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.
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Published in Images Retail November 2008 issue
Tuesday, July 21, 2009
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.
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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.
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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.
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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.
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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.
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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.
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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?
Saturday, October 13, 2007
CUSTOMER INTIMACY - 1
At the height of the dot-com boom, predictions about the outright demise of the brick-and-mortar store were floated about in the retail industry. However, it seems that one of the lasting effects of the Internet revolution has been to make the store an even more central part of the shopping experience. Whether it’s the place where customers go to actually touch an apparel item they’ve seen in a catalog or researched online, or where customers pick up the grocery order they updated via a cell phone text message, the store has become the center for the new multi-channel, multiple touch point shopping experience. If you notice many single brand retailers are now launching flagship stores as a destination to promote their brand and display their entire range to the customers in a real environment. This is also driven by the retailer’s desire to build customer intimacy. The physical store still represents an optimal environment for such efforts, because building customer intimacy involves much more than just collecting data from customer relationship management (CRM) applications.
“Customer intimacy is defined differently by each customer and retailers need to interact with them in the ways the consumer wants,” says Rob Garf, Retail Research Director at AMR Research. “Some customers want an almost purely self-service environment—they don’t want to talk to anyone, they just want to select their products and check out quickly. These people might be more apt to use technology such as kiosks or self-checkout systems. “Other customers might want a store associate to help them, especially in a
‘high-touch’ environment such as apparel,” Garf adds. “That store associate needs to be empowered with the same information that’s available to consumers online, such as product information, availability and shipping options.”
“Customer intimacy is defined differently by each customer and retailers need to interact with them in the ways the consumer wants,” says Rob Garf, Retail Research Director at AMR Research. “Some customers want an almost purely self-service environment—they don’t want to talk to anyone, they just want to select their products and check out quickly. These people might be more apt to use technology such as kiosks or self-checkout systems. “Other customers might want a store associate to help them, especially in a
‘high-touch’ environment such as apparel,” Garf adds. “That store associate needs to be empowered with the same information that’s available to consumers online, such as product information, availability and shipping options.”
Sunday, September 23, 2007
In store service-Nordstrom Effect
On the 21st of September 2007, I was driving home to Pune after having attended the India International Retail Convention in Mumbai. It was 9.15 by the time I pulled into the Furniture Bazaar parking strip and we were relieved to see a large sign indicating that store hours were 11.30 to 9.30.
For the last few weeks, my mother-in-law had been looking around for bedroom furniture for the spare bedroom of the house she had recently rented. These days a wide range of imported furniture is available at very attractive prices. She had finally decided on the range from Furniture Bazaar. The store being really far from where we live, we had been delaying the purchase, and this was a good opportunity to stop and buy on the way home.
As we entered, we saw a barrier displaying the sign “Store Closed”. We rushed around it, but the sales person was talking on his cell phone with a faraway look in his eye. “Is the store closed?” I asked loudly. He nodded absentmindedly, waving us away, and moved off.
“It’s not 9.30 yet!” I called out, but he was gone.
Rather than driving all the way on another day to this place an hour from home just to sign a credit slip for reasonably high-value goods, we would probably go and buy something similar from a nearby store of another chain. The extra thousand or so rupees we might have to pay would be compensated by the time and effort saved.
“It’s not 9.30 yet!” I pleaded to the two young men engaged in day-end activities at the till. One of them, who later told me that his name was Raju, stepped out and said “Yes, sir, we are open sir, what can I do for you?” Phew.
Then the security guard Yogesh who had been watching us, dismayed that the store might lose a customer, came up and offered a seat, and involved himself in clarifying price and availability.
As the processes of ordering from warehouse and invoice preparation were started, I smiled to myself.
A few hours before I had heard a story at the IIRC about a woman who entered a Nordstrom store at closing time. Even worse, the size of the garment she wanted was not available. Instead of shooing her away as had nearly happened to us, an employee of the store had warmly escorted her to a comfortable seat, and plied her with coffee while she waited, having arranged to have the item she wanted brought across from a competitor’s store across the street.
Nordstrom is a high-end fashion specialty retailer in the U.S. known for their carefully and impeccably presented merchandise. Quite apart from that, Nordstrom has achieved near-legend status with the coining of the phrase “Nordstrom Effect” which retailers enviously associate with their unparalleled, even obsessive, customer service.
Another Nordstrom anecdote concerns a woman who phoned a store as soon as she returned from a shopping trip there. Apparently one of the hubcaps of her (very expensive) car was missing. The attendant went out and scoured the parking lot, located the hubcap, and phoned her back to ask whether she would like to have it home-delivered.
I spent some time chatting with Raju and Yogesh. The other young man who had been on the phone and eager to get rid of the nuisance we presented him by arriving so close to closing time had retired to a far corner of the store and was relaxing on one of the comfortable sofa displays, still chatting away. He was obviously senior to Raju because he had to be called to enter the authorization code required. He refused to make eye-contact but I called him and inquired in a friendly tone who he’d been talking to. His category manager, he said. He confided that he had been under a great deal of stress and was very tired. I controlled myself from laughing, wondering what kind of training he’d been given.
Yogesh in particular impressed me a lot. We’ve all got used to sluggish and indifferent security people, telling ourselves that if Shah Rukh Khan and even the Prime Minister of India can have incompetent security staff, who are we to complain? But here was a young man who instead of spending his idle hours yawning, was adding totally unexpected value to his post.
In India we certainly do not expect service of the Nordstrom level. In fact, many of our retailers believe that Indian customers are mere yokels looking for nothing but bargains and product range, and are not the least interested in good quality service. They patronisingly imagine that the Indian customer with a crafty bargaining mindset, would not even RECOGNIZE good quality service, or would be embarrassed by it or take advantage of it. With this attitude, one can’t imagine how many customers are turning away to go and shop at other stores, as we nearly did.
On the other hand, with the right type of training, the security guard Yogesh (a true asset to the Furniture Bazaar store in Pune) and the sales assistant Raju, and the hundreds of others like them at your stores, could surely evolve to the Nordstrom level.
For the last few weeks, my mother-in-law had been looking around for bedroom furniture for the spare bedroom of the house she had recently rented. These days a wide range of imported furniture is available at very attractive prices. She had finally decided on the range from Furniture Bazaar. The store being really far from where we live, we had been delaying the purchase, and this was a good opportunity to stop and buy on the way home.
As we entered, we saw a barrier displaying the sign “Store Closed”. We rushed around it, but the sales person was talking on his cell phone with a faraway look in his eye. “Is the store closed?” I asked loudly. He nodded absentmindedly, waving us away, and moved off.
“It’s not 9.30 yet!” I called out, but he was gone.
Rather than driving all the way on another day to this place an hour from home just to sign a credit slip for reasonably high-value goods, we would probably go and buy something similar from a nearby store of another chain. The extra thousand or so rupees we might have to pay would be compensated by the time and effort saved.
“It’s not 9.30 yet!” I pleaded to the two young men engaged in day-end activities at the till. One of them, who later told me that his name was Raju, stepped out and said “Yes, sir, we are open sir, what can I do for you?” Phew.
Then the security guard Yogesh who had been watching us, dismayed that the store might lose a customer, came up and offered a seat, and involved himself in clarifying price and availability.
As the processes of ordering from warehouse and invoice preparation were started, I smiled to myself.
A few hours before I had heard a story at the IIRC about a woman who entered a Nordstrom store at closing time. Even worse, the size of the garment she wanted was not available. Instead of shooing her away as had nearly happened to us, an employee of the store had warmly escorted her to a comfortable seat, and plied her with coffee while she waited, having arranged to have the item she wanted brought across from a competitor’s store across the street.
Nordstrom is a high-end fashion specialty retailer in the U.S. known for their carefully and impeccably presented merchandise. Quite apart from that, Nordstrom has achieved near-legend status with the coining of the phrase “Nordstrom Effect” which retailers enviously associate with their unparalleled, even obsessive, customer service.
Another Nordstrom anecdote concerns a woman who phoned a store as soon as she returned from a shopping trip there. Apparently one of the hubcaps of her (very expensive) car was missing. The attendant went out and scoured the parking lot, located the hubcap, and phoned her back to ask whether she would like to have it home-delivered.
I spent some time chatting with Raju and Yogesh. The other young man who had been on the phone and eager to get rid of the nuisance we presented him by arriving so close to closing time had retired to a far corner of the store and was relaxing on one of the comfortable sofa displays, still chatting away. He was obviously senior to Raju because he had to be called to enter the authorization code required. He refused to make eye-contact but I called him and inquired in a friendly tone who he’d been talking to. His category manager, he said. He confided that he had been under a great deal of stress and was very tired. I controlled myself from laughing, wondering what kind of training he’d been given.
Yogesh in particular impressed me a lot. We’ve all got used to sluggish and indifferent security people, telling ourselves that if Shah Rukh Khan and even the Prime Minister of India can have incompetent security staff, who are we to complain? But here was a young man who instead of spending his idle hours yawning, was adding totally unexpected value to his post.
In India we certainly do not expect service of the Nordstrom level. In fact, many of our retailers believe that Indian customers are mere yokels looking for nothing but bargains and product range, and are not the least interested in good quality service. They patronisingly imagine that the Indian customer with a crafty bargaining mindset, would not even RECOGNIZE good quality service, or would be embarrassed by it or take advantage of it. With this attitude, one can’t imagine how many customers are turning away to go and shop at other stores, as we nearly did.
On the other hand, with the right type of training, the security guard Yogesh (a true asset to the Furniture Bazaar store in Pune) and the sales assistant Raju, and the hundreds of others like them at your stores, could surely evolve to the Nordstrom level.
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