This webinar discusses intelligent planograms and how they enable an individual size distribution for fashion retail stores and make sure that products are available on the sales floor in the appropriate sizes.
It provide insights into how the self-learning system adapts to possibly changing conditions and continuously optimises the plan – with a direct impact on the store revenue.
Detailed analysis by retail tech specialists at Detego has confirmed that the average retailer’s data is only about seventy-five percent accurate when it comes to knowing exactly what inventory is actually in stock at any particular time. The problem is often compounded by retailers continually managing stock across multiple channels and increasingly having to stay on top of consumer demands for up-to-the-minute, reliable information. Detego, which has been monitoring its own chatbot service that allows consumers to engage with retailers via their smartphones, found the most common enquiries to be about stock availability. It found data inaccuracies around inventory to be most of an issue in fashion retail where ever shorter product lifecycles, fast turnarounds of stock and multiple style, size and colour combinations can play havoc with the supply chain and in-store operations.
“Customers, above all, want instant and accurate information on product availability,” says Dr. Michael Goller, CTO at Detego. “If you’re shopping for clothes, you want to be sure of getting the exact size and style you’re looking for. But many retailers fall by the wayside here – their systems might tell them that a particular size is available; yet, there’s a one in four chance that this isn’t the case.”
According to Goller, continually relying on manual processes for something as vital to the retail business as stock – usually by shutting up shop once or twice a year for store or warehouse staff to do a stock-take – is madness. And especially given that smart technologies abound, including RFID and mobile devices which ensure continual monitoring and lead to near hundred percent accuracy and operational excellence in the stores.
Research by the University of Parma in Italy has shown consistent sales increases in RFID-managed apparel stores and deduced that “RFID item-level tagging is a powerful tool for improving inventory accuracy, which is a prerequisite for both omni-channel strategies and store floor replenishment from the backroom.”1
Thanks to technology that helps increase the availability of products on the shopfloor – such as using wearable devices that rely on alerts and images to guide staff and speed up the replacement of missing articles and gaps on the shelves – the industry is starting to see a gradual shift towards more connected technologies in retail. IDC Retail Insights predicts that eighty percent of retailers are due to spend on visibility platforms powered by RFID and IoT2 over the next few years.
An extraordinary four-month project sprint for 500 adidas stores in Russia has been successfully completed. The goal: Boost store KPIs such as inventory accuracy, article availability and consumer service to the highest levels. The means to achieve that: Extremely fast, error-free stock taking of 45 million articles per year through real-time in-store processes that are more efficient and intuitively managed, using decision-relevant analytics. The end-to-end integration was accomplished in just four months. The interdisciplinary project team consisted of business, IT, logistics and retail experts coming from five different countries – all working together across ten different time zones. The result: 99% inventory accuracy and the highest on-floor availability that adidas wanted for its stores. The winner: The adidas end customer.
The future? Athletic.
adidas and Detego are entering the next round. More than 500 stores are live in Russia and an additional 90 stores are planned. Currently, the teams are working on replicating this success in other markets.
Although the customer leaves an invisible data trail in the store, brick-and-mortar retailers barely use them to improve customer service. Dr. Michael Goller, CTO at Detego, explains why things need to change in the future.
Online retailing has not only created a new way of shopping, but also has a powerful toolbox to measure its results – with the overall objective to meet the customer’s expectations at all times. For that reason, online retailing has become the highest standard when it comes to measurement and evaluation in fashion retail. There is almost nothing that is not being evaluated while surfing the web shop. Conversion rate, click through rate, average order value, relation between new and returning visitors, bounce rate and retention time are just some of the KPIs that measure the success of online shopping activities. The really powerful thing about this is that analysis is always followed by action – usually fully automated.
And what about brick-and-mortar retail? It is about time to take some lessons…
The need for real-time data
For years, brick-and-mortar retailers have been complaining about imprecise stock-figures and unreliable historical data. Unhappy with its purchasing decisions based on last year’s sales figures, retailers would prefer to have real-time data and inventories that allow for reliable and economically viable decisions. After all, it is important to avoid high security stocks in order to reduce capital tie-up.
But why do we actually have this problem? Are the datapoints offered by the ERP systems not enough? Unfortunately not – it is not unusual that the ERP system shows higher stock than actually available on the sales floor. This so-called “ghost stock” is the cause for various problems in sales, e.g. the ERP system says a certain article, for example a red skirt in size S, is in stock, but in reality it is not. It can neither be sold nor refilled from the central warehouse – a classical out-of-stock situation. Or vice-versa, the ERP displays a lower inventory level than is actually available. The reason for these deviations is insufficient accuracy in individual processes that dangerously sum up over time.
Today’s intelligent article management is based on three pillars: fast, RFID-based article identification on item-level, tracking of every movement in real-time and proactive analysis with concrete recommendations for actions to take for the sales personnel. This is the foundation for optimum customer service and efficient processes.
Meaningful KPIs in the store
When measuring KPIs, the practical benefits for retailers are paramount. Three areas of data in the store can be distinguished:
- KPIs for inventory accuracy and product availability
- KPIs for campaign performance measurements
- KPIs on customer engagement and service quality
How KPIs are defined depends on the size and number of stores, the assortment depth and the flow of goods. Predefined objectives also play an important role: Whether five or 800 stores, KPIs for measuring inventory accuracy are significant for every retailer and still represent one of the main challenges in today’ business. Retailers, on average, can actually make accurate statements on just about 75% of their inventory (based on SKU level). However, this is not enough to meet customers’ expectations for omnichannel services. Therefore, inventory transparency and corresponding KPIs are essential for retailers´ success.
Product availability on the sales floor, also known as on-floor availability, is the second central parameter. Initially, it is less about the exact position and more about the fact that the articles are on the sales floor – after all, only items that are actually available can be sold. This key figure can be combined with an alert system that makes sure not to fall short of the defined minimum availability. Complementary to classical ERP-systems, an RFID-based merchandise management takes the data granularity to the next level, by knowing exactly at each moment in time if products are really on the salesfloor or still lingering in the backroom of a store. Having data on item level, store managers are also given important information on the dwell times of articles on the sales floor to gauge whether they are corresponding with the sales plan. One of the most famous KPIs in e-commerce is the conversion rate that describes the ratio between purchases and website visitors and also provides information on certain items that were already in the shopping cart, but for some reason have not been purchased in the end. Specifically this aspect was incredibly difficult to measure in the store for a long time but can now be measured in fitting rooms using IoT and RFID technologies. This provides meaningful insights into how many, and above all, which articles does a customer take into the fitting room and which one does she/he actually buy?
On an operational side, KPIs can also be used to manage the service quality. The replenishment rate, for example, states how quickly articles are replenished on the sales floor. On the other hand, the fitting room response time describes how quickly sales personnel handle customer requests coming from the fitting room.
The KPI “Conversion rate per campaign” shows the success of a campaign and if campaign-specific countermeasures are necessary / ©Detego
Turning data into actions
What else can brick-and-mortar retail learn from the web shop? Turning data into actions. Since nobody needs a data graveyard, any analysis of data has the goal to take immediate actions to improve. Today’s systems help the management team as well as the store personnel with concrete and automated recommendations for actions to take. This saves time in the decision-making process, unburdens the sales personnel, and enables them do the right things at the right time.
KPIs should be suitable for everyday business use. Presented visually and self-explanatory, they need to be linked to clear recommendations for actions to take. This frees up store personnel time and provides a data-driven way of optimization. Examples range from simple in-store replenishment advices, i.e. “The minimum stock for article #47699-0010 has been reached – please refill three pieces” to more advanced topics, e.g. to choose a different placement in the store for a specific article when the dwell time on the sales floor is too high compared to other stores.
Brick-and-mortar retail definitely needs support and an update to the toolbox when it comes to analysis and measures. Not only does the sales personnel benefit from intelligent recommendations for action, but the management team also gains efficient control mechanisms across the entire store network. Decisions are made on the basis of real-time data and therefore allow timely action. Ultimately, the end customer is pleased about a first-class service, which – thanks to the individual and informed advice through the sales personnel – even exceeds the standards of the online retail.
Why should fashion retailers deal with IoT? What problems could be solved in the stores? What results can be expected? As a retail decision maker you need to deal with IoT if increased article availability, exact inventories, interaction with customers and operational excellence in your stores are set as objectives. This practice-oriented guide sheds light on the triangle of “customer”, “processes in the store” and “deployment of new technologies” and shows how the use of IoT benefits retailers and ultimately the customer. The whitepaper reveals the formula for the perfect customer relationship, based on the right technologies and processes and shows how retailers can apply them to their business.
Detego, a market leader in real-time business intelligence for the fashion retail industry, is releasing its latest whitepaper, providing valuable information on the use of Internet of Things (IoT) in fashion stores. Titled as “The perfect customer relationship – How fashion stores leverage Internet of Things (IoT) technologies to put the customer in focus of all activities “, fashion retailers get a practice-oriented guide that highlights the most important aspects such as: Why should fashion retailers deal with IoT?, What problems could be solved in the stores?, What results can be expected? Retail decision makers need to deal with IoT if increased article availability, exact inventories, interaction with customers and operational excellence in the stores are set as objectives. The 35-page guide sheds light on the triangle of “customer”, “processes in the store” and “deployment of new technologies” and shows how the use of IoT benefits retailers and ultimately the customer. The whitepaper is available for download on the Detego website.
Detego discusses the various IoT technologies as a way for retailers to realize the perfect customer relationship. Based on customer’s needs, the practical tips are divided into 1. Self-service in the store: The customer as the main actor, 2. Brand Ambassador: The customer as influencer, 3. Co-Value Creation: The customer as partner and 4. Predictive Analytics: The Customer as creator of the future. All four subchapters describe what retailers can do to connect with the customer and enable an interaction in the store.
In addition, infrastructural prerequisites such as the optimal process support through IoT technology and in particular support for the sales personnel are discussed. With the help of IoT, retailers and their store personnel gain valuable data that is translated into recommendations for concrete action to take. In addition to the operational excellence in the store, it is primarily about the new shopping experience for the customer. The whitepaper reveals the formula for the perfect customer relationship, based on the right technologies and processes and shows how retailers can apply them to their business.
The one-size-fits-all sales approach is outdated. In the store, intelligent systems are needed to provide the customer with a personalised experience. Key elements for this are individual and personalised recommendations from the current product range and simplified processes that give stores associates more time for the customers.
In this webinar you find out how “Data Driven Empowerment” activates cross-selling potential, increases the number of articles per receipt and finally leads to satisfied customers and happy retailers.
All store assistants are busy at the moment and another customer enters the store. She has only one question: “Is the skirt in the shop window also available in XS?”– It’s not going to take long, however, nobody is available to assist. She briefly looks around on the sales floor…finds nothing and therefore leaves the store.
Increase service quality in the store with Artificial Intelligence
With digital sales assistants, fashion retailers no longer have to keep consumers waiting but offer them a convenient service. The chatbot serves consumers via smartphone by answering initial questions such as: Is the article still available in my size? Where can I find it? How expensive is it? What accessories go with it? If an article is out of stock, Detega makes suggestions, e.g. to have the desired article shipped from another store to the customer´s preferred store or even directly to her home.
Recommendations for more consumer engagement
If a store assistant recommends additional articles to a customer, it could easily backfire as unwanted assistance can be considered intrusive and the customer might avoid visiting the store in future. However, if a chatbot recommends an article that the customer clearly perceives as a possible additional purchase, he/she will have no problem considering the recommendation or rejecting it by simply swiping it away and look at other articles that he/she likes better. Chatbots enable a non-binding yet personalised dialogue – just as customers are familiar with online shopping.
Detega Video – Initial dialouge before sales personnel takes over
The use of digital store assistants. Benefits for retailers.
- starts a dialogue with the consumer via smartphone as desired
- notifies store personnel to bring certain articles to consumers
- pushes purchases through „live“ discounts
- brings online shopping experience into the store
- activates cross-selling potential by letting customers browse through the entire product range
- recommends articles that are actually available in the store
- supports as well as unburdens store personnel
- deepens the brand experience
- compiles data on customer clusters and their preferred article combinations
- continues to interact with customers after they leave the store to inform them about special offers, etc.
- offers after-sales services to customers such as reservations in the store
The use of digital store assistants. Benefits for customers.
- helps with the decision-making process using information
- provides useful product recommendations such as: popular items, bestsellers, reduced articles and product variants
- accurate product recommendations due to Artificial Intelligence
- offers self-service via customers‘ smartphone
- offers online shopping experience in-store
- answers immediately – customers are not kept waiting
- gives information in real-time
- notifies the store personnel to bring desired articles directly to the customer
- allows customers to browse through the full product range
- guarantees an unforgettable shopping experience
- passes on customers to sales personnel when required
„At the Point-of-Sale, the chatbot serves digitally-oriented target groups via their smartphones and passes them on to the sales personnel for individual service whenever the sales process requires it.“
Dr. Michael Goller – CTO Detego
Friendly sales personnel, stores in top locations and an appealing product assortment are not enough anymore for successful fashion retailing. Today’s consumers expect more: stores as temples of experiences, sales personnel that understands or even anticipates their needs and frictionless shopping across all channels. The use of IoT technologies in brick-and-mortar stores will support retailers to meet these expectations. But how much consumer engagement does it take to turn “today’s shoppers” into “loyal customers of tomorrow”? A search for traces…
What are consumers actually looking for?
That is quite simple: articles in the right sizes. Otherwise they are leaving the store without buying anything. Assuming that consumer engagement requires a proactive, not reactive sales culture, retailers need to start rethinking their business approach. This involves systems that provide high inventory accuracy and article availability, real-time information capability, and a single stock view across the entire store network including franchise and wholesales locations as well as online shops. In addition, it requires a customer-focused and empowered store personnel, equipped with smart devices and real-time information, to provide consumers with instant information about desired articles and the capability to reserve these articles or to deliver them directly to the customer’s home. It’s all about an effective way of interaction that is leading to a long-term customer loyalty. If the store staff is proactively supported by the in-store system by means of e.g. intelligent stock takes or smart replenishment processes, retailers – and ultimately the customer – benefit from high inventory accuracy and end-to-end article availability. This provides the base for a successful consumer engagement and is available with the Detego InStore Lean Edition.
What exactly do consumers expect?
A lot: individual and innovative shopping experiences. Spoilt by the convenience and services of E-Commerce, consumers’ expectations towards their shopping experience in brick-and-mortar stores are ever more stringent. Omnichannel services such as click-and-collect, return-to-store, ship-from-store and online availability check per store are part of these expectations and have to run smoothly. The Detego InStore Full Edition provides retailers the full-service package for their omnichannel business.
How does interaction with consumers look like?
Very versatile and via different touchpoints that customers choose, e.g. via their smartphone right after entering the store. The chatbot Detega gets in touch and supports with article and availability information, introduces the new collection and is also a virtual guide beyond the actual store visit. The Smart Fitting Room is also adapting to consumer requirements in an entirely experience-oriented way. It assembles preferred article variations and optimises the fitting service in close collaboration with the store personnel who brings desired articles from the sales floor or back room to the cabin when requested by consumers via the Smart Fitting Room application. Detego InChannels provides retailers with various opportunities for interaction with consumers that activate customer potential.
The Detego Suite supports retailers in meeting current and future challenges and keeps the store staff ready for increasingly demanding consumers while making the brick-and-mortar business run more efficiently.
Image source: IStock, Copyright: pixdeluxe
Retail software vendor, Detego, will be showcasing its latest digital in-store solutions for retailers at NRF, the world’s largest retail industry show on January 14-16 in New York, as a co-exhibitor on SAP´s booth # 2733. These include a new mobile solution for retailers, offering faster and cheaper access to the benefits of digital connectivity, as well as Detega, a new chatbot that supports customers throughout their entire shopping experience.
Detego’s software, in combination with tiny radio-frequency identity (RFID) tags on every item, makes it easier for retailers to boost inventory accuracy and on-shelf availability to levels consistently above 98 percent – a huge increment compared to the industry average of 75 percent. While Detego’s chatbot opens up the entire store chain and digital catalogue to consumers.
Detego says that it has decided to release a leaner version of its full product suite so that retailers can quickly experience the advantages of RFID-enabled merchandise management, which include reducing the number of markdowns and fewer gaps on shelves.
“The launch of Detego’s InStore Lean Edition provides a quick-start solution that’s productive within hours, not weeks or months, without the complexities typical of most IT implementations,” says Detego’s CTO, Michael Goller. “Fully hosted and managed in the cloud, it is being targeted at retail chains, pop-up stores, franchisees and brand store owners who want to benefit from modern in-store technologies without the need to invest in fully fledged, large-scale IT projects.”
The new software is highly modular and scalable, meaning that retailers can start with just a few stores and scale to hundreds or even thousands within a short period of time. Additional features can be added at later time, including retail analytics, omni-channel services such as “click&collect”, and other consumer engagement and supply chain applications.
The fully hosted and managed SaaS (software-as-a-service) offering that runs on SAP’s Cloud Platform enables retailers to seamlessly integrate systems across various applications. The combination of the SAP Cloud Platform and the analytics and merchandise software from Detego provides the basis for customer-centric processes and services, as well as real-time applications in omni-channel retailing. In the light of ongoing consolidations within retail chains, this gives fashion retailers a competitive advantage and differentiating element for their brick & mortar stores.
Detego’s new chatbot can be used at any time on a customer’s smartphone to help provide more pertinent product information or recommendations, based on real-time data on actual availability and customer preferences. The built-in machine-learning and artificial intelligence (AI) capabilities adapt to the ever changing dynamics of fashion retail, which means that results get better and better over time.