TechBytes: Three Takeways from MIT CIO Symposium
I’ve been attending the annual CIO Symposium hosted by the MIT Sloan School of Management for several years now, and always walk away with a fresh batch of thoughts from top business, IT and academic minds. Here are three of the most valuable insights I learned at the recent 2015 edition of the conference.
Know Your Customer – Now
Constant, ubiquitous Internet connectivity, which increasingly extends to products as well as people, gives retailers the chance to know their customers in a more timely and intimate manner than ever before. And customers expect retailers to take advantage of that capability to provide optimal service.
“Companies have to realize how to engage with the customer and find out when they’re happy and unhappy with a product,” said Paddy Srinivasan, VP of products of Internet of Things application provider Xively by LogMeIn. “There is now a unique opportunity to form a direct relationship with the user of a product.”
Srinivasan said customers now expect to be engaged with an awareness of how they are using the products they buy. For example, a hardware retailer who sold a water sprinkler could let customers having trouble with installation use the video function of their smartphone to show the problem to a live tech expert for real-time consultation.
“You don’t want to wait until 8 a.m. Wednesday for a technician to show up,” said Srinivasan. “You want to find out how to make it work in 30 seconds.”
Feedback Feeds Customer Experience
Srinivasan also recommended the use of “data-driven feedback loops” from connected customers and products to continually refine and improve the customer experience.
“You can know how a product is being used, when and in what conditions,” said Srinivasan.
In addition to potentially enabling predictive maintenance that would prevent appliances and electronics from breaking before they break, this type of real-time, continuous feedback can also be applied to omnichannel customer experience. Srinivasan gave the example of Google continually modifying its algorithms and search results based on the engagements of individual users.
The Cloud Clears Up Communication
The evolution of cloud technology has made activities like storing and analyzing data, as well as communicating digitally, thousands of times cheaper than they were before. Bryan Kirschner, director of research/strategy firm Apigee Institute, advised attendees to take advantage of the cloud to offer a holistic, branded customer experience, rather than simply sell goods and services.
“When was the last time you saw a Nike TV commercial?” asked Kirschner. “Nike products will tell them what their customers are doing. You now have a direct line to the consumer.”
Thus, Kirschner said companies must brand themselves as standing for something, such as health for CVS or fitness for Nike. Brands can also build digital communities of like-minded consumers to allow them direct communication with each other, further strengthening the customer experience.
MIT professor Marshall Van Alstyne stressed that not every digital interaction should be conceived as a way to create more sales.
“Do not incentivize everything,” said Alstyne. “Encourage product use in ways that create personal value for the consumer.”
Hibbett comes up short with earnings, revenues
Birmingham, Ala. – Hibbett Sports Inc. cane up short of Wall Street expectations for earnings and revenues in the first quarter of fiscal 2016. Hibbett reported net income of $27.4 million, down 3% from $28.4 million a year earlier.
Increases in store operating, selling and administrative expenses, as well as depreciation and amortization, fueled the decline in profit. Net sales grew 3% to $269.8 million from $261.9 million, while same-store sales dropped 0.9%.
“We experienced early headwinds in the quarter, with February posting a negative high-single-digit comp due to impacts from weather-related closures, port delays and a shift in the timing of tax refunds,” said Jeff Rosenthal, president and CEO. “We were pleased with our performance in March and April, and we have seen this trend improve in May.”
During the full fiscal year, Hibbett expects same-store sales growth in the low-mid-single-digit range.
Fresh Market beats Street on profit, misses sales; will open 19 stores
Greensboro, N.C. – It was a mixed first quarter for The Fresh Market Inc. as the grocery retailer met Wall Street expectations for profit but fell short on sales. Net income totaled $15.17 million, down 8% from $16.57 million.
Higher operating expenses drove the reduction in net income. Sales increased 7% to $462.04 million from $431 million. Same-store sales dropped 0.1%.
During the fiscal year, The Fresh Market expects to open approximately 19 new stores, with two new stores opening in the first quarter; five to six new stores opening in the second quarter; and 11 to 12 new stores opening in the second half of the year. The retailer will also remodel or refresh 10 stores, with the majority completed in the first half of the year
“These results demonstrate our ability to leverage expenses with relatively flat same-store sales and we believe this flexibility will enable us to invest in initiatives and help increase customer frequency and attract new customers as we grow our store base and position The Fresh Market for long-term growth,” said Sean Crane, interim CEO.
During fiscal 2015, The Fresh Market expects total net sales growth of approximately 9% to 11%, and same-store sales rose 1-3%.