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November 21, 2013

Can insights from social analytics be the final piece to the "360° customer view" puzzle?

On behalf of : Sathish Kumar R

Like cryptozoologists in search of a mythical creature, retailers have tried numerous customer relationship management (CRM) initiatives and tools available to capture the still elusive '360° Customer View.' Many have also been buying demographic data from third- parties to supplement these efforts. Today, the hopes of many rest on social analytics, but can insights generated from it really be the final piece to the 360° customer view puzzle?_

Retail businesses all over the world have been working hard to know their customers better. Over the years, they have created loyalty programs, built data warehouses, bought-in external data and invested huge sums in business intelligence and analytical tools to put together near-complete profile of their customers. Using their customer's historical data and advanced analytics, businesses have also been attempting to predict future purchases of their customers to influence them. A simple case of this would be grocery retailers trying to analyze their customers' purchases and offer appropriate promotions aimed at up-sell or simply to advance their future purchases. As grocery purchases often go through regular purchase cycles, with more and more historical data about a customer, it becomes easier to predict. While this may sound overly simple, we all know it is not the case.

First, the retailer should have the ability to uniquely identify its customers and consolidate their purchase data across all channels. This might seem a basic requirement but many retailers still lack this ability. Other challenges standing in the way of such analyses include irregular purchase patterns, purchases spread across multiple retailers, etc. The recent addition to these challenges is the influence of social media.

The on-going social backlash based on news articles about few global companies not paying their "fair share" of corporate tax showcases how social interactions can influence customer choices and purchase decisions. Indeed, such word-of-mouth social interactions, often confined to local markets in the past, have attained a level of importance previously unimaginable in a digital world fuelled by the boundless expansion of social platforms. Even though businesses cannot control such interactions, how quickly and effectively they respond to them largely determines their ability to influence them.

For these reasons, companies have started taking social media seriously. They are investing in capabilities that enable them to "listen" to social interactions in order to quickly engage, communicate and create a positive brand experience among its communities. While the primary purpose of this "listening" exercise is to engage and build positive relationship, it also presents an opportunity for retailers to integrate data from this channel with other sources of customer/prospect data to gain valuable insights. There are various mining tools to wade through terabytes of data about their user's interests, behavior and attitudes towards brands, products, companies, events, etc.

With this approach, a retailer can easily match prospects data with similar mind-sets based on their social interest groups and propose offerings for like segments. Similarly, individuals actively seeking advice on a particular product or a service in social media have a higher propensity to buy that product or service, if offered the right stimuli. The opportunities are many and with right CRM strategy, retailers could leverage data from social media to create impressive insights about existing customers and prospects that could potentially be the final missing piece to the "360 degree Customer view" puzzle.
What is your view? I would like to hear from the readers how integrated their social media to their CRM strategy is? How do they leverage data collated from social media across wider marketing initiatives? Please write to me.

About the Author: Sathish Kumar R is a Senior Principal in the Retail, CPG and Logistics practice at Infosys, and specializes on the demand-side of customer operations focusing in digital commerce, order to cash cycles, marketplace and CRM. He can be reached at sathishkumar_r@infosys.com

November 18, 2013

NowCommerce - We want it fast!!!

Online shopping has continuously been gaining grounds. Today, this selling channel is competing head-on with the brick and mortar channel. In wake of this competition, e-tailers are continuously working towards reducing their fulfillment times by targeting ever elusive issues like 'Same day delivery (SDD)'. SDD popularly referred to as NowCommerce, implying online retailing of goods that can be delivered within hours of ordering.


NowCommerce would however not be successful with all products across the broad base of customers. E-tailers would have to identify exactly who needs to be targeted, as referred more aptly by retail consultants as "Affluent millennials".  The service should especially focus on high margin, low carrying cost commodities.


A quick pro & con analysis of the SDD model offers the below mentioned findings. The key advantages offered are improved customer service and high customer satisfaction. Items are prepositioned in local market thus, rendering logistical optimization. The provider will need to scale up with the ability to have delivery and pick-up done fast. Reverse logistical capabilities would also improve in tandem. All these capabilities would in turn imply reduction in warehousing costs.


This service will offer a strong and stark competitive advantage. It would also enhance brand image of the product offerings.
The critical disadvantages on the other hand are, in turn, the need to maintain capacity needed to fulfill SDD requirements (higher inventory needs).  The supplier to local DC shipping cost would be higher because of decreased volume.

Observing the features of SDD as it exists today:

Cost - Today, customers have to pay extra in order to lower the delivery cycle time. Same-day delivery might be a saving grace for the urgent one-off purchase - last-minute Christmas gift, for instance - but in broader terms, will consumers pay extra for the convenience? The result of the survey undertaken by BCG showed only 9% of the US consumers was ready to improve their online shopping experience.

Inventory Stock Up - In order to meet such aggressive targets w.r.t. fulfillment lead times, it is essential that e-tailers maintain local DCs strategically located. The multichannel providers would definitely be at advantage on this front.

Adoption of technology - This implies automation of the logistics and management to the maximum possible extent. E-tailers are investing heavily into machine intelligence technology & automated robotics.
State of art fulfillment systems need to be maintained. They should be quickly able to identify the best suited & fastest replenishment center for the raised order. Communication of online order to the delivery channels should be lightning quick.

Local partnerships - Sole e-tailers need to tie-up with local retailers to get their orders fulfilled. Many leading companies have identified niche markets, where customers would order by a certain time to get their purchase delivered the same day.   The local partners (transportation partners) can aid e-tailers in faster delivery times or it can aid them by provisioning local inventory.

Across channel co-ordination in case of multichannel retailers is quintessential. The need of the hour is for the management to remove any inventory silos which exist.

All these factors imply that retailers would definitely need to up their costs in order to compete on this differentiating ground. The need is to strike a balance between the costs incurred and profit margin. Many companies encountered a roadblock in the NowCommerce arena. With biggies entering the NowCommerce battlefield only time will tell whether this turns out to be a fad, or is here to stay !

 

 

References:

http://www.onlineeconomy.org/nowcommerce-mass-market-retails-race-to-same-day-delivery

https://www.bcgperspectives.com/consumer_and_retail

http://finance.yahoo.com/blogs/the-exchange/same-day-delivery-consumers-want-want-now-134709782.html

November 13, 2013

See Your Customers In High-Definition

Guest Post by

Santhanalrishnan.R, Senior Principal, Infosys

 An old statesman once said that "all politics is local." The same could be said about retailing. We live in an exciting age - big box stores offer us every product under the sun in their modern, beautifully furnished outlets. Those chains have achieved admirable economies of scale and can therefore pass the savings on to their customers.

When you take a closer look at each store - you tend to come to a startling revelation. None of these outlets is equal, beyond a point. They all have distinct inventory issues, consumer buying habits, and market vulnerabilities. Only when retailers realize that all stores are local will they get the data-driven insights for which they're constantly searching.

As suppliers to the stores, Consumer Packaged Goods companies (CPGs) are one step removed from the customers who shop up and down the aisles. But they are an important element to the overall effort to achieve the best store-level insights. To many of us, "store level insight" means snapshots of data from the sales force or the sharing of data from retail customers. Other conventional sources of retail insight might be syndicated point-of-sale scanner data and consumer panel data, but neither of these sources is typically store level.

What else do retailers have at their disposal? Well, sales force audits take quite a bit of effort and they lack the desired precision in general. Then there's syndicated point-of-sale or consumer panel data sources. These two methods rely on sampling a few thousand outlets (or a few hundred thousand households at best) to project market-level trends. CPG brands have raised concerns about sample sizes. Plus, the higher the level of granularity you need, the higher the cost. Think about it: All that effort and cost and you're still analyzing the market area, not the outlet itself. 

The holy grail of retailing has always been granular level insights into each store. That's become more of a challenge as stores get larger, chains expand, and a handful of CPG companies turns into hundreds of them. If you drill down, you'd want to know what product is selling where and how much of it. You also want to know about the interplay between pricing, assortments, store level displays, and special promotions. These metrics are all important aspect in the formula that influences a product's market share. Granular store-level insights help brands move the right inventory to the right place and drive double-digit improvements.

Still, there's no doubting that achieving store-level insights is a hard nut to crack. Retailers and leaders of the top CPGs both know this for a fact and have confirmed in a recent study by Infosys 'State of the Store'. The challenges are many, from different formats across retailers to the harmonizing of data for different frequencies. The benefits, however, are simply too big to ignore. The leading CPG companies of tomorrow will become that way by deriving competitive advantage through store-level insights.

How they're already achieving this is by leveraging Big Data for their very-local needs. The right cloud-based retail data acquisition platforms come with operational and data management support. Combined with the right analytic themes, these platforms help achieve a broad range of goals, from improved alignment of inventory with sell-out trends to better consumption visibility. What the platform set in motion is a virtuous cycle that delivers better value to all stakeholders. 
 

When brands combine data from local sources with demand signals from other sources (like social media), they better understand localized demand signals, take stock at store level, and suggest incremental orders where necessary. The result is that they improve their organization's responsiveness. In order to achieve high-definition insights into your consumer base, think locally and balance your efforts with the best retail execution tools you can muster.
 
 

 

November 12, 2013

Finding Excellence From Within

Guest Post by

Anil Venkat, Marketing, Infosys

"It is astonishing as well as sad, how many trivial affairs even the wisest thinks he must attend to in a day; how singular an affair he thinks he must omit."


Who knew that the 19th-century writer Henry David Thoreau could be a 21st-century retail management expert? I say this because retailers and the Consumer Packaged Goods companies (CPGs) that supply them would do well to simplify their mission. When they strip away all of the complexities and minutia of big box retailing, their customers face a fairly simple proposition: Either they find the product they're looking for ... or they don't.

Think of the outlets that pour enormous amounts of time, energy, and money into creating stores that offer thousands of products and are backed up by the latest retail technologies. If the end result isn't the ability to ensure that popular products remain in stock at all times, it's time to conduct a self-assessment. Chances are your store has all of the excellence and talent it needs within its four walls. You simply need to know how to find it.

The new State of the Store survey by Infosys reveals that nearly 70 percent of customers experience an out-of-stock-out product at least once every three months. Half of these consumers are quick to change to another brand. Consumers aren't the only ones dissatisfied with the out-of-stock experience. The survey shows that 72 percent of retailers readily acknowledge the need for help in improving their on-shelf availability levels. Two-thirds of retailers believe that an effective in-store execution strategy is what makes a successful CPG company.

I'm astounded by the fact that many retailers remain reluctant to share point-of-sale data with CPG companies. These enterprises struggle to attain return-on-investment and increased profitability because of poor on-shelf-availability. The lack of real-time access to information about the consumer, product, promotion, and competitor can adversely affect timely in-store decision-making, which leads to loss of both revenues and loyalty.


The way to improving a shopper's experience is to drive in-store excellence. Give consumers what they want, when they want it. CPG companies need to improve collaboration with retailers to ensure the timely flow of information. Doing so ensures better on-shelf availability and improves shopper insights.


When creating an ideal store, keep things simple. Focus on scale and flexibility and everything else will fall into place. Sounds too good to be true? Well, consider this: Many CPGs have achieved 97 percent on-shelf availability by streamlining distribution and minimizing out-of-stock scenarios. Real-time knowledge of store conditions helps sales representatives identify and prioritize high impact retail execution activities.


Adopting a mobile solution for the field force will not succeed unless the interface is intuitive and fosters productivity. Similarly, applying a one-size-fits-all approach will not work. Every store, sales representative, and store activity is unique and requires a flexible solution that you can tailor to meet individual requirements and achieve true value.

A comprehensive solution that delivers actionable shopper insights, intuitive sales force automation, and holistic retail execution planning is the key to a winning formula. CPG enterprises that are implementing flexible and simple enterprise solutions are witnessing impressive supply chain efficiencies.

By combining a strategic retail execution plan with strategic insights and the right sales force automation solutions, enterprises can create their ideal retail stores and sharpen their competitive edge. They need to cut through the clutter and focus on the simple things. Ensuring that customers have the best in-store experience possible will keep them coming back for more.


 

November 10, 2013

How To Engage Consumers Everywhere

Guest Post By

Anil Venkat, Marketing.

An alert to all Consumer Packaged Goods companies: Your most loyal, longtime customers are up for grabs.
 
The "culprit," if you will? Other CPGs. The days when a handful of large CPGs dominated the marketplace are a distant memory. There are hundreds of nimble branded suppliers out there vying for precious space on the shelves of big box retailers. That's because just a meter or two on the shelf of a big box chain can translate into enormous global exposure for any brand.
 
Consumers now have endless options. And their brand loyalties lie wherever they can get good deals, experience targeted promotions, and find quality products immediately. A CPG can no longer operate under the assumption that consumers will wait and come back to the store again if they can't find their preferred brands. They'll buy whatever is on the shelves at that moment. Rival CPGs are working harder than ever to woo those fickle consumers away from brands that have until recently stood up against every test in the marketplace.
 
It's time for CPGs to re-evaluate how they do business. First and foremost is a re-assessment of their relationships with retailers. In the recent State of the Store survey by Infosys, 97 percent of retailers said support from their suppliers is vital to ensuring a customer-centric business model. There are so many opportunities to strengthen brand loyalty and the frequency of purchase simply by collaborating in such a way that the retailer and CPG are aligned in meeting the expectations of customers. To be sure, creating a new branding experience is a challenge for CPGs that continue to depend on old business models. In fact, the Infosys survey shows that 40 percent of consumers are no more compelled to make purchases because of existing promotions than they were two years ago.

Strengthening ties to consumers begins with "omni-channel" convergence. In a bygone era, a CPG could rest well knowing that a customer would continue buying a certain laundry detergent after years of coupons and promotions. It was relatively cheap for the company to keep that customer in the fold. Today, however, with the popularity of mobile devices, consumers are accessing product reviews, chatting with their friends, and comparing prices before they even begin to shop. The dynamism of shopper loyalty in the digital marketplace is forcing mature CPGs to focus on building emotional connections with their consumers - connections that drive affinity and trust.
 
Building emotional connections takes data. Lots of it. CPG companies are discovering the advantages of deploying solutions that integrate different data sources - products, consumers, demographics, point of sale, promotions, and supply chain - across all channels. Sales teams better understand consumer behavior when they're equipped with a holistic view. Without this perspective, trade spends and promotion planning won't deliver the promised return on investment.
 
There are plenty of opportunities to improve ROI. The Infosys survey shows that only 10 percent of customers have seen companies incorporate interactive digital displays within stores and 84 percent say they have not seen price comparison apps over the past year. There's an undeniable need for IT and sales to collaborate so that consumers keep coming back for more.
 
Part of the solution involves using robust data solutions to eliminate silos across retail channels. You don't want inconsistent consumer experiences and poor execution at various points of sale. Enterprises need to find ways to perfect their information models because there is no one-size-fits-all solution to bring all of the consumer information together. Sophisticated IT solutions will help enterprises develop bespoke consumer programs that are customized by channel and format. Most enterprises may not have this expertise in-house, so choosing the right technology partner is critical.
 
The time is now to adopt a retail execution strategy that leverages the power of omni-channel convergence, increases sales productivity, and extracts valuable shopper insights to build a holistic consumer view. With smarter investments in inventory replenishment models, CPGs companies can better position themselves for success.
 

 

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