CX & Design Archives - SkillNet Solutions

The frictionless shopping experience and metrics for customer value

This post was first published on Medium.com

In his yearly letter to shareholders published 15th of April 2021, Jeff Bezos shared some fascinating back of the envelope calculations on the value that Amazon creates to its customers.

28% of purchases at Amazon are completed in three minutes or less and 50% in less than 15 minutes. He concludes than on average a shop in Amazon takes 15 minutes. In contrast, he mentions that a visit to a store would take on average an hour and each customer would save two visits to the store per week (this latter part lacks mention of how that data was arrived to) If a time saving is value as 10$ per hour and multiplied by the 200 million of Amazon Prime members, the value creation in 2020 alone is $126 billion (after discounting the cost of Prime member fees)

As Amazon prime member myself, I have completed many of these quick purchases and find the value proposition compelling. However comparing time of purchase in store, which includes time to travel, with time for a digital sale is not a fair comparison. The lockdowns and pandemic have accelerated the transition to digital sales but should have also reminded us of the importance of the in store sales experience.

The challenge to compete with Amazon for retailers is huge. The logistics and commercial advantage that Amazon has through its scale are unparalleled. However if the main value to customers as stated by Jeff Bezos in this letter, is a frictionless digital sale, this is something that retailers can improve on today, on their own digital experiences.

A frictionless digital experience is only part of the value proposition for a store sale. If it is a convenience shop in a store, customer is not travelling to the store, the location is nearby and needs to have the ability to be in and out quickly, it is indeed the main value. Solutions around scan and go should be available so there is no need to interact with staff, if the customer doesn’t want to. This is not a sale that takes an hour. However if customer is travelling to a shop, in order to be motivated to do so, having a different rich experience is what would differentiate from buying online.

Metrics to differentiate between time spent in friction in the sales process and the value add provided by an in person experience are useful to explain why people still go to shops. Investing in both frictionless digital experiences and rich interactions delivers on critical metrics to generate value and compete against Amazon. The value add can translate into entertainment, education, loyalty rewards, gamification, social interaction, or others based on the specific retail brand. This value add is part of the digital solution.

At SkillNet a lot of our focus over the last 12 months has been to help retailers to design and implement the right digital customer journeys with the metrics built-in to track and reduce friction and enrich customer experience. Starting with the customer journey allows to ask the right questions about how to best use technology to serve customers and better measure the real value creation. Knowing the technology and the retail domain operation is still critically important but not sufficient.

As Jeff Bezos reminds us in most of its public communications, Amazon’s vision for being Earth’s most customer-centric company has paid off well.

The mechanics behind successful customer experience

Delivering Successful Customer Experience

Being a maker of modern commerce isn’t just about building cool looking applications and utilizing the latest and greatest architectural patterns. It’s about a complete and holistic approach to delivering a superior customer experience. Right now, as we enter the New Normal, everyone seems to be talking “customer experience” and that’s certainly a step in the right direction. But what are the mechanisms required to deliver a successful customer experience that will differentiate and separate your retail business from  the competition?

Focus on the Customer

While it’s important to have a strong and stable back-end supporting your applications and systems, without a focus on the front-end experience all those great integrations and data sharing won’t matter once the application is deployed in stores. If the experience isn’t usable and fails to meet the customer’s needs, whether the customer is the consumer or employee, the application will collect dust on a shelf and not be used. This will result in an application which will be a complete waste of money.

Focusing on the front-end means talking to your customers and finding out what they want and need. What’s also important to remember is that many customers may not know what they want and need. Or, worse, be wrong about what they think they want or need. If you get this wrong then you’re back to “App on a Shelf”. So how do you get this right?

Modern Methods for Modern Commerce

  • Agile
  • Design Thinking
  • DevOps

Usually, the first modern development methodology that comes to mind is Agile. While certainly not without its problems, Agile is a far cry and way above the traditional waterfall approach. It also has many different incarnations such as Kanban and Scrum that allow teams to find out what works for them. But what’s most important is keeping Agile as a philosophy and remembering the key values of Agile and not let yourself get caught up in the processes and “rules” of Agile. Trust your teams to build working software through constant collaboration with customers and never be afraid to respond to change.

As you work in an Agile environment, Design Thinking becomes a critical piece of the development puzzle. By working interactively with the Design Thinking steps, and not being afraid to work the steps out of order, you can build better applications, prototypes, and a customer experience that will better serve your business. Design Thinking is about making sure you hit all the important concepts. You have to start with talking to your customers and determine what they want and need. Then you need to define these wants and needs as requirements. Next, have brainstorming sessions with your team to develop new and innovative ideas. Building a prototype based on these ideas will allow you to do some testing and get some valuable feedback. This feedback will tell you what you need to do next. Maybe you need to go back and talk to your customers again. Maybe your requirements were off. Maybe your idea needs a few tweaks.

With both Agile and Design Thinking it’s time to get technical. This is where DevOps comes in. Like both Agile and Design Thinking, DevOps is an iterative approach that constantly loops back on itself to improve and proactively produce working software that is usable, desirable, and feasible. The cycle of DevOps allows for working releasable software to be in constant production. By always building releasable software on a consistent basis, you can easily react to new customer requirements instead of having to wait for a yearly scheduled release.

Continuous Improvement

The only way to improve is to collect and analyze quality feedback from your customers. There are multiple ways to generate this feedback. On one end of the spectrum are surveys. These can be sent out to customers as an email where, hopefully, enough customers will participate to create adequate actionable feedback. On the other end of the feedback generation spectrum is direct one-on-one interviews with customers. This may be more difficult with consumers than employees but it is extremely worth the effort. This is how you find out whether or not you truly understood what your customers desired and whether or not you delivered. The key here is that negative feedback is good. Negative feedback is actionable. Positive feedback feels good but doesn’t really give a viable means to improve. And if you’re not improving then you’re stagnating and if you’re stagnating then your competition is about to pass you by. In between surveys and interviews are focus groups where the opinions of groups of customers are solicited. This is another  great way to gather large amounts of feedback quickly and in an inexpensive manner.

In summary, using modern methodologies, focusing on end customer experience, and gathering continuous feedback will allow retailers to deliver a successful customer experience to consumers and employees. It will also keep you to ahead of the competition by differentiating your businesses.

How do Modern Commerce Leaders justify investment and change?

This is the fourth blog in a series of four blogs( Read Blog 1, Blog 2 and Blog 3) from SkillNet on how Modern Commerce Leaders have used technology to digitally transform their retail businesses to adapt to the New Normal. This ability to adapt, gives these brands a competitive advantage. While the blogs are connected each of them can be read independently.

The last year has been challenging for almost every company’s bottom line. Even essential businesses like Grocery stores that saw a revenue lift, have also seen tight margins as labor and product costs rose. In this time of uncertainty, it may be hard to convince internal decision makers to make investments which will provide long term benefits.  

On a recent call, a client mentioned that they convinced a skeptical Chief Financial Officer (CFO) to invest in a new multi-million dollar app enhancement by simply demonstrating how easy it was to complete a purchase on a competitor’s mobile app, “within 5 minutes, because I was able to show how easily I could purchase a $30 Mr. Coffee Maker on my competitor’s app, I got the funding I had been asking all year”.

Change is often initiated as a reaction to market or competitive forces. However, a true Modern Commerce Leader is often trying to be an innovator, before these forces become apparent, and may not have the easy argument “our competitors are doing it”. In those cases, a more strategic approach may need to be taken to get stakeholders to agree to not only a major financial investment, but a commitment that their organization will adopt new operational process changes.

At SkillNet, we look at developing a Return on Investment (ROI) model as a 5-step strategic effort:

  • Step 1: Define Business Needs
  • Step 2: Identify Costs
  • Step 3: Identify Benefits
  • Step 4: Gather KPIs and Baseline Data
  • Step 5: Make a Decision

In our experience, getting a customer journey defined in step 1 is critical and its effort is often underestimated. The journey could be a new or enhanced process, but a trend we have seen accelerate over the last year is the re-platforming of existing journeys to new platforms. An example of this re-platforming is the replication of the in-store shopping experience through mobile applications. Retailers, across both softlines and hardlines, are offering virtual chats with in-store sales associates. Others are creating a curbside pick-up process that allows for complimentary sales to make up for the loss of impulse purchases that would normally happen in stores. Once these customer journeys are identified and mapped, potential solutions can be identified.

We also see many Retailers stumble when trying to see if their initiatives actually paid off. Hence we make sure to include a Step 4, where Key Performance Indicators are identified prior to making a decision. Below is a model for a recent ROI exercise just completed for another client which highlights the potential solutions based on the journeys and some key performance indicators we considered.

The major benefit of taking a more strategic view when justifying a project is the alignment you will gain from stakeholders. The benefits of this alignment include a common stakeholder understanding on how your customer’s experience will improve, the costs to get there, and what subjective and objective metrics will prove you made your innovation goals.

Watch the Webinar on customer engagement – Real Engagement is the new normal

Top three trends in customer engagement!

This is the third of a series of four-blogs (Read Blog 1 and Blog 2) from SkillNet on how Modern Commerce Leaders are adapting to the New Normal.  SkillNet defines a Modern Commerce Leader as a retail brand that is engaging customers through new customer journeys enabled by Technology. The flexibility and ability to adapt, provides these companies with a competitive advantage.  

Retailers are using customer engagement not only to weather the current economic uncertainty but also to build a sustainable competitive advantage. As we surveyed retailers, both essential and non-essential, we are seeing three trends on how Customer Engagement leaders are investing their dollars strategically:

  1. Building or enhancing existing mobile applications from a transactional to a relationship building platform
  2. Investing in offers and programs to build customer loyalty
  3. Offering additional fulfillment options that not only promote safety, but convenience

When it comes to the first trend, there are countless examples of Retailers investing in their mobile apps. When mobile apps first arrived, they were often just designed as extensions to the company’s website, but now mobile apps have their own distinct customer journeys. An example is Avocado Mattresses which offers scheduled visual chat sessions with store team members, mimicking the in-store shopping experience from the comfort of your mobile phone.

On a recent webinar I hosted, Scott Steever, Adjunct Professor at Fashion Institute of Technology, shared his story of how his local Fairway grocery store in Brooklyn quickly turned on functionality that allowed him to have a complete contactless grocery shopping experience in-store with his app: self-scan, self-checkout, and Apple Pay all through his phone. He noted, “I don’t know whether they were working on that ahead of time or they just really pivoted quickly, but in any case, it really made a difference in terms of the experience of shopping with Fairway. It greatly reduced the anxiety for me as a consumer during the early days of the pandemic in New York City.”

Loyalty programs have been around for years, but recent trends show retailers are looking for innovative ways to reward their customers. According to a 2020 Marketing Week survey, 29% of brands are re-budgeting marketing dollars to fund initiatives to maintain customer loyalty. This trend is evident in mobile application integrations to existing Customer Relationship Management (CRM) packages to tailor discounts and recommend complimentary products based on previous purchase history. Other brands such as Levi’s are offering a special concert series for their top customers while Sephora is offering special private beauty events.  

The third trend we are seeing in engagement is providing customers with additional ways to acquire a Brand’s products. Obvious additions to fulfillment options have been curbside or drive-up pick up. On a recent trip to Target after placing an order using their app and requesting drive-up pick up, I timed how long I had to wait before the team member came out with my order: 33 seconds, and this was during a snowstorm! In Q3, Target reported that 75% of digital orders were fulfilled from their stores.  This helped them reach some remarkable sales increases (19% same store sales), while starting the quarter with 3 % less inventory.  

Another example of fulfillment innovation is seeing brands partnering with each other. Even before the Pandemic, Kohl’s was offering Amazon lockers and in person return services. Another interesting example has been a test where select Walgreens’ stores are offering Kroger grocery drive-up pick-up services.  

Even when we return to pre-pandemic behavior, we believe these customer journey enhancements will continue to be adopted because of the convenience and safety they provide to the community and the improved profitability that these journeys realize for Modern Commerce leaders.

Watch the Webinar on customer engagement – Real Engagement is the new normal

Do investments in customer engagements really work?

This is the second blog in a series of 4-blogs (Read Blog 1, Blog 3, Blog 4) from SkillNet on how Modern Commerce Leaders have used technology to digitally transform their retail businesses to adapt to the New Normal. This ability to adapt, gives these brands a competitive advantage. While the blogs are connected each of them can be read independently.

During this time of uncertainty, Modern Commerce Leaders have been investing in improved customer experiences to help them build customer loyalty and to weather a drop in traffic.

A recent McKinsey study showed that in last major downturn (2008 economic crisis) the top publicly traded customer-focused companies had three times greater shareholder return than customer experience laggards.

Customer experience (CX) leaders are more resilient during recessionary periods, experiencing shallower troughs and quicker recovery

Financial performance (total shareholder returns) of CX leaders vs laggards

Even before the pandemic and resulting economic downturn, Modern Commerce Leaders had already begun investing in customer focused innovation, but the pandemic increased the impetus to find new ways to engage with a newly home-bound customer.  More importantly, it also has resulted in massive changes to behavior, with customers being more willing to try new technologies thus reducing the challenges that retailers may have faced prior to COVID-19. As reported in CNET, Oz Alon, co-founder and CEO of HoneyBook, a financial tech startup in San Francisco said, “I do believe this is an opportunity. This is a huge event in the world, people are going to change their behaviors and a lot of things that have struggled for adoption will get a new push.”

Much of the customer experience improvement has come with enhancements to existing mobile applications. Scott Steever, Adjunct Professor at Fashion Institute of Technology, on a recent SkillNet Webinar shared his own experience developing Mobile Applications for ABC Carpet and Home in New York City:

“Before the Pandemic, ABC Carpet and Home saw some customers wanting an option to be able to schedule an appointment and potentially initiate a video chat, online or through an app, with associates. Buying a $15,000 sofa or a $50,000 carpet is a major purchasing decision and anything we could do to facilitate the decision making process was seen as a win for the customer, sales associate and our bottom line. The Pandemic just pushed the adoption of this technology.” Professor Steever also added, “I think tools like this that are flexible and adaptable are very important in this age of COVID 19 because we don’t know when or where the next hot spot will come up. The good news is that we know this long-term investment and current adoption will give ABC a competitive advantage.”

Recent earnings reports seem to support this correlation between an enhanced customer experience and better financial/operational performance as shown by three customer engagement leaders:

  • Target: enhanced mobile apps, fulfillment and loyalty program
    • Q3 2020 saw digital sales grow over $2B and drive-up service grow over 500% in Q3
    • 20% increase in same store sales with 3% decrease in starting inventory for Q3 2020
    • 75% of digital orders were fulfilled by stores in Q3 2020
  • Walmart: enhanced mobile apps, fulfillment and new subscription program
    • Curbside projected to drive over $7B in sales and account for 33% of digital sales in 2020
    • Average basket size for curbside pickup were double that of in-store baskets
    • Q3 2020 saw the number of transactions drop by 14%, but average ticket increased by 24% and eCommerce was up 79%
  • Kroger: enhanced mobile apps and fulfillment
    • Q3 2020 saw 108% digital sales growth and 10.9% comparable store growth
    • Expanded to 2,213 pickup locations and 2,468 delivery locations, covering over 98% of Kroger households
    • Estimates that 50% of online revenue is coming from competitor’s customers

In conclusion, investments in customer engagements definitely pay off for retailers and, in today’s world, pay off quickly. The good news is that it is never too late to start. Given the speed with which technology changes can be implemented to support both digital and in-store experiences today, retailers will quickly see the benefits of innovation in improved financial and operational performance.

Watch the Webinar on customer engagement – Real Engagement is the new normal

Retail Spending is up 24%, if you are not seeing a bump you may have a long-term customer problem

This is the first of a series of 4-blogs (Read Blog 2, Blog 3, Blog 4) from SkillNet on how Modern Commerce Leaders have used technology to digitally transform their retail businesses to adapt to the New Normal. This ability to adapt, gives these brands a competitive advantage. While the blogs are connected each of them can be read independently.

Up through the Fall of 2020, the economy looked like it was approaching a “New Normal” of economic activity. However, pessimism based on poor holiday sales and political unrest has countered the optimism coming from new stimulus spending and vaccines. Uncertainty continues to be the defining term for 2021. In this blog, we will discuss where we are on the path to the New Normal, and how retailers can support customers changes in behavior.

First question we all have is “Has the bleeding stopped?” According to TrackRecovery.org, consumer spending in week ending January 17, 2021, was up 6.5% over same time period in 2020. Driven by $600 stimulus checks, retail spending was up 25%. Consumers have dramatically shifted spending from Entertainment, Travel, and Restaurants to Essential Retail and eCommerce.

Consumer Spending up 6%; retail spending up 24.5%

Source: TrackRecovery.org

Given this situation, if your business is not seeing a rebound in Sales, you may have a problem, in that your customer may have made a long-term behavioral change. These changes can be as simple as your customer still buying your product but just not coming into the store (reducing add-on sales), to your customer finding more convenient options from your competitors. Kroger reported in their 2020 Q2 earnings call that they estimate 50% of their new digital customers are coming from their competitors.

With this consumer behavioral change, not only does a business have to worry about  competitors, but also whether they have lost the traditional add-on opportunities in the urgency of making the shopping experience safer. When adding functionality online, retailers may have neglected to identify opportunities to replace the incremental sales normally associated with in store traffic. Traditional merchandising and pricing techniques, which offers add-on sales opportunities, just may not work if the customer is not walking your aisles, end caps, shelves, tables, four ways, or seeing your accompanying promotional signage.

I was recently on a call with a Midwest Essentials Retail client, and one of the initiatives they have undertaken to address this uncertainty, is to partner with SkillNet to improve customers mobile shopping experience and to offer additional customer engagement functionality that not only mimics in-store experience, but in many circumstances enhances on it. This functionality includes additional fulfillment options, appointment scheduling, loyalty program, inventory availability, personalized marketing and an enhanced consumer shopping experience.  

What will help retailers regain lost sales is identify what has changed in their customer’s journey. One of the ways to identify this is through financial modeling by analyzing traffic and average order values, by channel, pre-2020 and post-2021. Using technology to bridge the gap and to enhance customer experience will go a long way in deepening customer engagements and help getting the dollars back while enabling growth.

Watch the Webinar on customer engagement – Real Engagement is the new normal

Custom mobile check-in app helps James Avery keep customers safe

“SkillNet designed and implemented a bespoke mobile check-in application for James Avery that allows stores to better manage customer queues. This application allows customers and store personnel to maintain social distancing practices and adhere to COVID-19 regulations.”

James Avery Artisan Jewelry is a vertically integrated, family owned company located in the heart of the Texas Hill Country. They are a multi-channel retailer with 94 James Avery stores in four states. Their jewelry is also available in more than 215 Dillard’s stores in Texas and in 28 additional states; and nationwide through JamesAvery.com. Their jewelry is crafted in Texas workshops in Comfort, Hondo and Kerrville with the finest materials sourced worldwide.

On March 18th, James Avery Artisan Jewelry temporarily shut their retail stores to help slow the spread of COVID-19.  Select stores reopened on May 22, in accordance with Texas Gov. Greg Abbott’s recommended health protocols.

“We’ve missed our customers over the past eight weeks and we’re ready to begin calling some of our retail associates back to work after extensive furloughs in March,” James Avery CEO John McCullough said in a media release. “We’ve heard from our customers that they are ready to come back to our stores and we want them to know their shopping experience will be different as we continue to monitor safety protocols and adapt to the current situation.”

Each store is strictly following state guidelines as well as any additional local or county requirements for reopening in the community.

Care, concern and safety of associates and guests is a cornerstone of our business and we remain diligent as we work to reopen our retail stores,” McCullough said.

With the reopening of the stores, James Avery needed an easy to use yet enterprise ready mobile application to help them manage and maintain social distancing in their stores per state regulations regarding occupancy limits.

Their initial solution to address the issue, was to simply break out scraps of paper and give out numbers like in a deli. Of course, this experience was far from ideal as it wasn’t in alignment with their corporate culture and brand. James Avery prides themselves on the customer experience they offer and a hastily scribbled number on a scrap of paper just didn’t make sense. There had to be a better way to manage the customer queue to ensure that everyone in the store felt safe and not bunched up next to one another.

SkillNet’s approach to developing a bespoke mobile check-in application started with multiple functional design workshops. The result of these collaborative workshops was a series of Agile user stories that defined the benefits of the mobile check-in application. Then, the SkillNet team designed an enterprise architecture that securely integrated all the data points required by the user stories. The backend was built using Spring Boot in a Docker container.

As James Avery rolls out their bespoke mobile check-in application, store associates and managers are finding it very easy to use with little to no training. The application is helping stores to manage and maintain their customer queues during busy times keeping customer, and themselves, feeling safe as they shop for artisan jewelry from James Avery.

By keeping the development process open and transparent to James Avery, SkillNet was able to produce an application that exceeded initial expectations. Using Agile methodologies kept all stakeholders in the loop at all times and made sure that the solution not just met current requirements, but as an enterprise class application on a modern architecture, it is ready to adjust quickly and easily as new requirements arise.

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Seamless omnichannel experience

Enabling 2X growth in online sales for Mid-west Retailer with seamless omnichannel experience

Brief

SkillNet streamlines auto-parts lookup and appointment scheduling for highly successful regional retail chain. Customers can now order tires and schedule appointments for tire change in a single transaction on their phones. The improved customer experience has resulted in doubling the growth in online sales for the Tires & Automotive division.

About the client

The client is a privately held company, operating 45 large format stores in the US mid-west. Since 1955, it has been the go-to store for hunting and fishing equipment and licenses, small appliances, housewares, automotive goods, apparel, hardware, lawn and garden supplies, paint, pet supplies, sporting goods, tools, and farm supplies.

From the beginning the client has been committed to honesty, integrity and value. Its stores are an intrinsic part of the local community.

Challenge | Uneven customer experience on auto services web pages

Most of the Client’s locations have a tire center, convenience store, and car wash. As part of the services of the Tires and Automotive department, customers could order tires and make an appointment for a car wash and tire servicing online.

Many of the customers were unable to complete the transactions due to various challenges in the ordering process. Customers who were able to schedule their appointments received their confirmation by phone. This meant that there was a time lag in the entire process.

The Client team realized that the uneven customer experience could impact their value commitment to customers. They decided to partner with SkillNet to review the online ordering process and redesign the web site to enable a seamless customer experience.

Solution | Integrating parts/tire lookup and service scheduling into auto services web page redesign

The SkillNet team had to consider a number of issues while designing the new online experience for tire ordering and appointment scheduling. The first was that none of the other functionality on the live site could be impacted, even though data had to be consolidated and fetched from external sources. Secondly, the main reason for the uneven experience was the lack of information regarding the availability of parts and tires when scheduling the servicing. Thirdly, this was atypical of an e-commerce order flow – “without shopping cart payment”, the site could not combine the process of tire purchase and other item purchases.

Given that more than 50% of the transactions were made from mobile phones, the SkillNet team proposed a solution with a Mobile first approach. The solution also recommended the integration of appointment scheduling system and Year Make Model Engine (YMME) system into the retailer’s website. The process of lookup, quote, and appointment process was also seamlessly merged and they were able to do away with the call center since confirmation was available as part of the web site transaction. This resulted in a simpler business process.

Results | Seamless omnichannel experience enables growth in online auto services

With the new solution, there was a dramatic reduction in bounce rates, 30% increase in the time customers spent on the website and 60% reduction in the number of people leaving the site without making appointments. The entire process of making and confirming appointments for tire selection and car washing was now a seamless experience on the Client’s website.

The availability of real-time inventory lookup also enables client to dropship tires to customers, thereby reinforcing their value commitment.

All product names and trademarks are property of their respective owners.

Meet SkillNet at NRF 2020 booth #1334

NRF (National Retail Federation) is the biggest global industry event for retail with 40k+ attendees and 800+ exhibitors. As always, NRF2020 will be held at Jacob Jarvits NYC location from Jan 12-14, 2020. According to NRF, it is the must-attend week where retail movers and shakers from around the world come to learn, share, collaborate, network and inspire. SkillNet will be in presence again this year. Come join us, at NRF booth #1334 and learn how we are transforming retail. 

We will also host our annual customer appreciation event “Spark” on Jan 13th. Spark is an invitation only event where SkillNet’s past, current and future customers come together to network and exchange experiences in a fun, informal setting.

Visit_SkillNet_NRF_Booth_1334

For invitation reach out to us at http://www.skillnetinc.com/contact/

SkillNet exhibiting at NRF2019 : Jan 13 – 16, NYC

The world’s largest retail conference and expo is here again. NRF 2019 is expected to bring together over 38,000 attendees, including over 10,000 international attendees, to discuss the latest in retail tech, strategy, leadership, economy and many more topics.

SkillNet will be co-exhibiting at the event with its strategic partner Oracle Retail. Meet us there!