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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February 28, 2017

Managing Shopper Information is the Key in Today's Retailing Curve Ball

Technology has transformed the Retail Environment and has made Shopping multi-dimensional. This quote from Scarlett Ballantyne a popular make-up artist on Pinterest is more than relevant: "Nothing haunts us more than the things we didn't buy". In today's world of consumerism, Shoppers are Omni-channel, driven by price consciousness and are bargain hunting. As the touch-points increase in number, opportunities to sell are increasing but it's becoming tougher than ever to make an impact and also earn better margins. Herbert Hoover, the 31st President of US quoted: "About the time we can make the ends meet, somebody moves the ends".

Being better than the competitor in Shopper Marketing will be instrumental to come up roses. Influencing the Shopper through continuous and innovative Shopper Marketing practices has to be enabled by customer relationship management, workforce efficiency, product availability, lean inventory, controlled shrink and efficient value chain processes.

60% of purchase decisions are impulsive and hence the need to influence Shopping pattern and create impact with the "Right" Shopper Centric Retail Environment on any Shopping Channel.

 

Shopper Centric Retail Environment.png

This requires creating an Enterprise Shopper Marketing Information Warehouse to analyze Shopper actions, needs and preferences and work out tactical and operational decisions to make an Impact and earn better margins.

 

Shopper Marketing Information Warehouse.png

February 27, 2017

Rethinking the Shopper Experience Journey to develop Store Associates Behavioral Skills

  - R. Sriram and Krishnakant Kasturi

Products are out of stock, products are shelved incorrectly, shelves are messy, change in the location of the product from the previous visit made by the customer, customers cannot locate store employees to help customers with the products and services that they demand, Long queues for billing products and product returns, "not my department" indifferent responses.

 Are not these regular customer grievances from any kind of Physical Retail Store? Can use of technology improve Shopper experience better without correcting the basics? Probably, not. It is like pouring water into a sieve.  Retailers are losing more than 15 percent of potential sales every day in their stores because of poor staff performance and bad execution of in store processes. Shoppersare likely to buy 60 percent more than their planned purchase in the store if they are happy with the store employees helping them with their purchase. With 85 percent of the shoppers likely to buy their products from a physical store, the potential loss to a retail outlet because of the employees who are indifferent to the needs of their customers is a whopping 47 percent.

The Elephant in the room is the core human behavioral skills that are lacking in the era of accelerated technological Innovation. Store associates seem to be lacking in compassion and empathy. The Gen-Z millennial associates, who are more adept at digital communication as compared to verbal communication, seem to lack the necessary behavioral skills to interact personally with the Shoppers, understand their needs, or do their job efficiently so that the Shoppers are served efficiently. This is observed across as many store formats across retail businesses.

This skill gap is widened by attention deficit, poor verbal communication, lack of structured training and lack of expertise due to frequent job-hopping is the Achilles heel of Retail Operations, which are going through the mill, trying to mature in Omni-channel operations competing with Amazons of the world that sell everything from soap to nuts.

Sports Authority has closed all its 460 stores in the US in 2016, Walmart has closed 154 stores in the US in 2016, Aeropostale, Kmart/Sears, Ralph Lauren have closed 182 stores put together in the US in 2016, all owing to negative profitability. Could the operations have been profitable if they had invested in human skills resulting in more walk-ins and conversions?

Associate training should make up a larger portion of the opex spend in comparison with the spend on technology, rather than consider it as budget dust to comply with organizational guidelines.

  • What are my key KPIs?
  • What are the root causes for the declining performance?
  • What are the basics that are missing that have impact on these KPIs?
  • How can the associates be trained on behavioral skills to improve the performance?

As targets are time-bound, there would be a rush to use technology to keep pace with competitors, with the possibility of overlooking the need to correct basic operational skills and tasks.  Here are a few examples of evaluating the need to correct basics rather than resort to a technical solution.

In the age of web-rooming, technology should complement the store associates rather than replace them. Here are a few examples where technology and human actions can complement each other:

·         Associates describing a product + reading product information on a mobile app.

·         Associates guiding the Shopper to the shelf and describing promotions + Digital signages/Guided selling tools or product locators conveying location and marketing content.

·         Associates calling and speaking to a customer + personalized messages to mobile/email.

·         Associates  recognizing a high value or regular customer  and greeting them + mobile app triggered welcome messages

 

Self-checkout vs Cashier Checkout: They cost a whopping $15,000-$20,000 with an objective to aid faster checkouts. However, are they productive, do shoppers take more time to learn the tool or do they bring up a host of other new issues to tackle and end up having associates to juggle many frogs?

·         Can the cashiers be trained better on offers, handling complaints and returns!

·         Can they be trained on the Loyalty program!

·         Can promotions be updated on the POS!

·         Can all skus have barcodes on them!

·         Can scanners be working all the time!

Robots for replenishment, stocktaking vs Trained Staff: Robots are replacing Store associates and why? Notwithstanding the augmented value of Digital product information signage or kiosks and interactive technology -

·         Can Associates be trained to comply by planogram!

·         Can they be trained to count skus efficiently!

·         Can they be trained continuously on the new products, offers etc. and in displaying PoP material!

·         Can they be trained to replenish stock on time!

·         Can scheduling be improved to ensure they are found on the aisles during lean, normal and peak business hours!

·         Can they be trained to exhibit product knowledge to help shoppers on the path to purchase!

·         Can they be trained on selling high margin products!

 

Developing Store Associates into the real Shopper Marketers

Store associates are the real Shopper Marketers in the physical store. Investment on Training to couple operational activities to their behavioral skills will lead to efficient retail operations and drive automatic walk-ins into the store.

1.       Rethink and revisit the Shopper Experience Journey in the Store connecting all Shopper touch points in the store.

2.       Map all Operational activities to be executed by associates  for each touch point- Describe the associate roles handling that point, as-is process and experience, shopper pain points, gaps, to-be process and experience, training required to achieve the to-be experience, frequency, methodology etc.

3.       Map behavioral skills to Operational activities: For every training need identified for each touch point in the store, map an activity to a behavioral skill required by the associate for executing the operational activity at each touch point in the Shopper Experience Journey.

4.       Identify Shopper and Store Value for each operational activity and behavioral skill : This would serve as basis for training the associates and as a platform to develop their behavioral skills for achieving operational efficiency.

Here is an example:

Shopper Experience Journey Touch Point

Associate activity Training Component

Behavioral skill or instinct

Shopper Value

Store Value

Shopper searches for product on the Shelf

How to Stack the Product on the shelf in the right place as per Planogram displaying the Shelf Label and Shelf Talker

Understanding the Planogram, reason for adjacencies or facings or stacking method.

ensuring compliance

Shopper is able to find the product immediately and drop the product into the basket

Conversion is ensured.

Basket value is increased.

Shopper does not switch to another store.

 

5.    Mass induction training programs are old hat. Conduct role-based Training conducted by Operations experts rather than Career Trainers.

6.   Conduct training programs continuously for all roles - immediately after induction and on a regular basis on a training calendar. Revise Training content constantly based on the business developments. Conduct Training throughout the year for all associates old and new.

7.   Impart Shop-Floor based practical training with less hours in classroom. The skill learnt has to be demonstrated by the trained associate to assess training effectiveness.

8.   Include more video-based content and less of text-based theory sessions.

9.   Supervise every training session and practical test demonstration by the so that, the desired behavioral skills for each operational activity are learnt effectively.

10.   Organize associates by various bands on a ladder based on their ability to demonstrate behavioral skills in operational activities.

11.   Incentivize associates based on their position in the training ladder.

Developing Associates Behavioral Skills are bound to be the biggest ticket to successful Next-Gen Retailing. Come what may, its always back to the basics !

February 10, 2017

Agile - A promising way or just another over-rated term

It's not that old when organizations used to work in phases for any IT development starting from Ideation, requirement gathering, solution design, development, testing and until UAT & launch; and things were proving to be successful and satisfactory. Then shouldn't we wonder, suddenly what made the businesses start think it's not productive anymore? There are 3 basic reasons I can think -

1. For long durations the solutions have to be stacked until the big releases so for this whole duration the product used to work with outdated concepts.
2. The handovers used to take time while other downstream resources were waiting to get the final guidelines from their upstreams to start their own work.
3. Poor, negotiated quality of the delivery and sometimes the feature is already outdated if you don't think ahead of time.

Then idea must have been triggered to bring everything together and doing smaller and more frequent releases with minimum valuable functions. The term that was coined was a big hit - 'AGILE'. Wondering why? I guess it was pure luck or may be really smooth execution. This new model of every expertise working together as team like a battalion in a war room creating war plans came out to be extremely productive and beneficial. But the thing here to understand is, there was no-one calling it an "agile migration", may be that was the biggest positive about the first profitable agile execution. Now since the organizations inform everyone 'we are moving to Agile' seems to be a hindrance to migrate the mindsets because of an obvious human resistance that comes due to the word 'migration'. 

Agile is one of the latest and ongoing trend in organizations working with IT support. But 'trends' have their own prophecy, A prophecy of complicating things in the name of making them easier. Let me explain this with a simple example. John, a 20 year old boy from a village thought of starting to sell fruits, For the first day of his new business, he kept standing silently at one spot with his fruit cart, he was able to sell to only 10 customers. after 3 days, he understood the pattern that 7 of those customers at that spot come between 8:30AM to 10AM. He thought why not find another spot after 10AM to sell more, he started walking through streets and then a few people saw him and bought fruits from him. This day he sold to 35 customers. After a week he realized that his target customers don't know when he is in the streets, so he bought a bell and started ringing it every time when he used to pass on a street. This time he sold to 60 customers. In a few days he realized that some new customers visiting his fruit cart doubted if the fruits were good, so he thought let me explain them about my fruits and started explaining the customers the quality of his fruits. However he hardly got a few more customers added. He realized he is missing something, and that is 'the showcase', the customers should see how the fruits are from the inside and be able to taste them. So, he added a small glass box in the cart where he could put the open fruits (peeled oranges, already cut papaya and apples etc.) in display and for taste. This time he realized that he sold to more than 100 customers in that day and this whole thing happened in a 3 week's period. Let's stop this story here and look at this again. The first step John did was efficient utilization of time and resources, the second step he did was Acknowledging presence and availability in market, the third step he did was consultative selling and fourth was visual merchandising & experiential marketing. Imagine that fruit seller to combine all these concepts together and calling it "5 Fruits of John" and then ask the other normal fruit sellers to migrate to the 'new' 5 fruits of John 'set up' which works on efficient resourse utilization, presence & availability acknowledgement, Consultative selling, Visual Merchandising, and Experiential Marketing. What do you think, would it be easier now for a new fruit vendor to do it in 3 weeks?

Same goes with Agile. The idea and concept of agile is very simple - if you know your problem statement, all you need is all expertise on a round table throwing ideas to resolve it. you as a team select one idea, decide what needs to be done, by whom and by when it will be complete. We choose shortest yet quality path to reach there and address the problem. If the addressal is not good enough we will surely get another problem statement soon to make it better :). Scrum is just and just one way of managing agility in organization's development model, nothing more, nothing less. Making this concept flashy with jargons and fancy words is a matter of only of complicating it. all agile means is a flexible and fast thought process. To my opinion this is one good reason for the agile migration failures ;).

PS. I am not promoting any frameworks whether agile or waterfall, I am only promoting to maintain real concepts behind any idea. Hope you enjoyed reading!

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