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The breadth and pace of modern retail innovation amazes me constantly. For example, my neighbour Jones, a sprightly 75 year old retiree living in East London, recently announced that he’s looking into a new career as a Doddle Neighbour.
He expects to cover his entire weekly beer and darts expenses running parcels across our estate. Given that I often miss retail deliveries and collections whilst travelling for work, I have already applied for my ‘JonesMail’ loyalty card!
The retail technology revolution
Jones’ entrepreneurial story is heart-warming and fun, but it also personifies the technology revolution which has transformed the retail industry over the last two decades.
What began with Amazon shipping books via traditional postal services has now evolved to encompass one hour deliveries via fee-levying neighbours.
The revolution is not purely an ecommerce story either – augmented reality fitting rooms, personalised in-store marketing and click and collect are all rapidly becoming part of the everyday physical shopping experience too.
E-commerce and digital innovation have caused headcounts to shrink in some areas of retail, but despite this the sector is still one of the UK's largest employers, with a workforce of around three million.
The reality is that, even with an increasing number of self-service points in stores, vast numbers of people are still required to replenish stock, merchandise windows and, crucially, advise customers on their purchases.
The technology has focused on the customer
With such an enormous labour force, it is perhaps surprising that virtually all of the benefits of new technology have so far been focused on the customer and have mostly bypassed frontline staff.
Even with an increasing number of self-service points in stores, vast numbers of people are still required.
Much progress has been made in the fields of browser-based HR systems, in-store tablets and turbo-charged intranets, but by and large the staffroom noticeboard remains the most effective means of reaching the troops.
As a huge Game of Thrones fan, I sometimes wonder if it would be any less efficient to wax seal scrolls and send them out to stores by horseback messenger or raven!
It’s actually not fair to tease retailers for persisting with legacy technologies (or none at all).
Few outside of the technology world realise how enormous the costs of essential technologies used to be for retailers.
When you have tens of thousands of staff, as many of the largest retailers do, it was simply not economic to licence traditional enterprise IT products for every individual within the business.
However, technology has completely changed the game modern retailers are competing in.
Barriers to entry have not just fallen in retail (where an eBay seller can register and begin competing with the High Street and Amazon for customers within minutes), they’ve collapsed for IT vendors too.
It’s actually not fair to tease retailers for persisting with legacy technologies.
Today, cloud computing and Software as a Service (SaaS) have enabled us to ‘rent’ servers and software when only ten years ago a seven-figure capital investment would have been required.
This means that large retailers no longer benefit from their ability to out-invest their smaller rivals.
Everyone can afford state of the art technology, which raises the standards across the market. The big prize now for the ultra competitive retailer lies in achieving ‘marginal gains’ – lots of small business wins, which cumulatively equal overall market victory.
Looking to marginal gains
The concept of ‘marginal gains’ was popularised by Sir Dave Brailsford, the British Olympic cycling coach, who led his team to Olympic Gold after year of chronic under performance.
Brailsford achieved his turnaround not by introducing big, bold initiatives but rather by making lots of seemingly insignificant improvements such as shaving a few grams off the weight of a bike.
Some retailers are now exploring how new ways of working can deliver both better sales and job satisfaction on the front line.
His mantra was “forget about perfection; focus on progression, and compound the improvements.”
Applied to retail, forward-thinking companies are waking up to the fact that globalisation is no longer reliably delivering ever-lower product costs and back office outsourcing opportunities to maintain company profitability.
In the absence of inflation, sales growth has to be earned the old fashioned way – and that’s against a backdrop of falling footfall across many UK high streets.
It’s all about squeezing marginal gains from every part of the organisation and, due to historic under-investment in employee engagement, that’s where the greatest opportunities exist.
Combining performance with employee engagement
Some retailers are now exploring how new ways of working can deliver both better sales and job satisfaction on the front line.
This means instant, mobile, information flow to create more open cultures and more efficient sharing of information, the 'gamification' of sales targets and promotions, and in-store fulfilment technology that allows them to use 'dead' time to support web orders.
For example, one of our customers has made its sales promotions more engaging by running friendly competitions between its stores.
Knowledgeable, passionate customer services assistants can add enormous value to the experience of customers.
The aim is to encourage staff to sell more special offer items, with daily results pushed direct to their mobiles in real time and individual and team winners celebrated more widely within the company.
What’s interesting is that local managers found it far easier to motivate front line colleagues to win a one day match against a neighbouring store than they had previously found it to make weekly (or worse still, monthly) targets meaningful, especially for part-time staff.
Other anecdotal feedback also suggests that overall performance went up too while the matches were running – including for aspects of work which were not being gamified, or even measured.
We might conclude, then, that shaking things up in this way didn’t just have a positive impact on sales, it created a ‘halo effect’ that brought additional benefits to the business.
The three reasons to invest in productivity-enhancing tools for retail staff
Beyond achieving this halo effect, I personally believe in productivity enhancing tools for frontline employees for three big reasons.
Firstly, the best brands are constantly innovating in terms of bringing new products to market and it’s very hard for the average consumer to keep track of what’s hot and what’s not.
Knowledgeable, passionate customer services assistants can add enormous value to the experience of customers who don’t have the time or interest to curate the perfect basket of products entirely on their own.
Investing in state of the art tools for workplace improvement is the right thing to do for all of a company’s stakeholders.
Secondly, even customers who don’t need help do expect a minimum standard of service in stores – that means properly stocked, cleaned and organised shop floors.
It will be a long time until these tasks are automated or eliminated, so we will continue to rely on conscientious staff to take responsibility for these for some time to come (and by reliably, I mean consistently and not just when the regional manager has an inspection booked).
Finally, investing in state of the art tools for workplace improvement is the right thing to do for all of a company’s stakeholders. Higher productivity means higher returns for shareholders and a higher potential distribution of value to labour.
And, as we’ve discovered, helping employees to be more productive might just make them happier too.
