Thursday Apr 10, 2014

Stage Stores Rounds-up

Steven Hunter, SVP and CIO at Stage Stores, said something at Oracle's recent Industry Connect conference that caught my attention.  He was retelling a story about how Stage Stores customers, communicating through social media, said they wanted to make donations to charities at the point-of-sale.  So Steve implemented round-up functionality that allowed donations to several nationwide charities.  The program was good, but not great so they went back to social media to receive additional guidance.  This time they swapped the nationwide charities for local charities and donations rose by 600%!

There are a few lessons to take away from this story.  First, listening to customers is important and never easy.  Social media can be a big help, but sometimes it still takes experimentation to find the right solution.  Second, customers want to be charitable, but they want to be involved in the choice of charities and prefer local organizations that directly impact their communities.

Donating to worthy causes feels good, so why not associate that feeling with shopping?  The donation jar by the register has been around forever, but it presents issues for security, counting/reconciling, and lack of audit trail.  So retailer's have a couple requirements for taking donations at the register:

  • Must never increase checkout time.  Long lines are bad news for retailers.
  • Must be integrated into the payment process, without requiring prompts from employees that are awkward for both parties.
  • Must be electronic, so theft is minimized and there's no overhead for counting.
  • Prefer to give customers a choice of charities, so they get a say in where their money goes.
  • Prefer configurable charities, that are local and can be changed to align with events.
  • Prefer to provide receipts for donations, so customers can collect them and take deductions at tax time.

Based on these reasonable requirements, ARTS developed an integration standard that aims to reduce the cost of integrating the POS to "charity processors," the third-parties that process donations for retailers. Greg Buzek, who is very active with his own charity, quickly calculated that 1.4 million POS registers were represented by the companies involved in creating the standard,  Just imagine if each one of those collected $10 a day for a year.  That would be $5 billion, significantly more than what's collected today, for those in need.

Using the standard, Oracle Retail has integrated its POS with Mini-Donations as a proof-of-concept to show what's possible.  As more retailers follow Stage Stores' lead, vendors will incorporate the interface into their POS and e-commerce offerings, making it easier for retailers to adopt the practice.  Then retailers can strengthen the bonds with their customers and community, and reap the benefits that follow.

Tuesday Oct 01, 2013

Five Ways to Seed Innovation

So you're a retailer and you want to plant the seeds of innovation at your company.  Where do you get started?  Here are 5 suggestions:

1. Find sources of inspiration

You and your team need to be exposed to many ideas from lots of different industries. Its unlikely a perfect solution to a problem will drop in your lap -- more likely you'll see how someone in a similar industry solved a similar problem, and you'll be inspired to do the rest.  I follow general technology sites like Mashable, TechCrunch, Ars Technica, The Verge, ReadWrite, and MIT Tech Review and look for applicability to retail.

You can also get a good understanding where technology is going by reviewing ARTS blueprints, analyst briefings, and industry publications like Retail TouchPoints, RIS News, Chainstore Age, Retail Wire, and Internet Retailer to name a few.  These organizations do a good job of staying current with the happenings of both retailers and vendors in the industry.

Its also important to cultivate ideas within your own organization.  At Oracle Retail, we have a yearly science fair in which employees form teams and are given time to build out ideas and experiment.  I've also been invited to retailers' "vendor innovation weeks" where various vendors are invited to pitch ideas.

2. Set aside resources to experiment

Many retailers have decided to acquire a start-up to form an internal lab where engineers are free to experiment with new ideas.  Others create a rotation of engineers through lab assignments to spread wealth.  Whether there are dedicated or ad-hoc resources, the important thing is always be testing new ideas.

3. Establish partnerships

Vendors, especially start-ups, want to partner with retailers to test ideas.  Its important to cultivate partnerships with regular meetings and occasional proof-of-concepts. You can get access to multiple start-ups by staying in touch with venture companies, or attending conferences.

4. Streamline processes

Its easy enough to plant the seed, but existing processes are sure to strangle any seedling.  Some amount of capacity needs to be set aside to cultivate ideas when they spring up.  Forcing someone to create a huge marketing pitch and wait six months for hardware will not advance the cause.  Make it easy to start, pivot, and if necessary, fail fast.

5. "Non-stupid vs. brilliant"

I was once discussing innovation with Jerry Rightmer in a bar in San Francisco when he said something that has stuck with me.  Paraphrasing, he said it wasn't necessary to have a brilliant idea, only a non-stupid one.  If the idea has any merit, then follow the thread and see where it leads.  From one idea, many others may sprout with a little investment.  Failed projects are full of valuable learnings and will likely lead to better ideas in the future.

Monday Sep 30, 2013

Standards Accelerate Innovation

At the beginning of the US Civil War there were over 20 different railroad gauges in use across America. That meant railroad cars could only travel on the track with a matching width thus limiting how far cars could travel.  For example, in 1853 there were three different gauge tracks leading into and out of Erie, Pennsylvania where a booming business grew for workers to unload cars on one track and transfer cargo to cars on a different track.  It was clear this approach wouldn't scale in our westward expansion so in 1862 Congress specified a standard gauge for railroad tracks.  During the spring of 1886 the standard was adopted across the US thus freeing minds to solve more important problems.  Instead of researching ways for cars to adjust their wheels to fit different gauge tracks, the industry focused on other aspects of improved transportation. Standardization frees capital for additional innovation.

The Association of Retail Technology Standards (ARTS), takes a similar approach.  One of its goals is to standardize the way in which we handle data so retailers can focus their limited resources on innovations that more directly impact consumers. Retailers spend far too much time integrating systems instead of adding features.  (Sometimes integration can be the innovation, but often times its just the cost of doing business.)

There's a three-stage cycle I've observed.  Typically an idea emerges, adoption begins, its standardized, then we move on to the next idea.  Its a cycle where the idea gets optimized and standardized for mass consumption.  Standardization reduces costs thus freeing resources to work on the next great idea.  In the case of the railroad, we don't really care if the gauge is 3 feet or 6 feet.  The important thing is that we all agree on a standard (by the way, the standard is 4ft 8.5in or 1435mm) and move on.  The earlier we agree on a standard, the less rework that must be done down the line (11,000 miles of track had to be fixed in the South to match the standard).

The Technology Adoption Lifecycle depicts how new ideas are adopted by the masses. (This was extended by the book Crossing the Chasm by adding a gap between the Early Adopters and Early Majority.)  The graph is depicted below along with ARTS inputs.

ARTS provides whitepapers, blueprints, and webinars that inform retailers and help the industry cross the chasm.  When its clear the industry is interested in adopting an idea, ARTS creates database and XML standards that lower the cost of adoption thus making the idea more affordable for smaller retailers.  To help the late majority, ARTS creates Request for Proposal (RFP) templates, training, and appears at conferences to tout the idea and best-practices for its use.

As you can see, ARTS helps retailers take advantage of emerging technologies at various stages of adoption.  Membership and participation in ARTS is open to both retailers and vendors that want to be on the forefront on innovation.  I've certainly found it a valuable resource over the years.

Thursday Aug 09, 2012

Integrated Mobile Initiative Launch

Back in 2009, ARTS (a division of the NRF) began to collect information on the use of mobile devices in the retail industry.  A committee was assembled consisting of retailers, vendors, analysts, and standards organizations for the purpose of authoring the first retail-specific whitepaper addressing mobile marketing, mobile commerce, mobile payments, and mobile operations.  The tremendous reception of document led to a second version that followed in 2011.

As mobile continues to gain momentum in retail, the NRF has now established the Integrated Mobile Initiative (iMi), an effort aimed at providing crucial resources to retailers for all things mobile.  Today a portal (www.nrfmobile.com)  was launched where all the NRF's information on mobile can be easily found.  This includes research, articles, whitepapers, and webinars.

Expanding upon the previous Mobile Blueprints, ARTS has published the Mobile Integration whitepaper on the new portal.  This document is available for download and explains how existing standards can be leveraged to integrate mobile applications into a retailer's existing business processes.

The upcoming ARTS User Conference, September 30 to October 2, is a gathering for experts to exchange ideas about mobile retailing and more.

Tuesday Jul 03, 2012

Social Analytics and the Customer

Many successful retailers put the customer at the center of everything they do, so its important that the customer is modeled correctly across all their systems.  The path to omni-channel starts and ends with the customer so at ARTS, our next big project is focused on ensuring a consistent representation of customers across our transactional data model, datawarehouse model, and XML schemas.  Further, we've started a new whitepaper that describes how Big Data and Social Media Analytics should be leveraged by retailers to add and additional level of customer insight.

Let's start by taking a closer look at the meaning of social analytics.  Here's my definition:

Social Analytics, in the retail context, describes the analysis of data obtained from social media sources in an effort to better comprehend and interact with the community of consumers.  This discipline seeks to understand what’s being said by the community about brands and products (“monitoring”), as well as understand the behaviors of those in the community (“profiling”).  The results are used to enforce the brand image, improve product decisions, and better focus marketing, all of which lead to increased sales.

To help illustrate the facets of social analytics, I drew the diagram below which was originally published by Retail Touchpoints.

There are lots of tools on the market that allow retailers to monitor social media for brand and product mentions.  These include analysis of sentiment, reach, share of voice, engagement, etc.  When your brand is mentioned, good or bad, its an opportunity to engage with the customer and possibly lead to a sale.  Because products are not always unique, its much more difficult to monitor product mentions, but detecting product trends early can help a retailer make better merchandising decisions, especially in fashion.

Once a retailer understands what's being said, the next step is learn more about who's saying it.  That involves profiling customers beyond simple demographics to understand their motivations.  Much can be learned from patterns, and even more when customers voluntarily share their data.  Knowing that a customer is passionate about, for example, mountain biking allows the retailer to make relevant offers on helmets, ask for opinions on hydration, and help spread marketing messages.

Social analytics has many facets that benefit retailers, some of which are easy but many of which are hard.  Its important for the CMO and CIO to work closely together to plan for these capabilities and monitor the maturity of tools on the market.  This is an area that will separate winners from losers.

Wednesday Jan 11, 2012

ARTS Social Retailing Blueprint

At ARTS, we focus on helping retailers succeed with using technology.  Technology can be a competitive advantage, but it can also hold companies back if its allowed to grow stale.  Its important for every retailer to stay abreast of emerging technologies, and understand how adoption may or may not benefit the business. Using social media is the latest topic being addressed by ARTS.

The ARTS Social Retailing Blueprint is a 143-page whitepaper that describes the use of social media by the retail industry.  It includes ten specific tactics, examples of those tactics in use, and suggestions on organizational alignment.  The document was written by representatives from the following companies: 8th Bridge, MicroStrategy, Verizon, Cisco, IBM, Oracle Retail, Versatil, Epson, SAP, Pier 1 Imports, Meru Networks, Red Prairie, Safeway, Criti, Cellpoint Mobile, and Push Science (in no particular order). 

Below is my favorite part of the blueprint, a summary of the ten tactics on a maturity scale.  Retailers should first determine which of the ten tactics makes sense for their business, then for each tactic there are varying levels of maturity.  Retailers will ideally start with the Novice level and grow to the right toward Advanced.

If you're having trouble reading this eye-chart, click here for the raw version in which you can zoom.

At the ARTS User Conference last year, I delivered a presentation on the Social Blueprint which you can find here. Two other great articles are at the NRF Big Blog and RIS News.

There is no perfect recipe for social retailing, so its necessary for each retailer to experiment to find what works for them.  Also, set realistic expectations for your social media efforts.  Its unrealistic to think you'll substantially increase sales by creating a Facebook page, for example.  Social media campaigns are an investment in your relationship with your customers, so give it some time to grow and strengthen.  There is great potential for a relatively small investment.

Monday May 16, 2011

Social Blueprint for Retail

The Association for Retail Technology Standards (ARTS), a division of the NRF, has three primary objectives for helping retailers: build standards, produce RFP templates, and educate.  Lately I've been focused on the education aspects, helping with the SOA Blueprint, Mobile Blueprint, and Cloud Computing whitepapers.  Our next endeavor will be a whitepaper that discusses the use of social media in retail.

This will be an interesting project since social media is relatively young and fluid.  In my discussions with retailers, most generally understand the value of mobile right away, but the jury is still out on social.  Therefore, this paper will focus on classifying the different types of social media campaigns and programs, examples specific to retail, and advice on ways to get started.  Regular readers of this blog know there are many interesting examples, and retailers will benefit from having them easily accessible in a single document.

Unlike the NRF Mobile Blueprint, this project is sponsored by ARTS and therefore requires ARTS membership.  Big names like IBM, SAP, Oracle, and Pier 1 Imports are already signed-on along with others to create a healthy mix of vendors and retailers.  If you are interested in joining ARTS and participating on the sub-committee, please contact Richard Mader (maderr@nrf.com).  There will be several conference calls leading up to our next face-to-face in Minneapolis, July 25-27.

About


David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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