Rise of the Retail Robots

Robo-ClerkFRUSTRATED WITH STORE EMPLOYEES? Maybe a mechanical clerk is the answer.

The retail industry today is making some fascinating, promising, and perhaps troubling moves toward the routine use of autonomous robots in human environments. The efforts seem energized by technical advances, affordability gains, and increasing wages for their human counterparts.

“Everybody is beginning to talk about robotics as a way to remove labor from the system,” said David Marcotte, a senior vice president with consulting firm Kantar Retail, a friend of this blog, in an interview in the Star Tribune newspaper.

As a confirmed sci-fi geek (occasionally prone to paranoid fantasy), I’m both fascinated and a bit leery about this development. There’s little doubt, however, that the robots are coming to retail from numerous directions.

Tenser’s Three Laws of Retail Robotics:

1 – A retail robot may not harm, mislead or impede a shopper, or, through inaction, allow a shopper to fail to complete a sale or have an otherwise poor experience.

2 – A retail robot must faithfully implement the merchandising plans given it by retailers except where such orders would conflict with the First Law.

3 – A retail robot must encourage and protect the sale, as long as such protection does not conflict with the First or Second Law.

(Adapted with great reverence from i Robot, by Isaac Asimov.)

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Independent Grocers – 3 Ways to Gain a Trade Promotions Edge

NGA, LAS VEGAS – When it comes to capturing their fair share of impact from trade deals, independent grocers have long struggled to match their crosstown, big-chain rivals. Scale is a key challenge. The effort and resources required to identify, negotiate, accept, implement and publish a single promotion are the same, whether the execution is for 12 stores or 1,200.

Big chains may spread these tasks across more hands, but they also suffer from promotion practice logjams and disconnects that may tend to neutralize their advantage, due to versioning complexity, duplication of effort, review and rework.

Make the Effort-to-Benefit Ratio Work for You

The opportunity is open for smaller retailers – who are inherently more consolidated, nimble and fleet of foot – to gain an edge in the promotions game. It comes down to defining and enabling promotion practices that permit streamlining and collaboration across the enterprise. Independents should explore three areas of present opportunity:

  • Streamline and connect your processes. Neutralize the scale advantage by making promotion decisions faster and adopting disciplined executional processes that offset the differential effort. Use automation to reduce and simplify steps and ensure that correct information is in play across functional areas of your business. Harmony is enabled when you successfully align the creative process with the business decisions.
  • Collaborate within your enterprise. Structure your ad process for collaboration and design connectivity throughout the lifecycle of each promotion, from planning, to execution, to measurement. Establish a consistent workflow with roles defined, assigned and tracked.
  • Collaborate with your vendors. Establish a portal-based system that transfers responsibility to vendors to enter complete information about each offered deal and makes it better for them to do so. Online accuracy will make faxes, emails and paper forms a thing of the past. Negotiations and decisions will commence faster while minimizing the need for reviews, changes and reconciliations.

These trade promotion management capabilities are enabled by software solutions but rooted in best practice. They are quite readily available now, and adopting them can be far less disruptive than you might think, especially where web-based technology is available.

The right promotional tools and processes can enable independents to exploit their natural advantages to win with shoppers and capture a fair share of deal profits.

© Copyright 2014 James Tenser
(This article was originally commissioned by Aptaris LLC. Permalink. Republished here by permission. All other rights reserved.)

The End of Loyalty

Tom Fishburne cartoonIF IT EVER WAS, it’s fading fast. I’m talking about shopper loyalty and the card-based frequent shopper programs that try to pass as loyalty builders.

I’ve long been a skeptic about the premise of customer loyalty. Card based programs are more about behavioral modification, segmentation and targeting. In many instances — airlines come to mind — the net result is the cultivation of dis-loyalty and skepticism, as a consequence of added complexity, suffocating rules, suspect prices and incentives that many users can never achieve.

Now comes news that the Kroger supermarket chain has begun converting its frequent shopper card holders to a smartphone app. This is news with big numbers behind it, as 96% of Kroger shoppers presently possess a card. Its personalized marketing subsidiary, dunnhumby, is surely driving this action.

This morning, the good folks at RetailWire.com asked its distinguished BrainTrust panelists: “Will Kroger’s App Replace its Loyalty Card?”  Here’s what I had to say about it:

Welcome to the post-loyalty era.

Card programs are not quite obsolete, but they are about to be absorbed by mobile apps. While a front-runner such as Kroger/dunnhumby may be able to convert many shoppers to its proprietary app for a while, the lasting future will be defined by electronic wallet solutions that aggregate frequent shopper plans, coupons and payments on the shopper’s terms. NFC communication with the POS will likely be a key enabling technology.

An observation: The pure value of of frequent shopper data is approaching its zenith. It now diminishes slightly in relative significance as the volume of social media interaction grows. This is the mind-bending next stage in behavioral-based marketing: Things people do, say and experience outside the store may soon eclipse what happens within the four walls.

For retailers that have steadfastly bucked the loyalty-card trend (like Walmart), this may be a moment of affirmation. Or maybe they just got lucky.

© Copyright 2013 James Tenser

In-Store Sensing Tops Online Metrics

I POSTED THE FOLLOWING commentary this morning on RetailWire.com as part of a discussion, Can Online Shopper Metrics Be Brought to Stores? I believe online innovation has influenced expectations in the bricks and mortar world. Now stores are poised to deliver sensing that online players can’t ever provide.

I must disclose a recent, prior influence. This post appears just a few days after I made a very informative visit to eTailWest in Palm Springs. Talking with vendors on the exhibit floor, I was struck by their degree of online-only thinking. Innovative analytics tools abounded, but bricks & mortar perspective was in relatively short supply. Since 90% of retail sales still take place in stores, some balance is in order.

Here’s my take:

Online metrics have certainly raised the bar, but in-store sensing will bring its own particular nuances—in some ways surpassing online practices.

The In-Store Implementation Network identifies five senses of in-store: Demand, Items, Messages, Employees and Shoppers. DIMES is part of this 2011 workshop. If you are in a rush, click forward to slide #22:

Tracking shopper movement within the physical store is only one element of the Shopper term of the equation, as I see it.

The present discussion drills deeper into shopper data alternatives—to consider whether tracking mobile phones is a better choice versus analyzing security video versus installing special-purpose video networks versus tracking transponders mounted on shopping carts. (Have we totally given up on electric eyes and grad students with clipboards?)

Further choices include: Do we analyze whole paths or stick to zones? Do we infer shopper demographics from video images? Do we mesh tracking data with POS transaction data?

However data is captured, appropriate analytics must be applied to extract managerially useful insights. The outputs must be timely and in a format that is accessible to decision-makers.

This is a lively sector for our business. With many competitors vying to be the industry standard, I can only offer some general advice:

#1 – Don’t assume comprehensive understanding of your shoppers based solely upon path tracking data
#2 – Never install more technology than is needed to achieve the desired objective
#3 – Expect best practice to change rapidly in this arena
#4 – Results will vary a lot based on channel of trade

[Tenser excerpt from “Can Online Shopper Metrics Be Brought to Stores?” discussion on RetailWire.com, Feb. 5, 2013.]
© Copyright 2013 James Tenser
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