October 3, 2006
Chain Store Age: Store-Level Success Stories
By Deena M. Amato-McCoy
Through special arrangement, what follows is an excerpt of a current article from Chain Store Age magazine, presented here for discussion.
Retailers are integrating information technology (IT) into business strategies to operate companies more efficiently and to establish a point of differentiation in a very saturated
marketplace. By educating store-level associates about how IT actually supports store-level operations, chains are improving customer service and the overall shopping experience.
Two separate events at Target illustrate the point.
After having trouble locating a window treatment at his local Target, an industry colleague (an executive at a supply chain vendor) enlisted an employee to hunt down the treatment.
He learned the item was not in stock, but thanks to a process called “vendor-managed inventory [VMI],” customer demand ensured a shipment was arriving by the end of the week.
The associate helped my friend order the item and then began “educating” him about VMI.
During my own recent Target visit, I asked an associate to help me locate YoBaby yogurt for my daughter. It was out of stock, but the associate said, “We know the product will
be here tomorrow. We use an automated replenishment process and the product is delivered every Friday.” He then gave me a layman’s lesson on this practice.
Sure, many chains will read this and say, “Our associates do that.” Others, however, need to ramp up their employee-education practices.
My local supermarket recently failed the customer-service test. While searching for Johnson & Johnson Baby Wash, a hole on the shelf sent me to the customer-service desk.
Here, the associate logged into the store’s inventory-management system that revealed a case should be in the back room. Upon asking her manager about the product’s availability,
he matter-of-factly answered, “I have no idea.”
In an era where data is available at a moment’s notice, this answer was unacceptable. Not to mention, how can store employees learn to use technology to improve the shopper experience
if the manager is uninterested? Clearly, this “leader” should take a lesson from his more tech-savvy employees.
These examples are not the best or worst in customer service. However, as more chains educate associates about how to utilize enterprise technology at store level, these examples
will serve as my benchmarks going forward.
Discussion Questions: What lessons are there to be learned from the Chain Store Age article? What benefit is there to having associates educate consumers
on how they solved a customer service problem such as locating a product that is out-of-stock?
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Mega dittos on the comments regarding the pitfalls of educating the CONSUMER vs. just getting succinct answers to them. It reminds me of a top retailer pet peeve often expressed to us during our vendor assessments; getting the “boat sunk in the harbor” story from a rep, followed by a hopeful guess as to when quantities will be available, etc. via multiple phone calls and emails. Why should any customer have to endure such a process run-through? The real challenge, even for retail associates armed with specific data, is to proactively bring that information to shoppers before being asked (not everyone thinks to ask “when?” They just leave the store). One bad example was a Target employee who told me a few weeks ago (after I asked) that she knew the entire accessories portion of the current Go International (Paul & Joe collection) was “somewhere in the back room,” that she looked for it daily “when she had time,” but hadn’t managed to find it and put it out over a three week period. There the 90-day-and-counting planned obsolescence program sat – all apparel, no accessories. Sell-through reports for that store anyway will clearly show that accessories were in the store and not selling!
A positive example? The new prototype Sam’s store right here in NWA. Never have I seen such an army of informed Sam’s employees seeking out customers to facilitate sales. I was approached several times and asked if I was finding everything and if I had any questions. As for the MSO’s that were directly interfacing with customers, particularly in CE/higher ticket items, not a value-added effort!
More than simply IT education, this issue is about providing employees immediate access to product information.
In a competitive marketplace with fickle customers, availability is a growing issue and it needs a resolution. Many retailers are moving to CAO systems that link to store-specific inventory planning. But in the interim, one effective way to keep customers informed is with employee knowledge of product delivery schedules. This could drastically reduce the level of defectors due to stock-outs.
I recently worked with a retailer who uses handheld scanners in their stores. Once a product is scanned, the employee has access to instant sales analysis, inventory on hand and frequency of delivery. This provides instant information using Wi-Fi technology to ensure store teams have the data they need. Employees are in better control of product availability issues and customers stay more satisfied.
The key to success with customer service is education. It is not technology, nor is it being able to share with the customer why a system works to fill their need. Instead, it is educating the associate so that they know how to fill that need and can do so when called to task by a customer. Each of these examples relates to a customer’s need being met (or not). It was not the technology which met the need, or the explanation of how technology could meet the need, but instead the follow-through of the employee which ensured that the customer was satisfied and that their needs were met. This could easily have been done if there had been no technology involved; so long as the employee determined what the customer wanted and filled that need. This is considered good employee customer service and reflects an employee who has been properly trained on placing the customer’s needs ahead of their own.
Store level IT integration is clearly the wave of the near future. Now, do customers really want to know all about your automatic replenishment system? My guess is they don’t. They just want the product the replenishment system ought to have on the shelf if it’s working properly. Hard to get a customer all pumped up about the wonders of an inventory management system when the item they came to the store for is out-of-stock.
I’m not sure there are tremendous benefits to having store employees educate customers about PLU and replenishment systems. What a customer wants to know is whether the store has the product and, if not, when the store will have the product. Understanding how the employee gets that information is less important than having employees who can and will get the information and work to solve the customer’s problem.
Big box retailers are farther along this curve, for the most part. Small box retailers need to move along much faster. The challenge is the training hurdle. The labor costs to educate employees in a small box (which can mean, e.g., double staffing during periods when normally only one employee would be in the store) can be significant. Add this type of training on top of all the other training small box stores do or need to do, toss in employee turnover, and the costs skyrocket. Small box retailers need to determine how to provide the training and customer service while keeping labor costs at a manageable level.
Numerous times I’ve asked store staff when an out-of-stock item is expected. Retailers with transparent, accurate supply chain systems impress customers when the staff can reasonably answer questions. Most retailers don’t use transparent supply chain systems, so their staff can only shrug. Both the staff and the customers are demeaned. Even worse: systems with unreliable data causing customers and staff to get angry when a promised item is late. Rarest of all: a chain retailer whose staff can see a screen that tells which nearby store has the sought-after item.
Often times it is not just the end customer who has interaction with a store-level associate that could be well-versed in the IT infrastructure. Rather, it is the army of store-level merchandisers, niche product sales staff, brokers, and regional territory managers who are compensated by the supplier on the retailer’s compliance in having promotions put out on time, correct signage, etc.
Visibility of in-stocks, on order quantities, in transit quantities, and on hand quantities is vital when these reps come into a store to ensure the customer is not disappointed. The most successful reps are those who build relationships with department managers that reward the rep with real-time statistics that can be acted upon instantly.
It appears that the points being made here are: some stores are using inventory management systems to get product to customers faster, to advise customers of availability dates, and to make these a customer service differentiator.
Well, okay. This seems a bit basic to me. Having items in-stock, and being able to find the desired items, are two of the core customer expectations in retail. This has been true for decades. Many stores have been using computer systems (“information technology”) to try to meet these expectations for a long time. These expectations are not met well overall, and even in the best cases, there are at least 15 percentage points of improvement available. I would think that this, too, is known. I can see that having an employee tell you about “VMI” might in some cases interest a customer and in other cases repel a customer; this is no different than many non-core expectations where some customer like it and some don’t.
It seems to me that the media carry these type of articles quite often. I’m curious what store executives think of them. Do these articles give the industry important information or incentive for improvement?
For anyone who may have doubted that we are now in the age of truly empowered shoppers, the stories here aptly confirm the “power shift.” Ten years ago, not many shoppers would bother asking when an out-of-stock product would be replenished, or whether the item might be available at, or via, another store. Today, as consumers, we not only routinely ask the questions, but we demand satisfactory responses. As others have already pointed out, most shoppers don’t care about the systems that support the supply chain; they just want to know when, where, and how their intent to purchase can be completed. There is no question that real time inventory data at a granular level (i.e. sku level/by store, warehouse, in-transit, etc.) is needed to respond satisfactorily to the empowered shopper’s questions. It’s equally vital to effectively and accurately detect/predict patterns of purchase activity at the same level of granularity (i.e. by store/by sku) and correlate in real-time with inventory information to increase the frequency of satisfactory responses … sounds like a “demand-driven supply network” to me!
I think Race’s commentary is appropriate. There is no “insight” in stating that visible supply chain information empowers employees to communicate effectively with customers. There is no “insight” in stating that training is required in order to act up on the information empowerment. Most major retailers either have visibility to supply or are getting there. Most major retailers probably trained everyone on the new systems, and may even have well written manuals for new employees post-integration.
Potentially, the “insight” may be in seeing this as further evidence of the need for a paradigm shift in the distinction called “customer service.” The interactions noted, and anecdotes given are all the very last step in a very long chain of human behavior, all of it influenced by how that retailer and its stakeholders have chosen to understand “customer service.”
The inescapable fact for most retailers is that providing effective and efficient customer service requires a “breakthrough”…a result previously thought to be impossible. Technology, training and other “how to” processes are only part of the challenge. They are the “content” of the paradigm shift, but not the “context” in which it takes place. All the tweaking in the world, all the new technology in the world and all the training in the world will not deliver the outcomes required short of an organization-wide paradigm shift around “customer service.”
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Mega dittos on the comments regarding the pitfalls of educating the CONSUMER vs. just getting succinct answers to them. It reminds me of a top retailer pet peeve often expressed to us during our vendor assessments; getting the “boat sunk in the harbor” story from a rep, followed by a hopeful guess as to when quantities will be available, etc. via multiple phone calls and emails. Why should any customer have to endure such a process run-through? The real challenge, even for retail associates armed with specific data, is to proactively bring that information to shoppers before being asked (not everyone thinks to ask “when?” They just leave the store). One bad example was a Target employee who told me a few weeks ago (after I asked) that she knew the entire accessories portion of the current Go International (Paul & Joe collection) was “somewhere in the back room,” that she looked for it daily “when she had time,” but hadn’t managed to find it and put it out over a three week period. There the 90-day-and-counting planned obsolescence program sat – all apparel, no accessories. Sell-through reports for that store anyway will clearly show that accessories were in the store and not selling!
A positive example? The new prototype Sam’s store right here in NWA. Never have I seen such an army of informed Sam’s employees seeking out customers to facilitate sales. I was approached several times and asked if I was finding everything and if I had any questions. As for the MSO’s that were directly interfacing with customers, particularly in CE/higher ticket items, not a value-added effort!
More than simply IT education, this issue is about providing employees immediate access to product information.
In a competitive marketplace with fickle customers, availability is a growing issue and it needs a resolution. Many retailers are moving to CAO systems that link to store-specific inventory planning. But in the interim, one effective way to keep customers informed is with employee knowledge of product delivery schedules. This could drastically reduce the level of defectors due to stock-outs.
I recently worked with a retailer who uses handheld scanners in their stores. Once a product is scanned, the employee has access to instant sales analysis, inventory on hand and frequency of delivery. This provides instant information using Wi-Fi technology to ensure store teams have the data they need. Employees are in better control of product availability issues and customers stay more satisfied.
The key to success with customer service is education. It is not technology, nor is it being able to share with the customer why a system works to fill their need. Instead, it is educating the associate so that they know how to fill that need and can do so when called to task by a customer. Each of these examples relates to a customer’s need being met (or not). It was not the technology which met the need, or the explanation of how technology could meet the need, but instead the follow-through of the employee which ensured that the customer was satisfied and that their needs were met. This could easily have been done if there had been no technology involved; so long as the employee determined what the customer wanted and filled that need. This is considered good employee customer service and reflects an employee who has been properly trained on placing the customer’s needs ahead of their own.
Store level IT integration is clearly the wave of the near future. Now, do customers really want to know all about your automatic replenishment system? My guess is they don’t. They just want the product the replenishment system ought to have on the shelf if it’s working properly. Hard to get a customer all pumped up about the wonders of an inventory management system when the item they came to the store for is out-of-stock.
I’m not sure there are tremendous benefits to having store employees educate customers about PLU and replenishment systems. What a customer wants to know is whether the store has the product and, if not, when the store will have the product. Understanding how the employee gets that information is less important than having employees who can and will get the information and work to solve the customer’s problem.
Big box retailers are farther along this curve, for the most part. Small box retailers need to move along much faster. The challenge is the training hurdle. The labor costs to educate employees in a small box (which can mean, e.g., double staffing during periods when normally only one employee would be in the store) can be significant. Add this type of training on top of all the other training small box stores do or need to do, toss in employee turnover, and the costs skyrocket. Small box retailers need to determine how to provide the training and customer service while keeping labor costs at a manageable level.
Numerous times I’ve asked store staff when an out-of-stock item is expected. Retailers with transparent, accurate supply chain systems impress customers when the staff can reasonably answer questions. Most retailers don’t use transparent supply chain systems, so their staff can only shrug. Both the staff and the customers are demeaned. Even worse: systems with unreliable data causing customers and staff to get angry when a promised item is late. Rarest of all: a chain retailer whose staff can see a screen that tells which nearby store has the sought-after item.
Often times it is not just the end customer who has interaction with a store-level associate that could be well-versed in the IT infrastructure. Rather, it is the army of store-level merchandisers, niche product sales staff, brokers, and regional territory managers who are compensated by the supplier on the retailer’s compliance in having promotions put out on time, correct signage, etc.
Visibility of in-stocks, on order quantities, in transit quantities, and on hand quantities is vital when these reps come into a store to ensure the customer is not disappointed. The most successful reps are those who build relationships with department managers that reward the rep with real-time statistics that can be acted upon instantly.
It appears that the points being made here are: some stores are using inventory management systems to get product to customers faster, to advise customers of availability dates, and to make these a customer service differentiator.
Well, okay. This seems a bit basic to me. Having items in-stock, and being able to find the desired items, are two of the core customer expectations in retail. This has been true for decades. Many stores have been using computer systems (“information technology”) to try to meet these expectations for a long time. These expectations are not met well overall, and even in the best cases, there are at least 15 percentage points of improvement available. I would think that this, too, is known. I can see that having an employee tell you about “VMI” might in some cases interest a customer and in other cases repel a customer; this is no different than many non-core expectations where some customer like it and some don’t.
It seems to me that the media carry these type of articles quite often. I’m curious what store executives think of them. Do these articles give the industry important information or incentive for improvement?
For anyone who may have doubted that we are now in the age of truly empowered shoppers, the stories here aptly confirm the “power shift.” Ten years ago, not many shoppers would bother asking when an out-of-stock product would be replenished, or whether the item might be available at, or via, another store. Today, as consumers, we not only routinely ask the questions, but we demand satisfactory responses. As others have already pointed out, most shoppers don’t care about the systems that support the supply chain; they just want to know when, where, and how their intent to purchase can be completed. There is no question that real time inventory data at a granular level (i.e. sku level/by store, warehouse, in-transit, etc.) is needed to respond satisfactorily to the empowered shopper’s questions. It’s equally vital to effectively and accurately detect/predict patterns of purchase activity at the same level of granularity (i.e. by store/by sku) and correlate in real-time with inventory information to increase the frequency of satisfactory responses … sounds like a “demand-driven supply network” to me!
I think Race’s commentary is appropriate. There is no “insight” in stating that visible supply chain information empowers employees to communicate effectively with customers. There is no “insight” in stating that training is required in order to act up on the information empowerment. Most major retailers either have visibility to supply or are getting there. Most major retailers probably trained everyone on the new systems, and may even have well written manuals for new employees post-integration.
Potentially, the “insight” may be in seeing this as further evidence of the need for a paradigm shift in the distinction called “customer service.” The interactions noted, and anecdotes given are all the very last step in a very long chain of human behavior, all of it influenced by how that retailer and its stakeholders have chosen to understand “customer service.”
The inescapable fact for most retailers is that providing effective and efficient customer service requires a “breakthrough”…a result previously thought to be impossible. Technology, training and other “how to” processes are only part of the challenge. They are the “content” of the paradigm shift, but not the “context” in which it takes place. All the tweaking in the world, all the new technology in the world and all the training in the world will not deliver the outcomes required short of an organization-wide paradigm shift around “customer service.”