Data & Analytics Archives - SkillNet Solutions

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

AWS Cloud re-engineering for Modern Commerce in the age of COVID

In Partnership With Amazon Web Services

Companies are accelerating the move to the cloud of more of their critical business applications. However, lift and shift strategies don’t maximize value and pure microservices approaches are not practical for most organizations without very significant investment.

In this webinar, we will cover practical reengineering examples in AWS to help retail and hospitality organizations increase the value of their migrations to the cloud. Including:

  • AWS Guidance Patterns for Migrating your existing POS solution
  • Extending omnichannel capabilities in AWS
  • Creating new customer journeys leveraging  your existing applications and AWS

Accelerating Retail decisions with real-time data

Brief

Europe’s largest health and well-being retailer accelerates the pace of retail business decision making by implementing a data lake to enable stores to respond in real-time to customer needs.

About the client

The client is Europe’s largest health and well-being retailer of branded and own-label products across a wide range of vitamins, supplements, specialist food, sports nutrition, and ethical beauty. Founded in 1870, they focus on making people healthier and happier, operating more than 1300 stores worldwide as well as an expanding e-commerce business.

Challenge | Continuous product innovation requires real-time data

The client constantly innovates to meet customers’ needs, whether it is ethical sourcing or digital transformation to provide a world-class shopping experience. Continuous product innovation requires the client to better harness their data in real-time to make decisions such as refilling store inventory to avoid stock-outs, product manufacturing batch-sizes, offering new discounts, promotions, and customer rewards.

The business decision making was based on spreadsheets using data collected in silos from diverse systems and sources such as stores, audited sales, online sales, and SKU/stock data. This meant the process was slow (up to 48 hours to collect data), prone to mistakes (no single version of the truth), and not able to support business information requirements. This lack of real-time visibility was impeding the pace of innovation and customer responsiveness.

Solution | Improving business efficiency and customer experience through a data lake

After identifying the key business areas and decision insights required by client’s business finance teams, SkillNet created a data lake as the single source of truth by integrating data from multiple source technologies such as stores, audited sales, online sales and inventory. Using Oracle’s Business Intelligence platform, SkillNet automated data collation and report generation.

Hundreds of manual spreadsheets were replaced by automated reports that were run hourly, daily and weekly. Business users now have the ability to create near real-time visually impactful reports with self-service tools.

The solution enabled retailer’s team to gain visibility and proactive actionable insights across store systems and various lines of business.

Benefits | Making Better Decisions with real-time data

  • Availability of near-real-time (as compared to 2 or more days earlier) integrated data with automated reports
    • This has considerably reduced business decision cycles
    • Proactive decision making due to the business teams’ ability to generate user-friendly reports with near real-time data
    • Near real-time hierarchical store dashboards (Region, area, Store) and KPI reports on sales, ACT, conversion, engagement and loyalty participation
  • Dashboards with deeper data insights have helped the client’s business & store teams uncover newer insights
    • More informed decisions regarding inventory, discounts, shrinkage, product scan data and channel resulting in better responses to customer requirements.
    • Teams are being able to view sales data in near real-time and be more effective in their stock allocation and replenishment
    • Reduction in thefts and shrinkage
  • Regional Managers were spending ~15hrs per week on analysing and customizing reports. They now spend time with Area Managers and Store Managers to drive store performance

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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!

Are you ready for GDPR? We can help.

Iain Long, SkillNet’s Sales Manager for Europe and Africa, sheds light on the looming EU General Data Protection Regulation deadline and shares how SkillNet’s “2-week Rapid Assessment of GDPR Compliance” can help retailers understand how their enterprise and compliance approach stack up against these regulations in our latest Thought Leadership Blog.

Read the blog.

NRF Protect EXPO 2017

Join SkillNet at NRF Protect 2017! We will be on hand discussing how retailers can minimize losses and protect profitability with Oracle Retail XBRi Loss Prevention services from SkillNet. SkillNet offers Loss Prevention Consulting, Implementation, and Training services to help you protect profitability and secure your future.

DATE

June 27-28, 2017

LOCATION

Gaylord National Harbor
Washington, D.C.

DETAILS

The NRF Protect Loss Prevention Conference is, ‘the largest, most important retail and restaurant loss prevention event in North America.’ The conference is especially for those who protect retail brands, assets, people and profits bringing together LP, asset protection, internal audit, ORC investigators, risk management and retail operations professionals responsible for securing retail’s success.
#NRFPROTECT

Related Resources

DATASHEET

Download: Datasheet for SkillNet Oracle Retail XBRi Loss Prevention Services