Customer Insight Blog – “We are living in a good time!” says Perry Kramer Vice President & Practice Lead at the retail consulting firm BRP. While Amazon’s acquisition of Whole Foods reinforces BRP’s intimate belief that “the physical and digital worlds are forever intertwined as we look into the future” we asked Perry Kramer how he sees the future in retail. Very enthusiastic!
Boston Retail Partners is a true management consulting firm that always approaches problems from a management perspective first. Has your consulting services changed as the retail industry has changed dramatically in the past few years?
Perry Kramer: We work in all areas of retail – specialty, grocery, hospitality and quick service – and our consulting services include strategy, vendor selection and project implementation.
We break retail management projects down into three phases: (1) we think strategically about the issues and pain points of our clients to help identify the best strategy, (2) we then help them map the organizational changes, develop a roadmap, and select the appropriate software and hardware to support their strategy, and (3) we also help implement the solution. After the project is completed, retailers often come back to BRP for help with the next phase of their road map or a refresh of their strategy project.
In the last few years, many retailers have taken a more strategic approach to selecting a product. Before they start evaluating solutions, they embark on a customer journey mapping exercise to learn how customers interact at each touch point during the customer journey. We help retailers understand their customers’ points of view: what they want to buy online, what services they use, and expectations for customer service. This stage is very important, and much more critical than it used to be. Once they understand the current and ideal shopping journey for their customers, they are in a much better position to address their needs and select the best solution.
To stay ahead of customer’s expectations and retail trends, we field four retailer surveys a year. The last one, available to download free, is the « 2017 Customer Experience / Unified Commerce Survey ».
Amazon to buy Whole Foods: does it show how brick and mortar business is fragile ?
The Amazon acquisition of Whole Foods can be analyzed from several angles. There is no doubt that brick and mortar is changing very rapidly. What Amazon is doing is very interesting. They had great success online because in the online environment it is easier to engage the customer, build his or her profile and personalize the experience. Trying to achieve the same success rate in brick and mortar environment will be more difficult for Amazon. It is much more difficult to bring the same level of personal experience to the physical store which often has limited customer profile information or anonymous customers. An additional challenge for Amazon will be that they picked one of the most difficult retail segment, as the grocery segment has one of the lowest margins.
Amazon won’t expect to be profitable right away – giving it several years to perfect their customer experience as they have done online. They have the luxury of experimenting and losing money while other retailers can’t afford to do that. This will create a very challenging time for the competition. While Amazon will eventually succeed, other retailers will also be able to expand the localized programs they already have in process. With Amazon’s impact not being widespread immediately, other retailers will have time to mature and lessen the overall impact of Amazon’s brick and mortar invasion. Amazon can lose money for four, five years figuring out the recipe in grocery and then expand in other brick and mortar segments!
In the « 2017 customer experience/unified commerce survey » you just published, you mention that 45 % of retailers plan to utilize artificial intelligence (AI) within three years to enhance the customer experience. How have your clients start to integrate AI capabilities?
A lot of retailers are using artificial intelligence for product recommendations, especially in fashion and cosmetic areas. For example, if a customer purchases a certain tone of blush in the spring, artificial intelligence can be used to recommend a complementary product that goes perfectly well with that color palette and the season.
There are also an significant number of pilot projects by retailers to improve the online authorization process and sales that are driven by the need to do next day delivery and sometimes even same-day delivery. This is a customer expectation – they want their products the same day – and the old order manual approval process for exception and questionable transactions doesn’t work anymore. Artificial intelligence is the next generation answer to this challenge.
We also see artificial intelligence integrated with virtual reality. For example, retailers can show customers what their kitchen will look like when remodeled based on their current interior or what a dress or shoes will look like in any color on an actual image of the consumer (not a mannequin or model).
In a mobile application, what features do you recommend to your clients in order to increase the frequency of use?
Source : 2017 BRP Special Report: Mobile. To download free here
Successful mobile applications depend on several key factors. First, it is imperative to make sure the mobile application works 100% of the time. If not, people will walk away. In the US, the average person has 27 apps and use only about six per month. So if something is not working perfectly, they will not use the app.
Second, it is recommended that you link your mobile app to your store Wi-Fi. If customers “opt in” when they sign into your mobile app, when they are in the parking lot or they are walking in the street or the mall and are close to your store, you can ping them with a coupon or a message to remind them they have your app on their phone. This enables retailers to communicate with their customers at a relevant time – when they are likely to make a purchase decision. Drugstores like Walgreen’s and CVS are very good at this.
Also, if a customer is in your store and wants to access to your Wi-Fi, you can offer them this service if they download your app.
Lastly, retailers should make a major refreshment of their mobile app every six months. While most retailers are doing bad job budgeting for this, to be successful, you have to have something new or cool in your mobile app on a regular basis.
Personally, where do you find inspiration?
I have about five daily retail blogs or retail specific newsletters that I read every day (they cover different verticals and topic areas such as grocery, apparel, payments, CRM, etc). When we see something interesting and intriguing, we ask our analysts to research this deeper to see the value of it. And I love to shop! I started my career in retail and I love to come back in the stores to see innovations. We are living in a good time!
Read full article: Interview: Perry Kramer, VP at the retail consulting firm BRP