Retailers are facing ever-increasing pressure to improve performance against a backdrop of YOY traffic declines, increasing competition and increasing wages. Specifically, we are seeing 5 areas where the burden is the highest:
- Increasing yields from each customer visit is critical.
- This includes increasing conversion, adding items or services to each in-store or on-line transaction, or driving a customer to a premium offering.
- Exceeding customer experience expectations.
- While sales and gross margin dollars are the end goal, measuring and continually improving “Net Promoter” and “Likelihood to Recommend” scores is critical. Have you noticed the recent increase in survey activities on nearly every in-store or on-line interaction in your life as a consumer?
- Improving productivity on each payroll hour invested.
- Most retailers allocate very specific amounts of payroll for each store task that needs to be completed in a time period based on how long they think it takes. If that allocation isn’t adequate, or if the store teams don’t use proper methods, the work takes longer pulling from the payroll allocated for customer service. Have you wondered why you can’t find someone to help you in some stores?
- Effectively measuring and driving execution to the plan at retail.
- As mentioned above, if stores can’t (hiring, training, equipment, conditions) or won’t (supervision) execute the plan, customer experience and associate experience will suffer.
- Building associate engagement in a challenging labor market.
- Many new technologies in retail today are associate facing to enable individuals to manage their relationship with their employer (or employers). By providing tools to associates to allow them to manage their availability, swap shifts, manage benefits, etc., retailers can attract or retain the associates they need.
The reality is that in recent years, countless technical solutions have emerged to help. Whether mobile tools, point solutions, enterprise platforms, and/or data services, there seems to be a service or technology offering reprieve from the stressors of these demands.
And although many of these solutions hold great promise, we’ve been finding that too many retailers inadequately test or ineffectively deploy technologies and they fall short of potential and expectations. At that point, the retailer often becomes frustrated and gives up. This challenge is compounded by the rate of updates, versions and enhancements introduced by providers and vendors every year as they respond to market conditions.
Even though it’s difficult to take the time to ramp up on the knowledge and/or realize the full potential of these new solutions, we’ve suggested to our clients that it is imperative to include stakeholders from across the organization, including Operations, Field, IT and Product Teams, Finance, HR…as well as individuals from all aspects of the field and stores. And, depending on the situation, we have seen situations where changes in organizational structure, communication, KPIs, and even compensation structure were required to drive meaningful business impact.
Aligning these stakeholders on philosophy and creating the environment to support a proof of concept, let alone a meaningful test, pilot or successful rollout, requires steady focus from leadership, investment and a very deliberate multi-phase process.
Following this deliberate process can pay off, however. Given the new competitive environment between retail and eCommerce, projected wage rate increases in coming years, and the impact delighting customers has on your business, it’s worth the effort. Finding and effectively deploying tools and technology-enabled processes that can help with the challenges outlined above can have a direct impact on your organization’s ability to unlock payroll hours and focus them on customer service.
To prove the point, we see again and again that providing meaningful service to customers typically increases conversion by 2X to 5X, depending on the business segment, while it can ALSO impact units per transaction. The definition of service, of course, varies from segment to segment, but we always see a significant impact when our clients focus and get it right.
The sky’s the limit for retailers embracing new technologies and leveraging technologies as enablers to drive focus on what “moves the needle” in retail today.