Why Mystery Shopping Data Isn’t Enough

By Brian Harris

walmart-checkout

“The goal is to turn data into information, and information into insight.”
Carly Fiorina
Hewlett-Packard
Former Executive, President and Chair

Your No. 1 goal in collecting data is to gain actionable insights. You could have a great mystery shopping program that provides detailed responses from the field. We don’t doubt the value of a good, unbiased program, but we’ve seen firms tell retail companies that they’ll improve sales through mystery shopper feedback.

That’s like saying you can be fluent in French by studying a set of flashcards. You’re missing some critical steps in between. Only in submersion of a language can you gain the kind of understanding that helps you reach fluency. Similarly, you must submerse yourself in data to gain actionable insight. Only then will you achieve your end goal of improving retail sales.

How to Improve Data Quality

It’s not about quantity; it’s about quality. If you’re still mailing mystery shopper packets, STOP. There’s a better way that’s going to save everyone time, aggravation and postage fees.

Here are three tips for improving data quality with a mobile solution:

1. Measure real-time analytics

Say goodbye to inputting data from a paper form into an Excel spreadsheets. First and foremost, real-time analytics lead to real-time, actionable insights. This is the question we always ask: Why are you waiting a week or longer to learn there’s a problem in your sales? Real-time exceptions help you be proactive, rather than reactive.

2. Reduce the risk of error and improve responses

If you’ve ever conducted a survey, you know the importance of writing each question in a way that’s impartial and elicits measurable responses. A mobile solution enables you to easily create and update forms across multiple locations. If you find that a question is confusing your representatives out in the field, you can correct it for future surveys.

3. Involve your employees

Just like mystery shopper data has its limitations, the mystery shoppers have limitations. This is in no way to discredit people who are good at the task. However, they probably lack the detailed knowledge of your business that your employees’ have. Involve your employees in the auditing process to get a fuller picture of your retail operations.

Optimize the way you collect data and you’ll gain better insights. Gain better insights, and you’ll soon see the improvement in your sales.

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Topics: Retail

You've Been HACKED! What a Retailer Should Do Next

By Julia Burnett

target credit card scanner
Photo by Mike Mozart, flickr

Retail data security became one of the hottest topics in the retail industry last year after two of the United States’ largest retailers, Target and Home Depot, experienced devastating network breaches.

We use the term “devastating” for two reasons. First, the attack affected tens of millions of customers – 60 million for Home Depot and 40 million for Target (New York Times). Secondly, the breach had a very serious affect on the brands’ reputations and this was evidenced by both companies adjusting their earnings forecasts and trying to regain customer trust.

Here are some rather disturbing facts about cyber security:

  • Cybercrime cost more than $445 billion worldwide in 2013.
  • More than 2,160 data thefts occurred in 2013. The number of records exposed tripled from the year prior to 823 million. Source: CSD magazine, Jan. 2015

Here are two additional facts about company preparedness:

  • Thirty percent of companies do not have a plan for dealing with a data breach before it happens. Source: Mike Bruemmer, Experian Consumer Services, in Forbes, Sept. 2014
  • Fifty-four percent of companies believe it can take anywhere from 10 months to more than two years to restore a company’s reputation following a data breach. Source: “The Reputation Impact of a Data Breach,” Experian and the Ponemon Institute, 2012

When faced with a data security breach, what can you do to improve your company’s ability to respond and regain consumer trust?

“It’s not a question of if you will be hacked, but when.”Joe Adams
cyber security expert

Have a plan

Develop a threat response system and know what information is vulnerable and where it is located. For instance, if you are a smaller operation, you might store customer transactions on a cloud, rather than a network.

Be prepared to communicate with customers

Don’t delay public notification. The person in your company who is usually the spokesperson should state the facts of the breach clearly and make it known that you are actively taking steps to resolve the vulnerability.

Don’t forget to apologize

It’s not just your executive team experiencing anxiety right now. Consider offering customers a free membership to enroll in an identity protection service -- a response that’s becoming more and more popular.

Keep your systems updated

Run updates on malware, regularly update software and patches. Adopt the new EMV standard prior to the October 2015 deadline (see our previous post for more details). If no one in your organization has the technical knowledge for these tasks, it’s time to make the investment in hiring someone.  

Train your staff and communicate

Make point-of-sale training a priority. Employees at the register should ask vendors and technicians for ID before granting access to POS terminals. This is where moving training modules and checklists for onboarding new retail employees are especially helpful.

Remember that knowledge is an extra layer of security. Even the most prepared companies can fall victim to an attack. You must protect against vulnerabilities not only in your computer systems, but also within your franchise network. This is why regularly inspecting your franchise is crucial to security.

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Topics: Retail

Beyond the ATM: The Next Innovation to Drive Retail Foot Traffic

By Julia Burnett

sunoco gas station line

In 1968, a Dallas man and Docutel employee named Don Wentzel was standing on line at his local bank, trying to cash a check. The line was long and his lunch hour was evaporating quickly. As he grew more and more frustrated, he suddenly had an idea. Why not invent a machine to take the place of the teller and speed up the banking process?

In the early 1970s, Docutel sold its first automated teller machine. It took years for banks and credit card networks to embrace the technology, but by the 1990s, the number of in-store machines was growing exponentially. Customers love ATMs for the convenience; retailers love them for the in-store foot traffic.

The ATM was by far one of the most significant -- if not the most significant -- in-store innovation of the late 20th century. It’s been a while! Now that it’s 2015, it’s time to find out what the next major innovation will be.

3 Future trends that could drive more in-store foot traffic

amazon locker 7 eleven

1. Amazon Locker

UPS attempted a delivery when you weren’t home and now your package is at a drop-off inconveniently located across town. Amazon Locker is a great solution to the common parcel pickup problem. It’s no surprise that the world’s largest online retailer partnered with the United States’ largest convenience store operator, 7-Eleven, to create a network of Amazon Locker pickups, mainly in metro areas.

How it works: When ordering from Amazon, customers choose to have a package delivered to an Amazon locker located in a 24-hour convenience store. Customers retrieve the parcel at their convenience and hopefully (for the retailer) buy some other items. Retailers also receive a stipend to host the lockers.

bitcoin accepted at subway

2. Bitcoin ATM

Bitcoin belongs in “Game of Thrones.” Since you can’t physically hold a bitcoin, it’s something of a fantasy, yet it’s part of an entire financial “world” on the Internet.

How it works: Bitcoin is a decentralized, digital currency that lacks intuitional and/or political affiliations. Once bitcoin is exchanged for goods and services, the record of the transaction is publicly recorded onto a block chain known as a ledger. Other bitcoin users called miners verify the transactions in the block chain. Miners will receive newly minted bitcoins for their work and more currency enters circulation.

Consumers can also convert cash to bitcoins. Some companies are installing bitcoin ATMs or what others prefer to call bitcoin vending machines. Here’s an interesting video of how a man tries to survive on bitcoin for a day. It seems that the biggest challenge to adoption will be retailers understanding how to accept bitcoin in transactions.

duracell powermat charging

3. Wireless charging

Offering wireless charging stations is futuristic as well, but adoption seems less cumbersome. In fact it’s already happening and it’s no surprise that Starbucks is leading the way. The general idea is that if a customer is going to sit down at one of your tables to charge a cell phone, he/she will first purchase something. At least that’s common etiquette!

How it works: Starbucks unveiled Duracell Powermat charging in approximately 200 of its stores in the San Francisco Bay Area in November and plans to roll out the service nationwide. To charge wirelessly, customers place their compatible device on Powermat Spots, which are designated areas on tables or counters. Or, customers can purchase or borrow “rings” that instantly upgrade any phone to wireless charging compatibility.

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Topics: Retail

How to Conduct a Retail Employee Performance Review

By Brian Harris

office-space-flair

It’s 2015, and with the New Year comes new opportunities -- including new jobs.

Did you know that Americans are quitting their jobs at the fastest pace since early 2008? That’s great news for recruitment, but not great news for retention.

According to Doug Fleener, author of “The Profitable Retailer: 56 Surprisingly Simple and Effective Lessons to Boost Your Sales and Profits,” retail turnover rates come down to two issues:

  1. Bad retail management.
  2. The attitude that employees are expendable.

Reduce turnover by keeping your employees engaged

An employee review sends two important messages. First, it reminds your employees that they are critical to your mission of providing exceptional customer service. Secondly, it tells employees that management values their input and is also looking to improve.

what-would-you-say-you-do-here

Do you remember that line from the cult-classic movie “Office Space”? It’s a scene that pokes fun at two efficiency evaluators, both named Bob.

Don’t be “The Bobs.” An evaluation is not the time to get a clue about what your employees are doing. You should already know this information!

Quantify, Quantify, Quantify

Accountability is a two-way street. If you want employees to be responsible for their performance, you must also be responsible in how you quantify their performance. You must have a process.

Optimize the return on your time by sticking to the facts.
Evaluations take time and in business, time is your most valuable asset. Don’t ask your employee how she feels she performed, according to Jeff Haden, contributing editor at Inc.com. Instead, talk about performance examples, both recently and in past months.

Have data to back up everything you say.
Having specific examples assumes you already conduct regular retail sales audits and property inspections. If there’s an ongoing problem at one of your retail locations, it should already be on record.   

Use visual examples.
Words can be poignant but photos can be powerful. Imagine if you had the capability to call up a photo that proves your point about store cleanliness or retail execution.

Capture data from your employee reviews.
You won’t be the only person conducting employee reviews. By using a mobile solution, you can easily create new forms that employees can fill out via their smartphone or tablets. Store managers can evaluate store employees, regional managers can evaluate store managers, and so on, right up the chain.

When everyone uses the same form, data is collected accurately for analysis.

Stay positive. Remember to stay positive throughout the employee evaluation and be sure to point out what your employees did right along with areas in need of improvement. Don’t argue! If you need to criticize, do it constructively with factual support.

Sample Personnel Evaluation Form

Topics: Professional Development, Retail

5 Things C-Store Operators Should Know About Apple Pay

By Vladik Rikhter

Apple Pay

Just like Instagram is social media’s cool kid in school, Apple Pay is turning heads in the mobile payments industry. It’s among the platforms we covered in our 5 c-store technology trends for 2015.

Apple Pay allows iPhone 6, iPhone Plus 6 and Apple Watch users to pay for fuel and other goods and services via their smartphone.

In October, Chevron announced that it would accept Apple Pay at more than 3,000 Chevron and Texaco ExtraMile locations before the holiday season.

Before taking a big bite of Apple Pay, here are five things c-store operators should know:

1. When used in-store, Apple Pay qualifies for card-present rates

Merchants pay credit card companies a fee, usually 2 to 3 percent, every time a credit card is used for a purchase, and Apple Pay is part of this system.

2. Apple Pay has met resistance from big retailers

Many big retailers view credit card companies as the enemy. Remember the swipe fee lawsuit saga? Big Retail believes swipe fees are too high. As a result, some c-store retailers, including 7-Eleven, refuse to accept Apple Pay and other competing mobile wallet platforms.

3. Apple Pay’s main competitor is CurrentC

Google Wallet and Softcard (formerly Isis) have not caught on in terms of widespread adoption. Rather, CurrentC was set up via the Merchant Exchange consortium (MCX) and is spearheaded by Walmart. CurrentC helps retailers boost profits by reducing credit card transaction fees required under the Apple Pay system.

However, CurrentC is clunky to use since it involves scanning QR codes. Apple Pay is more convenient for users. You simply hold your device up to the contactless reader, which will open up your default credit card and use a biometric fingerprint scanner to certify the transaction.

4. Apple Pay requires extra hardware

While QR codes are clunky, CurrentC requires a QR reader on a smartphone and the code on the cashier’s screen. In contrast, ApplePay requires a payment processor with a near-field communication (NFC) reader that allows for contactless payment. As of October, only 10 percent of U.S. retailers had installed these readers, Mark Hung, an analyst with IT research firm Gartner, told the New York Times.

Additionally, each terminal must be equipped with software that accepts contact-free payment, and a merchant account that accepts Apple Pay.

5. Using Apple Pay is more secure than swiping a card

Apple insists it is not in the business of collecting data, and that any in-store transaction with Apple Pay stays between the customer, the merchant and the bank. Also, the cashier won’t see a customer’s name and security code. You just have to accept the premise that Apple will not store your card information somewhere on a cloud.

The Takeaway

As you can tell, there are some stumbling blocks to widespread adoption of Apple Pay. To be fair, however, the platform seems to make payment easier for consumers than rival platform CurrentC, which seems hellbent on making Visa suffer. We’re serious. We leave you with this now infamous quote:

“I don’t know that it will, and I don’t care. As long as Visa suffers.” Lee Scott
Former Walmart CEO when asked if MCX will be profitable
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Building vs. Buying Software for Your Business

By Brian Harris

bridge-fail

You’ve heard the phrase “if you break it, you’ve bought it.” But, what happens when you’ve bought it and then it breaks?

If, for example, your company’s software isn’t working properly, do you have the capability to fix it on your own?

In the realm of SaaS (software as a service), the building vs. buying debate comes down to cost, skill and time. However, customization is the overriding issue that is oven overlooked.

Chuck Cohn, the CEO of Varsity Tutors, writes, “The vast majority of off-the-shelf software will not allow you to modify its functionality in a meaningful way. It may be difficult to add or subtract built-in features leading to either too many or too few functions for your company.”

Cohn raises a valid point. That’s why the key to buying an off-the-shelf solution is to look for the exception. Select a customizable platform that fits your needs and look for exceptional customer service.

Software as a Pizza

Categorizing off-the-shelf solutions as rigid or inflexible is like saying all pizzas are made with just cheese. That’s certainly not the case.

Is it easier to buy a pizza or to make one yourself? That depends, but think of some of the advantages of buying a pizza rather than making your own.

Cost

By the time you’ve purchased quality ingredients -- dough, sauce, cheese and other toppings -- your grocery bill is adding up. You might as well have purchased the pizza!

Similarly, many companies set out to create their own app or software without realizing the exorbitant costs of hiring an in-house developer or outsourcing the project.

Skill

You’ve never made a pizza. You’ve researched how to make dough, or maybe even watched an instructional video, but you lack the finesse to make the quality pizza you could get from a pizzeria.

It’s like lacking the technical knowledge for maintaining your software. If you don’t have an in-house team, you can outsource tech problems as they arise, but this tactic will prove costly in the long run.

Time

It’s getting late and you have work to do. You’re hungry and you just want to eat the pizza already!

Creating custom software can take several months, if not a year depending on the size of your team. You’re looking at more time if you need to add extra features and capabilities. As you know, time is money.

Software is not a personal pie

Your entire organization will share it, so the final product must be flexible and customizable across your organization. This is especially true for franchise management.

Choosing the right software is just one of many challenges in operating a business. So, don’t become chained to the kitchen or stuck shopping for talent just for the sake of creating proprietary software.

Three tips “to go”:

  1. Determine whether or not building custom software is worth the time, effort and resources needed. Remember, stuff breaks!
  2. If buying software, select a flexible platform and one you can customize to your business’ needs.
  3. Ask questions and look for great customer service. Your software provider should be responsive to your needs.
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How to Onboard a New Retail Employee

By Brian Harris

7-11-training

The recruiting process is extremely time consuming. You’ve sorted through applications, screened employees, interviewed them and confirmed offers. At this point, you and your employee are both eager to get started.

Why, then, is your onboarding process so tedious? There has to be a better way to get new employees situated.

Go paperless. Each time we say this, we urge you to have a process. A paperless system is worthless if you can’t easily analyze data and more importantly, gain actionable insights.

When onboarding a new employee, the actionable insight is making sure your new employee has completed all the necessary forms and received crucial information prior to actual training.

3 Tips For Onboarding A New Retail Employee

1. Convert your paper forms into electronic forms and make them accessible through a portal. Save paper and ink, and eliminate faxing sensitive information like social security numbers. Review and share forms in one central, secure location.

2. Create a digital checklist the employee will use to show his or her progress. For instance, have the employee check off when he/she has submitted forms or completed a safety module. If documents are missing, you’ll be able to pinpoint the issue.

3. Use a non-robotic welcome video. The key is to be human. If your new employee won’t be interacting with the executive team, why is there a guy in a suit talking at her? Try creating a custom message. Your regional manager can take a short video with his smartphone and upload it to the portal. The message can be simple:

“Hi, Mary. Welcome to [name of company]. I’m excited to have you on board, and I’m looking forward to meeting you on my next visit. If you have any questions, feel free to give me a call.”

Don’t forget: Making a good impression works both ways. The human element is one of the greatest attributes of a customizable onboarding process. It lets employees know they’re valued members of your organization, and not gears in a corporate machine.

3 Ways to Increase Retail Execution

By Naomi Balagot

retail-execution-empty-shelf
Photo by Marc van der Chijs, via Flickr

“The result of bad communication is a disconnection between strategy and execution.”
Chuck Martin
Former Vice President, IBM

Your retail company may have the best and brightest employees in the industry. You have game-changing ideas on how to take your business to the next level and as a team, you have spent hours developing your strategy.

Ready, set… uh oh! You’re just finding out there’s a problem in your retail execution. It’s disappointing after all your strategizing, but it’s not something that can’t be fixed.

You can quickly respond to – and perhaps even prevent – flaws in your retail execution.

We’ve identified three key problems in retail execution and how they affect your operation:

1. Compliance
You lack the ability to monitor compliance on multiple fronts, including product distribution, promotions, planograms and out-of-stocks.

2. New product launches
You lack the ability to monitor new product launches in real time. As a result, you have a poor return on brand and promotion investments.

3. Limited decision making
Since you lack real-time data for customers, promotions, products and competitors, you’ve prohibited your ability to quickly identify a problem and develop an actionable plan to address the issue.

If you’ve noticed any of these issues before, you have a communication problem.

Even the best strategies may need some tweaking once implemented. If you want to improve your retail execution, you must have access to accurate data at a moment’s notice. You need real-time information and the ability to quickly analyze the situation.

What can you do? You are the doctor and your store is the patient. You order an “MRI” to diagnose the problem and gain insight.

“M” is for monitoring.

Track new product rollouts and monitor promotional execution. Verify in-store displays and signage.

“R” is for real-time reports.

Don’t wait a week to find out there’s a problem in your sales. Track the execution of programs by region and individual location. Receive real-time exception reports on your mobile device or desktop.

“I” is for images.

Share images and video, and pop into your store from anywhere. Stay organized by using a mobile solution that uploads images directly from your device, and sorts them by team or region.

Don’t let poor communication get the best of your strategy or impede your execution. Stay mobile and use a flexible platform that works with you, not against you.

Sample Retail Inspection Form

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5 C-Store Technology Trends for 2015

By Julia Burnett

tesco-homeplus-subway-virtual-store-south-korea

Technology advances continuously. Just when you’ve learned how to use your new smartphone, the next generation device is announced.

Now more than ever, convenience store retailers are using technology to their competitive advantage, which requires keeping up with the latest trends.

To help you, we’ve identified the top five trends in c-store technology for 2015:

1. Data-driven decisions are the new norm

No one is psychic, but having data in real-time is the next best thing. Only through analytics do retailers understand what drives customer behavior or what’s driving their customers away. A flexible platform allows employees to update inventory data, while documenting store conditions and real-time exceptions. More retailers are realizing that better knowledge leads to better decision making.

2. Point-of-sale infrastructure updates

Hill Ferguson, the chief product officer at PayPal, writes that only 2 percent of U.S. retailers have point-of-sale systems that are NFC-enabled (near field communications) and there are 9 million retailers in this country.

There is also a push for U.S. retailers to adopt Europay Mastercard and Visa (EMV), which uses a chip and PIN technology vs. magnetic stripe to authenticate transactions. By October, card networks will pass the risk of fraudulent charges to retailers who have not adopted the new standard.

3. Consumer adoption of mobile payment systems

 It’s no surprise that Apple Pay is leading the way, given the Apple brand’s popularity and trust with consumers. The technology is catching on so quickly, in fact, that Chevron USA Inc., is going “all in” and adopting Apple Pay at the pump this year.  

Swipe-to-pay is an attractive solution for an industry that targets on-the-go consumers, but the key is getting consumers to make the switch. Look for c-store retailers to offer customers more loyalty incentives to adopt new payment technologies.  

4. Mobile consumer engagement: beacon

A beacon is a low-cost piece of hardware that typically attaches to a wall or countertop, and uses Bluetooth connections to transmit messages or prompts directly to a mobile device.

Beacons are useful for indoor spaces where cell phone signals are often blocked and devices are unreachable via GPS. More retail outlets are adopting beacons as a way to provide customers product information, including flash deals or sales.

5. Integrated digital marketing

Content-rich marketing is becoming the new norm, and c-store retailers are seeking creative ideas to make the shopping experience more engaging. In fact, 7-Eleven just hired a new digital marketing agency to drive innovation.

Of course, having a flashy app isn’t the end game of an effective marketing approach. According to Retail Info Systems News, ad campaigns driven by customer data have high click-through rates and nearly 500-percent return on ad spend, according to Justin Honaman, managing partner for CPG and Retail Industry Consulting North America.

We’ve come full circle to data-driven decisions as the No. 1 technology trend in c-stores this year. Good things are bound to happen when retailers combine real-time data analysis and effective marketing campaigns.

Of course, each individual retailer is unique and not every solution works for all retailers. Assess your business’ needs to determine the best tech solutions.

See also:

5 C-Store Trends for 2015: Foodservice & Snacks

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The Biggest Difficulty in Managing Multiple Store Locations Is...

By Brian Harris

map-locations

You’ve heard the phrase “fake it till you make it.” It’s the idea that in order to be successful, you must exude confidence, even if things are falling apart behind the scenes. It’s like putting up a sign that says “please pardon our appearance” while you renovate. Your customers don’t see the mess and your retail operation marches onward.

Unfortunately, “faking it” doesn’t work when communicating with your employees. If they know you’re not engaged in their activities, they become disenfranchised. Bad morale eventually hurts customer service, and when customer service falters, so does your brand.

Communication is the biggest difficulty in managing multiple store locations.

Fact: If you’re struggling to manage your retail network or franchise, you have a communication problem.

  • Vendors didn’t send the right products or promotions? Communication problem.
  • Employees not cleaning up in the store? Communication problem.
  • Store planogram is a disaster? Communication problem.

You get the idea.

Don’t take the approach that says, “What am I paying these people for?” It’s too easy to pass the blame onto your managers without asking what you could be doing better.

Maybe you’ve recently expanded to more locations, or maybe your company is scaling back growth due to stagnant sales. William J. McEwen, author of “Married to the Brand,” writes, “The company must recognize that its stores aren’t merely distribution centers; they are in fact brand centers. And they are crucial to delivering on the company’s brand promise, whether the total number of stores is expanding or contracting.”

Regardless of your current situation, how can you improve store operations?

Communicate Spontaneously

Think of your organization like it’s your family. Imagine if you only talked to your spouse or called a parent during a scheduled timeslot. What would that do to your relationships? It would undoubtedly cause negativity and tension.

Remove barriers to communication

Encourage employees to report problems in real time. Document issues digitally, and keep everyone in your organization engaged.

Let’s look at those communication problems again, this time with real-time solutions:

  • Vendors didn’t send the right products or promotions? Scan a barcode or take a photo with GPS and time stamp. Notify vendor of the problem in real time.
  • Employees not cleaning up in store? Document the issue. Take photos as visual evidence. If a store is a “repeat offender,” have managers address individual problems as needed.
  • Store planogram is a disaster? Upload latest version of planogram and share with staff. If there’s a problem with SKU or promotion placement, take a photo. Share and comment to resolve.

Sample Planogram Implementation Form

See also
How to Simplify Franchise Management
Why Regularly Inspecting Your Franchise is Important

Topics: Retail, Franchise