow community spirit to thrive. It is instinctively human. Retail spaces should be fun and should create opportunities for us to come back to it, again and again.

    We’ve been moving away from world of channels and eCommerce to a world of ecosystems and habitats. It’s about providing convenience and customisation supported by data. The data the retailer needs as well as the data you need to have in the path to purchase, during purchase and also after you settle with the product. This creates an ecosystem connected by several Habitats (e.g. Taobao, Tmall, Tmall Luxury Pavilion and Ant Group are the Habitats of Alibaba’s ecosystem and they are 100% connected to their data science system). Customers can seamlessly enter from any habitat to any habitat and purchase from anywhere they choose. Everything about the customer is known and customer is fully supported in all the interaction points (thank you @Doug Stephens in Resurrecting Retail about Alibaba ecosystems)

    So I  am excited to think about the possibilities when Google ventures into Retail. Will it beat what Alibaba did? Ever? Will it have the algorithms to feed into the data science environment before or after you visit a store? Will it correlate your visit to the mountains of data which Google is sitting on ? Will it feed those valuable insights back into their product designs? To what extent? Even better will they reinvent the whole buying experience and beat Alibaba at the ‘New Retail’ as Jack Ma coined it in 2016? Can they? Fun to think of the possibilities.

    Source: Surfacemag.com

    Also, let’s talk about it from Design perspective.

    • It’s not plush but minimalistic
    • It’s not organized into aisles at all but product interaction zones and fewer shelves
    • It’s not a small space
    • It’s got ‘here to help’ approach to product discovery

    AND

    • It’s beautiful
    • It’s super fun
    • It’s packed in with a lot of character
    • It has a warm feeling..The warm colours and fun cushions and everything add so much character to the store which angelic design of apple stores do not do. It goes well with product colours of Google phones and devices. Sadly such ingenuity is not felt in even Android 12. I’ve always disliked the bright coloured iconography of Android. Very personal preference indeed.

    I really believe that spaces we work and live affect our behaviours and moods beyond measure. There is enough research which proves that but ask any self aware person and he/she would endorse that our lives are impacted by spaces we live/work in.

    To truly differentiate themselves from the competition retail space designs of the future have to have character, warmth and ability to inspire. The inspiration can come from the way products add value to the buyer’s life or anything which the human mind values the most. Now that’s a no-brainer.

    Anuj Vaidya

    I must admit that the whole concept of experiential retail was emphatically led by Apple. However the white walled spaces, interaction zones and pale wood tables of Apple stores became a bit predictable and dare I say without character. Apple sales have zoomed ahead beyond measure but when it comes to design – Apple is too predictable and lacking in personality. Apple product designs are also not game changing anymore in design (talk about Apple watch, talk about iPads, talk about iOS 15). May be the store designs of Apple are still congruent with Apple products as well as Apple – the company which makes amazing (predictable products). Google on the other hand continues to look like the one who is shamelessly experimenting and continues to surprise us (think of new design overhaul in Android 12)

    Source: CNET.com. Apple’s Regent Street Store in London

    Product design is as fascinating a topic as the topic of spaces and design of spaces they should belong to (imagine art galleries). Together these two subjects depend on anthropology to allow humans to create something awe inspiring and truly innovative. When all of this comes together what we get is the potential to create ‘Exceptional Retail’. Exceptional retail which leaves lasting life impressions in a world which is increasingly becoming virtual and less physical. I continue to remain an optimist who believes in this power of physical retail. I am not ashamed to say that it is therapeutic. I am more than ok with that? Aren’t you?

    Digital Retailer’s Litmus Test

    Ecommerce is the first Imperative among a myriad of others (IOT, social, analytics etc) in running your business DIGITALLY.

    If you are a retailer and not yet online let me tell you that it takes time and patience to build it before you see the business impact on your top line, it is very important that you keep checking if you are not heading for a disastrous or broken outcome.

    How do you know that you have chosen the right team to take you on the next-gen commerce journey which they promised? How do you understand the so called checkpoints? What do these checkpoints indicate about the health of your project implementation and what is the likelihood of it delivering an outcome that you aimed for?

    A self evaluation framework on these lines is a good starting point. Whether you are just starting off or midway through the process of building your e-commerce platform or have gone live but looking for a litmus test to ‘RESET’. It’s never late to evaluate and re-evaluate. Introducing an evaluation framework which can help businesses to self rate their e-commerce platform initiatives and verify their alignment to their Omni Channel Commerce strategy.

    This framework is based on a self evaluation questionnaire with scores which can be weighted against its business priorities. What you get is a multidimensional score chart across multiple parameters. Each tells you where you stand.

    There are two broad categories of self evaluation to keep in mind.

    1. Global Standards & Best Practices
      1. Customer Centricity of your Platform
      2. Branding , Visuals and content Marketing approach
      3. Heuristic Evaluation
      4. Omnichannel Capabilities
      5. Alignment to Business Operations (merchandising, publishing process, creatives)
    2. Project Planning & Delivery
      1. Project Scope Control and Optimisation
      2. Project Test Plan and Coverage
      3. Project Planning and Execution
      4. Project Risk Planning and Performance Assessment

     

    Global Standards & Best Practices

    It is clear that no ecommerce platforms are alike and what applies to your competitors should ever be considered AS IS. It is also very important that the scope of your ecommerce platform features is keeping in mind the customer base that you are trying to impress and the geography you sell to. This sounds common sense but a lot of companies do ‘copy paste’ the website of their closest rivals (or business threats). Add to that situation the ‘productised’ solutions who promise faster time to market often standardise far too much and compromise customer experiences. Result – a ‘me too e-commerce store’ which neither creates a great customer experience nor delivers on the promise of sales which it aimed to provide to begin with.

    Chart1It is important to remember that –  the functionality could be same as any ecommerce store the CUSTOMER EXPERIENCE SHOULD BE UNIQUE TO YOUR BRAND.

    “Does the designed system consider optimal navigation paths to place an order”? Does the website communicate to the customer it does offline? Does it convey to the customer – I am here (anytime), I am awesome easy and I will be here to listen to you?

    Heuristic evaluation should consider questions like “Does the system keep the error avoidance approach instead of error message approach?

    “Is the user proactively informed about everything about the most important things in an ecommerce store aka “product, price and orders”?

    “Is the system focusing on the balance between visual appeal, right content and ease of order conversions?” Even one aspect being compromised leads to poor customer experience.

    Do you have clearly defined key metrics to chase e.g. average order value, unique visitors, conversion rates etc ?

    Does your product data from the Product Masters consider the ‘digital catalog essentials’? Digital catalog essentials include three primary requirements (a) customer friendly product title and product information(including pictures) (b) extensible product data structure which can evolve with time and covers aspect of inventory, price and promotions too. (c) Alignment of this product data structure to match the overall experience of the stores. Are the publishing workflows understood by your business teams?

    “Are you focusing enough on the complete experience (physical and digital channel) or just focusing too much on order capture? Did you consider ways to help customer get updates about his order and products with the same rigour with which you incited him to place his order?”

    Are you making your click and collect or BOPIS customers wait for their orders in stores? Did you forget to train your staff for these orders and the related process of delivery and service in your stores? Did you explain this process well enough to customers and do they know what to expect? What if customer wanted to cancel one of those items ordered online when they come to collect in store? What if they want to convert it to a gift?

    Did you plan to ensure that the web platform does not miss out on the minimum security standards like PCI, Privacy Standards (PII), COPPA, OWASP top ten security vulnerabilities etc ? What’s more critical to your country and it also depends on what you sell.

    Have the Business Operations beefed up to support the upcoming ecommerce platform? Have the teams been identified, trained and engaged at a deeper level to enrich product data, support customer service requests both for online and physical stores – (overlapping scenarios). By the way it makes a lot of sense to bring up cross functional teams  as champions of the new environment.

    Depending on the size of your product catalog, what is the readiness of your teams in achieving the following for your ecommerce platform?

    (a) product feed file preparation for product, price and inventory information
    (b) product data enrichment process on PIM
    (c) product photography and banners
    (d) test data readiness for those testing cycles
    (e) test data verification and agreements for the vendor teams to test them and time

    Project Planning, Testing & Delivery

    Scope

    In any new technology (platform) adoption, defining a right fitting project scope (aka minimum viable product) and executing it till it delivers through a 1st launch– lays the foundation of an application which is built to last for your current and future customers. If you fail here, you are starting off on a shaky vessel. A shaky vessel never go the distance – it’s just a matter of time. Very soon you will be out scouting for an alternative service provider or an alternative technology platform. Anyways the rate of technology change rivals the timeframes applicable for phased developments today.

    But before the application is built, was there a consensus among all the business stakeholders and IT teams about the scope of the project. Was there a collaboratively created business requirement document / user stories? Did the user stories evolve into a visually stunning and content rich and useful web pages or mobile app experience? Did you identify who and how would you create that engaging content? Did you mobilize those resources? Did the creative process align to the technical? Did these teams understand what is critical for your business?
    You would have changed a lot of business requirements from the point you started to the time teams were brought together to verify the said application. Were these changes tracked carefully to ensure no business requirements are missed?

    Chart2Did your vendor also cover non-functional software requirements. Examples like ‘expected concurrent users, page views per second, other performance benchmarks, global configuration settings, internationalisation, data migration, archiving rules’ etc? Did you participate in completing the loop?

    Did project WBS cover important milestones, demos, common dependencies between its tracks? Did the plan get updated due to unmet dependencies? Did the plan get updated to cover up for the scope creep which cropped up ;-)? Did you add a new third party relationship during the project execution (e.g. a new ratings and review platform? Did you realign project plan and the deliverables to cover this new component of the application? Did you plan for setting up this business and technical relationship?

    Architecture & Testing

    Were the key architectural decisions discussed and taken through consensus? Did you ensure that a functional as well as a technical roadmap was placed on the table for atleast a 3 year horizon? Did they converge well? Were the resources required for those upcoming projects were made available and put in place today?

    Test Planning and Strategy

    The test strategy highlights important feeder checkpoints in the development lifecycle where a certain part of the application is verified. (e.g. dummy credit cards and white labeled cards need to be available to testers to verify your loyalty account payment transactions). Availability of data for these feeder checkpoints is critical for verifying application delivery on time. Availability of related third party system for it’s sandbox servers should be committed and made available early during the ‘construction/creation’ phase of the application.

    There is nothing like a working piece of application. So even if you are following a standard RUP or Agile based delivery, a working piece of the application is always an important part of the plan. It creates fantastic engagement opportunities and also reference point for the business stakeholders. For RUP processes, demos should be proactively planned and given its importance for any solution delivery. Agile method assumes this.

    Peak load performances should be based on

    • deployment frequency
    • number of assets involved
    • size of assets applicable at each performance test time.

    The system test plan should be upto-date and should be revised periodically to accommodate all the change requests initiated during the course of the project

    Automated workflows to publish the content are great but they should consider all the failure scenarios (as in the real world) (e.g. auto deployment of minor catalog updates could have a failure scenario where manual deployment should be considered and that should be tested)

    The testing strategy must cover all the aspects of the project. Most commonly missed activities in testing approach are

    • Browser Compatibility Testing
    • Multi Lingual Testing
    • Multi Site Specific (difference) testing
    • Planning for A/B testing for specific business initiatives.

     

    Too often IT/Business managers have a lot of these in their mind and challenges are plenty in ensuring that all of these fall in line at the same time. The orchestration of all of these activities is life and blood of an IT business manager. A trusted program advisor, a domain expert and a hands on project manager can ensure that the surprises during the execution of the application delivery can be minimised and bring the business outcome you aimed for. Using the fundamentals of this framework is relevant to any typical e-commerce implementation in an RUP based delivery cycle. However there are different models of application building/delivery/execution which creates its own set of unique challenges and checkpoints and needless to say it requires its own set of checkpoints.

    As i write this, I am wondering on ‘how would you apply these checkpoints in an Agile delivery model’? What would you say are very relevant for each sprints? When and how in the project lifecycle would you ensure coverage of aspects like PCI, PII etc? How would you ensure you would ensure compliance of these standards during each sprints?

    OmniChannel Customer Experience

    Globally when businesses talk about OMNICHANNEL COMMERCE few themes emerge very strong.
    • Start with the Customer Experience in mind
    • Build systems/digital infrastructure which are sustainable and ready for a dynamic  future. (REST APIs etc.)
    • Consolidate downstream systems (supply chain and services) to orchestrate a better customer experience(again customer!!!).

    CustomerExp3
    So what is this customer experience we keep talking about? How do you go about making a delighted customer from a happy one. Let’s take some examples of an improved OMNICHANNEL COMMERCE experience.  Let’s ask some questions to get some answers.

    PRODUCTS AND PRICE

    PDP2When a customer looks up for a product seen by him/her at your competitor’s physical store, will your e-store provide a detailed and rich product data to the customer? Will the product search show the product he/she is looking for(correcting his/her typos and still knowing what he/she wants? Perhaps land on product detail in a couple of clicks only? If yes, he/she is likely to switch from your competitor.

    Will the product data consist of details he/she is looking for? (e.g. a demo video for a coffee maker, or a product zoom for a beautiful dress)

    Will the product offer a better value for the money he/she is willing to spend? Will the product be available to him/her when he/she wants it? Perhaps on her way back home in the evening? Perhaps before the weekend social event?

    Will the final product price inform about tax breakups and delivery options way before he/she proceeds to checkout?

    If you want to look at an awesome review of a good customer experience of an online store – checkout this article by Christopher Ratcliff @ Econsultancy. 

    BTW – Did you know that Thornton’s (cited in the article above) – an online chocolate retailer in UK  sold more chocolates online than their own physical stores during the same time due to a better customer experience.

    STORE PICKUP

    StorePickupIf the customer is looking for store pickup, can your system tell a customer – which of those SKUs can be picked up from which stores and also tell exact inventory for each? Can it also say upfront which items are generally on store pickup? Can it give a trending info about those items? Can it say, generally available in store A during Thanksgiving?

    When a customer places a ‘store pickup’ order, is the business in a position to provide real time update to the customer when the ordered item is picked and reserved for a pickup in the specified store? Can you backfill the inventory immediately if the customer does not pickup in a stipulated time?

    Does the email or sms alert provide a hyperlink to the customer to view the item status or update it or cancel it? Is it device optimized (aka phone, tablet, phablet, smartwatch, google play etc.) ? Better still is it a rich media message with personalized suggestions?

    Does the email or sms contain a direct phone contact to a rep for any queries? Can the customer reach an agent faster who already has customer data preloaded before the customer shoots his/her question?

    In a very rare occurrence(yes it should be rare), if the reserved item not available anymore or is identified being damaged, is the system in a position to provide alternative nearest store for a pickup proactively?

    Better still, is the system capable to intelligently re-route/reshuffle shipments in real time -to make the promised item in the said store?

    Does your store actively track and improvise store pickups process per day? Is your store staff mature and aware about online ordering process?

    Does the store have a clearly laid out business process and system level tasks for the store reps to honour store pickup requests? Hope that the reps are not attending to store pickup requests while a REAL PHYSICAL CUSTOMER is waiting for his/her billing?

    WISHLIST & GIFT REGISTRY

    1425474422_PresentIf a customer is buying for a friend’s gift registry in a store, is the system capable enough to suggest the customer other related items of that gift registry created online? Does the rep know where are those items? Does he/she know how much is required(as specified online) vs how much is actually available in that store? Is the store rep empowered enough to do all of the above with a finesse, only a human can provide?

    What about other gifting ideas for the buyer? What about suggestions relevant to the owner of the gift registry? Can you assign a store rep to talk about all of the above with knowledge and charm? Can he/she ensure it is not intrusive but only delighting?

    Can the store rep, suggest the buyer if his/her item in the wishlist is on sale? Can he/she show the item physically in the store with buyer’s consent? Can he/she demo it?

    If a customer is in a store and creating a gift registry(with a phone in hand), can the customer scan the barcode of the item via a mobile app and add that item to the gift registry? Can he/she look up for a related item and still add that item to the same registry? The related item may not be present in the store at that time.

    RETURNS & EXCHANGES AND REFUNDS
    ReturnsWhen a customer walks into the store to return an item which was bought online, does the store rep know about the order, the time and fulfillment method of that item? Does the store system have the capability to register this return, ship to applicable DC and perhaps offer a replacement item right at that moment? Can the replacement sale be linked to the original order?

    When a customer initiates a return of the item, can your system capture customer friendly version of “reason data” and also let merchandisers have intelligent insights on why certain products of certain suppliers are returned more than usual? Do you know why is it that customers from a certain region often have a relatively active return history?

    When the customer looks at his order history, can he view the store location where he/she could return/exchange the item or have returned in the past? Could he have rated that experience immediately on his/her mobile device? Can he/she remember that store as a preferred store for all future purchases, returns and exchanges? Can all of this be done right at that moment by the customer? (immediacy and relevancy)

    When a customer at the last moment decides to pickup the order from store B instead of store A,  can the system offer this flexibility to the customer to cancel 1 pickup and reorder the same for another store pickup?

    If the customer bought a product on promotion, can you make it transparent to the customer as to what would be the refund amount when the customer returns a discounted item?

    NEXT GEN EXPERIENCES
    UserProfileCan the retailer app (OR APPLE SIRI), provide a time and  distance dependent reminder to the customer for a store pickup(e.g. you are 1 mile away from the store which has your ordered item waiting for you. Yes the store is open until 8:00 pm, Lisa is at the CS desk”)

    Can the NFC enabled loyalty card(in the customer’s pocket) help a retailer to identify the customer’s interests, purchase history, patterns, returns, exchanges etc without being intrusive? The loyalty card is not used to identify the customer but only personalize the offers, update about returns/exchanges when the store rep interacts with those users?

    Can the augmented reality glasses (perhaps Google Glass V2.0) help store reps know customer before making a relevant offer? Imagine a “HIGH SPENDER” text floating on top of customer’s head when he/she is around the store? Imagine “LOOKING FOR SIZE M” floating over my head when a store rep looks at me in the store via Google Glass (or equivalent) ? You guessed it right – the loyalty card talks to store systems which feed into the store rep’s Google glass, and voila you have a smarter store rep via augmented reality device.

    You would notice that in all of the instances sighted above (including the futuristic ones) – the overarching rule will and shall remain delivering value to your customers. Didn’t we know this already? Didn’t we know, technology is just an enabler? The use cases of customer experiences are plenty and limited by anybody’s imagination. The key to knowing them ALSO lies with your customers. I am sure you would agree.

    What is OmniChannel? Really?

    So what does it mean for a retailer to be really OMNI CHANNEL. Being a consultant by profession and wired the way I am, I will take a shot at it from the following 3 dimensions and would also put across some of the do’s and don’ts.

    1. What are the common use cases ?
    2. What does it mean operationally for a retailer (We know that OmniChannel is really an operational concept driven by the customer expectations and user stories)
    3. What does it mean strategically for a retailer?

    Caution
    There is enough talk about what is truly OmniChannel. Here are my disclaimers
    a) There are too many definitions of the term itself and I wouldn’t be surprised if you notice a different definition somewhere or this post sounds a lot like another blog/article. I guess It does not matter for now.
    b) When I say “channel” I do not mean – website, mobile, app etc. I mean the sales channel. (Brick & Mortar Store Vs Online Store Vs Partner Stores Vs Micro Store Format Vs Affiliate sites etc.). We all know that we are dealing with ever evolving systems interaction points.

    ======================COMMON USE CASES========================

    Buy From Any Store – For Online Order
    Check availability at SKU level.
    All Variants available at all channels.
    Find any store for ‘buy from any store’ or select regular (or any DC) for fulfilment.

    Pick Up from Any Store for Online Order
    Check availability at SKU level.
    All variants available at all channels.
    Find any store for store pickup.
    Reviews about the stores itself – for online order.

    Build a Single view of the following Online Only Features
    Gift Registries – where customer was a buyer as well as recipient.
    Customer Wish lists
    Customer Likes and Social Media Conversations
    Customer’s Ratings and Reviews
    Customer’s Order History including Returns and Refunds
    Personalisation to build loyalty.
    Product Recommendations should learn from all the channels. Does not matter whether a customer bought this product online or in the stores. If it is a favorite pair of your customer. It is a favourite pair. Period.

    Returns Processing
    Initiate return in store (any nearby store).
    Initiate return through return shipping label (easy self service-automation a must).
    Initiate refunds from stores for items bought online. (i.e store walk-ins).
    Initiate refunds online for items bought in store.
    View my returns (per SKU) online.
    View my refunds and amounts (prorated/actual per SKU) online.
    Self help modules for customers which brings customers back.

    Service Capabilities
    Register a product online. Allow him to do what he/she might have done at the store.
    Offer some self help tutorials and guides which are engaging for the customer
    Offer a host of value added services. Encouraging enough to be bought.

    ==================OPERATIONALLY – WHAT IS IT?====================

    Cost Effective:
    Ship from anywhere nearby but, be cost effective – customer does not care where the item came from – if it reaches fine and on time. Needless to say this but remember a bad customer service is also when you charge a lot for shipping.

    One View Everywhere
    Store systems should be capable to manage online profiles.
    Better still store systems & online profiles are the same as CRM profile of your customer. Ditto for warehouse systems, DCs and also fulfillment partners.

    Customer Life-cycle
    Marketing has a view of the life-cycle of the customer. Not just curates content, media and engages customers.Marketing rewards loyal customers based on the same CRM profile. It does not matter where the customer was acquired. Channel does not matter. Perhaps this could help justify the marketing dollars spent.

    Although the deals and the offers customers use are from the same bundle of offerings. Personalisation strategy should be designed to provide – channel relevant offers/deals/incentives (e.g. do not ever offer Buy X Get Y on discount if the Y is not available in that store OR offer a free discount for every 5 recommendations)

    Cross Train
    Also consider this – store staff should be trained for – cross channel sales, product know-how and competitive price matching.

    =================STRATEGICALLY – WHAT IS IT?======================

    Single View
    To have a sustainable approach to building and maintaining single view of the customer and consistent end user experience. Have a continuous review around that approach.

    Strive to Have It All
    Aim to fulfill all the use cases from the end customer (who shops around various channels) (eventually – oh yes there will be more use cases!).

    Channel Agnostic Approach
    Ensure     everything is channel agnostic yet meaningful and relevant to the customer and it evolves along with these ever changing use cases.

    Supply Chain Efficiency is a Must.
    Agreed it is not an easy rejig. Must rely on the experts. Higher transparency across suppliers is one of the essential pointers to achieve that. Checkout http://www.GTNEXUS.com

    Cater to Social Shoppers
    OmniChannel should support the use cases of a social shopper. E.g. I liked a product online on Facebook and your store rep says – do you want to buy that today – you liked it yesterday? Are you still thinking?). This is a fundamental shift and it pushes businesses to rethink traditional strategies of selling.

    OmniChannel as a concept should cater to odd customer requests and have an easy mechanism of managing it through a minimum cost (take this for an example: My sister bought this for me from your SF store but I live in newyork and i need to change the color at NY store. I can’t send it back to SF coz i have to fly to London tomorrow for the wedding. This is a wedding dress.). Keeping such customers in mind is at the crux of redesigning your supply chain and build a strategy to continuously improve that.

    There is more….what do you think? Do leave your comments and opinions.

    Business Imperatives – Online Apparel Retailer

    Online retail is about flexibility and value. A product/solution/tool which provides flexibility to the merchandiser and best value to the end consumer would be the perfect way. When you decide to build an online store it would be precious to consider the following business imperatives.

    1. Excellent Merchandising Tool
    2. Easy to Maintain (interdependent) Systems
    3. Intuitive and Functional Storefront UI

    Excellent Merchandising Tool

    Flexible Product Hierarchies
    If you are the one who is from a business environment of maintaining globally relevant Product Hierarchies – you would wonder why “Pants” would fall under “Super PANTS” category as well as ” APPAREL > PANTS > …”. Obviously product attributes never dictate what should be the arrangement of product catalog. Product catalog is a constantly changing definition based on trends and is always customer influenced. Merchandisers require that flexibility to customize the way products are searched and displayed.

    Promotions & Flexibility
    Promotions are a lifeline of brands especially those which cater to value conscious customer segments. It is what keeps customers coming BACK. It is what makes it A STEAL. Ability to quickly and flexibly create customized promotions and deals matters in order to grab that attention in the virtual world which is strewn with coupons and offers everywhere.
    For EXAMPLE
    I may want to offer free shipping to my loyal customers only if they use a specific tender and have selected ground shipping to XYZ.
    OR
    I may want to disable all my coupons for the time period I am offering this “EVERYDAY NOON DEALS”
    OR
    I want to be able to offer free shipping to my Loyalty customers but only if they are my PLATINUM card holders. Else a shipping minimum is a must.

    Entice – Engage – Shop
    Arranging and changing ‘STORE HIGHLIGHTS’ & SHELVES In the store – is a routine activity in the physical world but in the virtual world it has to be faster and more flexible. Merchandisers among other things need the ability to quickly setup THE landing page around new product launch or modify existing ones. The product/solution should support ways not only to render interesting content but also ways to ENGAGE, ENTICE the customers and provide INCENTIVES to shop. If I see a pre-order which is sold out – it might get me(the shopper) to think – “This got to be good!”. Sold Out cases is not always a bad case..is it? The key is to decide when the product is made available. You take too long – you earn a bad reputation – You make it available too early you fail to generate that extra interest which was hoped for. The most important aspect to keep the customer engaged is not always social media but inventory availability. A smart shopper often waits for the deals and assumes a good inventory status – making her – grab the opportunity.If she steals – SHE WINS and YOU WIN too.

    Easy to Maintain Systems

    Managing Business Data better
    Single and manageable version of truth about business data like inventory, products, sale orders, returns and refunds.

    1. Inventory Data Like : – OnHand, Pre-Order, Back-Order
    2. Products Data Like:- Variants, Styles, Archived Styles, Duplicate Styles, Product images etc.
    3. Sale Orders & Returns Data Like:- Open Orders, partially fulfilled orders, fulfilled orders, Returned orders and Settlements.

    Using Consumer Facing Data Better
    To evolve as a strong consumer-centric retailer. It is important to leverage the data you gather about your customers usage behavior. Never ever you can let this useful bit cut loose. After all that is one of the greatest advantage of selling online. Customer Engagement Data (Ratings & Reviews), Customer Service Feedback data are also critical as they represent direct communication which is greatly enabled through online commerce. It makes sense to deploy vendors which help mine this useful information. Trust me they are your best allies.

    Define Roles Better
    Ownership of storefront data (primarily site content) and managing product/system configurations could be the overlooked aspect of maintaining storefronts. For example managing Marketing Assets is better done by a separate team than the technology guys who maintain and configure the solution. Marketing Assets (banners, Images, styles, alternate images, lay down images, 360 degree view images, ramp videos etc.) require a different skill set to manage as against maintaining an import of store feed data or that of a search synonyms repository. Your reps are better off helping customers find their orders and order statuses if they understand the fulfillment process.

    Intuitive Shopping Experience

    Last but not the least it is important to develop a storefront page design which is highly intuitive, creative and yet functional. This helps the team focus on taking and FULFILLING ORDERS instead of helping customers place those orders. A bad design – erodes the brand loyalty sooner than you can expect. The ease of doing business is what UI does in the online world. Some of the most relevant UI imperatives are

    Say It So Rule!
    Clearly layout the discounts, whether it is a promotion message in view, the promotion on a specific variant or the promotion on entire order or shipment – it ought to be told with clarity and consistency across the purchase process.

    • If the customer gets 20% off only if they use a certain tender – say it so upfront on category pages or banners.
    • If the customer gets an effective discount of 50% on each SKU in a bundle – say it so on the banner and on the shopping bag.
    • If you have an “NOON DISCOUNT CARNIVAL” – lay out those discount details at each stage of the shopping flow. Remember the customer might come back in the evening to buy the product added to the bag during the NOON.
    • If you have an updated discount offer on the saved item in the shopping bag – say it so.

    Clearly Explain Shipping Rules
    If you ship international – you might have restrictions related to specific destinations because of ‘Nexus’ which exists. Also items which you do NOT ship 1-BusinessDay could be told way before the customer heads to checkout.Shipping rules may get complex at times – the rule of thumb is to inform your creative as much to your implementation partners who build the systems for you. This helps creative agencies to consider for informative texts, error messages, overall dialog with the consumer during the purchase process.

    Make product recommendations relevant and sensible.
    Product recommendations make sense only when a customer is just evaluating but not when he does ‘Checkout’. Making it relevant when he is not checking out requires a clear personalization rules approach. To build your personalization approach the existing consumer data becomes really useful.

    Make Product Search Highly Intuitive
    No one knows your products better but if you know the way customers know your products – that is the key to relevant search results. Relevant customer search results should increase the chances of a purchase by 70%. After all you cannot throw out “RIP” as a part of search result set when a customer searches for “PINSTRIPES”. A strong product/solution knowledge again aids in setting up the right configuration here.

     

    Work Ethos

    Some time ago I had read one interesting article from an employee from a smaller Digital Agency in New York who was pleasantly surprised about the amount of research and preparation one of the prospective clients had done before he approached them for a business enquiry.
    ..…”But unlike most of the calls I’ve vetted lately, this guy really did his homework. He not only knew all there was to know about my company — even citing details about the client work we’ve handled in his industry – but he’d also read my AdAge blog, knew my personal interests and was genuinely interested in our agency’s fit. I felt like the pretty girl at the dance and was excited to have a meaningful conversation with someone who respected my time as much as he did his own” says the founder and president of a Digital Agency called ‘Squeaky Wheel Media’.
    Here is the link to the blog

    I think all who work in the services business face such different clients at various degrees of readiness and at various stages of their interactions. It does not matter if the client was interacting with a banking services business or an IT services company or even getting basic services like car-wash, what is essential and to note for me is to note and appreciate the work ethos an individual has(in this case the client). Work ethos is something which is very individualistic and often a softer element of evaluating individual performance. I think it should be a critical one and as critical as ‘Integrity’ in an individual. Great work ethos is a hallmark of an individual’s personality and it can contribute significantly to the way an individual progresses in his/her career.

    Incidentally I read the article when I was having a similar experience with one of my clients and I appreciated more of what I saw. The amount of effort she put into her work while maintaining a good balance of time was truly inspiring. There are many aspects of our work life which are influenced from our professional training, our education, our schooling but the ones which are from our professional experiences if noted and well received will always have significant influence.

    Of course a way to define what we BE is by observing WELL what we SEE and what we DO.

    Value Proposition & Simplicity

    Understanding Value proposition is a key thing for any Business. Unless you experience(feel just like the customer) as to what is a strong value proposition you are offering, there is no way you can actually create one. A very interesting story of a simple independent venture makes me wonder – Is it possible that every business venture(aka service offering, product offering, …) can offer a solid value proposition to all(at least majority) of its customers. And I am not talking about a plain vanilla satisfaction but a very compelling one which brings the customer back and again even if there is no need for him to buy it(services, products…).

    I’m talking about Veekes and Thomas Restaurant which has five principal offerings

    a) Price

    b) Choice

    c) Convenience

    d) Simplicity

    e) Authenticity

    To begin with they are really cheap for a plate. For about 100 bucks($2) a plate(for the most exclusive non-veg stuff) and a lot many lower than that, you are spoilt for choice in continental food. Best of all it has very simple things to offer which includes a simple menu and simple cooking without strong marinades and spices, no fuss order online concept(without payment – they collect on delivery). They do not have a place to sit so you enjoy your food at home(there is no choice here). Delivered in boxes which are bio-degradable and recyclable. The packaging is simple with use of traditional disposable plates and fork. Inspite of all this the food tastes awesome and authentic and you do not feel you had a low-scale dining experience. That is because you always place an order to a person who is excited about the food they serve. They are enthusiastic, aware and want to recommend items. You feel you had a fine dining experience at home.

    All in all it’s the whole customer experience which matters and which defines the value proposition in a business like this.

    Bottom-line: With a good quality product/offering if you are excited , positive about the offering you have and accentuate it with uncomplicated offerings you are bound to make an exciting value proposition to your costumers.

    What do you need to have this

    · Understand to whom you are offering what you are offering. What matters more?

    · Focus on listening well to your customers – continuously and vehemently.

    · Attention to details makes the experience complete.

    · Stay excited about your work and hire equally excited people to make that positive impression.

    Of course internally you have to

    · Understand your constraints right and play well (work out a clear financial model)

    · Focus vehemently on quality as a default objective. You don’t have to have correction systems.

    I can’t help but to compare this to my previous post about compelling innovation. If you connect the dots, a compelling innovation has to have a strong value proposition but not necessarily vice versa (any thoughts on this?). Also maybe a compelling innovation makes no sense for me..and hence no value proposition. (what would go-gurt mean to a lactose intolerant person?)

    Is it an observation for you that very innovative things are often simple?

    Is it also necessary that a value proposition is often based on simplicity? How complex can it get?

    What Makes Someone an Entrepreneur?

    My regular reading of the the Forbes has made me believe in the power of confidence. Particularly in the world of business. What is most striking and influential is the fact that if you believe in a Business Idea and you perform the due diligence you could very well be on your way of starting your own enterprise (big or small doesn’t matter). Confidence in your idea MATTERS.

    Hybiscus is one company unheard(atleast for me)and is an unusual example where you can make a living. Selling garden accessories. (i thought a local potter sold it). But here it is different. It is about unusual services. Can anyone invent an offering of services? Yes you can. Why not. Do you have a knack of observing needs of customer and demands of the market?If yes then you can.

    It does not matter how big or small is your business. Do you have it in YOU?

    There have been uncountable instances where I thought this is a great Idea to begin a Business about. They lie latent in my head today. Why Why?…I ask.

    As the interviewer of the zen garden points out in his books. You must have a vision to make it possible. What’s this vision about? Is it about creating an enterprise which provides employment to people and contributes towards India’s GDP? Is it about making someone’s life better? Is it about being the most innovative and creative individual to sell it’s craft? Is it about doing your own thing rather than told to do?(this cannot be a vision ..however this question has its place..we all know it)

    Apart from this vision thingy..what else?

    Disruptive Innovation

    I love this phrase “We are a Boutique Consulting Firm”, if this name wasn’t innovative enough I came across more details about this consulting company called “Innosight”. Clayton CHRISTENSEN and Mark JOHNSON founded this company because they really believed in the patterns of ‘DISRUPTIVE INNOVATION’. With the author of two books titled “Innovator’s Solution” and “Innovator’s Guide to Growth”(co-authored) this bunch of people guide companies to nurture innovation for growth.

    Disruptive is a great adjective to define what innovation brings/does.

    • Micro Financing is disruptive. It changed the way business of money was percieved.
    • Twitter is innovative because it brought open API and mobile phone integration to a public web app.
    • Procter Gamble’s ‘Whitestrips’ creates a new market by creating a new market by targeting non-consumers.
    • Blog Talk Radio is disruptive because it is to merge the phone to web 2.0 (don’t know about how successful it will be..). Click here to know more.

    Briefly it

    1. Creates New Markets
    2. Reshape Existing Markets

    However there are constraints

    1. It has lower Profit Margins(atleast initially). Or it gets too expensive for a consumer to start.
    2. Innovations don’t address the needs of their best consumers

    Innosight says
     “Innovative products are successful when they connect with a circumstance and with a job which customers find themselves needing to be done”.

    How and when would a customer find themselves in a circumstance to use a product. I think it is when the product is compelling enough. There cannot be a better example than i-pod. One heck of a device which sets new benchmarks in product design and innovation. The i-pod experiance is unparalleled and there is no soul left on this planet(barring the ones at the bottom of pyramid) who would have atleast not thought of using this wonder prod. More than the real design extravaganza it was popularized better by target users. Young and hip and happening. Also it’s an entertainment prod after all and who in this world does not need one.

    Another Disruptive Innovation about everyday product …‘yoghurt’ …..transformed to….Go-GURT
    Instead of improving on the attributes of yogurt itself, General Mills just introduced conveniance of eating it. It innovated to change product delivery. Go-GURT is packaged in a tube, which allows one handed consumption. Rather than sitting down with a spoon, children can grab Go-GURT and, as the name implies, eat it on the run.

    Some Thoughts to Ponder..
    Is it true that only large corporations with economies of scale and higher risk taking ability are able to innovate?
    Where does this need to create disruptive innovations come from? Is it the need for growth or culture of creativity?
    What is the last most disruptive thing MindTree did or for that matter big Indian names in IT services did?