Is Your Self-Service Ready for the Future?
By John Rossman, a managing director with Alvarez & Marsal
By designing complex internal, cross-channel customer-facing processes from the customer’s viewpoint, retailers can create what I like to call “future-ready self-service.” What constitutes a customer self-service offering that is “future-ready”? Let’s take a closer look at a few key elements of a future-ready self-service strategy.
It’s All about Longitude
Most customers will approach the various channels your organization offers with a “lengthwise” view – they have a number of interactions over an extended period of time across multiple channels which they want to see all connected. Customers don’t care about the complexities of purchasing an item with their mobile phone and picking it up later that day at a local store. The difficulties of having transactional and inventory management systems immediately register a purchase made on a mobile device mean nothing to your customers. All the customer wants to know is that the service works and is a fluid, user-friendly experience.
Thus, retailers need to start viewing their omni-channel programs longitudinally. They need to design and implement customer-centric self-service transactional capabilities and solutions capable of delivering massive amounts of data at scale in a timely manner. Armed with this type of data delivery capability, retailers can realistically take the cross-channel approach their customers expect.
As is always the case with the implementation of new capabilities and IT systems, simply rolling out the latest and greatest technology will not solve all your problems. There are also leadership, policy and cultural issues that must be addressed.
Innovation is Not Incremental
Change at most retail organizations happens incrementally. Usually a grassroots initiative starts somewhere below the top leadership level and gradually makes it way to C-suite executives who ultimately decide if company-wide change will truly happen or not. You don’t have the time for that type of slow, incremental change when it comes to developing future-ready customer service.
Instead, future-ready customer service needs to happen NOW, thus requiring senior leadership to take the reins in executing the vision of future-ready self-service. Culturally, retailers will need to rapidly adjust their view of a transaction from their own goal of making a sale, to the customer goal of obtaining a product or service.
Meeting the Customer’s Goals
Stepping outside the retail realm for a moment, imagine how a customer views taking out a loan from a bank. While the bank’s goal is to execute a loan which will eventually return the original value of the loan plus interest, the customer’s goal is to receive funding. The best way to make the loan process more satisfying for the customer is not to simplify the loan application process, but to improve the entire experience of receiving funding.
Returning to retail, future-ready self-service is all about improving the entire experience of obtaining a product. Automating as many processes as possible is a big step toward this customer-centric goal. Rethink why a human being, whether a retail associate or the customer, is needed to touch or renew something involved in the process of obtaining products, such as entering a credit card number.
In addition, examine all the aspects of the customer experience in every channel. Site content, item descriptions, fulfillment, shipping, payment and returns are just as crucial to future-ready self-service as efficient cross-channel transaction execution. Can a customer check your inventory levels, both at local stores and at distribution centers, in real time? If not, they should be able to.
Of course, for the effort and expense involved in creating a future-ready self-service strategy to be worthwhile, the equation needs to include benefits beyond happier customers. Future-ready self-service delivers the “triple threat” of improved customer experience, decreased transactional cost and improved decision-cycle time. In practical terms, this means you are obtaining improved customer satisfaction as well as more frequent purchases and increased repeat visits and market basket sizes, all at a lower cost of doing business. In plain English, it means you are doing the right thing!
Weak sales drive lowered Q2 outlook for American Eagle
Pittsburgh – American Eagle Outfitters is lowering its earnings outlook for the second quarter of fiscal 2013 due to what the retailer characterizes as weak sales and margins. The company now forecasts earnings per share (EPS) for the quarter of about $0.10, down significantly from $0.21 in the second quarter of last year.
Total net revenue decreased approximately 2% in the second quarter, while consolidated same-store sales, including AEO direct, decreased 7%. This compares to an 8% consolidated same-store sales increase last year. American Eagle CEO Robert Hanson said that despite second quarter issues the retailer is prepared for success in the near future.
“We are not at all happy with our second quarter results, which were impacted primarily by a disappointing performance of our AEO women’s assortment and weak traffic,” said Hanson. “Results were exacerbated by a highly promotional retail environment, which intensified over the course of July. Within this context, we increased the depth and breadth of markdowns; these actions have enabled us to achieve a clean inventory position moving into the third quarter.”
“We are encouraged to see strength in our direct business, which posted a low double-digit increase,” Hanson continued. “Other areas of continued performance included AEO men’s business, aerie, factory stores, and international markets, validating our strategic initiatives. Our efforts are keenly focused on strengthening our women’s’ business and ensuring our assortments are compelling, innovative and balanced across core, core fashion and fashion. The domestic retail environment remains challenging, however, we have a strong sense of urgency and believe we are focused on the right actions to regain traction, deliver strong returns and profitable growth.”
American Eagle will release full second quarter earnings on Aug. 21.
Jack in the Box pops up with Vine campaign
San Diego – Jack in the Box is launching a new summer promotional campaign utilizing the mobile video platform Vine. Developed by digital agency Struck, the campaign consists of 101 videos showing Jack in the Box customers how to "Go Big," a promotional theme the retailer is using in its menu.
The videos are available within the Vine mobile application as well as on the Jack in the Box website, and will be promoted via the restaurant chain’s Twitter and Facebook page. The website will solicit user-generated content gathered throughout the summer.
"In addition to providing a continual pipeline of digital content, the Vine promotion does a great job of connecting together our big summer products, and utilizing a technology platform that really resonates with our target,” said Andrea Shuff, director, marketing communications, Jack in the Box.