Customer/Shopper Experience Management (CEM) Case studies in Retail Industry Virgil Popa Theodor Purcarea Dorina Tănăsescu Mădălina Barna Valahia University of Targoviste Supply Chain Management for Efficient Consumer Response Conference 31 May – 1 June 2013 Valahia University of Targoviste, Romania SCM 4 ECR
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Customer/Shopper Experience Management
(CEM)
Case studies in Retail Industry
Virgil Popa
Theodor Purcarea
Dorina Tănăsescu
Mădălina Barna
Valahia University of Targoviste
Supply Chain Management for Efficient Consumer Response
The customer experience originates from a set ofinteractions between a customer and a product, acompany, or part of its organization, which provoke areaction.
This experience is strictly personal and implies thecustomer’s involvement at different levels (rational,emotional, sensorial, physical, and spiritual).
A second and related definition is that “CustomerExperience is the internal and subjective responsecustomers have to any direct or indirect contact with acompany.
The customer experience encompasses the totalexperience, including the search, purchase, consumption,and after-sale phases of the experience, and may involvemultiple retail channels.
Most of the researchers centers on what happens atthe front-end of the retail store, supply chain managementoccurs at the back end.
For decades, retail supply chain and logistics issuesseemed somehow less important than other activities suchas promotion, pricing, or customer service.
Retailing academics and practitioners seem alwaysto emphasize “location, location, location” as the key tosuccess.
An important research advance could consider therole of travel time on consumers’ choices of retail formatsand the related retailing implications because consumersvalue their time, researchers should investigate what itmight take, in terms of price savings and deals, to attractconsumers to a factory outlet store (normally located somedistance away) rather than a similar store in aconveniently located mall.
Exponential growth in Internet hosts and personalcomputer adoption has led to dramatic increases in onlineactivity.
During the growth process, marketers recognizedthat the Internet was a medium for reaching millions ofpotential customers. Since then, marketers have adaptedvalue based advertising strategies to the Internet.
Packaging plays a major role when products arepurchased.
After all, it is the first thing seen before makingpurchase choices and it is widely regarded that over 50 percent of purchasing decisions are made at the shelf, or pointof purchase.
Therefore, packaging which creates differentiationand identity in the relatively homogenous consumerpackaged goods industry is therefore highly important.
G. Crucial issues in achieving a great customerexperience:-Personalisation - the company knows the name of thecustomer and the historical background of the relationshipirrespective of channel;-Customisation - the company is able to offer a tailor-made solution to the customer’s problem;-Consistency - the experience is consistent over time,regardless of the channel used;-Channel choice - the customer has either the option toselect the appropriate channel or is steered towards aparticular channel.
Six Steps to Enhanced Store Shopping1. Distribute Enriched Information via Next-Generation Digital Signage.Present shoppers with an attractive alternative to their own mobile devices
with digital signage offering deep product information, ratings and reviews, andalternate colors/models of merchandise.
2. Use Technology that Invites Customer Interaction.Gamification solutions and gesture-based technology offer shoppers unique
experiences that can only be found in the store channel.3. Match Your Store Labor Force to Demand and Customer Needs.Use multiple data points to determine not only how many employees should
be working but what the optimal combination of job types and skill sets is for any givenshift.
4. Build Store Traffic by Providing Cross-Channel Functionality.Buy online/pick up in store and cross-channel returns are basic but effective
tools for building store traffic, increasing incremental sales and improving customerservice.
5. Make Omni-Channel Inventory Easily Accessible in Stores.Store shoppers seek immediate gratification, so retailers need to invest in
inventory and order management solutions that handle the disappointment out-of-stocks create.
6. Make Relevant, Real-Time Data Available to Store Associates.Tablets and other smart mobile devices are becoming optimal vehicles for
delivering endless aisle, sales support and clienteling solutions to store employees. 27
The concept of collaboration was institutionalizedin the mid-1990’s with the “Efficient Consumer Response”(ECR) movement, which sought to establish consumerunderstanding as the foundation for improved demandmanagement and supply chain efficiency.
But while ECR’s mission has always been toimprove consumer value and choice at the store level, itsattention to reduced costs and streamlined processes hashad a debatable impact on marketing and merchandisinginnovation.
The Shopper Marketing refers to the stimuliencountered and perceptions created in bricks-and-mortarstores, as well as retail websites and other e-commerceformats. But it goes well beyond such transactionaloccasions to encompass all activity along the path topurchase designed to influence brand awareness andpreference, store selection, consideration, in-storeexperience and, ultimately, post-purchase evaluation (seechart above).
as the level of customer’s implication for anenterprise which, first of all, satisfies the needsexpressed by the clients/shoppers andestablishes a long term relationship andsurprises its clients/shoppers by anticipatingtheir needs and wishes. Customers/shoppersthemselves develop a very strong emotionalconnection with the offer of the enterprise, whichbecomes a part of their lives.
To be a leader in today’s competitive marketplace, retailersneed to focus on the importance of impact, ambiance andsustainability.
Lighting can support these three key factors to help addressthe critical issues of the shopping experience, the brand and meetingyour financial goals, helping you transform your property
Give shoppers an experience they’ll never forget. Greatlighting can create an inspiring atmosphere and a meaningfulexperience that goes beyond shopping.
Whether your retail personality is charming, sophisticated,no-nonsense or high glamour, store design should support yourstrategy—and bring your brand to life.
Shoppers have more choices today, so attracting thosecustomers is more competitive than ever before.
Impact: For shoppers, the quality of a store’s atmospherespeaks to the quality of the retailer. A store with unique, powerfulcontrast between merchandise displays and general circulation areasis dynamic and memorable.
It’s not hard to make a bottom-line case for better lighting.Retailers can maintain and even enhance lighting levels while
cutting overhead and operating costs thanks to better lightingsystems. Simplification, along with energy-efficient, long-lastinglighting solutions, can mean savings.
Because retail outlets operate seven days a week, even smallgains in efficiency can lead to big cost reductions. Replacing outdatedlighting systems with more efficient, environmentally-friendlysolutions will reduce energy consumption and maintenancerequirements.
Using fewer lamp types and standardized wattages can reducecomplexity and make maintenance more manageable, too. It all addsup to big savings, and improved bottom lines.
Hedonic shopping motives are based on the quality of theshopping experience itself rather than on information gathering orpurchasing products. Consumers' shopping motives: product oriented,experiential and a combination of product and experiential.
The product oriented shopping motive refers to a store visitmotivated by the desire to acquire product information or to purchasea product.
The experiential-oriented shopping motive refers to a storevisit motivated by the pleasure inherent in a store visit, in and of itself.
Hedonic shopping motives are based on the quality of theshopping experience itself, rather than on information gathering ofpurchasing products.
The main reason many people visit shopping malls is for theexcitement of the experience. These motives indicate the importanceof entertainment in shopping.
Experience economy refers to a next economy following theagrarian economy, the industrial economy and the most recent serviceeconomy.
A transition must made to providing customers withmemorable experiences in order to achieve competitive advantage.
Experiential marketing refers to a live event of experience thatgives the target market the opportunity to see a product andexperience it for themselves .
Its purpose is to provide a variety of paths to experienceentertainment in a shopping center so that it makes consumers'experiences enjoyable rather than simply purchasing products.
The goal is to make shopping fun and interesting in order toseduce more consumers into shopping centers.
In the situation where retailers viciously compete, due to thelimited time and consumption abilities, its purpose is to pursuedifferentiation with new distribution businesses through the factor ofentertainment.
Co-creation is a business strategy that works more like a business forum and is born out if enterprise socilasoftware. It involves the coming together of different elements of the value chain to mutually benefit each segment- right form idea generation, resource allocation, revenue generation, implementation and delivery of the product or service. This mutually creates new types of capabilities, interaction and learning experiences and creates an open space for innovation, research and development, production planning and even customer feedback and satisfaction.
Connectivity (networks) and convergence, today, are two technically inclined but very distinct Mega Trends that cannot be more intertwined with each other. Connectivity is one Mega Trend that has perhaps had one of the steepest evolutionary curves this decade as well as, perhaps, the one Mega Trend that is taken the most for granted.
NEW PRODUCT AVATARS : MAKE WAY FOR ‘PHONCIERGE’ AND ‘I’M WATCH’
The mobile phone, today, has transformed itself from itsarchaic functionality of making mere calls to assuming thedigital responsibilities of a wallet, a ticket, a map, anorganiser, a browser and, at times, even a trip advisor oran on-demand entertainer. In the future, we will see all ofthese functions being integrated-empowering the phone toact as a concierge, a secretary, a banker, a grocer andeven, perhaps, an accountant who assists our dailyroutines by making ‘independent‘ yet accurate decisionssuch as personalising text messages, answering andscreening calls, making grocery orders and even orderingflowers for our friends on their birthdays on our behalf.This new phone avatar would be pre-programmed andattuned to the user’s preferences, contacts, food habits andfavourite geo-locations and would respond and reactintelligently without the need of or with minimal humanintervention.
FUTURE CONNECTED HOME : INTELLIGENTLY CONNECTED DEVICES
In 2025, Internet nodes will be integratedinto everything – paper, food items,microwaves, furniture, security systems –allowing machines not only to intelligentlycommunicate and work independently, butalso enable remote monitoring from thephone, car, office PC or any other mobiledevice.
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COLLABORATIVE AND CONNECTED WORKPLACE WITH EACH EMPLOYEE A
CEO
Digital and physical media not only impacts our leisure time but also impacts our culture – meetings, sales, service, the works.
IMPLICATIONS FOR NEW BUSINESS MODELS : IT’S ALL ABOUT CONVERGE
Connectivity has, perhaps, made the mostimpact on new business models. Thesebusiness models are inherently born outof converging gizmos, applications andeven from the converging of industries.We have digital strategies today that arewholly designed based on connecteddevices.
With the advent of mobile phone technology, companies are increasingly getting cognizant that it could be sole means of getting through a consumer in the future.
Tesco, a grocery retailer from UK whoopened shop in South Korea, has figuredout a cool new way of tapping into thewaiting time of tech-savvy commuters inthe subway stations of Seoul, South Koreato improve their bottom line. It installedvirtual stores – which are nothing butilluminated LED screens of their groceries– with QR codes. Commuters can scan theproducts they wish to purchase with theirsmartphones and Tesco will deliver it totheir homes.