Once upon a time, the retail calendar centered itself on the Christmas season. Now, the retail surge is year-round. Not just the wave of traditional seasonal holidays from Valentine’s Day to the 4th of July, but also newer sales holidays, such as Cyber Monday, or even holidays created by some gigantic companies themselves, like Amazon’s Prime Day.
Now, instead of a steady pace leading up to a frenzied December, retailers are in sprint mode all the time. This new “always on” sales calendar affects sales in a way that has changed the very nature of retail and its preparation.
“How an organization builds its architecture, builds its infrastructure, from a retailer perspective, used to be very cyclical,” according to Leslie Lorenz, Industry Principal, Retail GTM at Snowflake. “Now, you need to have architecture that’s just consistently good. You’re feeding the beast while you’re in competition mode.”
Just like you wouldn’t make much progress in the gym without a workout plan, to keep your retail infrastructure in tip-top shape for this year-round race, you need a good training regimen. Here’s one suggested by Karen Rhodes, Account Chief Technologist at Hewlett Packard Enterprise, with some color commentary by other experts in “retailer fitness.”
1. Take your measurements
Shelf inventory, supply chain structure, units in warehouse, speed of delivery, costs, online conversion rate: Rhodes advises you to think of these as your weight and body measurements. You’ll see progress more clearly if you know your starting point.
Speed and accuracy have long been important retailer goals, but today’s customer expectations for speed are particularly acute, and speed can apply almost anywhere.
“There is now a need to be able to respond to customer demand more quickly,” said Lorenz, “whether that be in product availability, product placement, or even agility in marketing campaigns and marketing channels to meet customer expectation and channel touchpoint requirements.”
2. Set your goals
Where do you want to see improvement first? You can’t work on everything at once, so choose a focus, and set a measurable and achievable target.
According to Rhodes, customer insights are particularly fertile ground for working out, as more data and better analysis tools become available.
“With things like omnichannel optimization, understanding the demographics of who’s buying is important,” said Lorenz. “Understanding the seasonality, whether it’s a major holiday, online, or in a brick-and-mortar store, can help shape what product you’re putting into what store or warehouse. It helps you to make sure that you’re getting the product to the customer when they’re expecting it.“
All of that can be measured, and what is measured can be improved.
3. Establish rewards
Hitting goals in a retail context is less like lifting weights by yourself and more like strength training as a member of a sports team.
“This is hard work, and you will need everyone pulling for the same goal. This is much easier if there are clear rewards in it for them. Include everyone in this reward,” said Rhodes.
4. Choose your gear
Determine what equipment is available to achieve your goals.
For example, video analytics is a popular technology for quality and service assurance. It might help you spot slowdowns in the movement of goods, or it can be used to track and understand in-store customer behavior. On the other hand, Rhodes said, what this tool doesn’t give you is supply chain flexibility.
Machine learning or AI remains a top priority for retailers across many tool categories. Right now, many retailers are grappling with the “build versus buy” decision in regards to AI tools, according to Kurt Lacy, Hewlett Packard Enterprise’s Hybrid Chief Technologist. You can purchase a retail AI solution from a vendor or you can develop one that is specifically tailored to your needs.
It’s worth grappling with this decision, rather than burning money and time on the wrong tools. “I find that most people jump into a solution before they understand the problems they’re trying to solve,” said Lacy. “So they’re not successful overall.”
He offers a quick list of questions to ask before writing a check to an AI vendor:
- What solutions are on offer?
- What potential use cases do they solve?
- Do you have some of those common use cases in your organization?
- Would you see the benefit of those solutions being implemented?
5. Understand your failures
When you fail—and you will, Rhodes said—ask why you failed. Then try another approach.
“Grit is great, but failing fast is better when you are just getting started,” she said.
Data science is terrific for analyzing failure, and customer service—or customer complaints—is an excellent place to glean the necessary data.
Take sentiment analysis, for example. Natural language processing applied to surveys, reviews, and social media can yield insights into what people think and how they feel, as well as how to respond most effectively.
“Now, the retailer can immediately reply back and go, ‘Thank you so much for telling us that our bathrooms are dirty. We’ve done a deep clean. We are scheduling a new cleaning service to come in. We really appreciate your loyalty in letting us know this. We can only be better with your help,’” said Rhodes.
Similarly, data science can help unlock pricing and stock problems.
“You’ll notice the secondary tier of sales, those designed to eliminate stock after the holidays, are essentially going away,” said Rhodes. “That’s a positive thing—they’re using data science to determine how to sell those products, saying, ‘This is the type of apparel that sells at this ratio, in these sizes, in these colors, in this particular store.’ And then they’re supplying that.”
6. Set new goals every six months
Rhodes suggests using the SMART methodology. Do this in writing and make it public for everyone to see. Have another group evaluate your success every six months. There’s your workout accountability.
7. Thank everyone when you are successful!
“When you do an analytics project, it may be the person in the proverbial mail room that gives you the key piece of insight,” said Rhodes. Make sure to not only provide them with rewards you identified, but also share credit and gratitude.
“You will need them again for the next six-month objective.” she said.
Hit the showers, come back tomorrow
All of this is easier for retailers with mountains of cash—like the beefier sorts at the gym, hoisting huge plates on the leg press. But what’s a smaller retailer to do?
Simple: Keep going to the gym. (Simple is not the same as easy.)
“Start small, deliver value early and often, and focus on what’s going to be the best and highest business value,” said Lorenz. “Prioritize what you’re working on based on what’s going to deliver the highest business outcome you can deliver against. Pick your battles.”