Off the Shelf provides a platform for Retailers and Consumer Packaged Goods companies to discuss and gain insights on the pressing problems, trends and solutions.

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December 25, 2013

The Hybrid shopping experience

On behalf of : Ugandharji HM

Retailing has been evolving over the years. What started as independent 'mom and pop stores' transformed into the first true self-service grocery stores in the form of Piggly Wiggly, where customer selected merchandise as they walked through the maze to the cashier. This further changed with the advent of the 'Big Box' retailers such as Walmart and Carrefour, which completely changed the landscape of retailing- the customer now had the option of shopping all under one roof. The rise of the digital era, completely redefined customer shopping experience with Digital retailing such as amazon and ebay, and shopping now could be done anytime, anywhere as long as one was connected to the internet.

Add to this, the dimension of new age smartphone mobile devices and what you have is shopping right at your fingertips. So does this mean the end of the conventional from of retailing? That would be stretching too far, at least not so in the immediate future. However, what it definitely means is, that there are now more avenues for a consumers to shop and it is imperative for retailers to be present at these touch points to influence consumer behavior and provide a seamless shopping experience across channels.

The apparel retail industry has been one of the early adopters of technology to drive customer experience. By embracing technology and continuously innovating, it has been able to able to understand and influence buying behavior.
One such recent adoption for customer engagement has been the Mobile which has enabled convergence with anyone and any channel. Mobiles can help apparel retailers in
1. Creating Awareness
2. Enhance in store shopping experience
3. Build loyalty post purchase

Create Awareness- Use mobiles to create brand awareness and enhance customer engagement
1. Use B2C mobile apps to Create Contextual Campaigns, advertisements and SMS to drive customer traffic to stores.
2. Initiate location based services to facilitate nearest store location, drive location based promos
3. Share shopping experiences with friends through social sites

Enhance in store shopping experience- Use tablet devices to enhance in-aisle shopping experience in the store
1. Use Mobiles to scan QR code/ barcode on garments to direct users to more information on the product, customer recommendations, ratings and reviews that build confidence about the choice of garment
2. Leverage augmented reality to facilitate trial of garments on mobiles e.g. Use of the mobile camera for quick virtual trial of various clothing on consumer's body without having to physically try each one out
3. Receive real time contextual based special offers and promotions based on customer profile and purchase history, and cross-sells related products or new fashion lines. e.g. Based on user profile, in store targeted promotions or coupons can be pushed in real time while shopping in store
4. Provide in store inventory look up or guided sales for difficult to get color or garment designs through endless aisles
5. Extend Loyalty redemption and services e.g. Passbook is used for storing and using digital loyalty cards as needed
6. Extend Point of sale on mobile for faster checkout and queue busting e.g. Using Mobile Wallets, NFC, and barcode readers to make mobile payments.

Build loyalty post purchase- Leverage mobile to stay connected with the consumer and retain loyalty long after the purchase is made
1. Provide garment cleaning/ maintenance tips
2. Provide outfit matching for color blind individuals,
3. Outfit creation support
4. Share celebrity/ friends' purchases, loyalty marketing, etc.
5. Provide information on new arrivals, size/ color alerts when in store

With a blurring line between online and offline retailing, apparel retailers need to embrace the opportunity provided by the paradigm shift in retailing happening around, and create the best differentiators to provide better customer experience.

Soft Goods Retailing: Where to draw the boundaries?

On behalf of : Anup Kumar

Should retailers continue with 'Make to Stock' or adopt 'Make to Order'? Apparels industry has moved on to force fit the consumers in one of the five defined sets - XS, S, M, L, and XL. The question that needs to be answered is how to address the changing consumer demands. A consumer may still like to go ahead with one of the five sets, but they have continued to evolve in terms of the selection between color of the dress, texture and fabric of the cloth, design and fashion trend, etc. Though consumers have been picky on these aspects ever since the industry existed consumer demand has evolved to find out what offer is just exclusive for them. Now retailers need to redraw the boundary between the traditional way of fulfillment and the way to address the changing buying pattern of the consumers.

Consumer demand pattern is captured through fashion shows, exhibitions, in-store and online buying behavior, etc. Based on preliminary assessment about demand pattern, designers / retailers initiate the production plan. Even after going through this due diligence retailers find out that few products are fast moving and some remain dead rubber. The question remains - how to assort the products better in order to not over stock and better manage the lead time?

The complexities of 'Make to Stock' consists of, though not limited to:

• Uncertainty in the quantity to be stocked
o Opportunity cost in case of stock outs for fast moving goods
o Rising inventory holding cost in case of slow moving goods
• The lead time to be maintained so as to capture the latest trend / fashion

By bringing 'Make to Order' in the offerings along with 'Make to Stock' some of the above complexities can be addressed better. Steps to be added in current production plan could be:
1. Extend the pilot run - produce sample products and connect with consumers to understand additional requirements about color, texture, etc.
2. Use multiple modes of connection - use online variants, magic mirror, social networking polls, etc. to gauge real time feedback from consumers
3. Forecast and revisit - assign connection period for three to four weeks. Post first two weeks of data start projecting orders of fast moving vs. slow moving and revisit the orders at the end of connection period

This mix-and-match strategy could be the way forward to better assort the products at the production stage itself. Assortment of products would enable better inventory management and also manage the lead time in accordance to the fashion trend. A few organizations - Nike (Apparel, Accessories) and Toyota (Auto Manufacturer) have empowered their customers to design their products online. On the same lines it is important for apparel retailers to empower their customer to design what they want to wear. Enhance the customer's experience and in turn better manage inventory cost. Extend the boundaries - let the customers into the production stage and balance a mix between 'Make to Order' and 'Make to Stock'.

Soft Good Retailing: Is it a Rubik's cube or simply 1+1?

On behalf of : Anup Kumar

With the empowerment of consumers by technology in various ways, the style of shopping has changed over the past few decades and if given a deeper thought shopping for apparels has seen the biggest shift. Is it only to do with the changing life style of consumers or is it also a lot to do with the adoption of retailers to the changing life style? If it is more to do with the second option ever wonder what more needs to be done?

Yes, retailing is not just about understanding the consumer behavior but it is more about acting in a way so as to match the customer expectations and then supersede their expectations. Focus on downstream supply chain has become dominant in this industry and so has the complexities within the various stakeholders increased to better match the customer needs. Each stakeholder understands that - collaboration within the organization is as important as collaboration outside the organization.
However, the argument continues on how far and in what way collaboration with the consumers can be increased. In recent times retailers have evolved in many ways to address customer needs, such as:

  • Used 'Big Data' to understand consumer behavior
  • Expanded their designer base to turnaround latest fashion within 4-5 weeks (e.g. 'ZARA')
  • Offer trendy fashion at a lower cost by shifting their production unit to Asia, etc.

So, retailers now provide customers the apparels with latest fashion, within budget and as per their need. What next?
Today's consumer is empowered by technology, i.e. today even before buying an apparel they would like to check similar designs in various online stores, upload photographs during trials of new dresses and then purchase the one which is most appreciated by their friends on social network. A real time appreciation of dress is much warranted by today's consumer. As a retailer are we prepared to meet these expectations? Yes, this is what a sales personnel in the store does, and the personnel is empowered by an understanding of the consumer's buying pattern using 'Big Data'. Let us take our sales personnel a step forward and replace them by a 'smart mirror'.

This 'smart mirror' lets the consumer try all kinds of dress that are in collection and that are in the pipeline. The consumer just needs to stand in-front of the mirror and choose the type of apparel they need - a jacket, a t-shirt, a suit, trousers, etc. ; just select the color and designer from the list and the dress appears in-front of you. As the consumer stands there and makes his choices, the mirror continues to notice his changing requirements, matches it with his past buying behavior and throws its suggestions. Thus the consumer can have real time appreciation for multiple dresses and designers can test their upcoming collections in real time. Retailers can also take this as an opportunity to expand their stores presence by implementing these mirrors as a kiosk in multiple locations.

So it turns out that it is only a matter of understanding the consumer and to continuously adapt to their changing needs. Just match 1 change of the customer with 1 change within and retailers can continue to supersede the expectations of consumers - simply 1+1 strategy.

Online Grocery Shopping: The Next Big Thing or The Big Avoid?

On behalf of : Roary Lee

What ever happened to Webvan? Over a decade ago, Webvan was the hottest thing since sliced bread. At home, from the comfort of my favorite couch, I would go online and select all of the grocery items that I wanted. Then, I would checkout and select a delivery date and time. Like clockwork, when the scheduled time would arrive, I'd see that tan Webvan truck heading into my subdivision. All I had to do was answer the door. The driver even brought the groceries into the house!

However, the joy would last for only a couple of years (around 18 months, to be exact) as Webvan shut down all major operations and filed for bankruptcy in July 2001. Experts within the trade cite various reasons for Webvan's demise along with other failed ventures in this trade. Here are some of my thoughts:

Have consumers started to miss actually going to the grocery store? During childhood, when our siblings and I heard that our mother was going to the grocery store, we would find a way to tag along. At the store, we would meet other kids, run around the store and be blessed with candy at the checkout line. Today, in my adulthood, these principles still apply. Whether it's to get out of the house, get moderate exercise, meet people or get an in-store treat (i.e. kids' cookie club at the bakery or free samples of teriyaki chicken), in-store shopping is more personable than online shopping.

Do fresh foods need to be vetted in person? Back when we were Webvan customers, I would just click on a steak and enter the quantity. However, over the years, I have grown into a food sophisticate (read snob). When it's time to pick a steak, I need to see it in person. It needs to have the proper color and marbling. Same thing with produce - if you've ever picked up a mushy potato, kiwi fruit or tomato, then you realize the importance of texture, appearance and freshness.

Does online shopping not support impulse buying? I used to make a weekly grocery list. Today, I'm more of an impulse shopper. I figure out dinner sometime during the day, and then I shop for the ingredients when I pick up the kids. Online shopping typically requires planning ahead.

Nevertheless, online grocery shopping remains a viable industry. While US consumers seem to strongly prefer traditional grocery shopping, some European markets are experiencing significant growth due to variations from the home delivery model, for example, "click and collect." For regions that are not experiencing this growth, how do retailers reach these consumers? Furthermore, many of my colleagues, friends & family do plan their shopping lists as they are rushed for time and not as nostalgic especially when it comes to grocery shopping. Based on this, is my emotional connection to grocery shopping mainstream or unique?

Customer Centricity in Retail Grocery: 3 Effects on Warehouse Operations

On behalf of : Roary Lee

It's 4:30PM, and it's almost time to pick up the kids from daycare. I am a husband, father and executive chef of my household, and I am struggling with choices for tonight's dinner. I'm quickly running out of time. Suddenly, I have a bright idea. I go to my favorite grocer's website which has already defaulted to my home store's page based on my zip code. I link to this week's sales flyer for my home store, and I notice that chicken cutlets are on sale this week. Then, I link to the Recipes page and check out a few suggestions for chicken recipes and voila! The "Basil Chicken with Fresh Tomato Sauce and Cavalier Couscous" recipe sounds delicious, so I decide to go with that. The same page allows me to print a grocery list of items that I will need for the recipe. So, I print the grocery list, grab my keys and head to my favorite grocer before picking up the kids. Life is great. Welcome to the world of customer centricity.

As mentioned on my online profile, I'm health conscious and prefer to consume chickens that have led a happy, healthy lifestyle- in other words, organic, no steroids and cage-free or free-range. Furthermore, we are in the midst of an era wherein consumers are becoming more particular regarding their food choices. Diets and lifestyle changes like Atkins, Paleo, non-gluten, vegetarian, Vegan, Whole30 have fueled more consumer preferences. Also, consumers want fewer preservatives. We have become "informed readers" who want ingredients on the label that we can understand and pronounce...less preservatives! Retailers have responded by making these foods available in their stores usually via specialized sections throughout the stores. The effects on merchandizing and assortment are apparent, but how has this affected operations in the grocers' distribution centers?

Increase in local/regional distribution - Decreasing transport time is one method that is used widely in the grocery industry. Therefore, we are witnessing a trend wherein more local distribution is encouraged. Take Organic Valley, for instance. Based in Southwestern Wisconsin, the cooperative is supplied heavily by local farmer-members. Consumers are growing increasingly concerned around their regional economies. Sourcing locally not only extends shelf life, but it satisfies customers' desire to support local farmers and other businesses.

Increase in barcode-based and RFID technology - The proliferation of technologies including handheld scanners and RFID has improved freshness and product safety For example, barcode scanning reduces errors that can occur when manually inputting data (i.e. incorrect expiration date or lot identifier). Also, programming RFID tags with valuable information including quantity, description and use-by date and attaching these tags to crates or pallets of fresh food has resulted in faster and better stock rotation

Equipment upgrades - In addition to technology upgrades, grocery retailers are also investing in their refrigeration equipment in order to extend shelf-life. I recently read about a Baltimore-based grocer that was experiencing significant spoilage issues. This occurred because their cooling & refrigeration system could not accommodate the high temperatures and humidity during the summer months. The grocer installed a new cooling and dehumidification system which resulted in extended shelf-life and lower energy consumption. Today's consumers are demanding "greener" stores, and equipment upgrades facilitate more energy efficiency while helping to preserve product freshness.

These are just a few of the areas where we are witnessing changes to distribution center operations based on the customer-centric paradigm. All three examples increase the speed at which the retailers get product in front of the customer. The end result: customer satisfaction! By the way, the Basil Chicken with Fresh Tomato Sauce and Cavalier Couscous turned out great. What experiences have you had with this new philosophy, and what do you see forthcoming?

December 2, 2013

Are you insane yet?

On behalf of : Venkateshwaran A.

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....Was Infosys bold question to the world a decade ago. We usurped traditional consulting models by applying flat world economics, conceiving and translating strategy to reality through global delivery execution model.

Infosys' Retail Digital Practice is at it again. We are declaring that insanity reigns in the Digital commerce world. Allow me to explain; you see, for humans old habits die hard. In the olden days (I mean the pre-internet era), when you needed something, you would dash to your retail store around the corner, pick up whatever you need and be a happy camper. When e-commerce evolved, retailers and technology designers dutifully translated the physical store model into the virtual world. Mash up a website, get the consumer to the website and dish em' whatever they need. Then the marketer spends all the time and money in the world trying to figure how to drive site traffic; digital footfalls if you will.

Lame eh? Why? Why does it have to be this way? Consumers don't care about visiting store websites. If you were planning that dream Patagonia hike or ski in Vail, do you run to rei.com as your first stop? Hell no! You look around, understand what's up with these places, figure where you need to go, what gear you need, what you need to plan for, the whole enchilada. So why are these businesses not there where consumers are? Why can't I find them in my favorite interior design website where I am looking for cool ideas to remodel my kitchen? Why can't I buy that ski gear or that chic accessory for my bike, right there, on sites where I care to spend time? Nope, I am not referring to those ads powered by grandma's cookies; I am talking about clicking those cool pumps that the model is wearing in that fashion website which I just want to click and buy, right here, right now! In short, why can't retailers come to me, why do I need to go to them?

Enter Infosys Retail Universal commerce (Digital Practice offering); we seek to turn the digital commerce model on its head, a model that's currently trapped in old dogma. Commerce sites deserve to be unshackled and liberated. Products and services float around as API services that anybody can discover, invoke and drive business. Discover any product anywhere anytime and complete the transaction right there. For a retailer the leap is a step up from square root of paths to purchase to infinity squared. No more launching a new tab on your browser, copy paste that weird product name that you can barely spell or care to, google for the product and trawl through 20 more pages before you buy that gear.

Hey old fashioned retailer, are you insane yet?

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