I’m at the National Retail Federation Conference in New York City where I had the opportunity to meet with and hear from some executives and employees from some of the world’s leading retailers such as Best Buy, Macy’s, Ann Taylor, Container Store, Disney Store, Morris Home Furnishings, Kroger and many others. I can safely say that based on what I have seen and heard, overall, collaboration in the retail industry is minimal. In fact, one major executive at a large retailer referred to what he wanted to do with customers as, “build a better mouse trap.”
Collaboration in the Retail Industry
Now, when I talk about collaboration I’m referring to both internal and external collaboration, the fact is that it doesn’t really exist in the retail industry. Sure, there are some companies such as Best Buy that are getting more involved, but even they are only able to get 2,000 out of over 180,000 active employees collaborating internally.
Externally Best Buy has also launched their successful Twelpforce initiative to provide customer service through Twitter. Examples such as Best Buy are few and far between and even Bill Hoffman, the senior VP of Consumer Insights said that “Best Buy still has a long way to go.” But, they have started and they are moving in the right direction. Admittedly, Bill also said that Best Buy has failed 26 times in the past and finally succeeded at attempt number 27. The good news is that social media and collaboration are both definitely hot topics of interest amongst the retail community; the bad news is that interest doesn’t drive action.
Editor's Note: Also read Retailers Struggle with Mining and Managing Unstructured Social Customer Data
Connecting Collaboration and Customer Experience
Almost any retailer you ask will always say that the customer experience and service is one of the key factors of making a sale. Yet, many retailers fail to make the connection that collaborating with customers (and employees) and servicing them through social channels does improve the customer experience and service.
My favorite concept or idea came from the CEO of The Container Store, Kip Tindell, who said that at his company they always put employees before customers. At first this might seem a bit counter intuitive but when you think about it the employees are the one’s driving the sales and building the customer relationships. If you keep your employees motivated and happy then they in turn will reciprocate that to the customers.
So why should the retail industry as a whole place a greater emphasis on collaboration? A few reasons:
- Collaborating with suppliers and manufacturers can dramatically improve overall supply chain efficiency and forecasting. Oftentimes what a retailer might project and what a supplier might project are very different things. Collaboration in the supply chain for the retail industry can have a dramatic effect on cutting costs and increasing overall revenue.
- Employee collaboration will uncover valuable customer insights directly from employees. Best Buy for example receives thousands of customer insights every week from engaged employees that share direct customer feedback, ideas and insights.
- The social customer has the ability, the desire and the means to share their experiences and feedback in a very public way; both the negative and the positive. In an industry where experience and differentiation is key, retail stores can’t afford to ignore the voice of the customer.
- Customer data is now immense; you can connect with your customers in a very personal and a very real way. When someone purchases a product from a store, a retailer can easily identify and connect with that customer through various social channels they belong to and offer relevant and unique promotions based on the social data. Of course, along with immense data comes the necessity to process and act on that data.
- Paco Underhill, famed consumer behaviorist and researcher stated that it usually takes consumers around 3 steps to purchase a product, the first two are focused on scouting, reviewing and comparing; the final step is the purchase. What’s interesting though is that the first two steps are now being conducted online through consumer reviews, online videos, mobile devices and customer communities. The purchase at this point is becoming more of a formality. Nowadays, when someone comes into a retail store, chances are they already know what they want, how much it will cost and what the pros and cons of that product are. Think of purchasing a car as an example, you can do all of your research online without ever having to speak to a sales rep.
- Mobile technologies are becoming the standard. Chances are that virtually every single consumer that comes into a retail store has a cell phone, and many of those are smart phones where consumers have the ability to snap photos and post the pictures to Facebook or Twitter, scan the barcode of your product to compare prices at other stores (with apps such as Red Laser), check in via geo-location devices to let people (including you, the retail store) know when and where they are as well as what they are looking for, or more recently; purchase a product at the store, directly from their phone. The flip side is also true where employees are going to become more mobile, serving customer through iPad devices that directly connect to inventory and purchase systems while being able to capture valuable customer information.
I could go on and on about why collaboration is not just necessary but crucial for the retail industry but it’s up to the retailers to make this happen. And in case you’re wondering if there will be failures, the answer is yes!
Dan Heath, the author of “Switch,” and “Made to Stick,” provided a very apt analogy which was, walking. Dan suggests that we should celebrate failures and the analogy he uses is a baby learning to walk. When babies learn to walk they always fall down many times and parents always encourage the baby to get back up and try again. Imagine if the baby fell down and the parent said, “well, guess that kid isn’t meant for walking, hope he learns to do something else such as play the piano!”