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Has your IT Organization Stolen the Customer?

Has your IT Organization Stolen the Customer?

Throughout my career in retail, I have had the pleasure of working with some of the greatest brands as a CIO, COO, VP of E-commerce and consultant.  I have recently come to a critical conclusion: The IT organization has STOLEN THE CUSTOMER from the rest of the retail organization.  Here are a few examples to illustrate my point:

  • A Blind Devotion to Governance – A store associate can help a customer with a purchasing decision and even capture their phone number or email. However, if the store team wants to now capture the customer’s birthday or preferred size, there is a business case to fill out, an IT governance meeting to attend to prioritize resources, plus a security review to approve the project. If all goes well, six months later, a project team will have mapped how to accomplish this.
  • Requirements Paralysis – The e-commerce team can send targeted customer emails, however, if they want to direct a customer to a personalized landing page based on her purchase history and geographic location, the team will need to engage with the IT director of e-commerce and technical and business analysts to initiate a project. There will be many meetings to define requirements and use cases. Everything will then need to be documented before the development starts and it will take three months for the company that provides development resources to find and secure the proper developers. By the time the project is close to being completed, the marketing manager has left the company and the solution no longer has a sponsor – so the project is cancelled.
  • Complex Resource Prioritization – The pricing and planning teams can build weekly promotions to drive store and site traffic through discounts, however, after looking at last year’s Black Friday results, the team decides they want to offer a personalized shopper program for a fee to reduce the impact of markdowns during the holiday season. To accomplish this, they try to gather technical resources but they were already committed to projects that were approved a year ago.  After trying to convince other executives of the opportunity, the president of retail works with the CIO to carve out resources across the e-commerce, POS and ERP teams. Unfortunately, this process takes several months and by the time the program is approved across all the different decision makers, there is not enough time to implement before the holiday season. Resigned to last year’s fate, the president of retail goes back to offering a low margin door buster, just like last year, and behind the scenes blames the CIO for poor business results.

As you read this, I am sure you can think of your own examples of how IT is standing between you and your customers.

How did we get here? 

There are three common fallacies that get in our way:

  1. Application development is not a core competency – I have spent much of my consulting career assisting retailers with their IT strategies. Ten years ago, the standard IT strategy was that technology in general – and application development specifically – was non-core (see Geoffrey Moore interview on core vs context) to retailers. This is WRONG! Given today’s environment and consumer expectations, technology couldn’t be more important. Do you think Amazon considers application development non-core?
  2. Technology people need to report to technology people – In a standard retail IT department there are usually several layers of people that separate the customer from the team responsible for the customer experience. This is WRONG! Technology resources and engineers need to report to managers who can help make decisions, solve problems and provide feedback and advice on career development. There is no reason this must be a manager in the IT department. In fact, managers spend 80% of their time on relationships and people issues. However, this bias seems to stop us from putting application development teams directly in a customer-facing organization. Nothing drives me crazier than hearing a developer say they are not customer-facing or that the “business” needs to tell them what to do.
  3. Being agile will make us move faster – This is WRONG! Most retailers have rushed into agile methodologies, but few have seen positive results.   The objective of agile development is to manage a consistent flow throughout the development process performing small chunks of work at each stop along the development process. Unfortunately, if you do not address the funding and deployment processes, you can have the best scrum master and deliver on each sprint flawlessly and still not release features faster. I have seen too many retailers that have fallen into this trap. Sprints are delayed because they are still trying to fund each requirement separately and they wait for a governance meeting, or deployments are delayed because it takes too long to manually test an entire system even though only a small change is made. For retailers to successfully improve their speed to deployment, they must fundamentally change the way they think about funding development and invest in automated testing and deployment.  We must stop treating investments in customer-facing technology as projects and treat them as a continual improvement process.

What can we do to succeed?

We need your support to give the customer back to the organization. I suggest you go back to your organization with this assignment:

  1. Ask the organization who owns the customer experience. Find the specific person, not a group or a title and don’t accept having separate ones for stores vs. online. If you can’t find one person, ask why and what it would take to establish one?
  2. Calculate how much time you have spent maintaining and enhancing your customer-facing technologies. Add to this the number of hours the entire organization has spent documenting requirements, in meetings, governance, etc. and multiply this by a blended labor rate – this is the total amount the organization has spent enhancing customer-facing technologies.
  3. Budget this amount next year for an internal development team and have them report to the resource identified in task 1.

We can give the customer back to our companies but we need your help.  For today’s retailers to survive, they must have a deep understanding of customer needs, be able to move quickly to deliver these needs and have an organization that rethinks the value of the brand they support. I believe that taking the steps outlined above is a good place to start.

Thank you for your commitment and let’s keep the dialogue open – let me know what you find out.

I welcome your feedback on this topic. Please share your thoughts and opinions below.

Jeffrey

Simple, speedy checkout the future of grocery

FierceRetail – Today’s grocery shopper has high demands, driven largely by expectations set by an Amazon-dominated marketplace. Consumers are looking for great service, lower prices, higher quality, personalized rewards and more checkout options. In addition, they want these services in a timely manner—no lines in-store and no lengthy fields to fill out in digital. A simple, speedy checkout.

According to a new white paper from Boston Retail Partners Consulting (BRP), the threats facing the traditional grocery industry are real. Keeping up with the changes is largely hinged upon technology-driven software solutions, and at the center of this upgrade is the need for deploying next-generation POS platforms.

“Grocery retailers are keenly aware that without the IT and operational investments necessary to support these critical, customer-demanded changes, the threats represented by so many direct and indirect competitors, such as Amazon, could be devastating,” said Scott Langdoc, vice president and practice lead at BRP. “No matter how extensive and complex the technical, operational or competitive changes to the grocery customer experience, nothing will ever be as important to the intersection of shopper satisfaction and profitable operation as speed of checkout.”

Despite customer demands, Langdoc says that less than half of U.S. regional and national grocery chains are fully enabled with advanced POS platforms capable of supporting the breadth of changing customer expectations—especially when it comes supporting the levels of personalization, engagement and flexibility that customers demand now.

Read Full Article: Simple, speedy checkout the future of grocery

Interview: Perry Kramer, VP at the retail consulting firm BRP

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

Retailers: How Well Are You Using the Most Powerful Tool in Your Arsenal?

LinkedIn – One of the greatest tools for driving connected commerce is probably sitting within five feet of you right now – in fact, you might even be reading this blog on it.

Of course, I’m talking about smartphones – one of the most accessible, ubiquitous methods retailers have to connect with their customers digitally and physically. Here’s the thing: While it may seem like a purely digital tool, the reality is that mobile accessibility can drive better engagement with customers in the store as well.

One of the greatest tools for driving connected commerce is probably sitting within five feet of you right now – in fact, you might even be reading this blog on it.

Of course, I’m talking about smartphones – one of the most accessible, ubiquitous methods retailers have to connect with their customers digitally and physically. Here’s the thing: While it may seem like a purely digital tool, the reality is that mobile accessibility can drive better engagement with customers in the store as well.

A new special report from BRP, “The Mobile World of Retail,” explores the growing trend of mobile in the brick-and-mortar retail experience. “Retailers now have opportunities to guide customers to areas of the store that should be of interest to them based on their preferences, purchase history, and environmental factors such as weather and store location,” the authors explain. “If a customer normally shops at a store in the Northeast but is in Florida, the software may assume they are on vacation and offer them a coupon targeting relevant merchandise.”

Connecting with customers through mobile devices is paramount. The study, which polled major North American retailers, found that their top three customer engagement priorities utilize mobile devices in some form.

“If a customer normally shops at a store in the Northeast but is in Florida, the software may assume they are on vacation and offer them a coupon targeting relevant merchandise.”

Connecting with customers through mobile devices is paramount. The study, which polled major North American retailers, found that their top three customer engagement priorities utilize mobile devices in some form.

Read Full Article: Retailers: How Well Are You Using the Most Powerful Tool in Your Arsenal?

Not just a fad: Pop-up stores shore up rough retail real estate market

DIGIDAY – As department stores shutter locations across the country, brands are reconsidering what the purpose of a physical store should be.

With the look and feel of the store changing, long-term leases for retailers are becoming less common, as brands look for more flexibility: The average length of a retail lease has shrunk to five years, down from 20 years in 1991, according to commercial real estate services firm CBRE. Pop-up shops and temporary experiential retail spaces are becoming increasingly appealing.

“People are very skittish about retail real estate locations. We’re in vastly changing times, where technology and behaviors are changing rapidly and long-term commitments to leases don’t make any sense,” said Ken Morris, principal at consulting firm Boston Retail Partners. “The idea of a pop-up isn’t just a phenomenon — it’s fully part of the way retail needs to change.”

To solve for the new way brands are doing business with landlords, marketplaces have emerged to allow for easier facilitating of the pop-up. Appear Here, one such marketplace that likens itself to an “Airbnb for commercial real estate,” is launching today in New York. It already has deals with clients including Opening Ceremony, Away and Gwyneth Paltrow, and exclusive partnerships with real estate developers Blackstone, Simon and Brookfield. In the U.K. and France, where Appear Here operates already, it has worked with companies including Google, LVMH, Net-a-Porter, Topshop, Supreme and Spotify. Last year, Appear Here was behind the launch of 4,000 pop-up shops in London.

Morris said that Boston Retail Partners is working on a solution for its clients that essentially acts as a “retailer in a box.” It allows for quick assembly and disassembly of a pop-up shop concept, allowing concept, staffing, set up and other logistics to come together efficiently. While he doesn’t see the temporary shop space as a replacement for traditional retail, he sees it as a supplement that will serve as both a platform for customer acquisition and brand marketing.

“We’re looking at vacancy signs in Soho, which you would never even see before,” said Morris. “This isn’t a flash in the pan — we’re going to see more temporary spaces. It’s easy to do, the technology is there, there’s a low cost of entry. It’s part of the next phase.”

Read Full Article: Not just a fad: Pop-up stores shore up rough retail real estate market

Exploring the Path to Connected Commerce

Diebold Nixdorf Blog – Retailers have played an undeniable role in the evolution of the consumer experience. From embracing e-commerce to making data actionable to the early adoption of mobile, the segment has truly changed the game. And its approach has been emulated across industries.

But we’re at a crossroads. While retailers have added technologies to create an omnichannel experience, their disparate systems most likely operate in silos. To deliver on consumer expectations of anytime, anywhere, anyhow shopping – what’s become known as connected commerce – the new aspiration is a common platform that enables real-time visibility and integration across every customer touchpoint.

How are retailers planning to get there? Diebold Nixdorf recently explored the path to connected commerce by sponsoring the Boston Retail Partners (BRP) 2017 Point of Sale (POS)/Customer Engagement Survey. In it, the leading retail management consulting firm examines the most significant challenges retailers face in their focus on consumer centricity. And it reveals their priorities and initiatives as they work toward a common platform.

Establishing a Framework

The survey was based on the premise that if we built a framework for connected commerce, customer experience would be at the foundation. Retailers can no longer differentiate simply with their product, or entice consumers with competitive pricing alone. Strongly influenced by personal computing, mobile technology and digital innovations, today’s consumers are more likely to consider the experience the key differentiator that leads them to choose – and remain loyal to – a retail brand.

Read Full Article: Exploring the Path to Connected Commerce

Amazon Launches Smart Home Services

HFN – Amazon’s latest initiative seems to be a smart move: offering consumers free in-home smart home consultations to help consumers navigate through the myriad technology products and services available now for the home.

Amazon employees—not contractors—conduct the 45-minute consultations, Amazon said on its site. Besides determining what the consumer wants in terms of technology—from saving money on one’s utility bills and/or automating home features—consultants will also assess the home’s Wi-Fi signal strength and demo products such as the Echo Dot, Philips Hue lights and TP link plugs, as well as voice-control through Amazon Alexa, the site said. The consultant will conclude with smart home recommendations and provide a personalized list of products, though the consumer is under no obligation to buy.

Amazon’s new service allows it to “gain traction in this area,” said David Naumann, vice president of marketing at Boston Retail Partners, as smart home technology can be confusing for consumers, both in terms of set up and what they need among the number of products now available. While he didn’t know if the service was cost effective, Naumann believed Amazon saw it as more of “first mover advantage,” allowing them to gain a foothold in this area in the home. And the personalized approach is the best way to do that, as everyone’s home environment has different needs, he added.

This service also needs to have the right people with right skills, Naumann added, “so there are no missteps.” But it looks like Amazon thought that through and has hired qualified people to do these consultations, he said.

Read Full Article: Amazon Launches Smart Home Services

Apple Pay Now Supported by 36% of Merchants in United States

MacRumors – Apple Pay is now accepted by 36 percent of merchants in the United States, according to research conducted by retail consulting firm Boston Retail Partners and shared by NFC World. That’s up from 16 percent last year.


22 percent of retailers who don’t currently support Apple Pay said they plan to accept the payments service within the next 12 months, while 11 percent plan to do so in the next one to three years. 31 percent plan to take a “wait and see” approach before implementing Apple Pay support.

PayPal was the next most widely accepted payments service at 34 percent, while MasterCard’s PayPass came in third with 25 percent. 24 percent of merchants claimed support for Android Pay, while 18 percent said they accept Samsung Pay. Given that many of these technologies are all NFC-based and accepted anywhere NFC payments are available, it seems merchants may be referring to “official” support or may be unaware of the way contactless payments work.
“PayPal has been bumped out of its top spot in this year’s survey, with Apple Pay now being accepted at 36% of the retailers participating in the survey. This is up significantly from 16% last year, and signals a growing acceptance by retailers and customers.”

“This year, fewer retailers are adopting a wait and see approach for Apple Pay and PayPal — likely because of the growing support from the payment software ecosystem and the acceptance for these mobile payments by the public.”

Read Full Article: Apple Pay Now Supported by 36% of Merchants in United States

All CIOs Want For 2017…Is Unified Commerce

Retail TouchPoints – November 25, 2016 lived up to its name for many retailers, signaling the start of holiday shopping and revenue generation. Unfortunately, for some unprepared retailers these results were disappointing.

Black Friday, along with its digital cousin Cyber Monday, signaled the official launch to holiday commerce and kicked off a season to be jolly for those retailers with a robust technology infrastructure. But it was a Blue Holiday Season for those who did not sufficiently invest in the infrastructure and processes that lay the foundation for a true omni-channel shopping experience.

This holistic and interconnected approach – unified commerce – is increasingly the conduit for delivering a seamless and consistent customer experience across all channels and touch points.
Unified commerce goes beyond omnichannel by enabling a single, holistic platform, combining in-store, mobile, e-Commerce and every other function throughout the enterprise. As such, it is quickly becoming the new retail imperative. While just 18% of retailers have implemented a unified commerce platform, another 57% plan to do so within three years.

Clearly, the presence (or absence) of unified commerce can make (or break) the customer experience – especially during the holiday season.

With the dust having settled from the holiday 2016, here are some insights into what retail CIOs and IT managers have on their wish lists for 2017…and beyond.

  • Unified Commerce Environment
  • Enhanced Mobile Capabilities
  • Virtual POS
  • Robust Network

Like water flowing out of a spigot, customer traffic – whether in-store, online or in-app – is a precious commodity that can pass through a business, never to return, if the resources aren’t there to capture it. Shoppers are in control, and their loyalty is only as strong as their next shopping experience.

Those retailers who remain slow in delivering a unified commerce experience will likely see the impact by the 2017 holiday shopping season – in the form of sluggish sales.

And those who are willing and able to effectively execute on omni-channel services are destined to have Happy Holidays, indeed.

Read Full Article: All CIOs Want For 2017…Is Unified Commerce

Apple Pay most popular mobile payment service among US retailers, survey finds

NFC World – Apple Pay has the largest percentage of supporting US merchants with 36% accepting the mobile payment service today, up from 16% last year, research released by Boston Retail Partners (BRP) reveals. Some 22% of retailers are planning to accept Apple Pay in the next 12 months and 11% plan to do so within the next one to three years, while 31% are adopting a “wait and see” approach.

PayPal falls in second place with a 34% acceptance rate, followed by Mastercard PayPass (25%), Android Pay (24%), Visa Checkout (20%), Samsung Pay (18%), Chase Pay (11%) and private label mobile wallets with 4%, the 18th annual edition of the POS/Customer Engagement Survey shows.

18% of more than 500 top North American retailers surveyed are planning to accept Android Pay within the next 12 months, with 13% planning to accept it within the next one to three years, while 11% are planning to accept Samsung Pay in the next 12 months, with 7% planning to accept it within the next one to three years.

Only 11% of the retailers have “no plans to implement” mobile payment acceptance within the store environment, while 24% of overall respondents have already done so and say the system is “working well.” 9% are offering mobile coupons, specials and promotions, while 7% are offering mobile loyalty programs.

“One of the critical factors for any mobile payment success going forward is education. We have found repeatedly that not only are consumers unsure of how and when mobile payments can be used but, even more telling, associates are unsure,” BRP adds.

“For mobile payments or mobile wallets to succeed, there must be further education at the point of sale to ensure that a transaction using a mobile device is not longer or more complicated than traditional payments methods for either the customer or associate.”

Read Full Article: Apple Pay most popular mobile payment service among US retailers, survey finds