A customer is for life; not just for the sales

Black Friday. Cyber Monday. Pre-Christmas & January sales. The cold, winter months are enlivened in the world of retail with a shopping bonanza for the savvy consumer. These high-profile sales see shoppers in a frenzy as they seek out the best bargains, both online and on the high street.

Then what? Once the furore has calmed down and normal service is resumed, how do you nurture these customers to ensure long-term loyalty to your brand?

The key is to keep them happy at every step of their interaction with you. They must receive an effortless service, when they want it and from where. More often than not, today’s customers also want instant gratification: to immediately know that what they’ve bought will be with them faster than ever before.

How to achieve this is the topic of a paper that I have recently published, ‘Rethinking your retail business around the customer journey and experience’. In it I make the case for what’s increasingly referred to as ‘unified commerce’. This is true omnichannel retailing (as opposed to just operating multi channels) that sees retailers delivering a seamless customer experience, regardless of which touchpoints they use. Unified commerce demands the fully integration and alignment of processes, systems and applications across both the back office and customer-facing channels.

Theory v reality

While the theory behind this makes absolute sense, the practical reality is that few retailers are truly achieving omnichannel status. The target is to enable a single enterprise-wide customer view, supported by the alignment of product data, pricing, promotion, procurement and inventory management. So why isn’t this happening?

An obvious reason is the siloed approach many retailers take to their operations. With each customer touchpoint (online, in-store, mobile, B2B sales, customer services, etc.) operated as a standalone entity, it is impossible to achieve a consistent customer experience across them. Even the way retail employees are managed in these siloes is a barrier to omnichannel success. As I point out in my paper, to be truly omnichannel, it’s important that all areas of the business are governed by consistent processes, incentives, measurements and ways of working. This means that decisions on remuneration and incentive schemes should be made at the very highest level of the business.

Technology too

The above is very much about a cultural shift, but technology too is an enabler of unified commerce. To deliver repeatedly and reliably at pace, retailers need to invest in cloud-ready infrastructure and they must automate at every opportunity – infrastructure and environment provisioning, application code build, deployment and promotion of application code and, of course, testing.

While cloud-native retailers are set up for this, the same isn’t true of traditional retailers. They are faced with the challenge of marrying legacy with new disruptive platforms and approaches in a genuinely omnichannel model. There are a number of ways to achieve this and, at Sopra Steria, we’re working with many organisations to help them modernise their IT so that they both unlock the value of current systems and keep pace with disruptive new entrants.

In the end, keeping your customers happy, not just during the sales season, but for the long term, begins with how you create and sustain a seamless customer journey. That’s everything customer facing and everything behind the scenes, such as logistics and fulfilment, as well as in the back office.

Download ‘Rethinking your retail business around the customer journey and experience’

For more information on Sopra Steria’s approach to applications modernisation and unified commerce, contact me on Gary.Ellwood@soprasteria.com

From Farm to Fork: How Blockchain Will Revolutionize the Way We Eat

When we think of potentially hazardous foods, chicken, pork or perhaps eggs might come to mind- but not lettuce.  Yet just last month in America, this supposedly harmless vegetable left 5 people dead and just under 200 seriously ill. The culprit? Contamination with the deadly E-coli bacteria at some point in the lettuce’s supply chain that, two months on, authorities have still been unable to identify.

In today’s complex and increasingly globalised supply chains, cases like this are becoming unwelcome regulars in our newsfeeds; so too are instances of mislabelling or even malicious tampering.  Outdated systems, never-ending paper trails and lack of visibility all contribute to the chaos. Every year, 30% of food produced worldwide is lost to supply chain errors, costing businesses a staggering US $1 trillion. Over 420,000 people die annually from contaminated food, a quarter of these being children. Our supply chains are long overdue a renovation, and the food industry thinks it has an answer: blockchain.

Over the past six months, major retailers across the globe, including Walmart and Carrefour, have announced pilot projects to experiment with blockchain-based supply chains. Proponents say that these new systems will revolutionize our current supply chains, reducing waste and creating safer, more efficient and more transparent processes for consumers and businesses alike. But is this simply another example of the hype endemic to blockchain, or will it prove genuinely transformative?

What is blockchain?

At its heart, blockchain is simply a ledger. Like a normal ledger, it can be used to document digital records of transactions. However, unlike centralised ledgers, which are stored on one single device, a blockchain is stored across multiple devices, and can be updated by multiple participants simultaneously. This makes it extremely transparent, and a highly effective tool for transacting across complex networks with numerous, geographically dispersed participants. Blockchain also offers a high degree of security and is effectively tamper proof, thanks to specialist cryptographic infrastructure- meaning it is virtually impossible to alter or delete information once it has been committed to the network.

On the surface, these characteristics of distribution and immutability make blockchain a highly attractive proposition for businesses with complex supply chains. It cuts out the need for the disparate, independent databases and paper trails that plague today’s systems, giving businesses an automatic, reliable and digitalised bird’s eye view over the journey of any product.

This increased transparency and traceability could offer significant advantages to food retailers. First, it incentivizes suppliers and producers to label products accurately and honestly- if an item has been tampered with, it is easy to identify the culprit. Currently, retracing a product’s journey through a supply chain takes weeks or months- something that was exemplified by the powerlessness of American authorities in the face of the E-coli crisis. A blockchain-backed system, by comparison, could reduce the time it takes to trace products from months to a matter of seconds.  This increased control over their networks could allow retailers to mitigate or even prevent contamination or quality incidents.

Giving customers increased visibility over the provenance of their food could also give businesses a competitive edge. Currently, consumers around the globe have little insight into the origins and quality of the food they are eating. In Chinese markets, where counterfeiting and quality has long been an issue, we are beginning to see this change. Retailer Alibaba, who is running its own blockchain pilot, is currently experimenting with adding QR codes to the back of imported butter. These are designed to allow consumers an overview of the butter’s lifecycle, giving them in depth information about the origins and quality of the product and acting as a reassurance that what they are buying is not a counterfeit. Retailers operating in the UK should pay attention. As we leave the European Union and its stringent food laws behind, consumer complacency around sourcing will likely decrease. Just earlier this year, there was wide scale public uproar against a potential import deal with America which threatened to bring in low welfare, chemical laden meat into the UK. If consumer mentality changes, businesses that prioritise transparency will stay one step ahead.

An imperfect system

While these potential benefits are significant, blockchain is no one-size-fits-all solution for supply chain management. Despite its transparency, this system- like any other database- is only as good as the participants operating on it, and will still be subject to human error (intentional or otherwise). The transparency of blockchain platforms does incentivize honesty, but businesses will still need to take measures to counter mistakes or fraudulent behaviour if they want a truly reliable overview of their supply networks. Such measures might include data verification technology like satellites, drones or sensors, but these will inevitably add to the cost of implementing these platforms.

Digital inclusion- or the lack of it- will also be a challenge for businesses who operate supply chains in developing nations. While the western world takes for granted digital technologies and our ability to operate these technologies, access to the same luxuries (or, in some cases, even the internet) cannot be assumed outside of this bubble. This has been a significant challenge for Moyee coffee, an Irish company trading on a blockhain powered supply chain, who have resorted to stationing employees in Ethiopia to operate the platform on behalf of producers. While this may work well on a small scale, linear supply chain, for larger organisations with more complex, disparate supply chains, it may not prove so easy.  It is also only a temporary solution; to make these platforms truly sustainable, businesses will need to take a longer-term approach to the underlying issues.

These challenges mean that blockchain, in spite of the noise currently being made in popular media, remains firmly in the proof-of-concept stage as a solution for supply chain management; it is not likely that it will be viable for widespread use for several years to come. However, despite these hurdles, blockchain’s impact on this industry should not be minimised. It has challenged the tired, outdated systems that are no longer fit for a globalised world; even if food retailers choose not to turn to blockchain for innovation, they should be striving towards the same goals it promotes- a more efficient, transparent supply chain for the benefit of businesses and consumers alike. Blockchain is no magic cure for the many woes that plague the food industry today- but it is certainly a good start.

 

3 tips for accelerating digital transformation in telecoms

The telecoms industry is no stranger to change. After all, the leading players in this sector have delivered network connectivity and devices that sit behind many of the world’s game-changing digital innovations. Take digital pioneer Uber as an example; it simply wouldn’t exist without the proliferation of smartphones and underpinning mobile network engines. But there’s a problem for the telecoms companies providing the networks and devices enabling these new business models. These telco giants need to accelerate their own digital transformations but, unlike digital start-ups, they have made massive investments in legacy IT over the past few decades and can’t simply ‘switch on digital’.

Nonetheless, business leaders recognise that, as consumers increasingly demand a digital customer experience, one that offers instant gratification, they must embrace the digital economy. Failure to become a truly digital company, is not an option. You only have to look at the number of big name companies that have gone out of business in recent years because they couldn’t, or wouldn’t, transform.

So, how can traditional telecoms companies survive in today’s fast-changing digital economy? Not known for their agility, how do they forge ahead quickly with digital transformation programmes that ensure their business models and operations are fit for the future? There are many recommendations for accelerating transformation, embracing technical, operational and process change, but I’m going to focus on just three in this blog.

Tip 1 – Modernise legacy applications, rather than dispose of them

At Sopra Steria, we encourage those clients with a heavy investment in legacy assets to modernise what they’ve invested in over the years, while ensuring they also keep pace with modern, cloud-based developments. It’s clearly not feasible to replace decades-old systems and applications in their entirety. That’s especially so in an industry experiencing significant pressure on revenues and margins (e.g. decreased roaming revenues, commoditisation and price erosion) and needing to continue investing in their networks (SDN/NFV & 5G, etc). So, my recommendation is to adopt an evolutionary approach. Ask what you need to do to extract more value from existing IT assets in line with a digital strategy. Then look at the real business triggers for legacy applications to become redundant or the option to replace with new, cloud-native ones. Be selective in your investments and opt for projects that give a rapid ROI. Modernisation offers a quick win as you accelerate your digital transformation.

Top 2 – Use Agile coaches to turn DevOps from theory into reality

We all know that speed to market with new services and products that give customers the digital experience they’re looking for is vital. To achieve this, organisations recognise that they need to transform their software development processes. Traditional lengthy waterfall-style development must be replaced with a DevOps culture that enables rapid, frequent releases through Agile sprints. This is typically a strategic top-down decision that sounds good in theory. The message is clear: we need to release fast, often and with assured quality; and we need to be agile so that we can respond quickly as the market changes. Yet that message becomes lost as it filters down through the management layers and those people expected to put theory into practice struggle to make it happen. I’ve seen enterprises overcome this by embedding Agile coaches at different layers of the organisation. These are people with practical experience of DevOps and Agile, able to lead and demonstrate this new way of working. This is a case of ‘don’t just tell us how to do it, show us as well’.

Tip 3 – Address adoption challenges with a defined vision and value position

Even with Agile coaches embedded in the end-to-end DevOps cycle, we still see instances where an organisation has implemented a new system or launched an innovative app that fails to gain traction with users. Let’s say, for example, you want to launch a mobile-front end on your Oracle DB system, enabling your employees to access what they need, where and when they need it. Or you might have invested millions in a new cloud platform for better visibility and control. If you want to avoid this being money down the drain, you must encourage user adoption. This requires communication of the ‘vision for’ and ‘value of’ your investment. So, it’s not just a case of communicating what the new capability is for (the vision), but clearly articulating the benefit it will bring both to the business and the users themselves (the value). If it’s a sales application, why would your salespeople use it if they perceive that’s it’s just a management tool for tracking what they do? How much more enthusiastic would they be if they understood how it will help them to sell more, faster? It sounds a simple tip for ensuring successful adoption of new digital tools, but the lack of a defined vision and value proposition can so easily stand in the way of you achieving your desired business outcomes.

Get in touch

The above three tips are just a flavour of the new thinking and approaches that telcos must take on board to survive in today’s digital economy by accelerating their digital transformations.

To find out more please contact me – jason.butcher@soprasteria.com 

Confronting the M&S challenge – why data is the solution

The impact of digital on the retail sector hit home at the end of May when M&S announced that it was accelerating its digital transformation following plunging profits. That one of the UK’s best-known retail brands had clearly failed to keep up with digital consumer trends may have come as a shock to many. I wasn’t surprised, however. I’ve recently written a paper on this very topic. In ‘Why data is the new retail battleground’ I look at one of the key reasons why traditional retailers are struggling to compete with their digital competitors – data.

For me, the challenge is not that these retailers have failed to invest in online commerce channels. Indeed, many are doing well in this respect. What’s holding them back is that they’re still using decades-old back office systems and processes governing Product Lifecycle Management (PLM), Product Information (PIM) and Product Master Data Management (MDM). These retailers, and especially those with a catalogue heritage, retain a large legacy of systems, processes and cultural norms that are not aligned to the expectations of today’s customer. They’ve typically expanded into digital channels to meet the consumer appetite, but they’re being hindered by operating models that remain wedded in their legacy data management principles.

The Amazon effect

To compete with the likes of Amazon and other digital retailers, traditional companies must transform – and they need to do this fast. The ability to capture the right product information quickly and accurately, then push it out to the relevant operational (Finance, Warehouse, Transport, Order Management, etc.) and commercial (Merchandising, Marketing, Pricing, etc.) systems will be critical for this. However, these processes are typically not well managed, or even automated, by many traditional retailer organisations today. Everything from data input, data cleansing and data matching, data enrichment and data profiling, through to data syndication and data analytics, is still dependent on disconnected and largely manual operations.

It’s clearly time to automate those areas of data management that are tying up valuable human resources in manual repetitive tasks. Trying to do what they do now without automation will not work for traditional retailers. In my paper, I describe a set of automation best practice that all retailers should be considering in this respect.

A strategic choice

I also point out that this isn’t just an IT challenge. It is a strategic choice to build a single source of data truth on which product decisions can be made. This is built on an understanding that to remain competitive with responsive and agile operations, every day, organisations need to bring about both technology and cultural change.

Like many traditional retailers, M&S clearly has a number of digital challenges to confront, such as those described above. After announcing its 62% drop in pre-tax profits, the retailer declared it would be modernising its business through ‘accelerated change’ to cater for an increasingly online customer base. I hope it puts data at the heart of this transformation.

Read my paper for more on how to move to a new data-led operating model in today’s fast-moving retail environment.

Don’t fear the RPA!

The Digital Revolution is upon us and the reality is that it will bring change we simply cannot afford to ignore.

Humankind has constantly striven to find new, better ways of living and working. The industrial revolution introduced new ways of working to a society relying on physical labour alone and the results – cheaper goods, improved transportation, safer factories, better working conditions and evolved communications – set the tone for a period of continuous improvement moving forward.  Throughout the 19th and 20th Centuries, the pace of change increased; developments in cars, fuels, heating, atomic power, plastics and synthetics have improved countless lives and this drive to constantly enhance and improve has continued.

Industry 4.0 concept. Man is holding tablet to control smart factory manufacturing line which is equipped with sensors and robotic arm. industrial automation line.

When the manufacturing industry adopted automation 20 years ago it was seen as truly revolutionary, bringing new, more efficient ways of working.  Doomsayers warned of jobs being lost but in fact, quality increased and competition flourished.   Outsourcing was another big change but each time the market quickly adapted, leading to a service oriented industry that has since generated millions of brand new jobs.  It’s a fact that what was once seen as truly innovative is soon seen as commonplace and ‘business as usual’.

Today, the seismic change is Digital.  It’s remarkable to consider that it’s only 10 years since the smart phone was invented  – but since then, Facebook, Twitter, Instagram and Linked in have emerged and Amazon, Uber, mobile banking and even online gaming have become daily realities of life.  The whole way we live, work and socialise is undergoing truly transformational change and the pace of that change is most definitely speeding up rather than slowing down.  The reassuring element however is that each time change comes, the new way doesn’t dominate – instead it augments and enhances the previous approach, introducing totally new ways of thinking.

So what’s the next big ‘game changer’? Robotic Process Automation (RPA) is the ‘new’ hot topic of the Digital era, offering huge advantages to business and society alike.  For business leaders – RPA delivers a more efficient, streamlined and cost effective business operation; for individuals – it offers the opportunity for more interesting, fulfilling and less repetitive jobs.  RPA empowers business leaders to automate manual tasks and simple ‘rules based’ activities freeing up staff to undertake more interesting and challenging activities – a true win-win!

Curiously, despite the rise of digitally enabled and automated application processes, many organisational activities in banks and investment companies today are still manually driven.  For example, across the Credit Risk lifecycle, manual data entry and manual data processing remains surprisingly prevalent at certain stages of the decisioning process.  In addition, for many Retail and almost all wholesale credit applications, decisions are manually underwritten.  Using RPA, a virtual workforce can augment processes undertaken across the Credit Risk lifecycle to deliver increased quality, improved accuracy and greater consistency 24/7 – reducing the risk of non-compliance and delivering a more responsive customer experience.

So don’t fear the digital revolution, now is the time to jump on board and embrace it.   Click here to find out how we do it at Sopra Steria.

2020: Retail as a Service?

Digital disruption is typically seen as a form of “waterfall innovation” – where a new entrant unseats legacy players by adopting a radical new approach to service delivery using technology (like Amazon leveraging its own cloud based e-commerce platform capabilities to beat incumbent Retailers on convenience and price). Yet a challenge to this view is that such disruptors are actually applying a form of “agile innovation”, where through incrementally developing their own live services they gradually transform and re-shape a market – a detailed look at Amazon finds its approach to customer service improvement is not disruptive but iterative; where over the last ten to fifteen years it’s used its own net revenues for R&D activities (not for short-term profit) to continually drive massive grow.

The implication is that a Retailer can exploit the competitive advantages of digital disruption by using an iterative service delivery approach – so what could be the benefits and challenges of this “Retail As A Service” model? Here are some ideas…

OpEx Funded Innovation – A major blocker to Retailers investing in digital transformation is that it can involve significant upfront capital expenditure to deliver a return in investment that is difficult to forecast and realise. Applying an “as a service” approach, an alternative could be to deliver small, incremental improvements using a portion of Retailer’s margin earned during the same financial year. No big financial risks, the Retailer can only invest what it earns from the market with the added benefit that such OpEx funded innovation can rapidly pivot to changing customer demands. Yet any slicing of margin will impact a Retailer’s profitability – its owners or shareholders would need to tolerate a different form of financial risk to make this approach acceptable; reduced, variable short-term profit for potential significant long-term gains.

Zero Physical Asset Operating Model – Could the application of a service-based approach to delivery be extended beyond the traditional areas of IT and back office transformation into other parts of a Retailer’s operating model? For example, a Retailer could run a “zero physical asset” business; where front-end services like stores, supply chain management, even sales staff resources are provisioned on a pay-as-you-go basis. A key benefit would be that the Retailer doesn’t run the risk of owning fixed term assets like property or technology that may become commercially unviable or obsolete. However, this would create new risks – a key one being that the Retailer becomes wholly dependent on other service providers’ availability and ability to innovate to meet its competitive needs.

If you would like more information about how digital transformation can benefit your retail business, leave a reply below or contact me by email.

AI Empowered retail roles: the new competitive advantage?

A Retailer can potentially use Artificial Intelligence (AI) to empower its people to analyse, transact and crucially sell faster and smarter to customers than its competitors. So, what might these jobs look like? Here are some ideas…

“Fixers” – Retailers are always looking to optimise their supply chain costs while improving the customer experience. A key pain point is last mile logistics – the need to offer increasingly timely, flexible delivery of goods to individual customers while maintaining the right economies of scale on distribution to achieve margin. A Fixer – possibly a third-party platform service provider – bids for and delivers instant solutions to solve these daily challenges. Their unique ability to use AI to continually optimise delivery routes and facilitate the sharing of local stock between Retailers (often competitors) to satisfy customer demand 24/7 places them at the heart of the Retail Sector in 2020.

“Instore Experience Trainers” – AI doesn’t innovate by itself; this advantage comes from people teaching or training it to deliver delightful and compelling customer experiences on any channel. An Instore Experience Trainer is someone who spends their working day testing different AI driven experiences from different Sectors and then uses this emotional insight to teach an Artificial Intelligence capability new ways to better engage customers instore – rapid human innovation scaled to differentiate thousands of individual customer interactions with a specific Retailer.

“AI Scanners” – As Artificial Intelligence grows so too does the opportunity for competitors to use it to analyse a Retailer’s offerings for strengths and weaknesses. An AI Scanner is monitoring daily how customers are engaging a Retailer’s Artificial Intelligence to identify such behaviour and its source to enable a proactive response to protect market competitiveness.

If you would like more information about how artificial intelligence can benefit your retail business, leave a reply below or contact me by email.