No need for change!

Managing adequate change has always been a challenge in retail. Especially when the majority of shoppers tend to pay for purchases, even of the smallest value, with the largest of denominations! I had written about this a few years ago. CLICK HERE to read that article. 

I can totally empathize with the shop keepers in the context of demonetization and what they must be going through. Suffice to say that they are having a tough time but managing as they always do.

Getting back to the topic of change, it has always been a challenge and my guess is that it will continue to be so even after the supply of the various new notes has become normal. 

The key issue is the habit of carrying larger denomination notes and expecting change during any purchase. In smaller stores they often resort to handing out chocolates in lieu of coins to manage such situations. However, larger stores cannot afford to do this at least as the norm. Needless to say the problem of change does not arise for any credit/ debit card payment. Although technology has enabled digital payments as shown in the video, mass acceptance and use of such payment modes will take some more time to become a common practice.

Increasing use of non-cash payment modes has many benefits and one of the biggest of them all is that retailers need not worry about organizing change. If the current cash crunch ends up influencing the way people pay for their shopping, it would be a good thing.

Video courtesy - Social media forward

So, you want to become an Omni Channel Retailer!

The latest buzz word that I am asked about in various forums is Omni Channel and how a retailer can become one. In many cases the understanding of what Omni Channel Retailing is very hazy. In a few cases this is considered to represent a seamless shopper experience across the physical, online and mobile access points of any retailer.

Some of the successful examples of Omni Channel retailing being showcased is more about such a seamless experience. For example, Apple has linked their mobile app to their store and vice versa. The app can be used to book service appointments, order products, etc., and the integration helps the shopper get alerts when they are near a store, receive targeted messages, etc. Carrefour has simplified this by enabling the shoppers to place online orders by voice or scan. Once the order is complete, the same can be delivered or picked up from a store. Several other retailers are experimenting with technology such as electronic tags, Near Field Communication (NFC), etc.

However I feel that all these are more about a superior multi channel approach to retailing. Multi channel retailing is when both online and offline options can be accessed by the shoppers and there is some extent of integration between the two. Omni Channel would ideally be the next step forward where such integration between offline and online access becomes seamless. 

The key word in this context is - seamless and that cannot be limited to only the information gathering/ sharing or shopper interface. Shopping is after all about purchasing physical products and unless the physical dimension of shopping becomes seamlessly integrated across physical, online and mobile.

Omni channel retail should be defined by the acronym BAFARA. This stands for Buy Anywhere, Fulfill Anywhere and Return/ Replace Anywhere.

Most of the current examples tend to focus on the “BAFA” part whereas this is an incomplete value proposition from a shopper’s perceptive. One point of view is that the extensive analytics and shopper profiling that is done would enable retailers to deliver the exact requirements of any shopper. The logic is that, therefore the need for return or replacement would not exist. Hence the focus on “BAFA” is good enough for creating a Omni Channel offering. 

As someone who understands shopper behavior and expectations I do not think that this would be acceptable to shoppers. Whether they actually return or replace any product purchased or not, they would like to have that option available to them at any given time.

An ideal Omni Channel experience offering BAFARA would play out somewhat like this;

I am leaving office and suddenly remember that I was supposed to purchase a few items as guests are expected at home in the evening. Thankful for having remembered I place an order for these items on the mobile app and select the option for a store pick up. Since I have paid for the same, these are available for immediate pick up and I don’t even have to park my car. I reach home with the purchases only to find that a few products need to be returned. Since I am logged into my home computer, I access my shopping history online and place a request for the return of these products. Since I am travelling the next day, I select the pickup from home option for the return. 

I bought the items on my mobile, picked it up from the store and would be returning it from my home. BAFARA essentially means the convenience of being able to shop in this manner with various permutation and combinations. That would truly be Omni Channel retail.

Sounds simple enough but it is not so and the challenges start mounting if one were to truly deliver the BAFARA value proposition. 

The primary challenge and to some extent becomes a constraint is with regard to the organizational structure and management mindset. In a scenario where offline and online channels are treated as separate business units with independent deliverables as also responsibilities, they become competitors. This is a significant bottleneck in the journey to becoming an Omni Channel retailer.

There are several other strategic as also operational challenges which have constrained most of the Omni Channel initiatives to remain restricted to BAFA instead of offering BAFARA. I shall detail the key challenge with some ideas with regard to the same in another post.

In summary all I would say is that Omni Channel is not about technology and data alone. It is equally about physical products and owning the shopper experience, end to end. This holistic experience cannot be restricted to BAFA and must encompass BAFARA. Till that is clearly and very well defined as also executed, experiments in the Omni Channel space would remain just experiments.

Are you ready to change the way you shop!

I have been writing about the disruption in the way people shop for some time now. Technology like Google Glass, HoloLens, 3D Printing, etc., is going to disrupt the retail environment as much as the internet did or maybe more so. It is only a matter of time before such devices become mainstream because of their price becoming affordable as also supporting software being available. Slowly but surely these changes are entering into the retail environment.
 

One of the key shopper expectations is to be able to purchase products which are different, unique and customized. Such purchases used to be quite expensive but no longer. Shoppers can now purchase 3D printed and customized products online from sites such as Shapeways, i.materialise, thingify, etc. Amazon has taken this to the next level and plans include a patented 3D printing truck which would come to your doorstep and print out the product! When 3D printers become affordable and mainstream, you could do the same at home, without even having to wait for that truck.

Alternatively you could drop into a store and get things made for you in a short while. This could be anything including a book being printed and bound in front of your eyes. This is what “Librairie des Puf”, a book store run by the publisher University Press of France does. They use an Espresso Book Machine which makes a book right in front of your eyes.

This machine used to be quite expensive but the prices have dropped over the years. Many smaller stores tried adopting a similar model but ran into issues when the publishers were not ready to share the content for instant printing of the books. Although eBooks are gaining ground, there are a significant number of readers who still prefer a hard copy one to read. With real estate costs rising and the overall spends on physical books becoming very niche, this trend of buying instantly printed books might be the future for the purchase of books.

As a shopper if you like online, the next level would be the virtual world and retail might cater to that preference too. Shopping in a holographic, 3D virtual store might take a bit longer but a step closer to this is what eBay is trying out in Australia. In association with Myers, a leading department store chain they are bring Virtual Reality stores to the shoppers, wherever they might be in the country.

This video would give you an idea of how the Virtual Reality shopping will be done in what is positioned as the world’s first Virtual Reality Department store.

An earlier post had detailed about how shopping might evolve in the coming years. The pace at which technology is evolving shows that the future is far closer than what was thought. Physical shopping, Online, Omni channel and it seems like it virtual reality shopping will soon encompass all these while redefining the retail space, business models, etc.

Are you ready to change the way you shop! 

Do organisations really want Happy Customers?!

I saw a cartoon in a leading national daily and was struck by the irony in this illustration. Although it is prima facie humorous, it is also a reflection of the reality and holds a very strong message to organizations, especially Retailers.

It raises the following questions which I will address.

• Do Retailers expect any customer to be happy, satisfied or delighted at all?
• Are organizations serious about making customers happy, satisfied or delighted?
• If there is no breed called happy customers, whose fault is it?

Forget Retailers, most organizations do not expect their customers to be even satisfied forget about being delighted. The rationale behind this statement is the fact that I am yet to come across anyone having a system or process to handle happy or satisfied customers. Let me illustrate this with an example from two service sectors. In most stores there are loyal customers who are happy and often give positive feedback and express their satisfaction with the store and staff members. Unfortunately these customers are often ignored while unhappy customers who complain get a lot of attention. In most of my programs I have advocated customer interaction forums where such loyal and happy customers are invited and that recognition alone would be a first level of reward for these shoppers. The second example is with regard to a leading airline. I had praised the way their staff had handled a situation and had messaged them. Imagine my surprise when I got a template reply thanking me for my patronage and feedback. Obviously their service staff has no idea about handling a happy customer.

Of course, it can be argued that organizations expect all their customers to be happy and that unhappy customers need to be handled as they are the exception. This is totally wrong. Even if satisfied customers are the norm they need to be recognized in order to motivate them to continue sharing this satisfaction and happiness.  Apart from reproducing a few appreciative letters or comments, most organizations do not even acknowledge satisfied customers.

This situation is largely because most organizations espouse customer service and delight while their actions on the ground are directly opposite to that. A very common example is the promise of a hassle free replacement while making the actual process for this painful enough to dissuade the shopper. Every shopper of physical or online retail must have experienced the sheer frustration of trying to resolve an issue wherein the customer service person responds like a robot with template responses which in most cases are completely irrelevant. In the case of such a reality it is highly questionable if organizations especially retailers are really serious about customer satisfaction or are they focused only on managing dissatisfied customers.

This is again a problem with regard to the service delivery design and the management’s orientation towards customers and shoppers. Although the stated intent of the organization is great service and satisfied customers, almost every system and process in place focuses on controlling and constraining the front line staff. This means that they are rarely empowered to deliver customer satisfaction. Obviously such staff have no clue about handling happy customers simply because they are not empowered to make the customer or shopper happy!

Lastly is the point about whose fault is it. Although organizations are at fault, the customer and shoppers must share some of the blame with regard to this situation. The majority of shoppers are eager to complain and make a noise when they are not satisfied. Unfortunately they rarely take the trouble to even mention situations and interactions which make them satisfied or happy.

The old saying that “the squeaky wheel gets the grease” is very apt in this context. Unhappy and dissatisfied customers make a noise and so organizations take the trouble to think of ways to handle them and manage such people. Happy and satisfied customers keep quiet and so the organization in most cases is not even aware that they exist. It is no wonder that most staff members do not know how to handle happy customers and their appreciation.

This cartoon is actually a reflection of reality and for this to change the customers and shoppers need to speak up when they are happy and satisfied. Organizations on their part should start recognizing happy customers instead of only managing the unhappy ones. 

Cartoon courtesy - The Hindu

Replacement Guaranteed!

The recent spate of messaging by the online Retail majors hinges on reassuring the shopper that it is very easy to return or replace what has been purchased.

This is a core shopper expectation which is catered to very efficiently by the stand-alone, neighborhood store.  Interestingly modern retail formats including eTailers  are still struggling to establish trust on this front.  This is a very critical shopper behavior aspect and some of my earlier posts on this topic can be viewed by Clicking HERE

I had a flashback to the late 90s, when the RPG Foodworld chain of supermarkets was trying to redefine the grocery and food shopping behavior. This involved addressing several key mind blocks and shopper resistance aspects; hassle free replacement being one of the most important amongst them.

“Replacement Guarantee” was an initiative to address this important issue and it involved a holistic approach which included messaging, internal processes as well as staff education and training. This had a very positive impact which was reflected in the sales increase as also the basket penetration of several core categories of products.

Coming to the present times the two recent advertisements by Amazon and Flipkart are focusing on the ease of return and replacement. These two advertisements drive home the message effectively.

It is interesting to note some subtle and sublimal messaging in both these advertisements and they do raise two important questions in my mind as a retailer.

1. Both the advertisements show an elderly person expressing concern about return and replacement. They are both reassured by someone who is much younger. Is easy return/ replacement a concern only for Gen X / older shoppers? The counter point could be that this a concern for the Gen Y and Gen Z but the advertisement is trying to drive home a message that their Gen Y and Gen Z customers do not face this problem. In that context are reference groups such a large influence for these shoppers?
2. Retail brand building is built on trust which can happen only during the transactional experience.  Even today, the return/ replacement in most modern formats and eTailers are definitely not up to the mark. In that context will messaging alone work? What process changes have these eTailers instituted to ensure that the real experience lives up to the expectations created through the advertisements?

The way men and women shop

There are countless jibes that are directed at women about shopping and their fondness for the same. However, it is a reality which is not well known that there are validated reasons for the differences in shopping behavior between men and women.

This cartoon of Calvin & Hobbes is an interesting depiction of how men get confounded by choice which would not be the case if a woman were shopping.

There are two fundamental differences between men and women which defines their orientation towards shopping and why they differ from each other.

Women are supposedly much better at multi tasking and anyone who has taken a ride with their mother would know that it would be a fun ride where the woman would not mind having loud music being played while she chats and also drives. This would be a direct contrast to a ride with a male who would prefer minimal distractions when driving and absolute quiet might be a de-facto requirement when navigating heavy traffic.

Women are supposed to have a wider peripheral vision. This essentially means that women can take in more visual stimuli as compared to men. Men have a stronger straight-on vision supposedly a hangover from the hunter-gatherer days. This means that men prefer a single target to zoom into and complete the task.

This obviously has significant implications for any retailer. The store and all the various elements inside in terms of design, display, etc has to be different, depending on whether the focus of that store is on women shoppers or men.

As the cartoon shows, men shoppers should ideally be presented with a simple design, easy to choose display and a quick shopping experience. The direct opposite is required if a retailer is targeting women shoppers.

That is not all, even the service and interaction levels would have to be tailored and structured differently for men and women as women are more socially inclined and actually welcome interactions. On the other hand, men are far more functional and their expectations are for functional service.

Cartoon courtesy - The Hindu Metroplus

Formats and Shopper Expectations

It was perfectly acceptable to see names like Bharat Departmental stores or even Bharat Mall even for stores which were only 400 – 500 square foot on average and be crammed with products with the shop owner serving the customers from across the counter. However, this was ironical because Bharat Departmental stores would neither be large, nor presented in well defined departments and most definitely not lifestyle led as the name would lead one to believe. 

It is no wonder that this small temporary stall decided that a pun on the world’s largest retailer was a perfectly acceptable thing to do.

This was mainly because of the shopper frequenting a store mainly because of their personal relationship and trust. As such the name of the store actually made no difference to the shopper and it ended up being a reflection of the shop owner’s aspiration.

Fast forward to 2015 and the shoppers are changing. This change in shopper’s orientation was driven home when I saw an advertisement for a regional retailer who has largely been known for apparel till now, announcing the launch of a 'Hyper" store. 

CLICK here to read my ET Retail article about these changes in shopper expectation and behavior which has led to format definitions to become important and accurate.