Sometime ago I had the opportunity to attend a day-long knowledge session conducted by Dr. Steven Covey on “How to Overcome Challenges in Today’s Times” and I would like to share what I learnt there, connecting it to a short story set in a retail environment, with which some of you may be familiar.
A man used to sell hot dogs by the roadside in the city of New York and he was illiterate, so he never read newspapers. He was hard of hearing, so he never listened to the radio and his eyes were weak, so he never watched television, but enthusiastically, he sold lots of hot dogs. He was smart enough to offer some attractive schemes to increase his sales. His sales and profit went up. He ordered more and more raw material and buns and his sale kept increasing. He recruited a few more supporting staff to serve more customers. He started offering home deliveries. Eventually he got himself a bigger and better stove.
As his business grew, his son, who had recently graduated from college, joined his father.
Then something strange happened. The son asked, "Dad, aren't you aware of the great recession that is coming our way?" The father replied, "No, but tell me about it." The son said, "The international situation is terrible. The domestic situation is even worse. We should be prepared for the coming bad times."
The man thought that since his son had been to college, read the papers, listened to the radio and watched TV, he ought to know and his advice should not be taken lightly. So the next day onwards, the father cut down his order for raw material and buns, took down the colorful signboard, removed all the special schemes he was offering to the customers and was no longer as enthusiastic. He reduced his staff strength by giving layoffs.
Very soon, fewer and fewer people bothered to stop at his hotdog stand. And his sales started coming down rapidly. The same happened to his profit. The father said to his son, "Son, you were right”. “We are in the middle of a recession and crisis. I am glad you warned me ahead of time."
Moral of The Story: We fuel this recession by our own actions and attitude!
I can relate this story very clearly with the current scenario in many of the modern retail brands where shelves are empty, there is less staff on the floor and no new range of merchandise has been introduced for a long time. Regular shoppers are repulsed by this careless, unfriendly environment. Already made wary by media horror stories, these negative signals scare them right away.
The story clearly suggests that you must not confuse intelligence with good judgment. You must choose your advisors carefully; and you must learn to trust your own judgment.
Dr. Covey proposes that a person or an organization will survive forever, if they have the 5 Cs:
• Character
• Commitment
• Conviction
• Courtesy
• Courage
I strongly believe that this is the time when retail brands will work internally to reunite as organizations, and motivate their people, their biggest assets. This is the time retailers will discover the value they offer to their consumers and communicate it to their consumers by re-aligning their business processes and service standards through a rejuvenated team serving the consumers in the stores.
Retailers must make sincere efforts to show higher levels of commitment towards their consumers.
Thursday, July 30, 2009
Wednesday, July 22, 2009
Focus On Customer At this Difficult Time
The current economic slow down seems to be building panic across businesses, and no less in retail. Like all other sectors retailers also seem to be looking at controlling operational costs as the top priority. Recruitments are frozen; organizational structure and business strategy is being reviewed and viability of low-performing stores is being scrutinized very closely. In fact many chains have already announced that they will be closing some of their stores. It is the retailers’ fear of drastic reduction in sales numbers that is leading to this panic. However, I am not sure whether the September, October and November sales figures are at all indicating a slow down and whether the cash registers have been affected – yet.
The industry target of achieving over US$ 50 billion revenue from modern retail by 2011 still seems to be realistic which means modern retail is here to grow. However, I definitely expect a change in consumer buying behavior to emerge very soon, and every consumer will be much smarter with their wallet and look for higher value for money spent. In my view, consumer traffic in modern retail is irreversible and consumers will continue to explore destinations to extract the best value for their shopping spend.
Large players which have invested in their core infrastructure including supply chain network will be looking at revised growth strategies. I see this as a phase in which some exciting opportunities have emerged for retailers. Since the panic has been triggered by an anticipated drop in consumer spend, this can be a great opportunity to take another look at the business strategy with the consumer firmly at the centre this time.
Retailers must now begin to start giving importance to in-store service as the first step in this direction. If retailers are able to develop a clear visibility of what exactly consumers expect from their brand, it will help them to design and implement effective customer-service programs for the store staff. They will also be able to put in place an effective system to deliver consistent and measurable service.
Consumers are likely to choose shopping destinations with pleasant memories and avoid those where they have had not very good experiences. The financial effect of a poor consumer experience can be very damaging even though it may not be visible in a short span of time. Consumers are typically likely to visit a department store only once in 3 or 4 months and it would take a few months before the bad experiences are reflected in lagging sales. By then it would most likely be irreversible, and would certainly require a great deal of effort and expense to address.
To prevent such consumer erosion, retailers must put a complaint management system in place. This would provide a listening post for issues at the store, city and regional levels. To be truly effective, such a system must promptly route complaints to the appropriate business role and ensure timely response and management accountability.
The next step retailers must take is more critical. They must set up a sensitive measurement system which is alert to unwritten complaints that occur when the promise of a great shopping experience is not met. While a complaint management system picks up only routine failures (such as non-availability, staff service etc.) failures in providing excellent service during each and every consumer transaction creates silent complaints. As these complaints accumulate they can become potentially very damaging for the business.
Having covered in-store service aspects and related practices, retailers will need to now focus on making efforts towards consumer-oriented merchandise-planning, merchandise allocation and pricing and promotions practices.
During this time when every consumer is actually counting the basket value while shopping, we expect that consumers would not indulge much in impulse buying, and most of the money they spend in a store will be as per their planned shopping lists. This in my opinion can be a great opportunity to enhance basket value by delivering a great consumer shopping experience. Using historic shopping data of different consumer groups and profiles, retailers can drive accurate merchandise planning and allocation models to ensure that merchandise available in the store will lead to a near match of the planned shopping list each consumer carries. This will not only enhance the consumer shopping experience but also help to make inventory and supply-chain cycles more efficient.
This deeper insight into consumer needs will also help retailers design targeted pricing and promotions for each group and profile of consumers. Today consumers are used to shopping as per general pricing, or on promotions intended for all consumers visiting the store. Many of these promotions are not popular since they meet consumer expectations or align with the shopping list. Once the promotions are designed based on consumer needs they will not just be more effective but also enhance trust between the consumer and the retailer.
Finally, this deeper understanding of consumer buying habits will also build sufficient knowledge at the retailer end to develop a consumer-specific private label for each category, and this can help retailers to broaden their private-label portfolio. This will not only lead to meeting consumer demands competitively but also create new opportunities for increased profitability.
-----------------------------------------------------------------
Published in Image Retail December 2008 issue
The industry target of achieving over US$ 50 billion revenue from modern retail by 2011 still seems to be realistic which means modern retail is here to grow. However, I definitely expect a change in consumer buying behavior to emerge very soon, and every consumer will be much smarter with their wallet and look for higher value for money spent. In my view, consumer traffic in modern retail is irreversible and consumers will continue to explore destinations to extract the best value for their shopping spend.
Large players which have invested in their core infrastructure including supply chain network will be looking at revised growth strategies. I see this as a phase in which some exciting opportunities have emerged for retailers. Since the panic has been triggered by an anticipated drop in consumer spend, this can be a great opportunity to take another look at the business strategy with the consumer firmly at the centre this time.
Retailers must now begin to start giving importance to in-store service as the first step in this direction. If retailers are able to develop a clear visibility of what exactly consumers expect from their brand, it will help them to design and implement effective customer-service programs for the store staff. They will also be able to put in place an effective system to deliver consistent and measurable service.
Consumers are likely to choose shopping destinations with pleasant memories and avoid those where they have had not very good experiences. The financial effect of a poor consumer experience can be very damaging even though it may not be visible in a short span of time. Consumers are typically likely to visit a department store only once in 3 or 4 months and it would take a few months before the bad experiences are reflected in lagging sales. By then it would most likely be irreversible, and would certainly require a great deal of effort and expense to address.
To prevent such consumer erosion, retailers must put a complaint management system in place. This would provide a listening post for issues at the store, city and regional levels. To be truly effective, such a system must promptly route complaints to the appropriate business role and ensure timely response and management accountability.
The next step retailers must take is more critical. They must set up a sensitive measurement system which is alert to unwritten complaints that occur when the promise of a great shopping experience is not met. While a complaint management system picks up only routine failures (such as non-availability, staff service etc.) failures in providing excellent service during each and every consumer transaction creates silent complaints. As these complaints accumulate they can become potentially very damaging for the business.
Having covered in-store service aspects and related practices, retailers will need to now focus on making efforts towards consumer-oriented merchandise-planning, merchandise allocation and pricing and promotions practices.
During this time when every consumer is actually counting the basket value while shopping, we expect that consumers would not indulge much in impulse buying, and most of the money they spend in a store will be as per their planned shopping lists. This in my opinion can be a great opportunity to enhance basket value by delivering a great consumer shopping experience. Using historic shopping data of different consumer groups and profiles, retailers can drive accurate merchandise planning and allocation models to ensure that merchandise available in the store will lead to a near match of the planned shopping list each consumer carries. This will not only enhance the consumer shopping experience but also help to make inventory and supply-chain cycles more efficient.
This deeper insight into consumer needs will also help retailers design targeted pricing and promotions for each group and profile of consumers. Today consumers are used to shopping as per general pricing, or on promotions intended for all consumers visiting the store. Many of these promotions are not popular since they meet consumer expectations or align with the shopping list. Once the promotions are designed based on consumer needs they will not just be more effective but also enhance trust between the consumer and the retailer.
Finally, this deeper understanding of consumer buying habits will also build sufficient knowledge at the retailer end to develop a consumer-specific private label for each category, and this can help retailers to broaden their private-label portfolio. This will not only lead to meeting consumer demands competitively but also create new opportunities for increased profitability.
-----------------------------------------------------------------
Published in Image Retail December 2008 issue
CRM Is More Than technology: Its An Emotional bond
Retailers understand in theory that Customer Relationship Management (CRM) is the foundation of profitable retailing. Key aspects of this are customer value, customer care, and customer retention. Most modern retailers have formally adopted loyalty schemes, and consumers are likely to have a collection of loyalty cards in their wallets.
However, loyalty is an emotional bond, and retailers have realized to their dismay that sophisticated technology and a piece of plastic alone are not sufficient to inspire it. During this slow-down phase every retailer is seeking ways to hold on to customers by invoking loyalty through various methods.
More than using cards and technology, retailers must establish the link between consumer experiences and repeat purchasing. By demonstrating that the quality of a customer relationship has an impact on Recency, Frequency and Value (RFV) factor, retailers can justify investments into actions that will deepen those relationships. They must identify which actions have the strongest effects to engender that all-important loyalty, and make strategic investments in technology.
But technology, no matter how sophisticated, cannot deliver loyalty on its own.
As an analogy, consider the computer software package Microsoft Word. When we write and make a typo or break a rule of grammar, we are alerted by the red and green lines that appear and enable us to make necessary corrections. But this does not make us all skillful writers. The ability to select words, construct sentences and express thoughts is something Bill Gates did not develop in us. All Gates did was to provide tools to make those jobs a little easier.
As we have seen, most of the CRM solutions in the market today have failed to deliver. Let’s examine the reasons why, and explore some solutions.
CRM is based on three core elements: People, Processes and Technology. IT vendors and consultants have ensured that technology has received the most investment and attention.
However, the best in the business have been quick to realize that you cannot install a system and expect it to deliver the desired results unless it also addresses the people and process issues. Until the gap between genuine CRM understanding and the technology to facilitate it is closed, all CRM projects – including up-and-running retailer loyalty schemes – are at risk.
In Retail CRM, technology should primarily work to enable the following steps:
- To establish who your loyal customers are, their satisfaction levels and what exactly it is that keeps them coming back;
- To identify the customers who do not come back, and why.
Based on what you learn, you can then set yourself clear objectives on the percentage of customers you want to retain per annum, the number of customers you want to acquire, and your marketing budgets to attract and retain those customers.
Loyalty doesn’t have to be about “prizes”. Once you have determined what motivates your loyal customers to stay, you should create the right mix of bonds to further improve their retention and increase their spending.
It is essential that the basic rules of customer service in your business should be in place before you go out in the market looking for a technological tool to implement those rules. The technology you select should be easy to adapt to your set rules and goals, and, most of all, easy to use by your business managers.
In my opinion, profitable customer service is another term for organized retailing, and finding the right mix is likely to lead to a very high chance of successful CRM in your retail business.
---------------------------------------------------------
Published in DNA Money Dated 22nd January 2009
However, loyalty is an emotional bond, and retailers have realized to their dismay that sophisticated technology and a piece of plastic alone are not sufficient to inspire it. During this slow-down phase every retailer is seeking ways to hold on to customers by invoking loyalty through various methods.
More than using cards and technology, retailers must establish the link between consumer experiences and repeat purchasing. By demonstrating that the quality of a customer relationship has an impact on Recency, Frequency and Value (RFV) factor, retailers can justify investments into actions that will deepen those relationships. They must identify which actions have the strongest effects to engender that all-important loyalty, and make strategic investments in technology.
But technology, no matter how sophisticated, cannot deliver loyalty on its own.
As an analogy, consider the computer software package Microsoft Word. When we write and make a typo or break a rule of grammar, we are alerted by the red and green lines that appear and enable us to make necessary corrections. But this does not make us all skillful writers. The ability to select words, construct sentences and express thoughts is something Bill Gates did not develop in us. All Gates did was to provide tools to make those jobs a little easier.
As we have seen, most of the CRM solutions in the market today have failed to deliver. Let’s examine the reasons why, and explore some solutions.
CRM is based on three core elements: People, Processes and Technology. IT vendors and consultants have ensured that technology has received the most investment and attention.
However, the best in the business have been quick to realize that you cannot install a system and expect it to deliver the desired results unless it also addresses the people and process issues. Until the gap between genuine CRM understanding and the technology to facilitate it is closed, all CRM projects – including up-and-running retailer loyalty schemes – are at risk.
In Retail CRM, technology should primarily work to enable the following steps:
- To establish who your loyal customers are, their satisfaction levels and what exactly it is that keeps them coming back;
- To identify the customers who do not come back, and why.
Based on what you learn, you can then set yourself clear objectives on the percentage of customers you want to retain per annum, the number of customers you want to acquire, and your marketing budgets to attract and retain those customers.
Loyalty doesn’t have to be about “prizes”. Once you have determined what motivates your loyal customers to stay, you should create the right mix of bonds to further improve their retention and increase their spending.
It is essential that the basic rules of customer service in your business should be in place before you go out in the market looking for a technological tool to implement those rules. The technology you select should be easy to adapt to your set rules and goals, and, most of all, easy to use by your business managers.
In my opinion, profitable customer service is another term for organized retailing, and finding the right mix is likely to lead to a very high chance of successful CRM in your retail business.
---------------------------------------------------------
Published in DNA Money Dated 22nd January 2009
Lack Of Clear Guidlines Can Harm Retailers
My last few columns covered common consumer experiences in the Food & Grocery sector, and I thought it would be interesting to now examine in what way Lifestyle stores and customers had different rituals and expectations. On a visit to the well-lit, fragrant and rather opulent Kakde Mall on Pune’s Moledina Road, I observed a customer who we can call Mrs. A and the fascinating experience she had.
The store is well signposted, and Mrs. A walked straight to the department she wanted. However, there was no sales staff there.
A security woman stood slouched against the wall.
Mrs. A: Excuse me!
Security staff (pointing arrogantly across the hall): Usko bulao na, sales person hai.
Mrs. A, indignant at being ordered around by store staff, looks around for help. A cashier at a nearby till is unoccupied, but seems lost in thought. Mrs. A asks, “Is there anyone here who can help me?”
Cashier (calling out loudly): Arre Nita!
Store staff (walking towards till): Nita break pe hai.
Cashier: Uska replacement kahan hai?
Store staff shrugs.
Mrs. A: Isn’t there anyone here who can help me?
Both shrug.
Mrs. A: Is there a floor manager somewhere around?
Cashier: Yes, ma’am. Arre usko phone lagao na re.
Store staff: (Picking up phone and dialling) Not picking up, sorry ma’am.
Mrs. A decides to walk around and hunt out the elusive floor manager and download some rage.
Mrs. A: (To another store staff): Where is the floor manager, please?
Store staff 2: Can I help you ma’am? I’m a senior person.
Mrs. A: Oh. Ok. As a senior person, do you realise that your store has a problem?
Store staff 2: Yes ma’am! We have a problem! Actually we have two problems, one with our staff and another with our products!
Mrs. A (Reeling at this astonishing reply): Umm, I’d like to meet the floor manager please.
Store staff 2 (Pointing at a man leaning against a railing and chatting with two others)): That’s our assistant manager.
Assistant manager (Straightening up): How can I help you ma’am?
Mrs. A: You really need to train your staff!
Asst. Mgr: Ma’am, can you give me a specific incident? What exactly happened?
Mrs. A: I came here to buy something. But there was no one attending the department. I interacted with four staff and none of them has any idea how to talk to customers!
Asst. Mgr: Well actually ma’am we have received a communication from our head office telling us that the company does not have a customer focus!
Mrs. A: Really! What did they tell you to focus on instead?
Asst. Mgr (thinking): Umm, they didn’t tell us anything ma’am.
Mrs. A: My god, that’s breaking news! They told you what not to focus on – and they didn’t tell you what to focus on!
Asst Mgr: Actually ma’am, you know, our new owners don’t know anything about retail. They are losing money very badly and they may close down this store.
Mrs. A: (Pointing around): They’re spending so much money on this expensive lighting, air-conditioning, prime-property rental, salaries to so many – and they’ve told you not to bother about the customers? No wonder no one is buying anything and they’re losing money! You’d better find yourself another job!
Asst Mgr: Actually ma’am, we are all applying. But our money is stuck here so we are scared to leave.
Poor communication and lack of clear guidelines from the senior management is always dangerous for an organization, and this true story showcases what can happen when transition in a retail acquisition scenario is mishandled.
If any retailer really wants customers to come back again and again – they just have to bring that focus into their store operations.
---------------------------------------------------------
Published in DNA Money dated 11th december 2008
The store is well signposted, and Mrs. A walked straight to the department she wanted. However, there was no sales staff there.
A security woman stood slouched against the wall.
Mrs. A: Excuse me!
Security staff (pointing arrogantly across the hall): Usko bulao na, sales person hai.
Mrs. A, indignant at being ordered around by store staff, looks around for help. A cashier at a nearby till is unoccupied, but seems lost in thought. Mrs. A asks, “Is there anyone here who can help me?”
Cashier (calling out loudly): Arre Nita!
Store staff (walking towards till): Nita break pe hai.
Cashier: Uska replacement kahan hai?
Store staff shrugs.
Mrs. A: Isn’t there anyone here who can help me?
Both shrug.
Mrs. A: Is there a floor manager somewhere around?
Cashier: Yes, ma’am. Arre usko phone lagao na re.
Store staff: (Picking up phone and dialling) Not picking up, sorry ma’am.
Mrs. A decides to walk around and hunt out the elusive floor manager and download some rage.
Mrs. A: (To another store staff): Where is the floor manager, please?
Store staff 2: Can I help you ma’am? I’m a senior person.
Mrs. A: Oh. Ok. As a senior person, do you realise that your store has a problem?
Store staff 2: Yes ma’am! We have a problem! Actually we have two problems, one with our staff and another with our products!
Mrs. A (Reeling at this astonishing reply): Umm, I’d like to meet the floor manager please.
Store staff 2 (Pointing at a man leaning against a railing and chatting with two others)): That’s our assistant manager.
Assistant manager (Straightening up): How can I help you ma’am?
Mrs. A: You really need to train your staff!
Asst. Mgr: Ma’am, can you give me a specific incident? What exactly happened?
Mrs. A: I came here to buy something. But there was no one attending the department. I interacted with four staff and none of them has any idea how to talk to customers!
Asst. Mgr: Well actually ma’am we have received a communication from our head office telling us that the company does not have a customer focus!
Mrs. A: Really! What did they tell you to focus on instead?
Asst. Mgr (thinking): Umm, they didn’t tell us anything ma’am.
Mrs. A: My god, that’s breaking news! They told you what not to focus on – and they didn’t tell you what to focus on!
Asst Mgr: Actually ma’am, you know, our new owners don’t know anything about retail. They are losing money very badly and they may close down this store.
Mrs. A: (Pointing around): They’re spending so much money on this expensive lighting, air-conditioning, prime-property rental, salaries to so many – and they’ve told you not to bother about the customers? No wonder no one is buying anything and they’re losing money! You’d better find yourself another job!
Asst Mgr: Actually ma’am, we are all applying. But our money is stuck here so we are scared to leave.
Poor communication and lack of clear guidelines from the senior management is always dangerous for an organization, and this true story showcases what can happen when transition in a retail acquisition scenario is mishandled.
If any retailer really wants customers to come back again and again – they just have to bring that focus into their store operations.
---------------------------------------------------------
Published in DNA Money dated 11th december 2008
Tuesday, July 21, 2009
Governance Through Operational Excellence
Globally retailers are facing a wide range of business challenges, dealing with a tough economic climate impacted by falling stock market, the credit crisis and industrial slow down. Whereas in India retailers are also struggling with some internal factors such as cost of scaling up, creating a flexible and efficient management bandwidth and converting trading profits into overall business profits. Since top line revenue growth was driven largely by opening new stores real estate prices have challenged this avenue severely and some of the large retailers are looking at acquisition strategy whereas smaller ones are shifting the focus towards bottom line to make themselves more attractive for acquisition.
A Technopak report on Indian Retail in 2005 forecasted that the period of 2006-2010 will be the period of back end consolidation and 2011 onwards Indian retail will get into business consolidation mode. I can see that the circumstances mentioned above have forced the beginning of consolidation process around six months ago. I see this as a great opportunity for the Indian retail industry to course correct its operational culture and build consumer centric strategies at this early stage of evolution. Since the overall growth opportunity offered by modern retail in India is huge I believe bringing Corporate Governance through Operational Compliance can strongly put Indian retail at a very stable and achievable growth path:
A key component for cutting operational costs is to have operational consistency across all store locations and gain efficiencies by streamlining processes. Since the time organized retailing started retailers have struggled to ensure that all stores operate the same way, using the same processes and getting the same results. This operational consistency ultimately rubs on to many aspects of business execution – operations, merchandising, finance, human resources, loss prevention, customer satisfaction, information technology, etc.
Over the last eight-to-ten years, most Indian retailers have invested in a wide range of new technologies such as POS, MMS, inventory management, space management, workforce management and other automated solutions to help improve operational productivity and efficiencies. On top of this retailers use other numerous manual methods to keep stores informed of corporate initiatives and operational strategy – telephone, email, faxes, mail bags, postal mail, paper forms, daily checklists and store visits. None of these methods have effectively solved the communications problem just because the people managing these modes are different and every one has their won style of doing it. In most cases retailers still do not know when the stores received the information and then if they actually acted upon them as directed. The result is typically more phone calls and more emails to determine if the original communications was completed. These methods just aren’t working. The reality is that retailers have an environment where multiple corporate departments are using various communications methods to gather information from the stores, without any type of governance. In many instances, one department’s request might conflict with that from another department, resulting in confusion at the store on what needs to be done at the right time.
Consistent operational compliance across all stores is now essential for retailers to streamline operational cost. Retailers must be able to monitor process compliance on a store and individual basis to identify areas of improvement for better results. I don’t think there is any possible methodology used by retailers to have an insight into the daily operations of each store to know which stores are complying with corporate operational practices. This scenario leads to the following issues:
- Mixed communications methods result in slow adoption of corporate initiatives.
- Scattered communications provide less than desired results of task completion and compliance.
- Lot of time and money is wasted following up to see if the original tasks are completed – more phone calls, more emails and lot of time wasted.
- Lot of time is wasted by store personnel chasing requests from various departments.
- There is no way to identify or track problems that stores are having with compliance.
- No way to measure compliance on which stores are completing tasks on time.
- High expenses related to compliance monitoring – travel, phone calls, faxes, etc.
- Inability to broadcast messages / alerts across all stores for issue resolution.
- Ability to identify recurring pain points across the enterprise and have the ability to fix the pain rather than provide a short term fix.
Most retailers in India have required components in the form of technology, processes and systems to deal with the above scenario but lack of execution and compliance has lead to the above situation. The challenge today is to build a culture of discipline in execution and compliance of the available resources. It will be useful to review the roles and authorities at various levels and reduce manual intervention in the system as much as possible since manual intervention is directly linked to the compliance factor.
Most of these systems and technology pieces are working in silos and most often the business data is put together manually and delivered to the decision makers. This can once raises data integrity issues and very often decisions are not based on clean data. Next step will be build a trust worthy integrated data layer across the enterprise which is stitching together the collated data on all activities across the business and not just the sales data from the POS tills at the stores. This data has to be very tightly integrated with no scope of leakage and this can be big technological challenge and success in this can provide you single view of the enterprise in most ways. This data layer will not only be the reporting source for all decision makers across the enterprise but also be used to build portal based common platform across the enterprise for all communication needs to handle messages, tasks & activities, issues tracker, compliance reporting and store dash boards. This will be more like a cockpit control for all users from a gatekeeper in the DC to CEO for all enterprise actions. This shall replace all manual communications across the enterprise over the phone, fax or paper forms.
Execution and prioritization of all business activities through platform will bring seamless execution discipline and ability to measure the compliance level. The ability to monitor store compliance increases accountability at the store level and provides a measurement tool for monitoring which stores are compliant with their tasks.
This will help retailers drive out costs by replacing multiple manual communications methods with a single online point of reference for centralized store communications. Additional costs may also be saved by reducing the number of store visits made by state and regional management. Efficiency in execution will enhance the productivity across the enterprise and reduce the operational cost dramatically. This will also allow the management at all levels to deliver a high quality work experience to store associates that is compelling, effective and more productive. This will allow store management and associates to be available and spend more of their time on the sales floor and this increased level of compliance around corporate strategy, retailers will be able to deliver a better shopping experience for the customers.
-------------------------------------------------------------
Published in Images Retail November 2008 issue
A Technopak report on Indian Retail in 2005 forecasted that the period of 2006-2010 will be the period of back end consolidation and 2011 onwards Indian retail will get into business consolidation mode. I can see that the circumstances mentioned above have forced the beginning of consolidation process around six months ago. I see this as a great opportunity for the Indian retail industry to course correct its operational culture and build consumer centric strategies at this early stage of evolution. Since the overall growth opportunity offered by modern retail in India is huge I believe bringing Corporate Governance through Operational Compliance can strongly put Indian retail at a very stable and achievable growth path:
A key component for cutting operational costs is to have operational consistency across all store locations and gain efficiencies by streamlining processes. Since the time organized retailing started retailers have struggled to ensure that all stores operate the same way, using the same processes and getting the same results. This operational consistency ultimately rubs on to many aspects of business execution – operations, merchandising, finance, human resources, loss prevention, customer satisfaction, information technology, etc.
Over the last eight-to-ten years, most Indian retailers have invested in a wide range of new technologies such as POS, MMS, inventory management, space management, workforce management and other automated solutions to help improve operational productivity and efficiencies. On top of this retailers use other numerous manual methods to keep stores informed of corporate initiatives and operational strategy – telephone, email, faxes, mail bags, postal mail, paper forms, daily checklists and store visits. None of these methods have effectively solved the communications problem just because the people managing these modes are different and every one has their won style of doing it. In most cases retailers still do not know when the stores received the information and then if they actually acted upon them as directed. The result is typically more phone calls and more emails to determine if the original communications was completed. These methods just aren’t working. The reality is that retailers have an environment where multiple corporate departments are using various communications methods to gather information from the stores, without any type of governance. In many instances, one department’s request might conflict with that from another department, resulting in confusion at the store on what needs to be done at the right time.
Consistent operational compliance across all stores is now essential for retailers to streamline operational cost. Retailers must be able to monitor process compliance on a store and individual basis to identify areas of improvement for better results. I don’t think there is any possible methodology used by retailers to have an insight into the daily operations of each store to know which stores are complying with corporate operational practices. This scenario leads to the following issues:
- Mixed communications methods result in slow adoption of corporate initiatives.
- Scattered communications provide less than desired results of task completion and compliance.
- Lot of time and money is wasted following up to see if the original tasks are completed – more phone calls, more emails and lot of time wasted.
- Lot of time is wasted by store personnel chasing requests from various departments.
- There is no way to identify or track problems that stores are having with compliance.
- No way to measure compliance on which stores are completing tasks on time.
- High expenses related to compliance monitoring – travel, phone calls, faxes, etc.
- Inability to broadcast messages / alerts across all stores for issue resolution.
- Ability to identify recurring pain points across the enterprise and have the ability to fix the pain rather than provide a short term fix.
Most retailers in India have required components in the form of technology, processes and systems to deal with the above scenario but lack of execution and compliance has lead to the above situation. The challenge today is to build a culture of discipline in execution and compliance of the available resources. It will be useful to review the roles and authorities at various levels and reduce manual intervention in the system as much as possible since manual intervention is directly linked to the compliance factor.
Most of these systems and technology pieces are working in silos and most often the business data is put together manually and delivered to the decision makers. This can once raises data integrity issues and very often decisions are not based on clean data. Next step will be build a trust worthy integrated data layer across the enterprise which is stitching together the collated data on all activities across the business and not just the sales data from the POS tills at the stores. This data has to be very tightly integrated with no scope of leakage and this can be big technological challenge and success in this can provide you single view of the enterprise in most ways. This data layer will not only be the reporting source for all decision makers across the enterprise but also be used to build portal based common platform across the enterprise for all communication needs to handle messages, tasks & activities, issues tracker, compliance reporting and store dash boards. This will be more like a cockpit control for all users from a gatekeeper in the DC to CEO for all enterprise actions. This shall replace all manual communications across the enterprise over the phone, fax or paper forms.
Execution and prioritization of all business activities through platform will bring seamless execution discipline and ability to measure the compliance level. The ability to monitor store compliance increases accountability at the store level and provides a measurement tool for monitoring which stores are compliant with their tasks.
This will help retailers drive out costs by replacing multiple manual communications methods with a single online point of reference for centralized store communications. Additional costs may also be saved by reducing the number of store visits made by state and regional management. Efficiency in execution will enhance the productivity across the enterprise and reduce the operational cost dramatically. This will also allow the management at all levels to deliver a high quality work experience to store associates that is compelling, effective and more productive. This will allow store management and associates to be available and spend more of their time on the sales floor and this increased level of compliance around corporate strategy, retailers will be able to deliver a better shopping experience for the customers.
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Published in Images Retail November 2008 issue
Retailers Should Have A Complaint Management System in Place
It was Diwali day afternoon, around 1.00 p.m., and on an impulse my son and I decided to do some quick last-minute shopping at a newly opened hypermarket near our home.
The store was buzzing with consumers mainly buying gift items. We had a few specific things on our list and it took us only a few minutes to fill up our trolley. We walked towards the checkout area, and found it completely choked with waiting consumers. I heard one lady consumer yelling at an associate, asking why other counters were not working. “I have the right to know this!” she shouted. Associates were struggling with various issues like removal of security tags from the garments, reward coupons, filling the bags as well as handling of lucky draw coupons.
Taking my role as a consumer experience activist seriously, I entered the fray and demanded to see the store manager. The associate told me that he was busy with some very important work in the office. I said that that what I had to tell him was more important than the work he was doing and that he should come right away.
In the mean time my son and I wondered whether it was worth waiting here since it looked like taking a very long time before we would be able to pay and leave. Five minutes later, the store manager arrived and confided that the reason all counters were not working was that it was Diwali so most of the operators would only be coming on duty on the second shift.
I found this most amusing. How can any chain pretend to be a part of the organized retail movement and be unable to manage its workforce on the day of highest shopping in the entire year? I wondered who could be at the root of this mismanagement – was it policy, or was it only at the local level?
I explained to the store manager to be there personally and make sure that the consumers are services smoothly and if required regulate them based on the basket size.
Ten minutes later, I was still in the queue. The store manager came back to me, smiling victoriously, and said he had organized it all. He then disappeared.
Many frustrated consumers in the queue were swearing never to come back to this place again. By the time I had paid my bill and collected my reams of gift coupons, another 15 minutes had passed. In all it had taken me more than 25 minutes to pay for shopping that took less than 5 minutes! I would certainly avoid that store on another rush day.
Retailers must understand that festival shopping season in the new climate of financial uncertainty will have a double impact on the consumer flow in the coming weeks. Consumers are likely to choose shopping destinations with pleasant memories and avoid those where they have had experiences of this type. The financial effect of a poor consumer experience can be very damaging even though it may not be visible in a short time. Consumers are typically likely to visit a department store only once in 3 or 4 months and it would take a few months before the bad experiences are reflected in lagging sales. By then it would most likely be irreversible, and would certainly required a great deal of effort and expense to address.
To prevent such consumer erosion, retailers must put a complaint management system in place. This would provide a listening post for issues at the store, city and regional levels. To be truly effective, such a system must promptly route complaints to the appropriate business role and ensure timely response and management accountability.
The second step retailers must take is more critical: This is to set up a sensitive measurement system which is alert to unwritten complaints that occur when the promise of a great shopping experience is not met. While a complaint management system picks up only routine failures (such as non-availability, staff service etc.) failures in providing excellent service during each and every consumer transaction creates silent complaints. As these complaints accumulate they can become potentially very damaging for the business.
Retailers’ proactive ability to manage consumer experience and ensure timely resolution of consumer complaints can help them grow their business effectively.
-------------------------------------------------------------------------------
Published in DNA Money on 13th November 2008
The store was buzzing with consumers mainly buying gift items. We had a few specific things on our list and it took us only a few minutes to fill up our trolley. We walked towards the checkout area, and found it completely choked with waiting consumers. I heard one lady consumer yelling at an associate, asking why other counters were not working. “I have the right to know this!” she shouted. Associates were struggling with various issues like removal of security tags from the garments, reward coupons, filling the bags as well as handling of lucky draw coupons.
Taking my role as a consumer experience activist seriously, I entered the fray and demanded to see the store manager. The associate told me that he was busy with some very important work in the office. I said that that what I had to tell him was more important than the work he was doing and that he should come right away.
In the mean time my son and I wondered whether it was worth waiting here since it looked like taking a very long time before we would be able to pay and leave. Five minutes later, the store manager arrived and confided that the reason all counters were not working was that it was Diwali so most of the operators would only be coming on duty on the second shift.
I found this most amusing. How can any chain pretend to be a part of the organized retail movement and be unable to manage its workforce on the day of highest shopping in the entire year? I wondered who could be at the root of this mismanagement – was it policy, or was it only at the local level?
I explained to the store manager to be there personally and make sure that the consumers are services smoothly and if required regulate them based on the basket size.
Ten minutes later, I was still in the queue. The store manager came back to me, smiling victoriously, and said he had organized it all. He then disappeared.
Many frustrated consumers in the queue were swearing never to come back to this place again. By the time I had paid my bill and collected my reams of gift coupons, another 15 minutes had passed. In all it had taken me more than 25 minutes to pay for shopping that took less than 5 minutes! I would certainly avoid that store on another rush day.
Retailers must understand that festival shopping season in the new climate of financial uncertainty will have a double impact on the consumer flow in the coming weeks. Consumers are likely to choose shopping destinations with pleasant memories and avoid those where they have had experiences of this type. The financial effect of a poor consumer experience can be very damaging even though it may not be visible in a short time. Consumers are typically likely to visit a department store only once in 3 or 4 months and it would take a few months before the bad experiences are reflected in lagging sales. By then it would most likely be irreversible, and would certainly required a great deal of effort and expense to address.
To prevent such consumer erosion, retailers must put a complaint management system in place. This would provide a listening post for issues at the store, city and regional levels. To be truly effective, such a system must promptly route complaints to the appropriate business role and ensure timely response and management accountability.
The second step retailers must take is more critical: This is to set up a sensitive measurement system which is alert to unwritten complaints that occur when the promise of a great shopping experience is not met. While a complaint management system picks up only routine failures (such as non-availability, staff service etc.) failures in providing excellent service during each and every consumer transaction creates silent complaints. As these complaints accumulate they can become potentially very damaging for the business.
Retailers’ proactive ability to manage consumer experience and ensure timely resolution of consumer complaints can help them grow their business effectively.
-------------------------------------------------------------------------------
Published in DNA Money on 13th November 2008
A Smile Can Make All The Difference
Jet Airways management’s decision to sack thousands of customer facing staffers justifies the perception that Indian service industry is today driven by the sheer number of staffers rather than their competence and aptitude to deliver quality service to their customers. As and when any of these service sectors will face growth challenges the companies will start focusing on quality and correct numbers.
I firmly believe globally retailers have remained profitable only by maintaining promised service standards to their consumers. The fact that more than 75% of employees of any corporate retailer are in consumer facing duties and that surely makes retail a service business. Following my last pieces on consumer experience this time I decided to go around and speak to some of the store staffers and find out why they are not focused on their consumers! Once I again I visited some of big brands in F&G retailing.
CSA working on the floor are only trained to move the merchandise from back office to the shelves and arrange the shelves from time to time. When they are not doing that they can have a tea break! Though they operate in the consumer environment but they hesitate in making eye contact with any consumer because of lack of confidence and motivation and this is the reason every time a consumer seeks help they fail to deliver especially the sub-contracted staff. Most of them admit of being thrown into this job without even being told about their job in detail leave aside the training on it. Basic training on shelf management, product identification and regular brief on promotion and schemes can make these staffers very effective and this can be achieved by store manager holding a morning brief with all of them before the start of the shift. Some of them have a different energy level because they are ambitious and they have their own initiative. Ganesh at Spencer’s tell me he enjoys talking to customers helping them and this has helped him a great deal in learning English language skills. I am sure Ganesh will go very far if he continues making these efforts.
Cashiers are seen as seniors by the floor staff and this is the reason many of them aspire to be in the check out job, also it is seen as more dignified. Since most of the stores face shortage of trained cashiers, one of the key reason for not able to operate all POS terminals at any point of time, retailers must train all direct staffers in check out process and rotate their duties between POS and shop floor. Since cashiering gives enough exposure and understanding of store merchandise cashiers can often be asked to supervise certain sections and help consumers. This role flexibility can directly impact the movement of consumer queue more effectively and also bring more parity amongst the staffers enhancing their motivation.
I have always advocated that store manager is like a ship captain with all types of resources at his disposal and every proactive store manager will first make a list of consumer touch points he/she wishes to address and sensitize all the staffers on these touch points regularly. Shuffling these resources between consumer touch points and back office activities such as unloading, sorting, labeling, packing or shelving based on consumer traffic can be very effective. Daily brief by the captain every day on daily sales targets, promotions and schemes of the day and allotting targets to each of them for counting consumer smiles can be very effective and motivating to get the best out of them.
--------------------------------------------------------------------
Published in DNA Money on 23rd October 2008
I firmly believe globally retailers have remained profitable only by maintaining promised service standards to their consumers. The fact that more than 75% of employees of any corporate retailer are in consumer facing duties and that surely makes retail a service business. Following my last pieces on consumer experience this time I decided to go around and speak to some of the store staffers and find out why they are not focused on their consumers! Once I again I visited some of big brands in F&G retailing.
CSA working on the floor are only trained to move the merchandise from back office to the shelves and arrange the shelves from time to time. When they are not doing that they can have a tea break! Though they operate in the consumer environment but they hesitate in making eye contact with any consumer because of lack of confidence and motivation and this is the reason every time a consumer seeks help they fail to deliver especially the sub-contracted staff. Most of them admit of being thrown into this job without even being told about their job in detail leave aside the training on it. Basic training on shelf management, product identification and regular brief on promotion and schemes can make these staffers very effective and this can be achieved by store manager holding a morning brief with all of them before the start of the shift. Some of them have a different energy level because they are ambitious and they have their own initiative. Ganesh at Spencer’s tell me he enjoys talking to customers helping them and this has helped him a great deal in learning English language skills. I am sure Ganesh will go very far if he continues making these efforts.
Cashiers are seen as seniors by the floor staff and this is the reason many of them aspire to be in the check out job, also it is seen as more dignified. Since most of the stores face shortage of trained cashiers, one of the key reason for not able to operate all POS terminals at any point of time, retailers must train all direct staffers in check out process and rotate their duties between POS and shop floor. Since cashiering gives enough exposure and understanding of store merchandise cashiers can often be asked to supervise certain sections and help consumers. This role flexibility can directly impact the movement of consumer queue more effectively and also bring more parity amongst the staffers enhancing their motivation.
I have always advocated that store manager is like a ship captain with all types of resources at his disposal and every proactive store manager will first make a list of consumer touch points he/she wishes to address and sensitize all the staffers on these touch points regularly. Shuffling these resources between consumer touch points and back office activities such as unloading, sorting, labeling, packing or shelving based on consumer traffic can be very effective. Daily brief by the captain every day on daily sales targets, promotions and schemes of the day and allotting targets to each of them for counting consumer smiles can be very effective and motivating to get the best out of them.
--------------------------------------------------------------------
Published in DNA Money on 23rd October 2008
Missing In Modern Retail: Convenience
Large number of retailers and consumers reacted positively to my last piece and it really encouraged me to start doing some realty check at the ground level. I am not sure if I call it being fortunate but I live in close vicinity of almost every brand, Food Bazaar, Spencer’s, More, Reliance Fresh and Subhiksha and it wasn’t very difficult to hop across all of them and spend some time observing holiday shopping as well as interacting with quite a few consumers as well as staff members.
For me parking is the first touch point and it is addressed very poorly by all brands. At least a sign board advising or guiding on parking can be big help. Convenient location of stacked trolleys or shopping baskets is desired whereas littered baskets and dusty trolleys are not only annoying but also raised questions of hygiene standards followed by the brand. Most of the shoppers across the brands were on a weekly or monthly shopping visit with a companion to push the trolley. Women actively going around and picking up the items adding to the trolley and occasionally she comes across some items, not in her shopping list, catching her fancy leading to a discussion of approval with the companion. Mr.Damodar Mal, Group Customer Director, Future Group observes that the truth is, from a woman shopper's point of view, modern trade takes out a "man's intrusion" in her decisions of choosing and buying personal things. Taking the shopkeeper out of the transaction is a huge service modern trade provides and women & simple families love the resulting empowerment. Allowing the shopper to talk to the companion in private at the store, allowing her to sit on the mattress before buying it, is new world of 'service'/’experience’ that simple urban customers flock for, away from the intrusive world of traditional trade.
Though a grocery shopper in a large format store comes with a shopping list but a large part of the basket is filled by impulse buying which is largely influenced attractive layout and new product displays and promotions. Mr.Andrew Levermore, CEO HyperCity rightly describes “Retailers who are providing a stimulating, interactive grocery experience with pleasing aromas and visual delights will always do better. Presenting food in an attractive and exciting way stimulates what we call the gastro-sino-occular reflex - what the eyes and nose loves, the stomach yearns for. Add a hygienic and orderly layout that induces trust and therefore stimulates experimentation. It is this that drives up the average basket value. Consumers are unlikely to experiment with a new food product from a chaotically laid out, unprofessional store”. On the other hand it is observed that in case the shoppers need any help or clarification on the product, price or promotion at this stage they are not able to find staff equipped with the desired information and this dampens the enthusiasm suddenly, especially the lady, and the sale is lost. This is a very crucial consumer touch point and often retailers fail to deliver this successfully. The store staff shall be trained and motivated to help shoppers locating the desired items, guide them to avail promotions and clarify doubts on the products if required. Most of shoppers I interacted with raised this as the key service requirement.
Once the shoppers have filled the basket now the most dreading phase of the shopping trip begins! The Check Out! During my association of over 14 years with Indian retail I have never seen any retailer operating all POS terminals at any point of time. I have failed to solve this mystery and I have always wondered if they don’t wish to use all of them then why they are wasting expensive real estate by occupying that floor space for additional tills. No shopper is willing to wait for more than couple of minutes in a small format grocery store and may be 5-6 minutes in a hyper format. Globally retailers, especially in a large format store, designate POS tills for different basket sizes and payment modes and this has proved to be useful in faster check outs. This can be supplemented by someone guiding the shoppers to the right queue during the high traffic periods. Indian consumers are not very demanding yet any of them don’t like waiting in long queues. Remember a great shopping experience can be ruined by delayed check out and this is what the consumer will remember as the last experience with the retailer!
With the beginning of the holidays shopping season consumers will be looking for destinations where they can shop comprehensively and save time. During my interaction with shoppers they rated shopping convenience higher than discounts for festival shopping since they don’t want to spend festival holidays only shopping. Large format stores will be expected to stock special festival merchandise as well apart from the regular range. In case retailers are giving festival offers please ensure your staff understands these offers very well and your inventories are managed properly to meet consumer expectations.
Finally I believe that apart from the brand the success of a retail store is largely controlled by the store manager. I have noticed not many store managers in Indian modern retail are seen on the floor or are in control of action in the store. He/she has to operate like a captain of the ship and maneuver all the resources, people, inventories and practices, based on the consumer flow and movement in the store. Store Manager’s visibility in the store not only raises the energy levels in the store but also instills great confidence in the consumers towards the brand.
--------------------------------------------------------
Published in DNA Money on 9th October 2008
For me parking is the first touch point and it is addressed very poorly by all brands. At least a sign board advising or guiding on parking can be big help. Convenient location of stacked trolleys or shopping baskets is desired whereas littered baskets and dusty trolleys are not only annoying but also raised questions of hygiene standards followed by the brand. Most of the shoppers across the brands were on a weekly or monthly shopping visit with a companion to push the trolley. Women actively going around and picking up the items adding to the trolley and occasionally she comes across some items, not in her shopping list, catching her fancy leading to a discussion of approval with the companion. Mr.Damodar Mal, Group Customer Director, Future Group observes that the truth is, from a woman shopper's point of view, modern trade takes out a "man's intrusion" in her decisions of choosing and buying personal things. Taking the shopkeeper out of the transaction is a huge service modern trade provides and women & simple families love the resulting empowerment. Allowing the shopper to talk to the companion in private at the store, allowing her to sit on the mattress before buying it, is new world of 'service'/’experience’ that simple urban customers flock for, away from the intrusive world of traditional trade.
Though a grocery shopper in a large format store comes with a shopping list but a large part of the basket is filled by impulse buying which is largely influenced attractive layout and new product displays and promotions. Mr.Andrew Levermore, CEO HyperCity rightly describes “Retailers who are providing a stimulating, interactive grocery experience with pleasing aromas and visual delights will always do better. Presenting food in an attractive and exciting way stimulates what we call the gastro-sino-occular reflex - what the eyes and nose loves, the stomach yearns for. Add a hygienic and orderly layout that induces trust and therefore stimulates experimentation. It is this that drives up the average basket value. Consumers are unlikely to experiment with a new food product from a chaotically laid out, unprofessional store”. On the other hand it is observed that in case the shoppers need any help or clarification on the product, price or promotion at this stage they are not able to find staff equipped with the desired information and this dampens the enthusiasm suddenly, especially the lady, and the sale is lost. This is a very crucial consumer touch point and often retailers fail to deliver this successfully. The store staff shall be trained and motivated to help shoppers locating the desired items, guide them to avail promotions and clarify doubts on the products if required. Most of shoppers I interacted with raised this as the key service requirement.
Once the shoppers have filled the basket now the most dreading phase of the shopping trip begins! The Check Out! During my association of over 14 years with Indian retail I have never seen any retailer operating all POS terminals at any point of time. I have failed to solve this mystery and I have always wondered if they don’t wish to use all of them then why they are wasting expensive real estate by occupying that floor space for additional tills. No shopper is willing to wait for more than couple of minutes in a small format grocery store and may be 5-6 minutes in a hyper format. Globally retailers, especially in a large format store, designate POS tills for different basket sizes and payment modes and this has proved to be useful in faster check outs. This can be supplemented by someone guiding the shoppers to the right queue during the high traffic periods. Indian consumers are not very demanding yet any of them don’t like waiting in long queues. Remember a great shopping experience can be ruined by delayed check out and this is what the consumer will remember as the last experience with the retailer!
With the beginning of the holidays shopping season consumers will be looking for destinations where they can shop comprehensively and save time. During my interaction with shoppers they rated shopping convenience higher than discounts for festival shopping since they don’t want to spend festival holidays only shopping. Large format stores will be expected to stock special festival merchandise as well apart from the regular range. In case retailers are giving festival offers please ensure your staff understands these offers very well and your inventories are managed properly to meet consumer expectations.
Finally I believe that apart from the brand the success of a retail store is largely controlled by the store manager. I have noticed not many store managers in Indian modern retail are seen on the floor or are in control of action in the store. He/she has to operate like a captain of the ship and maneuver all the resources, people, inventories and practices, based on the consumer flow and movement in the store. Store Manager’s visibility in the store not only raises the energy levels in the store but also instills great confidence in the consumers towards the brand.
--------------------------------------------------------
Published in DNA Money on 9th October 2008
Managing Customer Touch Points Will Make A Difference: Published in DNA Money 23rd Sept. 2008.
As modern retail gains ground in India, brands have begun competing with each other and retailers have begun putting aside budgets for brand building, CRM implementation, building consumer experience in the store and multi-channel retailing.
Multi-channel retailing is the new flavor of the month for global retailers, and they are making huge investments on technological tools. Indian retailers are now preparing themselves to follow suit.
I see this as a positive sign that the consumer is now emerging as an important entity in the business models of India retailers, and they are now willing to spend money to win the confidence of the consumers.
However, I personally have a different take on the overall approach retailers must use to win consumer loyalty, which I believe will be not just less expensive but far more effective as well.
I have always suggested that the first customer service initiative a forward-thinking retailer must have is to set up and implement a Consumer Service Management policy. This policy must align the organization with consumer-oriented thinking and strategies. A retailer’s CSM policy should be designed around the consumer buying process. This means that you can’t view your retail business in terms of how you sell, but in terms of how your consumer wants to buy from you.
Let us take a simple and basic example of a 13-step process for buying in a super market store which shows all the consumer touch points managed by the retailer as well the touch points not managed by the retailer.
Most retailers only manage 4 or 5 of these touch points, and this gives rise to a huge opportunity for your competitors to steal your consumers by addressing those unmanaged points.
The consumer buying process for grocery is different from buying garments or buying durables, and if you also consider multi-channel access to the consumers in all these shopping environments, the total number of touch points can go as high as 250. The challenge will be how many of these touch points you as retailers are willing to manage and influence.
Gone are the days when consumers went to a shopping destination just to buy a product. Today, where people shop has at least as much influence over what they buy – the retail brand has more power than ever.
As part of a brand building exercise, and with a view to delivering a superior shopping experience to your consumers, you need to sketch out what the process looked like from the customer’s perspective. You can then tabulate and discuss how to improve each process so that the customer would have a better experience the next time.
These can be quite diverse, for instance buying grocery as a weekend chore, buying a new durable in an emergency to replace ones that were broken, or buying a pair of men’s trousers for work. You need to focus on how many touch points you are willing to manage or influence, whether through operational practices or by using technological tools.
In this exercise you may not be considering the role of brand on a broader scale, but ultimately the number of touch points you decide to manage are sure to reflect your brand objectives very clearly to your consumers.
Working on this model is not only inexpensive but also very effective to build a consumer-oriented culture across the organization and will enable you to build strong brand loyalty with your consumers.
Imagine how powerful it would be if you could pull off a consistent brand experience across all 250 touch points! Can you say that your company is doing that today?
Multi-channel retailing is the new flavor of the month for global retailers, and they are making huge investments on technological tools. Indian retailers are now preparing themselves to follow suit.
I see this as a positive sign that the consumer is now emerging as an important entity in the business models of India retailers, and they are now willing to spend money to win the confidence of the consumers.
However, I personally have a different take on the overall approach retailers must use to win consumer loyalty, which I believe will be not just less expensive but far more effective as well.
I have always suggested that the first customer service initiative a forward-thinking retailer must have is to set up and implement a Consumer Service Management policy. This policy must align the organization with consumer-oriented thinking and strategies. A retailer’s CSM policy should be designed around the consumer buying process. This means that you can’t view your retail business in terms of how you sell, but in terms of how your consumer wants to buy from you.
Let us take a simple and basic example of a 13-step process for buying in a super market store which shows all the consumer touch points managed by the retailer as well the touch points not managed by the retailer.
Most retailers only manage 4 or 5 of these touch points, and this gives rise to a huge opportunity for your competitors to steal your consumers by addressing those unmanaged points.
The consumer buying process for grocery is different from buying garments or buying durables, and if you also consider multi-channel access to the consumers in all these shopping environments, the total number of touch points can go as high as 250. The challenge will be how many of these touch points you as retailers are willing to manage and influence.
Gone are the days when consumers went to a shopping destination just to buy a product. Today, where people shop has at least as much influence over what they buy – the retail brand has more power than ever.
As part of a brand building exercise, and with a view to delivering a superior shopping experience to your consumers, you need to sketch out what the process looked like from the customer’s perspective. You can then tabulate and discuss how to improve each process so that the customer would have a better experience the next time.
These can be quite diverse, for instance buying grocery as a weekend chore, buying a new durable in an emergency to replace ones that were broken, or buying a pair of men’s trousers for work. You need to focus on how many touch points you are willing to manage or influence, whether through operational practices or by using technological tools.
In this exercise you may not be considering the role of brand on a broader scale, but ultimately the number of touch points you decide to manage are sure to reflect your brand objectives very clearly to your consumers.
Working on this model is not only inexpensive but also very effective to build a consumer-oriented culture across the organization and will enable you to build strong brand loyalty with your consumers.
Imagine how powerful it would be if you could pull off a consistent brand experience across all 250 touch points! Can you say that your company is doing that today?
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