This article first appeared in the Winter issue of The Record
In a perfect world, retailers build flexible product assortments that can be adapted to new trends and tailored to suit unique customer preferences across all their store locations and sales channels. However, unlike some aspects of retail planning that are predominantly guided by data analytics – such as inventory management – assortment planning remains a largely art-based process driven by the unique knowledge and the instincts of merchandisers and buyers.
In this series of articles we’ve explored a technology inclusive approach to innovating around the friction points of achieving business goals. While each innovation might be targeted at an individual success metric, there is an approach that can generate improvements across multiple areas. The mass merchandise segment is the best place to understand how friction points cross the boundaries of multiple business goals.
I asked Jason Morris, vice president of store retail technology at Walmart, to explore the concept of distilling business needs, identifying friction and innovating in a multi-channel environment. Jason has participated in delivering many innovations in his 16 years at Walmart.
“Much of our innovation focus is aimed at removing friction via the injection of streamlined process and value into the digital interactions we have with our customers,” says Morris. “The traditional retail paradigm – where the customer enters the store, shops, loads their cart, then unloads their cart and waits in line to checkout – ultimately drives the experience in the direction that is easiest for the retailer. Friction occurs because the needs of the retailer take precedence over the way the customer truly wants to engage. Today’s customers want a process that is easy and frictionless from their point of view. Innovating around that means thinking about the areas we need to address to integrate the way we work into the lives of consumers.”
“The initiatives we’ve been putting in place – such as Walmart Pay, Online Grocery, Site to Store, Self-Service Lockers, Same-Day Pick-Up, and forthcoming innovations in other areas of our stores – are all focused on reducing friction, increasing customer value and improving the experience by meeting customers on their terms.”
Improving tools for associates is also an essential part of delivering that seamless experience. “Over the last 12-18 months we’ve gone through a mobile reinvention of the tools our associates use in stores, to help them do things like manage inventory, understand where customer orders are in the pipeline, and identify which customers have checked into the store through the mobile app to pick up their online orders.”
Delivering that experience is an incremental process that will involve adjustments to existing assets and a focus on innovation as the company moves forward. “The vision that we have simply cannot be enabled in one leap with the technology that exists today,” says Morris. “Rather than sitting back and waiting for that technology to be available, we’re partnering with major technology companies like Microsoft to build out solutions and make it happen. For example, we’re doing exciting work with imaging and cameras, we’re leveraging cloud computing, and we’re making good progress in using the internet of things (IoT) to enable us to manage the environment so that, as we transform the customer experience, we have telemetry for all of the components.”
Morris believes that an innovative approach is essential to success in meeting critical goals such as brand loyalty. “Traditionally people think of loyalty as a monetary benefit – the company gets information about the customer, who gets a discount or promotional offer that is marketing-centric,” he says. “We are looking at this differently and believe other ‘currencies’ like improved time efficiency and customer experience are key to ensuring customers keep coming back. Customers expect to get what they want on their terms – for example services like Uber mean you don’t have to worry about reserving a car, queuing for a taxi, or even paying at the end of the journey because it’s all done through the app. The retailers that have the most touch points with the consumer, and that provide the best offering at the best price in a way that fits into the customer’s lifestyle, are ensuring affinity to their brand.
“What we’re doing with grocery home shopping is a good example of that. For a busy family, grocery shopping on the weekends is a low priority from a time management perspective. Enabling them to open up an app and arrange to collect their shopping on their way through town allows them to fit the grocery shopping into their lifestyle.”
As well as helping to drive loyalty, this focus on the customer experience requires a non-segmented approach to multi-channel that helps to improve shopping convenience and increase frequency. “At Walmart, while we appreciate the nuances of each channel, we don’t necessarily look at it in a segmented way. Having a truly customer-centric approach means the customer gets to choose how and where they engage with us, not the other way around and as long as they continue to do that in an ever increasing way, that’s success.”
Customer-focused innovation for efficiency is also contributing to price competitiveness. “We’re looking at it from the perspective of how we drive greater economy for the customer, better self-service, and greater efficiency from an operational point of view,” explains Morris. “As we enable more consumers to easily serve themselves – whether through our in-store pick-up kiosks, self-service returns or a greater degree of self-checkout – that drives efficiency. This efficiency allows us to continue to invest in lower prices and to redeploy our labour force in a way that increases customer value and delight.”
Innovating at the point where friction keeps you from maximising business outcomes takes commitment and vision, but it’s an essential part of meeting the needs of customers in the digital age. Every friction point that is removed provides a smoother pathway to achieving key retail goals, improving the digital relationship and making truly customer-focused retail a reality.
Vic Miles is a global account manager at Microsoft