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5 Years of Tech Innovation Later, Retail IT Turns to Optimizing Operations for Better CX

Much of retail strategy has been locked in on improving customer experience with customer-facing tech innovations. This year, retailers are improving customer experience from the inside out, starting with their retail operations.

 

Retailers are Still Catching Up to Trends from 5 Years Ago

 

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For the past half-decade technologies at NRF’s Big Show focused on improving customer experience with tools like in-store mobile and trends like omnichannel and its latest evolution, unified commerce. Technology trends keep evolving to address retail challenges, with more complex solutions debuting every year. Exhibitors at this year’s NRF technology expo made admirable attempts at showing retailers how AI and virtual reality can augment the store experience today.

It’s true that some retailers, notably Rebecca Minkoff and Amazon’s strategic dabble in brick and mortar, are experimenting with headline-landing technologies: a luxury spin on RFID-driven self-checkout for the fashion brand and just-walk-out convenience for members at Amazon Go.

But even these innovations are reflective of the same core concept pulsing at the heart of retail this year: optimizing operations for greater efficiency (which leads to a better customer experience).

In reality, most retailers are still trying to catch up to trends set at NRF – tying together disparate data sources, gaining more visibility in their operations, and applying that understanding to improve their processes.

Retail just doesn’t evolve as fast as technology.

But each small step taken toward building a strategy on modern technology is an objective gain for both cost-saving efficiency in the business and customer experience.

 

The Best Customer Experience Resource for Retail this Year: Your IT Team

 

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When we think customer experience, we picture the actual interaction in stores. But so much has to go right behind the scenes before a retail associate can actually give customers the personalized attention they want!

And wrangling the tangled web of retail technologies is no easy task, so retailers’ IT teams are hands down the most valuable CX resource.

Let’s be honest – the plethora of tech options out there in the wild helping retailers improve customer experience have left retail IT teams mopping up after the tech revolution. But the turn to optimizing operations will actually help CX. Enterprise retail on the backend is addressing security concerns and integrating data and technologies to create memorable retail experiences.

 

Customers Appreciate When You Keep Their Credit Card Data Secure

Much of a customer’s experience with a retailer is taken for granted and is only missed when it’s compromised – like credit card security. 2016 saw an alarming number of POS data vulnerability in large retail and technology companies, including giants like Target and Oracle.

Retailers are always playing the defensive game here and the technology decisions retail IT teams make can help fortify retail data against cyber terrorists.

Some POS software is more effective at lifting the PCI compliance burden for retailers. Using out-of-scope POS and retail management software like Retail Pro – meaning, the software never touches credit card data – together with integrated payments can reduce retailer liability and keeps customer data safe.

 

Customers Just Want to Believe You are One Unified Brand (Not a Disparate Retail, Outlet, and eCom Retailer)

Serial shoppers often will frequent each of a retailer’s channels, scouting for the prettiest or most convenient option for the best price and experience. They expect to see a retailer’s inventory online so they can plan purchases around their schedule, and they are frustrated beyond measure when faced with retailers’ channel limitations – like store associates refusing to accept returns of ill-fitting online purchases because they can’t look up the online transaction, for example.

Retail IT teams inherited the challenge of integrating product and shopper data between POS and eCommerce. The ability to lookup inventory availability improves customer experience and comes from a unified data source on the backend.

Helpfully for retailers, this also connects data between shoppers’ research-related activities on the retailer’s website and actual conversion. Having visibility in to integrated data gives greater insight to optimize bottlenecks and improve the sales process, especially in stores.

 

Customers Like Using Mobile and Wish You Would Too

Customers have been using mobile in stores since the first iPhone. Retailers, however, have been slow to reciprocate with mobile software, and are losing opportunities to personalize the customer experience with real interaction.

Mobile as a retail trend will soon reach prehistoric status, yet it’s only just beginning to inch its way out of the back office to be used as a customer-facing tool for engagement on the sales floor. Part of the reason is the added IT complexity of configuring and managing multiple devices. But part of the pitfall is simply that retailers have not yet formed a clear strategy for how they will use mobile in their stores.

As retailers are adopting modern POS to replace or augment legacy systems, software with device agnostic flexibility is becoming top choice. Consistent software between fixed and mobile POS decreases employee learning curve, thereby increasing probability of adoption and actual use.

 

Mobile and omnichannel and integrated payments have been trends long discussed at NRF. This year, as retailers turn their focus inward toward internal, structural evolution and evolving their process and procedures, these trends are actually (finally) being reality.

 

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NRF 2017: In-Store Personalization and Better Store Fulfillment

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In-store personalization has been slow in coming, but at this year’s NRF Big Show, vendors showcased technology that indicated the tide may be turning. And why not? Retailers are well aware that the ability to create a personalized experience for every customer could methodically lead shoppers to the point of purchase.

However, while retailers have embraced personalization techniques online, that success has not provided the impetus for similar in-store implementations. The benefits personalization offers e-commerce are known and envied by their brick and mortar counterparts. But there are myriad types of personalization – navigational and predictive, for example. Personalization can be based on third-party data, database segmentation, past purchase history, location and more. It’s complicated to start on the path to personalized selling and it doesn’t get easier.

That may change shortly, as the costs of the technology have decreased, third-party integrators are more fluent with the necessary equipment and software, and the benefits are becoming more evident. Shoppers, too, expect a unified commerce, tech-driven experience in which in-store mirrors online, and vice versa. Vendors are more motivated than ever to provide retailers with tools that will help them reflect the online experience inside a physical store. In addition, increasingly, those tools are easier to use and to integrate with existing systems.

One of the big challenges for retailers is determining how to make in-store personalization attractive to shoppers; some customers see the technology as overly intrusive. In its second annual “Creepy or Cool’ survey, RichRelevance found customers embraced personalization when it suited their needs.

“For the second year in the row, the study finds that shoppers think it is cool to get digital help finding relevant products and information – on their own terms when they choose to engage,” said Diane Kegley, CMO of RichRelevance. “However, they are creeped out by digital capabilities that identify and track without a clear value offered in return.”

However, it’s difficult for retailers to understand exactly what shoppers’ expectations are at any given time because they are shifting and evolving. To address that, part of the focus of this year’s NRF was the underscoring of the need for retailers to get back to basics and to develop scalable, repeatable and reliable processes that support their enterprise order management capabilities. A solid foundation built on those principles is likely to be more responsive to constantly changing – and expanding – shopper expectations.

Much of the ordering technology that is currently available to retailers is focused on the flow of product from one channel to the next. Understanding and pleasing the customer, unfortunately, has until now been simply the result of having solid ordering technology. The customer experience is largely an afterthought.

Many of the vendors at NRF believe that consideration of customer satisfaction and their preferences will move to the forefront this year. While order systems must be accurate and efficient as well as cost-effective, those characteristics are no longer a differentiator in retail. Instead, they are a requirement. What will distinguish the great retailers are those that can receive orders and provide internal inventory visibility across all sales channels as well as track customer satisfaction with store fulfillment.

Although efficiency and process are obviously important to retailers, personalization offers the potential of increased sales as well as customer loyalty. People enjoy patronizing businesses that know their tastes and provide that personal touch. In addition, retailers can further improve the customer experience by providing insight into inventory and delivery, which in turn helps the customer feel empowered. As retailers continue to blend the right mix of product, service and ordering flexibility, they encourage a sense of empowerment that enhances the customer experience.






Understanding Key Performance Indicators

As a retailer in a competitive marketplace, a major focus should be monitoring the health of your business. For most retailers this means getting a handle on your Key Performance Indicators, or KPIs.

Defining KPIs

A KPI is a metric that is designed to give you a quick snapshot of some aspect of your business. A KPI might be a measure of sales, customer activity, or financial strength.

More than simply a bottom line number, a KPI is usually expressed as a comparison with some other factor. For example, looking at the average sale per customer gives you an understanding of the potential value of each customer.

Which KPIs should I track?

There are hundreds of KPIs that a retail business owner could be using at any one time. If an activity can be tracked and measured in your store, a KPI can be developed to provide you with business intelligence. One of the challenges is to decide on a handful of KPIs that provide you with the most valuable information based on the goals and objectives of your operation.

Every retailer will have a different set of KPIs. For example, a business that uses commissioned sales associates to sell to customers may place a heavy emphasis on KPIs that track the effectiveness of an individual sales associate while these KPIs may be irrelevant for another retail business.

You may want to track KPIs related to your customers. Simply knowing the number of customers who enter the store each day may not be enough for you. You may want to gain a deeper understanding about your customer’s shopping patterns and what converts them from a casual shopper into a dedicated, returning customer. To do this, you need to carefully consider what data you should collect and analyze.

Choosing the right data

Data, by itself, is not a KPI until it’s arranged in a meaningful way. A list of sales transactions throughout the day is good data to have but it’s not the whole picture. The next step might be to calculate the total dollar amount of sales for the day. You can arrange the data in any number of ways:  sales by department, sales by item, or sales by cashier. At this point, you still only have data to analyze.

The strength of KPIs is knowing how to use data to gain a competitive advantage. It all comes down to the goals and objectives you set for your business.

For each goal you establish, you must also create the metric that will determine if you are successful in reaching that goal. Your KPIs become the method by which you track your progress.  If your key performance indicators do not reflect progress toward your goal, you must change the tactics you are using in your business.

Using raw data to optimize your retail operations

Retailers assess KPI performance indicators to determine how to optimize their business.

Let’s look at one simple example of how your goals and KPIs come together to give you a competitive advantage.

Marlene runs a small clothing store in a mid-size urban market. Lately things have been going good but the business has leveled off. She would like to increase her business over the next year.  She creates a goal to increase her sales by 10%.

Marlene realizes that an obvious KPI is her total sales. She can also break down her sales on a daily, weekly, monthly, or quarterly basis to compare with the previous year. This gives her the maximum degree of flexibility especially since her sales tend to fluctuate according to well-defined fashion seasons.

Marlene decides that a good strategy would be to do more advertising on radio and television during the coming year. To find out if the advertising is bring customers into the store, she decides to track footfall, the number of people coming into the store. Fortunately, she tracked her traffic last year but if she didn’t, she could use the new data by correlating store traffic with the dates and times that advertising is running to see if the ads have an immediate effect.

If she notices that store traffic increases for a few days after a television ad appears, she may make more strategic choices about when to run television ads. Or she may be sure to have a special sale during the weekend following a big flood of advertising.

By tracking average customer spend, Marlene can determine how much the average customer spends during each purchase transaction. In order to increase sales, she decides to place some displays with accessories – scarves and jewelry – close to the cash registers. The strategy works and she notices that her average customer spend amount increases due to impulse purchases while customers are waiting in line.

Although her total sales KPI indicates some overall growth, Marlene is not satisfied with the progress she is making. She begins to track her conversion rate, the number of transactions throughout the day divided by the number of people who enter the store. This seems to indicate that a lot of people are coming into the store but not many are making purchases.

Retail conversion rate

To combat this, she could implement a number of new strategies. Perhaps she should take a look at rotating her inventory more frequently so the styles are kept fresh. She might decide that she needs to add new merchandise. Eventually, Marlene decides to hire additional staff to take more time with the customers and help them pick out merchandise.

To maximize the effectiveness of her new employees, she tracks shopper to staff ratio.  This KPI lets Marlene determine if she has the appropriate number of employees on the sales floor to handle the volume of shoppers. Monitoring her wage costs, which is wages paid divided by the total sales will also help her monitor her costs.

As her business grows, Marlene may decide to implement different strategies or develop completely new goals for her business. These goals and strategies may necessitate new KPIs to help her determine if they are effective. As her needs change, so will her data collection requirements and so will the way she analyses that data.

Tracking KPIs in Retail Pro

Retailers using Retail Pro have several built-in tools to help them track important KPIs easily and automatically including 160+ pre-designed reports that can be accessed using the Retail Report Viewer tool.

Filters allow you to easily report on different aspects of your operation and break down your data into different segments to allow you to take a bird’s-eye view or get down into the weeds.

Retail Pro reports can also be completely customized using an ODBC-compliant report writer like Crystal Reports. This allows you to save time and money by adapting an existing report to show exactly the information you need without a lot of work and effort.

From inside Retail Pro, you can use customer or inventory statistics to gain more perspective.

X-Out and graphical reports allows you to look at sales activity throughout the day and get instant analysis.

Happy tracking!

Want to learn more?

See how Retail Pro can help you improve visibility into your data using KPIs.

Contact us today





Retail Pro love at #nrf17

We <3 NRF! Here’s a short video recap for all those who missed it! If you want to read more, here’s what we were talking to retailers about this year: http://bit.ly/2jSiWCC

 

 

 






Helping retailers optimize retail and unify commerce | #nrf17 

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Helping you optimize retail and unify commerce. That’s what we’re all about at Retail Pro.

Whether your focus for 2017 is to increase efficiency on the sales floor or back office, improve your customer experience, go mobile, go global, or go unified, we’d love to help you do it.

Request a demo today or visit us at NRF to share your story and see how Retail Pro can help you optimize your retail business.

NRF’s Big Show | January 15 – 17 | Retail Pro Booth #4025






Will we see you at #nrf17?

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Hi there!

Just a couple days left until NRF’s Big Show! If you’re going, we’d love for you to come by our Retail Pro booth #4025 to say hello!

Until then, safe travels! See you soon!

Schedule an NRF meeting with Retail Pro

Here’s what you’ll see

You’ll see the modern, flexible Retail Pro retail management software that brands like Under Armour, Puma, Frye, Oakley, Samsonite, and L’Oreal use to increase efficiency in stores and across channels, create an awesome customer experience, and unify commerce – profitably.

These are just some of the Retail Pro capabilities that help you optimize retail. Come by our Retail Pro booth #4025 to see how Retail Pro can help YOU optimize your retail!

Learn more on our website
 


 
On the Sales Floor
 
In the Back Office
 
All Over the World
 
  On the Sales Floor   In the Back Office   All Over the World  
 
POS
Customer Mgmt
Employee Mgmt
Inventory Mgmt
 
Replenishment
Promotions
KPI Reporting
Multi-Subsidiary
 
Multi-Region
Multi-Currency
Multi-Language
Multi-Tax
 






How to create awesome customer experiences

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The experience you create in your stores and the way you treat your customers impacts how likely they are to shop with you again.

Find out how luxury luggage retailer Rimowa makes their customer experience awesome at every touchpoint. Then, book your NRF meeting to talk with us in person about how Retail Pro can help you create your customer experience!

Book my NRF meeting now

 






New year, new retail! 5 ways to use mobile in your stores

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Each new year comes with new excitement, new potential, new initiatives – like mobile in your stores!

Start 2017 off right – see how one fashion retailer uses mobile in their stores. Then, book your NRF meeting to talk with us in person about how Retail Pro can help you go mobile!

Book my NRF meeting now

 






How to Build Your Tech Strategy

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Technology empowers efficiency in your retail operations, so building a solid tech strategy is critical to effective execution.

See how Earthbound Trading Co is increasing operational efficiency by building their tech strategy with Retail Pro.

Then – book your NRF meeting to talk with us in person about how Retail Pro can help you optimize your retail tech strategy.

Book my NRF meeting now

 

 






How to Expand Your Retail

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See how one Retail Pro retailer is growing their operations and the 4 must-haves for retail expansion today.

Then – book your NRF meeting to talk with us in person about how Retail Pro can help you optimize your retail as you grow.

Book my NRF meeting now

 






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