Focus on: The Customer Experience

If there was a tagline for the 99th annual NRF Convention & EXPO, it would be “Hope Springs Eternal.” Just as Alexander Pope used the phrase to remind readers to rely on hope, upbeat retailers attended educational sessions and walked the show floor in anticipation of ideas to jump-start their businesses in a slowly recovering economy. At the top of everyone’s agenda: innovative solutions that can boost shopping experiences.

The year 2009 produced the worst economic conditions experienced in decades, and the retail industry is still trying to pull itself out from under the rubble of declining sales, bankruptcies and store closures. Chains that managed to survive were the ones that turned to innovative solutions to streamline operations.

“When choosing where to innovate, chains need to step back and evaluate all business processes,” said Rollin Ford, CIO, Wal-Mart Stores, during the “CIO Innovators Forum” session. “We need the right processes in place that will help the customer experience. But businesses must embrace the supporting technology, otherwise it doesn’t matter how innovative a solution is—it won’t work.”

Panelists at the session agreed that most innovation investments are applied to processes that touch the consumer. Due to multichannel retailing, however, retailers can no longer consider point-of-sale their only consumer touchpoint. Wal-Mart, for example, evaluates how it connects with shoppers on global, regional and local levels.

“Our business is no longer just about U.S. operations—we are global,” Ford said. “When it comes to the customer experience, one size does not fit all. We need to consider how cutting-edge solutions will still provide an experience that makes our shoppers feel special, yet it has to work on a global internal platform. That means solutions must be nimble and flexible enough to meet consumer needs worldwide.”

There is no better way to meet customers’ needs than “by getting to know your shoppers better,” said Greg Buzek, founder and president of IHL Consulting Group, Franklin, Tenn., during a session called “Retail 2010 IT Forecast.” “That’s why loyalty programs and customer-relationship management solutions are priorities for chains.”

Raleigh, N.C.-based Kerr Drugs concurs with that statement and plans to better meet consumer expectations through a new loyalty program. Unlike traditional loyalty programs that require shoppers to carry a physical frequent shopper card, Kerr is upping the ante with a mobile program supported by a managed service.

By texting a dedicated number while in the store, consumers receive a dedicated URL that will allow them to download an applet onto their Web-enabled cell phones. The applet also produces a 2D bar code that is scanned by an imaging scanner during checkout to apply discounts and promotions.

Getting to the source: Wal-Mart believes the only way to make the best decisions regarding the consumer experience is to consult directly with its customers.

“Our innovation always starts here, then the ideas are filtered to our business strategy,” Ford explained. “Once the plan is in place, we can apply technology. If you build a strategy around technology, you will lose buy-in, the business will not embrace the change,i and technology becomes stagnant.”

Wal-Mart’s RFID program is the perfect example of this strategy. While many chains continue to take a wait-and-see approach to the radio-frequency-based technology, Wal-Mart considers RFID an optimal way to combat the out-of-stock battle that still plagues the retail industry. In its newest RFID endeavor, the chain is applying the technology to its apparel categories.

“We own a lot of apparel, and we see the benefits RFID provides from [offering] insight throughout the supply chain and delivering better in-stock levels—factors that contribute to customer satisfaction and sales increases,” Ford said.

Richfield, Minn.-based Best Buy, a chain known for its consumer-centric experiences, also taps shoppers when determining how to improve customer service. And they get their ideas from many sources.

“If you don’t listen to your shoppers and don’t address their suggestions, they won’t shop with you,” Neville Roberts, CIO, Best Buy, said during the forum. “We source feedback in stores, and online, but social media has become an important channel as well.”

Best Buy looks at what shoppers post across social networks—the good, bad and, at times, ugly comments. The chain aggregates shopper opinions on a global level, then evaluates the best processes to enhance and the ideal technologies to apply to specific situations.

It was this type of strategy that helped McDonald’s Corp. decide to roll out WiFi across its U.S.-based locations. The chain analyzed blogs and tweets written by its “fans” and found the common denominator was a need for “free WiFi.”

“Consumers said they were happy with the quality of food, coffee, even our new look, but we lacked free WiFi,” reported David Grooms, McDonald’s CIO, during the session. “We listened to their needs, and as of Jan. 15, we began providing visitors free WiFi service, without the need to make a food or beverage purchase. It fits our mission of providing another level of convenience for our everyday customers.”

Looking inward: McDonald’s is also finding inspiration for new projects from within its family of associates. By enabling its managers and associates to blog on a dedicated internal site, the chain has the opportunity to harness the ideas of “associates across 14,000 locations across the United States,” according to Grooms.

Similarly, Wal-Mart used a similar strategy as it continued its strong push on the sustainability front. When the company was looking for ideas for energy savings, it posed the question to its associates.

“Ideas continued to flow up through the different business levels, and we had approximately 6,000 associates participate in the exchange,” Ford said. “They helped us save millions of dollars just by [us] asking the simple question, ‘What do you think?’”