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Five Truths for Building a Better Retail Organization

Guest Blog by Chip Averwater

A well-oiled, smoothly operating retail store is a beauty to behold. Its people are professional, they like what they do, their systems are efficient and reliable, the store is organized and everyone is happy with their transactions. People like doing business with them, and many do.

The keys to putting together such an organization aren’t secrets. Most retailers recognize them. Yet most of us struggle to get them right. Here are five of the “truths” of building a better retail organization:

1. A company is the people it hires.

Almost everything that happens in a store is through its employees – displays, selections, organization, sales and customer interactions. Good employees find ways to make the right things happen; poor employees find excuses to keep anything from happening. Our task isn’t finding people who will work for the wages – it’s finding people who will share our values and make the right things happen.

2. Employees want and need training, early and often.

A new hire is eager to learn and contribute; he just needs information. Give it to him quickly and he becomes a valuable team member, but if you make him wait, his enthusiasm and motivation will dwindle. Writing out operations and sales manuals makes them easily accessible. If you give them to new hires before they start on the job, they’ll learn them and thank you for the head-start. Ongoing training keeps skills sharp, updates information, reminds people of common goals and allows brainstorming for improvements.

3. Respect and recognition create commitment.

We don’t have to create motivation; our employees have it when they start. We just have to be careful not to kill it. Our responsibility is simply giving them the tools and information they need, then offering feedback and encouragement. Everyone wants to be recognized, respected and appreciated for what they do. Providing it costs us little and offers amazing dividends.

4. Only simple systems succeed.

We tend to overestimate the operating systems our people can remember and execute. Steps that seem obvious and simple to us as we design them are puzzles to those executing multiple systems on the diverse and busy frontline. When we see the same mistakes multiple times, the problem is probably not the people but the system. We have to design systems that are apparent to their users and easier to do correctly than incorrectly.

5. Everyone needs to see the scoreboard.

More important than what to do is why; it engenders a commitment that instructions alone cannot. When our people understand our goals and how we’re doing, they find ways to contribute. Progress and outcomes are easy to share as graphs and numerical comparisons. Financial statements are the ultimate feedback and are seldom as sensitive as we think.

We’re often pleasantly surprised at the many ways employees can help us reach goals they see and understand.

Chip Averwater is chairman of Amro Music Stores, Memphis, Tenn., and author of the book “Retail Truths: The Unconventional Wisdom of Retailing.” For more information, visit retailtruths.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

 

A Balancing Act: Merchants Struggle with the Fraud Prevention Equation

Guest blog by Jeff Liesendahl

Just think, not that long ago, a security guard positioned at the front door and a video surveillance camera were all merchants needed to protect their businesses.

How times have changed. With the rapid expansion of e-commerce as a profitable and oftentimes preferable way for merchants and customers to transact business, security and fraud prevention are clearly no longer as simple as a guard manning the front door.

Increasingly, merchants are realizing that finding the right balance of protection that enables fulfillment of legitimate customer orders while also flagging fraudulent ones can be a difficult task. Although too little protection can open the door to fraudsters, too much can frustrate customers to such an extent that they take their business elsewhere. As a result, finding the right level of fraud prevention has become core to merchant security efforts.

Accertify recently commissioned a study of U.S. consumers to see how people perceive and react to online fraud. We found that 28 percent of the American consumers surveyed have encountered a fraud protection system that unnecessarily delayed or denied their transaction. These results confirm what we’ve seen more and more in our own business: merchants falling victim to the misconception that overly rigorous fraud solutions are best for their business.

As consumers told us in our study, less is more. Interestingly, while being inconvenienced by a delayed or denied transaction may seem to be a minor nuisance, it’s actually a huge customer service issue. According to our research, consumers are less willing to give merchants a second chance after an experience like this, and frequently will take their business elsewhere.

More than 35 percent who reported encountering a delayed or denied transaction said they would penalize the business responsible by moving or consider moving their business to a competitor, while 11 percent immediately fled for competitors.

To protect against fraud while avoiding customer dissatisfaction, fraud prevention should be considered on a case-by-case basis, because not every business is subject to the same risks. With that in mind, a customizable platform that can be adjusted easily based on a business’ various sales channels, product offerings and other industry-specific risks will not only reduce the resources necessary to manage in-house programs, but also increase the speed and efficiency of the review process.

As consumers continue to flock to online payment channels, it is becoming increasingly apparent that they value the security of online transactions. Therefore, it is more important today than ever for merchants to have an effective yet balanced fraud prevention solution in place.

Although no fraud prevention solution fits all sizes, it is critical for the customer experience that merchants implement a flexible, customizable platform tailored to their specific business needs.

Jeff Liesendahl is president of Accertify, an American Express company. For more information, visit www.accertify.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

 

Home-Based Agents Provide Increased Service Quality and Lower Expenses for Retailers

By Rob Duncan

The Internet has made comparing prices before buying easy. Consumers love getting the best deals and are more price-conscious than ever before. Unfortunately, more comparison-shopping can mean lower profit margins and increased competition for many of today’s retailers.

Retailers must find new ways to operate faster and leaner. Every area of a retailer’s business is now under intense scrutiny, and divisions previously thought of as “expense” centers are being required to either generate revenue or be eliminated, including call center operations. To reduce cost without sacrificing service quality, many retailers are turning to home-based agents.

Whether it’s establishing an internal at-home workforce or partnering with a virtual at-home contact center service provider, home-based agents have been shown to save money through higher quality service, more efficient operations and higher revenues. Here’s how it works:

1.         Hiring From Anywhere. The virtual contact center employee model allows organizations to recruit and hire the best talent, wherever it may be located. This advantage is particularly appealing to retailers because it allows them to target professionals with specific relevant experience. For example, a retailer can hire agents who have purchased specific products online or shopped at certain locations.

2.         A Different Breed of Agent. With an average age of 40, more than 80 percent college-educated with 15 to 20 years of work and life experience, at-home workers tend to be more mature and empathetic. Connecting on a personal level with customers results in more efficient calls, higher first-call resolution rates and improved selling capabilities.

3.         Lowering Costs. Facility costs, furniture and fixtures, property taxes, utilities and physical security expenses can exceed $10 million annually for many large centers. Instead, modern technology and networks can be used to create a virtual call center environment. Using a secure desktop, phone and Internet connection, assigned agents are routed calls and have instant online access to all the necessary support resources.

4.         Staffing Agility. Unlike traditional brick-and-mortar environments, an at-home workforce is designed to meet the flexibility and scalability requirements of the retail industry. Whether it is ramping up for the holidays or handling variable call volumes, with home-based agents it is possible to adjust staffing levels in real-time to ensure calls are always answered quickly.

5.         Workforce Reliability. Dispersed at-home workforces and a flexible scheduling environment helps ensure that agents will be available to handle call volume fluctuations, preventing service interruptions in today’s highly competitive, 24/7 business environment. Flexing the workforce in real-time to handle call volume fluctuations helps keep service levels high, revenues up and costs down.

Businesses can lose up to 10 customers for every one that complains of poor service. By using highly qualified, home-based agents, customers will receive outstanding service, and retailers can maintain financial stability despite increased pricing pressures and competition.

Rob Duncan is COO of Alpine Access Inc., a contact center and customer relationship management outsourcer. For more information, visit the Alpine Access website at www.alpineaccess.com.

 

Out With the Old, In With the Heresy

The New World of Consumer Research

By Cliff Courtney

People make decisions on impulse. They decide what to buy with their hearts, not with their heads. So if you think for a second that you can quantify the emotional triggers of consumer behavior – the mysterious “why” people buy what they do – with traditional research, then perhaps it would be better to stand in a lightning field with a glass bottle and take your best shot.

The fact is, the only way to understand what makes people tick is studying them while they’re ticking, and that calls for dogma heresy. Specifically, in the same way that buzz or word of mouth is now an actionable media tactic, research, too, can integrate consumers and researchers in a more organic way.

Consider consumer hijacks, which allow you to take a customer who’s about to use your competitor’s brand – a restaurant or a store, for example – and incentivize that customer to sample your brand instead. Now you can capture real-time data from a rejecter. Or Red Light Project’s trademarked Ethnocepts, a hybrid of ethnographic research and intercepts that capture consumer insights from peer-to-peer dialogs instead of the more stilted consumer-to-researcher conversation. (The old clipboard has a nasty habit of turning into a barrier).

Also consider quality/quantity hybrids that allow you to collect real-time quantities in the file with tablets and smartphones. Finally, think differently about customer satisfaction surveys, where brands still rely on receipt-based web links – and yes, in some cases telephone-based systems – to gather data.

Data from consumers about meals they ate 30 days earlier are ineffective. Can you even remember what you had for dinner last night? The better way is real-time data collection, once again at the moment of truth, using SMS or QR codes for instant feedback and giving your customer an on-the-spot, redeemable incentive.

It is time to get heretical and demand more imaginative methods to research consumer behavior, because if you’re not measuring the moment of truth, you’re missing the truth altogether.
Cliff Courtney is currently the chief strategy officer for Zimmerman Advertising, Fort Lauderdale, Fla., and an adjunct professor at the University of South Florida. For more information, visit www.zadv.com.

 

Final Genetic Nondiscrimination Rules Took Effect in January

A Hidden Risk for Retail

By Susan Childers North

Smart retailers will periodically take a step back to contemplate their overall risk footprints. But naturally, the focus during such exercises tends to be on those risks that seem most immediate – fighting “shrinkage” by sticky-fingered employees, say, or finding ways to lower the number of lawsuits filed against the chain. Nonetheless, routine occurrences in retail – things like a manager asking a job candidate to fill out a medical questionnaire, or perhaps just walking in on a break-room conversation in which an employee gripes about her health – carry a hidden risk.

In January, the final provisions of the Genetic Information Nondiscrimination Act (GINA) of 2008 went into effect for employers with 15 or more employees. The legislation was passed amid heightened fears that genetic testing might result in discrimination in areas like employment and health insurance. Data covered under the act include medical information about fetuses, results of genetic tests taken by employees or their relatives, and family medical histories.

Under GINA, it is unlawful for employers to use genetic information as the basis for any form of employment-related discrimination. The regulations bar employers from requesting, requiring or purchasing genetic information about applicants or employees. How might a retail business receive such information in the first place?

Many job candidates are asked to fill out medical questionnaires or undergo exams, potentially yielding genetic information about candidates and their families. If an employee needs to take a medical leave, the retailer might receive genetic information through the required documentation. Likewise, medical and fitness tests administered through employer-sponsored wellness and fitness programs also can yield genetic information. Of course, a manager could certainly run across genetic information simply by walking in on that break-room chat.

Fortunately, GINA does provide for certain exceptions. For example:

• An employer will not be in violation if it inadvertently requests or receives genetic information about an employee or their family members. To satisfy this exception, employers must include specific language set forth in the regulations on its forms used to obtain medical information.
• An employer may receive genetic information as part of its voluntary wellness program, so long as the individual in question provides a knowing and voluntary written authorization.
• No GINA violation will exist if an employer requests family medical history to comply with certification provisions of the Family Medical Leave Act, comparable state laws and employer policies that permit the use of sick leave to care for oneself or a family member.

Retailers should keep all medical/genetic data about their employees separate from other information and strictly confidential. Last year, plaintiffs filed 245 cases under GINA, and this will likely increase in 2012. These regulations allow individuals to sue in federal court and to recover compensatory and punitive damages, injunctive relief and attorney’s fees. Retailers should review hiring policies and procedures, and evaluate all of their medical forms to assure compliance with GINA.

Veteran employment attorney Susan Childers North is a shareholder in the Richmond and Williamsburg, Va., offices of the national law firm LeClairRyan (www.leclairryan.com). She is also a co-chair of the firm’s Retail Industry Team.

The Evolution of the Omni-Channel

By Frank Riso

Retailing has evolved from single channel to multichannel. Now, multichannel is evolving further into the omni-channel, leveraging various customer touchpoints including mobile, social, kiosks, online, in-store, etc., to create a seamless customer experience that presents new opportunities for even more sophisticated targeting.

According to Motorola Solutions’ annual holiday shopper survey, retailers need to continue to address the needs of omni-channel shoppers. Online purchases swelled by more than 18 percent compared to 2010, and 63 percent of surveyed shoppers with smartphones downloaded some type of shopping application last year.

While this new model presents an opportunity, it also comes with an increasingly complex shopping experience that is changing consumers’ expectations and behaviors almost daily. Using the latest mobile devices, shoppers now have the ability to research, compare prices and make purchasing decisions while in-store, at home or on the go. Customers are more empowered than ever as they use smart devices to control where they get their information and whether or not they share their insights with others.

In order to survive, traditional retailers must embrace omni-channel retailing. They must turn shopping into an entertaining, exciting and emotionally engaging experience by blending the physical with the digital. The retailers who will gain an edge are those that take advantage of the latest mobile technologies.

Many retailers are incorporating innovative mobile solutions to help drive loyalty and convenience, while improving operations and the overall shopping experience. These cross-channel solutions include everything from inventory management solutions, integrated communication tools, self-service devices, personal kiosks and personal shopping devices.

With the right combination of technology, retailers can share, record and analyze data in order to evaluate and better understand buying behaviors. This knowledge can help fuel improvements online or in-store, resulting in fewer missed sales. In addition, the right self-service tools can provide customers with the information-rich experience of online shopping and even facilitate the checkout process.

The omni-channel is still evolving, and what we are seeing today is only the beginning. Technology is the enabler, and it will continue to change the fundamentals of retail. As we have seen, it has the power to reshape customers’ minds and influence how retailers construct their operations models. The retailer that can embrace technology and understand its tech-savvy shoppers will be the retailer that generates loyalty while increasing sales.

Read more about customer solutions for retail at www.motorolasolutions.com.

Frank Riso is the senior director of global retail solutions at Motorola Solutions.

Jurassic Park and The Lost World of Consumer Research

By Cliff Courtney

Why are we still doing the same research we’ve done for the last 50 years?

Eight strangers face each other around a table. The room is bland, except for a two-way mirror in the back that spans the entire wall. A pleasant enough moderator asks about a brand.

Let the post-rationalization begin! The consumers struggle to give intelligent responses to unanswerable questions. Why did you choose the Prego over the Ragu? How do you pick out a pair of pants? Is Chili’s salad healthier than Applebee’s salad? How do you feel about radial tires?

The consumers eyeball each other. This one is attracted to that one and is angling to make an impression. Another is a blowhard. Yet another is hesitant to speak up and another just agrees with the alpha in the room. Predictable group dynamics. And they all post-rationalize, trying to analyze decisions that they really made on impulse weeks, perhaps months earlier.

Welcome to the outdated, outmoded world of consumer research, i.e. Jurassic Park, where even many of America’s largest brands make billion-dollar decisions based on a handful of focus groups just like this one.

This is not entirely about the vilification of focus groups – they actually do have a place when certain group dynamics work in your favor. But more than 70 percent of consumer decisions are made at retail, at the shelf, where it matters. Nobody reaches for their wallet in a focus group, and that means measuring what happens at the moment of truth is all that truly matters.

By all means, whether you find value in intercepts, ethnographies or more modern methods that utilize “professional strangers” who mingle with consumers, make sure you qualify before you quantify. (After all, you can’t field a quantitative survey without knowing what to ask.) But if your research firm resorts to focus groups – even with jarfuls of M&Ms – or believes that calling home phones for a quaint survey is still a good idea – all from the same dusty playbook of traditional methods – alert your local paleontologist. Dinosaurs are on the loose.

Cliff Courtney is the chief strategy officer for Zimmerman Advertising, Fort Lauderdale, Fla., and an adjunct professor at the University of South Florida. For more information, visit www.zadv.com.