Subscribe

Share

Customer Experience

Strategic Evolution

Kohl’s takes a “test, learn, evolve” approach to optimizing the customer experience.

by Blair Campbell

November 2015

When Ratnakar Lavu started thinking about customer experience back in 2000, the new, disruptive technology was a little something called the internet. Today, as executive vice president of digital technology at Kohl’s department stores, Lavu is navigating “a whole new technology ecosystem,” with mobile, social, and chat shaping the retailer’s cutting-edge customer experience strategy—which includes an innovative, app-based loyalty program boasting 32 million members.

Snapshot

Kohl’s

    Headquarters: Menomonee Falls, Wisconsin

    Industry: Retail

    Associates: 140,000

    Oracle products: Oracle Endeca, Oracle RightNow Platform, Oracle Service Cloud

Ratnakar Lavu

Executive Vice President of Digital Technology

Length of tenure: Four years

Education: BS in computer science, Kumaraguru College of Technology; MS in computer science and engineering, Wright State University

Personal quote/mantra: “The world is changing fast. Embrace it and believe that you can make a difference.”

More

With an ever-growing number of customer touchpoints—and ever-increasing expectations about customer service response times and order delivery speeds—traditional retailers need to stay nimble, Lavu notes.

PN15-LeadingStrategies-pic

“Our focus is on how to make the customer experience in the digital environment simpler, easier, and more seamless,” he says. “To that end, we always ask why the customer is asking for customer service. Why are they engaging with us on social media? What wants and needs do they have?”

Lavu recently spoke with Profit about how listening to customers changed Kohl’s digital strategy, why keeping tabs on the industry is key to success, and what self-service enhancements can do for the bottom line.

Profit: How do you define innovation in the retail sector today?

Lavu: Being an innovation organization means constantly trying out new things that you think are important to your customer, or that your customer has told you are important to them.

The way to do that is either through experimentation—soliciting feedback from customers to see what they like or don’t like—or by testing new efforts in the marketplace and evolving based on success or failure. This constant focus on testing, learning, and evolving the model needs to happen so you are never caught not implementing things that influence your customer.

Our mobile app is a great example of this. We included a mobile wallet function within the Kohl’s app that allows customers to keep track of all offers within the app itself. That way, they don’t have to worry about forgetting a coupon, misplacing their Kohl’s Cash, or missing a savings opportunity.

Profit: What existing channels are being replaced by new channels, such as mobile?

Lavu: Phone and e-mail were the most-used channels. We’re looking at mobility, chat, and other technologies to enable a different type of interaction. In customer service, there’s a lot of focus on how to leverage digital to provide greater self-service so we can reduce calls and e-mails and continue to provide an easy shopping experience for our customers.

Profit: You have nearly two decades of experience in department store e-commerce. How has this influenced your digital strategy at Kohl’s?

Lavu: I’ve learned that you have to focus on the customer first. You have to understand data really well to create the best experiences for the customer. You must understand the data, and press for feedback and opinions. That’s number one.

Number two is working on innovation throughout the journey. In the ’90s, we saw an entire change in terms of the internet. More recently, we saw a complete change in terms of a new technology ecosystem. You cannot be stagnant—you have to constantly adjust with the customer.

Number three, you have to be agile. You have to continue to experiment, and you have to move fast. This includes testing things—certain strategies will work well, some won’t. And you have to be accepting of that and keep moving on.

Profit: How has your customer experience strategy evolved for the digital era?

Lavu: We have a lot more visibility into information. There are a lot of data points that enable us to understand what is working in terms of the customer experience and what is not working. We leverage all this information to make business decisions about which enhancements we need to work on, what we need to fix so our customers don’t have to call customer service as often, and we can address customer issues much more quickly.

And we have a lot more data about what customers are looking for and what they are purchasing. With this greater visibility, we can make decisions about how to organize our store in a much better way to provide our customers with the best experience.

Here’s a good example: At the time we did the original kohls.com website, we created some follow-up customer e-mails that were not clear. They didn’t always give all the product information within the e-mail. Some customers were confused about their purchase or shipment confirmation details. They didn’t know when their order was supposed to arrive.

We got that customer feedback and created e-mails that provided customers with the details they needed. So there wasn’t any confusion about what product they ordered, or about which products were being shipped to them in different shipments. And that has reduced costs significantly.

Profit: Where do you see new growth in interaction with Kohl’s customers?

Lavu: Customers continue to reach out to us on order-related and loyalty-program-related questions. We’re doing some additional work to provide customers with greater visibility and transparency so they will know that their order is coming soon—and they won’t need to call us as often.

In parallel, we rolled out a new loyalty program called Yes2You Rewards in October 2014, which can prompt new questions such as, “How do I find out how many points I have? Why don’t I earn points if I forget my loyalty card?” We’re looking at ways to simplify the program so that the customer clearly understands what is happening with their transaction and so the only question they have to consider is, “When will I receive my order?”

With Yes2You, we’ve launched a mobile wallet within the Kohl’s app. Customers can load their loyalty card in their mobile wallet and scan it at the time of transaction within the store. So the physical card itself may become less important.

Profit: What’s happening on the back end that is probably invisible to customers yet really affects service and operations?

Lavu: When a customer orders through digital channels, one of the big things that happens in terms of automation is determining the best place to source that merchandise to get the order to the customer in a more expeditious manner. The system automatically looks at our warehouses and Kohl’s stores to determine the best location to fulfill each order so the customer gets it quickly.

You have to understand data really well to create the best experiences for the
customer.”

Another area is personalization. In the past, we could send the same e-mails to all customers. Now that we understand the customer better, we’re able to automatically segment and deliver e-mails that are more relevant to each customer through our personalized e-mail initiative.

Profit: What role do Oracle solutions play in Kohl’s customer experience strategy?

Lavu: Oracle solutions support what I call the experience platform. That includes kohls.com, powering all the APIs we leverage to power our mobile and kiosks within the store. All the search functionality is powered by Oracle Endeca. For direct online customer service, we’re leveraging the Oracle RightNow Platform.

Profit: Why has Oracle Service Cloud been the right choice for Kohl’s?

Lavu: As the company grows, we need to think about where we provide the greatest value for our customers. It’s not in maintaining infrastructure and scaling our systems. That’s where we see the cloud playing a big role, scaling and managing infrastructure for us. That way, we can focus on offering customers the greatest value with functionality, features, and capabilities that enable the best experience with our brand.

Profit: How has social media changed customer service for Kohl’s?

Lavu: Social media is a big deal for us. Our customer service agents monitor our social channels regularly, and if a customer has an issue, agents are very quick to respond.

We also want to provide our customers with the ability to share information about our products, their shopping experiences, or things they like about our brand with their friends through social channels. We plan to provide the mechanism through our digital channels to share on sites such as Pinterest, Facebook, and Twitter.

Profit: Which trends do you think will have the biggest impact on Kohl’s in the future?

Lavu: The first trend is mobile. We think we have a lot of opportunity within mobile, and especially leveraging mobile within our stores, to create some amazing experiences for our customers within the store environment itself.

The second trend is personalization—continuing to evolve our old personalization strategy beyond e-mail so that we can provide a highly engaging personal experience for our customers at every touchpoint with our brand.

The third trend is the delivery network. The future is same-day delivery, or at least much faster delivery. We think there’s a lot of opportunity there, and because we have more than 1,100 stores, we think we can satisfy our customer needs much better than the competition.

I think truly understanding the data to provide both the right service and the most engaging experience for our customers is how we’re going to differentiate within the marketplace.

Action Items
  • Oracle Service Cloud
  • Photography by Shutterstock