After all the disruption of the past two years, retail operations leaders will be wondering what’s next. One thing for sure is that digitalisation is going to be a big factor, not just in terms of online experience but in physical stores too. What does that mean for retail operations management?
Improving efficiency and customer experiences are the driving forces behind an acceleration of digital transformation in retail, according to an international survey of 161 ICT decision-makers across the industry. The survey, by DataDriven, reported that improving customer satisfaction was the highest priority for strengthening competitive positioning. At the same time, almost three-quarters of respondents said efficiency was a high or extremely high priority, and only slightly fewer said productivity and collaboration improvements were near the top of their to-do lists.
To achieve these objectives, leaders will need to review their approach to retail operations management. Only by reshaping their operations can retails reshape the way they serve customers.
However, the survey acknowledged a series of challenges that slow down progress on digitalisation, including:
- Lack of time for innovation
- Concern about time taken for projects to show value
- Difficulty in gaining acceptance of new technology
- Complexity of business process change
- Increasing customer demands
In our recent webinar on retail trends, we asked a retail operations management leader for her advice on delivering effective digital transformation.
Hannah Barnes, VP of operational excellence for bp retail outlets across Europe and Southern Africa, shared her thoughts on creating the right conditions for success.
Define the starting point for digitising retail operations management
Picking out the use cases that offer the fastest returns will help leaders win early support, said Hannah. “The right place to start is to ask, where can you add the biggest value? The first piece of technology we brought in after I joined was a really simple use case. It was to replace a simple back-office procedure with a process that was digitised. It took away 10 hours of work a week, which is a tangible benefit that people could grab onto, and made a big difference immediately. My advice is to start where you’ll get the biggest bang for your buck for the benefit of employees. People will embrace it if it makes sense and it's logical to them.”
Don’t lose sight of human interaction when balancing the digital equation
Digital transformation programmes should never lose sight of the human element, said Hannah. “Data helps you to make the right decisions to inform the way that you operate. Anything that helps distil what employees should and shouldn’t be doing is positive. There's huge value in extracting that. But I think the tricky part is how you analyse that and get the right outcome. I don't want to be completely reliant on data. There's always a need for human intervention or interaction. There is a massive place for data in making both the customer and colleague experience better and driving the bottom line. If you are equipped with the right information, it makes that easier. But I also still have maybe an old fashioned view that that you need that human interaction to be make it come to life.”
Look out for good examples of retail operations management
Expanding your field of vision reveals new ideas for applying digital solutions in retail environments. “One of the things I love about my job is I get to see change programmes in every market,” said Hannah. “I was out in Poland recently and there are loads of really cool initiatives out there such as the use of digital screens. One of my colleagues sent me a great example of digital screens used in-store. It was like an emoji speech bubble above the top of the shelf, as if the advertising is talking to you. The way that other people approach changes to retail operations management is so interesting to learn from. As you move across the different European countries, you see how they apply things slightly differently. The use of headsets is an example. I see them used differently everywhere I go. There is real value in getting out there and seeing what people are doing across the European markets.”
Get staff engaged in retail operations management
Frontline teams are still at the forefront of most in-store interactions. Hannah said finding ways to colleagues was a major focus of her digital initiatives. “If you're a petrol station, you’re part of the local community and the way that our colleagues deliver is the difference between a great customer experience or not. As you free up more time for employees you get to see the amazing ideas that people bring to life, the generosity of the people that work in the store and their ability to spend time with customers. There's a journey we still have to go on in terms of the percentage of time spent in back-office administration versus being on the shop floor with the customers. But there are loads of really positive examples. Our Wild Bean Café staff are so committed and passionate about what they do and that often makes the difference. They're passionate brand advocates. We've also got lots of people who go the extra mile and it's all down making sure that you give people the time, the space and the right environment. That is generally the difference between a great customer experience or not. Of course, there are lots of functional things that contribute to customer experience, and the work we're doing in intelligent operations contributes to that. But for me, the differentiator is how you give colleagues time to be able to invest in the customer.”
Learn from data to optimise retail operations management
Digitisation projects can generate huge amounts of data that is useful in retail operations management. But to extract value from that data, it’s vital to analyse and act on new information, said Hannah. She highlighted examples ranging from car wash equipment to product availability. “One example is our car wash business, which is affected by the outside temperature. We've spent a lot of time capturing how quickly we respond to temperature changes and turn our car washes on and off. The data identified that we might lose between one and two hours’ trade every time the temperature changed because we weren't quick enough to turn the car wash back on. This is something we never would have discovered if we didn’t have sensors on the equipment. We then went on to digitise that process to ensure we respond more quickly. There are many other examples. Toilet usage is another one. We looked at monitoring the facilities to understand how often they are used and how often they need to be cleaned. There are also lots of tangible benefits looking at product availability on food service. Data from that enables us to work out how we make sure that at 5am we've got enough bacon and cheese turnovers ready because we know that's one of our best-selling products at that time of day. All that's coming from having the data.”