The K3 essential guide series Improving Customer Service Management in Home Retailing 10 key steps, one essential view

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1 The K3 essential guide series Improving Customer Service Management in Home Retailing 10 key steps, one essential view 10

2 Key Considerations for Home Retailers Home retail has a number of sub sectors that include; Big Ticket (furniture, kitchen, bedroom bathroom), DIY, Electrical, homewares and Garden retailers. The types of organisations vary from specialist retailers, department stores, hypermarkets and supermarkets. Regardless of the category of products they sell, the size of their organisations, and the channels over which they transact, the key objective for home retailers must be, at very least, to satisfy customers expectations. In these tough economic times there is little doubt that delivering on the customer satisfaction metric is the way to drive sales. And doing so must be an imperative for all merchants because the opportunity to increase revenues is infinite whereas taking the alternative route and driving out costs has a finite level of potential upside. As home retailers increasingly operate within technology-rich, data-driven multi-channel environments the complexity of their operations is accelerating. One common characteristic shared by home retailers is the requirement to efficiently capture customer information and the necessity to process that information effectively in business systems such as customer order management, warranty and CRM. 1. Holistic view of customers 2. Product information management 3. Retailer - Supplier communications 4. Delivery management 5. Complexity of broadening categories 6. Ubiquitous commerce 7. Tailored applications 8. Capturing customer details 9. Marketing 10. People Those organisations that optimise this process will ensure they deliver customer satisfaction to meet the ever increasing and more demanding customer expectation.

3 1 Holistic view of customers Typically within home retail organisations the various departments including sales, warehousing, and customer service will each have their own view of the customer and hold this data in discrete silos. However, business systems such as customer order management, customer service and CRM systems can only be effective if they provide a holistic view of the customer across the whole organisation. Whenever the customer has contacted the company and touched the business it must be possible for retailers to collect, monitor and store this information. Only then can key business processes such as complaints be acted upon in an effective, fullyinformed manner. Consider a two-man delivery of a bulky item chips a customers paintwork in their home or the wrong grade of fabric has been used on a sofa, these complaints from the customer need to be recorded and saved for viewing by the whole business regardless of where in the transaction/delivery cycle they were initially reported. Only through having this holistic customer view, which highlights all the communications that customers have had with a retailer, is it possible to empower the relevant departments and convey an effective level of service before and post-delivery. 2 Product information management Big ticket retailers such as the furniture sellers typically have between 200 and 300 suppliers and although the rule applies (whereby 80% of orders involve only 20% of the manufacturers) this still indicates a sizeable base of external suppliers to handle. The difficulty of this task for such retailers is further compounded by the complexity of the products they sell. For certain ranges there can be thousands of permutations for each built-to-order item in their inventory. The crucial element is to ensure the product information taken from the customer at the Pointof-Sale (PoS) when ordering is absolutely correct. Having accurate and complete product catalogues within their order management systems, which hold range, model and variant detail, with all available options for use when taking orders is essential for big ticket retailers. Front-end tools such as a product configurator, that contains all the possible permutations for each product, now exist which can be used instead of sales people taking physical notes and raising manual orders. This not only enhances the customer experience but also ultimately boosts satisfaction levels and increases margin by removing inaccurate order taking.

4 3 Retailer - Supplier communications Accurately taken orders should then be electronically passed on to the relevant supplier. This method should supersede the existing arrangement within most retailers whereby hand-written faxes or s are still sent between the two parties and this inevitably leads to confusion and errors. Accurate communication ensures customers receive the correct product and helps avoid the potential for retailers to lose margin by providing incorrect quotes to the customer. Only by having the correct quotes and product specifications, which are then communicated seamlessly between supplier and retailer and ultimately the customer, can the current shockingly high customer dissatisfaction levels within big ticket retailers of 18% be improved. K3 have facilitated a practical, integrated, retail solution that gives confidence in our business processes and has provided the spring board we needed for growth. 4 Delivery management Ken Owst Director, Beales Upon receipt of the order confirmation from the supplier it is imperative that retailers then engage in ongoing communication with the customer about the delivery of their items. There is no doubt that the scheduling of the last mile is crucial within this exchange. These communications should provide the customer with the relevant delivery window alternatives and provide updates during the whole delivery process otherwise there is the real risk of completely losing any satisfaction levels built up through the earlier part of the customer s journey. Customer order management systems must adopt the full panoply of communication tools to engage with the customer - with SMS and as imperatives and use them to fully update the customer of any changes to their delivery arrangements.

5 5 Complexity of broadening categories For many years the scope of retailers offerings has been well defined and manageable but as they have broadened the categories they sell the complexity of their business has increased dramatically. For the likes of DIY retailers there has been the industry-wide move from offering predominantly small ticket items to also selling large value goods such as kitchens, bathrooms and bedroom suites, which has added complexity into the sales process at the front-end of the business. There is now the challenge of selling 2 drill bits alongside 2,000 bathroom suites. Whereas the smaller item will go through the traditional PoS route the big-ticket order might not be as slickly handled because many retailers will likely revert back to raising a hand-written order in a note pad. It is frequently the case that merchants have a world-class experience in place for the smallticket items but let themselves down badly by having an inferior and inconsistent ordering process for big ticket goods. Not only does this lessen the experience for the customer (who is after all making a high value, and possibly high margin purchase) but it also massively increases the chances of inaccuracies creeping into the ordering process. Retailers need a customer order management system that provides different electronic fascias at the front-end that are tailored for specific categories so they can be used appropriately alongside the traditional check-outs. These front-ends should then feed through to the same back-end system comprising a single data repository that is then linked into the retailers fulfilment infrastructure and into the communication tools that ensure engagement with the customer is maintained through the delivery cycle.

6 6 Ubiquitous commerce Customers are increasingly engaging with retailers in a ubiquitous manner from various devices and from locations that suit them and they expect retailers to deliver a high level of customer satisfaction across these myriad of channels and devices. Whether they are interacting with the merchant on a browsing mission or they want to make a purchase is immaterial and retailers must have the infrastructures in place to seamlessly handle all types of customer demands. Information and order management engines must be universally available and be agnostic to channel and device. This represents a challenge for retailers as it signifies a rapidly changing backdrop to what has become established practice online. For the past few years retailers have simply needed an internet presence where customers are presented with an online catalogue and are then directed to a check-out to complete the process. This is no longer the case as there is now a huge disconnection between browsing and purchasing and as such, the old methods are being replaced by an application-driven environment where the proposition across all channels is tailored to the individual customer. This is clearly complex and the foundation of such an offer is a customer order management solution that has been created for the multi-channel environment. With this in place customer satisfaction levels will be enhanced as the customer is placed firmly in control of the interaction regardless of channel or device and irrespective of whether browsing or buying. The flexibility of dynamics immediately stood out, we could see it being adapted to our business needs. Richard Newson Finance Director, Housing Units 7 Tailored applications Without doubt the tailoring of the experience for customers via tailored applications - across all channels is vital to the future prosperity of retailers but this can only be fully achieved through the implementation of simple and easy-to-use methodologies. Simple, short steps must be the objective when setting up information gathering and transactional methods within these tailored applications. It is only possible to go down this tailored route with a customer order management system that, regardless of channel, ensures a holistic view of the customer and of the fulfilment mechanism (including the delivery management communications). The new world order of retailing places the customer order management system at the heart of the merchant. It is a data-driven mechanism, with seamless back-office functionality, and fulfilment infrastructures that ensure the customer is serviced in a way they choose.

7 8 Capturing customer details Many home retailers have the benefit of being able to capture customer details through the ordering process and when selling extended warranties but for smaller ticket merchants it is not as straightforward. However, it is imperative that they introduce a sufficiently smart system that allows them to capture such data on their customers and their transactions. This gives retailers the ability to address any customer issues especially post-sale - such as returning a product without a receipt. This should represent no problems whatsoever for a merchant with a customer order management system that has been aligned with a philosophy of having a holistic customer view and capturing shopper data.

8 9 Marketing The capture of customer data transactions and profile information provides retailers with the opportunity to segment this information and use it for marketing purposes. Extracting insight from this data enables merchants to send tailored offers and promotions to their customer base. This targeted marketing activity can be tied-in with retailers post-delivery engagement with their customers to enhance the communications between the two parties following a successful transaction. 10 People The essential component for any order management solution and customer satisfaction system are no different, it is to have customer-centric people using them. There is no doubt that many of the data-rich front-end retail systems around today help to overcome the limitations in the product knowledge of many store employees (especially as retailers continue to broaden the categories they sell) but unless they are used in the correct way then their value will be diminished. The most effective way for retailers to satisfy customer expectations is to marry their complex retail technologies available today with people who are comfortable using such systems thereby creating a powerful customer-centric proposition.

9 About K3 Retail K3 Retail deliver multi channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct or in-store. Over 18 years experience delivering award winning solutions, to more than 100 internationally recognised retail brands, has helped our experienced team of retail consultants develop the most complete range of multi channel retail solutions available to Microsoft Dynamics AX or NAV users. As a Microsoft Gold Certified Partner, member of Microsoft s Partner Advisory Council for Retail, invited member of Microsoft s Inner Circle and Presidents Club, we offer a clearly defined roadmap and proven products backed up by Microsoft s $2billion investment in the Dynamics platform. Our ability to translate thought leadership and multi channel experience into innovative and effective retail solutions has benefited customers including: Ask Electronics, Beales Department Stores, Bensons for Beds, Carpetright, Dobbies Garden Centres, Dreams, Digital Village, Fultons, Harveys, Housing Units, IKEA, Notcutts, Reid Furniture, Royal Horticultural Society, Selco, Sleepmasters, The White Company and Woodies DIY. K3 Retail is part of the K3 Business Technology Group plc k3retail.com K3 Retail & Business Solutions Corinthian Court 80 Milton Park Abingdon Oxon OX14 4RY enquiries@k3retail.com Joined up thinking. Connect with K3 Multi Channel Retailing.