Retail in Asia

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Taking Stock: How to transform retail business with mobility solutions

Manage on the go instead of from behind a desk. Give customers on-demand access to product information as they shop. Account for inventory so shrinkage is reduced. Enable checkout lanes to move quickly and efficiently… With the latest mobility technology, all these can be achieved with ease. In this interview, Anand Mehta, Business Development Director, Retail, at Motorola Solutions, tells Retail in Asia how mobility innovations can help retailers improve their businesses in different areas. He also shares with RIA one of Motorola Solutions’ successful cases in Asia.

RIA: Can you talk us through the mobility solutions? How are they related to retailers?

Anand Mehta (AM): Mobility solutions are applicable wherever a retail job function such as the consumer, inventory for sale and information cross paths.

Retail is typically the reselling of a finished product. However if we stop thinking of the endless permutations of store locations, the product on shelves, the sales staff’s knowledge required and individual consumers’ preferences, this will make an incredibly complex environment.

In addition to this, consumers’ appetite for seeing expanding product ranges and shorter product lifecycles is ever increasing. And therefore, retailers are in an increasingly difficult situation that can no longer be managed without absolute support from technology.

Put simply, mobility is about putting the right information, in the right hands, at the right time to enable better decision making, with a view to positively impacting either the retailer’s business goals or the consumer’s shopping experience. As a clear trend over the last couple of years, the lines between the two are becoming increasingly co-related.

RIA: In what ways can these mobility solutions be used in the retail environment?

AM: The technology can be used magnificently in the retail environment. We typically segment the retail environment into four areas, including "the shopping experience", "supply chain and inventory management", " productivity and infrastructure" and "the buying experience".

The shopping experience

The shopping experience for the customer is the softer side of retailing, as opposed to the "hard" side of retailing, which involves the actual business operations. Retailers can create this shopping experience through in-store merchandising, interactive elements and other things that personalise the experience for each customer.

The principal use of the technology in the retail environment for in-store merchandising is to have a strict discipline and compliance of the in-store display. This includes solutions such as "planogramming", which ensures that all requirements are followed in order to layout the best "shopping trail" and "shelf placement" which are relative to individual retail formats.

Equally important, the in-store staff will communicate back to ensure compliance of display requirements. Motorola Solutions recently introduced the only true enterprise-use tablet and this solution has been rapidly adopted given the device’s 7" screen and camera on board – the workflow now simply consists of the staff emailing a layout to a store associate, having them comply, taking a photo and emailing the picture of the layout back. 

Perhaps more importantly, technology now permits what I term as "Mass Personalisation" – we have the solutions to capture vast amounts of data, analyse patterns and make individual offers in the form of a digital coupon to individual consumers in a store. Additionally, a new wi-fi and video-based solution allows the consumer to be identified and located within a specific area of a store and make the relevant product offer when the consumer is in the relevant aisle, for instance.

One other solution deserves a specific mention is "Mobile POS". While the name suggests the ability to write, invoice and collect payment on-the-fly, a true "Mobile POS" solution is well beyond this. The sales staff is now equipped to be fully informed to be able to serve the customer without leaving their side. Components such as "Assisted Selling" also serve to fill the increasing product knowledge gaps we encounter as shoppers, due to the shorter product lifecycles and increased product ranges. The consumer has never had it better in terms of having a salesman guide them to a fully informed purchasing decision.

I believe we are entering an era where personalised offers and assisted selling will become the norm and not the exception. What is certain for now is that the first mover retailers will enjoy a massive competitive advantage.

Supply chain and inventory management

Supply chain and inventory management, which can be optimised by technology, is usually the core of retail operations. Technology here enables what we term as "inventory visibility", which refers to an almost real-time view of the status of all inventories in transit; be it in the warehouse or on shop floors. It is a clichéd saying but very true nonetheless – "you can’t manage what you can’t measure".

Historically, retailers take inventory twice a year – during their core promotional sale event and close to the end of their financial year to lighten the inventory holding on the books. In practical terms, what this means is that there is a massive lag time in them being able to react on bad inventory purchasing decisions.

In business terms, the impact of this is a massive loss in the form of "markdowns" – selling below recommended prices and in a number of cases, below costs. Adding to this is the cost of holding the stock in warehouses, as well as the opportunity cost of having the same capital invested in stock that could have sold well.  You will very quickly see why retailers flock to us to enable them to have complete visibility of the stock holdings.

Real-time technology-based inventory visibility concurrently enables the indentifying of stocks which are selling faster than they are being replenished – what we refer to as "out of stocks". This typically impacts a retailer’s sales and profitability far more than they are aware of because it is a simple case of them not knowing what they do not know!

As a retailer will tell you, the gospel measurement of retail is what is known as "the stock turn"; in essence there are only two types of stock holdings: "too much of bad stock that does not sell fast enough" and "too little of the good stock that sells too fast".

Motorola Solutions’ technology solutions in these areas are constantly pre-occupied with identifying and enabling a better execution of the above. Our experience with global retailers also clearly indicates that profitability remains a massive concern in the retail industry – occupancy costs, labour costs and advertising costs continue to increase while price and gross margin erosion continues simultaneously.

In the face of intense competition within every retail format, including luxury retailing, we have observed that better retailers concentrate on extracting additional value and margin from within their supply chain, as the cost of trying to get this from the consumer often results in the loss of the sale altogether. Visibility is getting directly co-related to profitability.

Productivity and infrastructure

Over the past few years, and in the years to come, retailers will focus on what has traditionally been their highest touch point with the customer–their staff–but had the lowest enablement in forms of technology that support to execute their roles better.

We largely segment the retail staff into what is classified as a knowledge worker, or a task worker. However, the lines between this continue to get more blurred by the day as information and action are increasingly co-related. While it was the norm for a knowledge worker to be in management functions, business intelligence and analytic solutions are effectively making everyone a knowledge worker, the only difference being the type of tasks to execute.

A retail environment has three stakeholders – the consumer, the retailers (represented by his staff) and the common binding agent – the product for sale (the inventory) – while technology enhances the "process-flow" of all.

The consumer’s typical in-store journey is that of discovery and selection transaction. A retail associate is driven by capturing, analysing and recommending action of relevant information whereas a product’s typical "journey" is that of acquisition, holding and disposing. Our solutions optimise each and every one of these stakeholders’ core process flows.

The buying experience

The buying experience is centred on an actual transaction occurring. While there are a number of established payment and POS solutions in place for this, the shifting sands in this space are to be found in e-commerce on internet retail sites.

Not shopping in a bricks and mortar store does tend to do away with some key considerations described in the "Shopping Environment" scenario above, which effectively results in a successful sale being largely dependent on the quality of the "Buying Experience". 

A retailer must give key considerations to the website guiding a sale online as a salesman would in store – aiding the discovery and selection phases in a typical "shopping journey" online has become a fine art. While it is a clichéd example now, the fact remains that anyone who has shopped frequently on Amazon.com will attest to the process being both effortless and intuitive.

The role of technology here is to clearly manage a huge repository of products and consumer preference information and to assist the merger and navigation of this with a clear view to generating an individual recommendation, thus resulting in a transaction.

RIA: How can retailers make their step towards a complete mobile environment?

AM: There are three core stages of evolution – Mobilising, Transforming and Innovating.

Firstly, mobilising existing systems – we must start with the basics of working with the existing enterprise solutions and migrating them onto mobile devices in the appropriate parts of the supply-chain and company organisation charts.

Secondly, transforming existing business processes to shorten cycle times – the typical first stop in step two is when a retailer becomes aware of non value-adding manual work and multiple data inputs and immediately moves to arrest this mismanagement of time and human resources. 

Thirdly, innovating with mobility as the driver – having tasted "visibility" in terms of consumer, inventory and information, the retailer’s mind is now completely at work with introducing new processes and revenue models based on mobility. At this stage, the retailer will start to identify their key operational pain points and build applications to specifically address these as well as start to strategise on capitalising on the smart phone and tablet consumers, resulting in an entire new "channel" of engagement and revenues.

RIA: What are the challenges associated with implementing a mobile environment? 

AM: In our observation, it can be best described as "putting the horse before the cart".

The first discovery of the role mobility can play in opening up an entire universe literally leaves retailers with stars in their eye, resulting in a haphazard adoption of mobility within the enterprise. As described above, we strongly recommend a very sequential approach based on the stage of maturity the concerned retailer is at.

While there can be actual technical challenges when integrating hardware and software to implement a mobile solution, in our opinion, the biggest challenge continues to be retailers not clearly thinking through a complete mobility strategy and phased implementation across their enterprise.

Being the global leader in Enterprise Mobility Solutions, we encourage and engage with retailers in a "Mobility Assessment" of both the distribution centers and store locations to study their current state and identify the gaps before making any recommendations.

The most common question I get asked by retailers is "What can you do for us?", to which I am now infamously known for answering with "I don’t know!". My point being that here is no solution to recommend until specific pain points are identified.

RIA: What should retailers look out for in an enterprise mobility solution?

AM: Without a doubt, dependability and limited down time.

Once mobility is adopted it very quickly becomes a "business critical" process and this dependency can cost a retailer if ALL the components of a solution have not been appropriately mapped to the specific business needs and workflows. A solution comprises of appropriate analysis, hardware, software, integration and support and is only as strong as the weakest link within this. 

A retailer must look out for experienced partners with reliable reference cases globally. In terms of business investment and calculating ROI a retailer must absolutely consider the Total Cost of Ownership over an entire lifecycle rather than the most common (and increasingly redundant) measurement of capital expenditure only.
This is clearly a hangover of the days of technology being strictly hardware-based for infrastructure purposes – what matters today is a total solution and its impact on enabling business results.

RIA: Can you share one of your successful cases with us?

AM: The retail sector is an important focus of Motorola Solutions’ business and the company has provided retail mobility solutions to both global and local retail brands in different markets, including the ones in the Asia Pacific. 

Motorola Solutions has worked closely with Malaysian retail giant Mydin Mohamed Holdings to help them deploy retail mobility solutions to improve customer experiences and enhance their worker productivity. As part of its efforts, Mydin has deployed Motorola’s advanced data capture solutions to manage its inventory, from receiving and replenishing goods, to tracking inventory and stock taking. This ability to gather real-time information on inventory levels has helped them develop an agile and flexible supply chain. With productivity enhanced at every point of the shopping experience, Mydin is able to mitigate pain points, and increase sales.

They have also rolled out customer retention/loyalty programmes. Advanced data capture solutions have helped capture information on customer preferences, patterns and shopping behaviour.  This in turn helps them push out special discounts and promotions to the customers, to help improve their shopping experience and loyalty.

 

Anand Mehta is Business Development Director, Retail, at Motorola Solutions. He has a collective 15 years of retail experience within the Asia-Pacific region with direct operational familiarity of the Singapore, Malaysian and Australian markets and significant research insight into other Asian countries. He has deep knowledge of a retailer’s key functions and the regional industry wide challenges of inventory, staffing and real estate.

Motorola Solutions is a leading provider of mission-critical communication products and services for enterprise and government customers. Through leading-edge innovation and communications technology, it is a global leader that enables its customers to be their best in the moments that matter. Motorola Solutions trades on the New York Stock Exchange under the ticker "MSI".

To learn more about this company visit Motorola Solutions.

Taking Stock is Retail in Asia’s fortnightly column dedicated to showcasing opinions from experts in the retail industry.