Customers in the Driver’s Seat
Working in concert to meet the busy lifestyles of customers, retailers also need to exceed their shoppers’ expectations,” Brian Kilcourse, president, Retail Systems Alert Group, said during the ERI eXchange which was held in Boston, June 4-7.
The notion of exceeding shoppers’ expectations was a consistent message throughout the conference sessions. Speakers emphasized that this practice should be evident across any retail channel where a chain conducts business.
For example, lifestyle retailer Anthropologie (a division of Philadelphia-based Urban Outfitters) has carved a niche for itself through its stores, catalog and Web site (www.anthropologie.com). Until recently, the company “strived to keep channels separate. This included creating different operating structures,” Michael Robinson, managing director, Anthropologie Direct, said during the session, “Enhance the User Experience Across All Channels.”
This strategy posed a problem as more shoppers began tapping the Web to enhance their offline shopping experience. For example, 58% of shoppers use the Web to research a product before making a purchase. This statistic proves that “customers are beginning to dictate the shopping experience,” Kilcourse noted during the panel discussion, “Getting to Know Your Customers.”
“Customers would see a product online or in the catalog, but since it had a different SKU than we used in stores, sales associates could not help find the item in physical stores,” Robinson said. “Returns were also difficult since there was no easy way to credit it back to the originating channel.”
To reduce these issues, Anthropologie is creating a common set of goals through the integration of IT across all of its channels. The retailer’s first step is to deploy a single SKU system that can be universally used across all sales channels.
“While we are making efforts to create a consistent brand experience for our shopper regardless of the channel they use, we realized we needed to make this effort a part of our corporate culture,” Robinson explained.
Anthropologie is not entering into this project lightly. In fact, it will be part of a five-year plan.
“Since the SKU touches almost every operation, we need to take our time to implement the plan,” Robinson added. “We will probably not complete this task for another 12 months.”
Access to information: The key to exceeding customer expectations is being able to answer their questions and meet their needs at the point of purchase. That said, “Retailers need to give associates and shoppers access to information and business rules,” Kilcourse explained.
AutoZone is successfully meeting this challenge. The automotive-parts retailer, which has $6 billion in sales, operates 4,000 stores across 48 states.
“Each location sells more than 20,000 parts,” Ken Brame, AutoZone’s senior VP and CIO, said during the session, “Creating the Wow Customer Experience.” “However, there is nothing more frustrating to a customer than searching for a sales associate when they need help finding a product.”
A high retail turnover rate also made it hard for AutoZone to keep its store-level associates up to date on new products, available inventory and important product features. As a result, the chain created the Z-net parts-lookup solution.
Düsseldorf, Germany-based METRO Group has built its Future Store initiative around “developing and delivering new ideas that can make the customer’s shopping experience more convenient, interesting and personal,” Dr. Gerd Wolfram, the company’s managing director, information technology, said during the recent ERI eXchange, sponsored by Retail Systems Alert Group. He delivered the luncheon keynote, “Dominate the Competition With Chainwide Innovation.”
Rather than rely on internal test labs and limited store-level pilots when evaluating new solutions, METRO tests all new concepts and technology platforms at its Future Store in Rheinberg, Germany. As technologies are accepted and regularly used by Future Store shoppers, they find a home at other METRO banners.
For instance, the store’s successful Smart Scales, which can automatically identify fruits and vegetables via digital camera, have been installed in approximately 100 other locations.
High customer usage of the store’s self-service solutions, including self checkout and information kiosks, prompted the retailer to add these innovations in several other stores.
By the end of the year, the chain will launch its newest Future Store, according to Wolfram. He declined to reveal where the store will be located.
AutoZone initially launched a parts-lookup solution 15 years ago. But the chain replaced this proprietary, “green-screen,” keyboard-based system with a new-generation solution that is based on the C++ programming language. The application features an electronic catalog of all inventory and product images and descriptions. Users access the application via thin-clients at store level and navigate the system with a mouse or keystrokes.
The application features an expanded search functionality that enables associates to locate a part—regardless of whether it resides in the store, at another location, or if it has to be specially ordered—in real time.
“It gives our associates confidence to do their job,” Brame explained.
AutoZone tested the solution in a limited number of stores over several months, and it was rolled out to approximately 3,800 locations by December 2006.
Circuit City Stores Inc., Richmond Va., is testing a similar concept to keep its sales associates in-the-know when helping shoppers, and more importantly, “deliver a consistent consumer experience across our stores,” William E. McCorey Jr., senior VP, CIO, said during the keynote, “The Strategy for Outsourcing for Innovation and Change.”
The retailer’s Digital Guide gives Circuit City’s 43,000 associates insight into all available merchandise and product details, “so they can help our shoppers succeed at whatever installation they are trying to accomplish,” he said.
Circuit City is evaluating how to put a self-service spin on the application by delivering information via kiosk, hand-held unit or PDA (personal digital assistant).
Whole Foods CEO Apologizes for Postings
Austin, Texas, Whole Foods Market announced Tuesday that its board of directors has formed a special committee to investigate CEO John Mackey’s postings regarding Wild Oats on the Yahoo! financial message boards.
Whole Foods also released the following statement from Mackey: “I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards. I am very sorry and I ask our stakeholders to please forgive me.”
Earlier this week, on the Whole Foods Web site, Mackey confirmed that he did submit a number of postings to the Yahoo! financial bulletin boards regarding Whole Foods and Wild Oats under the name “Rahodeb.” He added that the comments he made did not always reflect his personal views and that he was merely playing “devil’s advocate,” in order to stir up discussion on the topic.
Survey: U.S. Shoppers Spend More Time in Stores
London, Sales employees of U.S. fashion retailers are engaging only with 5% of customers who enter the store, according to a survey conducted by U.K.-based Envision Retail, and it’s costing the retailers about $12 billion a year.
If those workers approached the additional 4% of customers who are looking for assistance, sales could increase 7%, the survey said.
“Retailers are very good at selecting products and merchandising them in a way that inspire customers to make a purchase, which is why over half the shoppers who enter a store with no clear idea of what to buy account for over 40% of sales,” said Jason Kemp, managing director, Envision Retail. “But if they want to make a big leap in sales, apart from just expanding the number of outlets, they need to get their staff selling.
The importance of the fitting room is also a major finding from the survey. On the sales floor 10% of customers are converted into buyers, whereas in the fitting room it is closer to 70%. Envision calculated that if staff provides quality service at the fitting room and assists customers with finding alternative sizes or items, sales could increase by 1%.
American shoppers spend 23% longer in a store compared with the global average and this is partly accounted for by the fact that 50% more customers use the fitting room.