Omni-Channel Retail Forum Breakfast – April 2016
Our latest Omni Retail Forum breakfast kicked off with a summary from our last meeting.
Last time we discussed how if there are not sufficient data scientists we must invest in AI. But a colleague from KPMG demonstrated how mining existing data is able to produce stunning results. He cited the university student case study where analysis of behavioural and demographic data enabled them to predict student leavers 90 days prior enabling effective intervention.
In addition big data is able to provide great insight but is meaningless if the customers’ expectations, needs and wants are not fully understood so the right questions can be asked of the data. So it is not data but the customer journey experts who are king.
So for example, ThoughtWorks cite the ground breaking Domino’s Pizza – Pizza Mogul programme. It came not from the data but watching how customers engaged with the design your own pizza product. Customers were posting their designs on social media and winning followers. From this they developed the Pizza Mogul programme. Moguls create pizzas, promote them and receive a royalty for each pizza sold. Switching marketing to payment on results, transparent ROI and huge improvement on revenue and profit.
Key discussion points:
AI – Before developing AI there is a need to fill the holes in existing data but to maintain competitive advantage we will need to do both in parallel. The trick is how intelligent you are able to get with the data. Some roles like that of the merchandiser can be probably be better delivered by AI but never product design and customer experience design. One has to be guided by the customer experience before the data. There are only incremental improvements not great ah ha moments.
Behavioural changes – Pure play price comparison and insurance sites are capturing web behavioural data and use that to suggest the next product and predict renewals. This is where the value lies as the first years premiums are loss leaders. There is plentiful live social data that is easily available and predictive of behaviour. However, caution here as data protection is changing all the time and one may build something that is not freely available at a later date.
Online customers can become dehumanised, hosting research groups is a great way to understand their experience and the group discussion allows opinions and ideas to be built upon. Technology has to respond to changing behaviours not the other way round. In the past desk top design came first and mobile was then shoe horned to fit. Now it must be mobile first.
Customer insight – Data and technology is available to all but it is the customer insight that will inform the unique proposition, fulfilling needs, wants and desires. The best solutions have been developed from understanding the customers’ behaviours and needs. Even from a pure play services business, understanding how customers deal with the pile of papers sitting on the kitchen worktop provides the insight to develop new solutions and products, the one stop-shop. This qualitative data is researched from meeting and interviewing customers in shopping centres. This data cannot be universalised but it provides the insight for further data gathering.
Big data works but the best outcomes are when you talk to customers and understand their perspectives.
The human touch – The first issue is to understand what your customers actually want of your business. The USP is actually in the hands of the human interaction. People are actually the brand and bring it to life.
Within the logistics world all delivery drivers are remunerated the same way. What makes one driver more successful than another is the interpersonal contact the make with the customer. Feedback works as the best drivers get the most jobs. But these are the people typically described as unskilled, earning the least in society. But they have to be highly skilled in managing relationships.
Interesting that so many retailers outsource their brand to third party logistics firms when, the last and lasting experience the customer has of the retail brand, is the driver. The low cost model is unsupportable but most customers (especially under 25years) think that delivery is actually free.
Culture and retention of talent – A home delivery food business, having carved out a huge slice of the market is now losing staff. The energising agile start-up culture is replaced with process and structure. Retailers know their customers better than their staff. But it is the staff that are delivering and unique features of the brand experience so it may be prudent to invest more in staff.
A general merchandise, global, online retailer has a vision of the future that is totally data driven. Not a place where people say they want to work but will happily buy from. So is this disconnect going to be an issue in the future? Perhaps only if a competitor offers the same service levels and price, with added cultural values.
Digital tourism, a trip to Silicon Valley, was a great way of understanding different ways of working from start-up operations.
Leadership and ownership – Different models and owners will drive out different goals and outputs. Data can produce a long list of possibilities but the trick is to determine the right priorities and deliver. Creating the right culture for success is critical. Fail fast and learn fast.
Within the FinTech space there are multiple start-ups and many are being brought into large corporates to provide the innovation that they are unable to deliver for themselves. There is a commune model where complimentary providers get together to provide the most agile solutions.
The future – all of the above is fine as far as it goes but we are embarking on a paradigm shift. A generational shift from gen Z (born either side of 2000). They will represent 40% of consumers by 2020, have an 8 second attention span, spend 7.6 hours a day socialising and be umbilicaly connected to their mobiles (NY Futurologist).
In summary although everyone believes big data and AI are critical for future success, it is nothing without the customer insight on experience and journey – the quantitative and qualitative. In addition it is essential that the leadership creates and builds into the business the culture for innovation and success. Thus, we are left with the question of the impact of Gen Z, not to mention Gen-i, a whole new set of challenges and opportunities. Gen Z demand justice, authenticity and commune (McCann Erickson). How do businesses need to evolve to embrace and engage with the consumers of 2020?
This will be the topic of our next debate.
I am provisionally planning the next Omni Retail Forum Breakfast for October 2016, do let me know if you would like to join us.
Best wishes, Christine
Christine de Largy, Managing Director of Impact Executives, experts in interim management, is passionate about the digital transformation of consumer businesses. She hosts a retail forum to facilitate debate around the issues retail businesses today face and also sits on the management and advisory boards of IORMA, the International Omni-channel Retail Markets Association.
About Impact Executives Ltd Impact Executives is a leading interim management provider to organisations of every size in the UK and globally. Originally formed as a specialist practice within PA Consulting Group, over the past 25 years Impact Executives has helped over 2000 companies, including more than two-thirds of the FTSE 250 – find the very best executive interim management talent.
Clients choose to work in partnership with Impact Executives because of our proven ability to offer client’s immediate solutions to improve their organisation’s performance through identifying skills-gaps, business process reengineering (BPR), turnaround, restructure and growth.
With offices covering the UK, the Nordics, Europe, Asia Pacific and North America, Impact Executives is part of the global recruitment specialist Harvey Nash Group plc. Over the past 20 years we have given clients and interim managers the confidence that we have the resources, expertise and focus to deliver results – fast.
For further information on Impact Executives, please contact Vicki Ludlow, Impact Executives, Tel: 0044 20 7314 2011 Email: email@example.com
When: April 14, 2016
Where: Home House