By Bela Lainck and Dominik Brokelmann
Whether they’re walking down the street, playing around on smartphones or working from desktop PCs, when consumers start their product hunting mission, retailers need to be front and centre. It’s no mean feat to be all things to all people in all places. But ‘always-on’ availability is the hallmark of cross-channel selling, and it’s key to survival in the modern retailing world.
Against the backdrop of this relentless selling cycle, it’s no secret consumers are continuing to embrace e-commerce and online shopping in mind-blowing numbers. Without exception, most research points to a growing global e-commerce juggernaut.
Amazon’s winning combination of user experience and product range availability, all at the right price, is proving a formidable market force. Where once it was just small independent retailers feeling the heat, today, large multinational retail chains are continuing to struggle with adaption strategies against maturing digital disruptor players.
While moving to a cross-channel sales approach may be the obvious solution for bricks and mortar retailers, the challenge to make it happen and successfully compete as a new online entrant is phenomenal.
For us, the key question is: how can businesses possibly match the Amazon model on user experience, price and product range, not to mention the backend IP and IT capabilities holding it all together? Well honestly – we don’t think business can do it in isolation anymore.
Many retailers may only sell 5 per cent online at the moment, but are aiming to lift that figure up to 25-30 per cent of total sales. How can businesses hit such aspirational targets? We’re starting to see some very interesting ‘share economy’ concepts flowing into retail and we think these ideas will be the linchpin of successful cross channel selling.
All manner of global retailing businesses are rapidly adapting to cross-channel approaches. In Australia, we’re seeing the establishment of a retail presence for Etsy, the online doyenne of craft. In Asia, we’re noting retail supermarket chains moving into online kiosk spaces in high-traffic utility zones like train stations. And in the US, the decline in foot traffic is birthing the movement of profit per square foot metrics in the bricks and mortar domain.
Even a market leader like Amazon isn’t standing still. It’s establishing micro-warehousing in high-density locations like New York, and abandoning expensive courier contracts for share-ride services to deliver on product fulfilment needs.
So what lessons can aspiring e-commerce retailers and operators apply to make the successful transition to cross-channel selling? We think there are two particularly interesting opportunities that retailers moving online should focus on.
Share the load
A small player starting its own online store has no chance of competing with larger established players. Being little and late to the party, your online brand simply won’t come up in any Google search results, so you’ll have to pay top dollar for SEM visibility. Collaboration is a vital area for retailers moving online to explore. So whether you’re a small dealer or a large operator, consider the benefit of a collective effort, versus going it alone. Can you formulate some strategic partnerships and win by sharing the load?
Simplicity trumps complexity
The next massive opportunity area is shifting stock control to a shared virtual inventory approach. The virtual inventory has been around as a concept for 20 years or more. It struggled to gain traction because few operators found ways of tackling the complexities of legacy IT systems (think ERP and PoS), curating a huge product range and dynamic pricing.
Try to imagine this scenario: a customer comes into your store only to find the item they want isn’t in stock. But the virtual inventory shows the item’s only two streets away at another store. “There’s no need to walk over there,” you tell the customer, “we’ll get it uber’ed over to you in the next hour.” Although still in the trial phase, this kind of retailing utopia really is in sight. Think about simple methods for integrating a virtual inventory, rather than coming up with a large-scale intricate solution that’s too complicated to succeed in the short to mid term.
As we recently explained, the most successful retailers of the future will encourage consumers to browse their “virtual inventory” via an in-store online catalogue, and place their order in-store as well. This gives retailers a huge product offering without having to keep items in stock. Consumers are satisfied by the wide choice and retailers mitigate their inventory risk.
Bela Lainck is the president of global services at Brightstar
Dominik Brokelmann is the founder and CEO of Brodos AG
Global Vice President, Enterprise at Brightstar Corp.
Every company claims to have an Enterprise Mobility Strategy, however, global mobility is exceptionally complex and the stakes are high.
There are truly no easy solutions for creating an efficient, secure enterprise mobility strategy, serving every country of operation. There are multiple device manufacturer and platform encounters. Hundreds of carriers. Dizzying local regulations and socio-political challenges. The more you scan the landscape ahead, the more complexity arises.
How will you succeed in an environment of such complexity and not hit a global-sized wall? The global wireless ecosystem is indeed vast – but not without guideposts. To successfully transform your enterprise mobility efforts, consider this advice:
Get clear on your destination. Why does mobility matter to your company on a global scale? I’ve worked with dozens of multinational companies, and it always seems to boil down into three areas: increased efficiency, data security or differentiation from competitors. Generally speaking, companies engaged in highly competitive, margin-tight industries are looking for cost reduction. Industries such as banking and pharmaceuticals are most concerned about data security. And mobility is helping the hospitality and customer service industries to differentiate. Like any large scale, complex program, clearly setting the direction and goals is critical to eventually obtaining them.
End the internal turf war: Gain commitment from all key stakeholders, including HR, IT, and Operations. Gone are the days when mobility efforts can be pushed onto one department or team. Global mobility simply won’t work without the input of a CIO for data security, and HR for employee policies, and operations for business processes. Let’s take a national restaurant chain rolling out tablets for its servers, for example. The marketing and operations departments may want a sleek look with easy-to-swipe access. However, the IT and Legal departments wants to shift from swiping to a chip reader for security and lower risk. Whatever you decide, hire a project manager to run the program with all the structure and rigor you would apply to any other large-scale effort.
Create a realistic roadmap—not “as the crow flies.” Try not to fool yourself into thinking this is a three-or four-month effort. Mobility initiatives evolve over several years. Patience is a must because big or small – it’s always complicated. For example, some areas in the world are far more difficult than others to import and distribute devices. I’ve worked with global companies that needed to roll-out devices in 100 countries, but could only reliability get devices into about 20 countries. Is your organization really ready for a “big bang” approach to new security policies or a switch to corporate-owned phones around the world? Probably not, but it’s okay. With any effort of this magnitude, all global companies come to the realization that they can’t do it on their own and hire the outside consultants whose expertise shows from the well-earned scars of experience.
Travel light. If you haven’t already, look at decoupling your hardware procurement from your carrier relationships. Historically, for simplicity, many organizations have purchased hardware through the carriers. This can severely hinder your ability to shop around and drive down cost. Multinational organizations must work with global companies to successfully roll-out mobility initiatives because hardware and additional value-added services are global in nature, whereas, many carriers only operate in one country.
Don’t get lost in the weeds. And don’t rely on hope! Build with scale in mind, but start small and build outward. You may not be able to achieve a program that covers 100 percent of the globe or all necessary services from “Day One.” That’s not failure, as long as each part of the program is built with the end goal in mind. For example, we’re seeing several companies running pilot programs in countries that are not difficult in North America, Europe and some places in the Asia/Pacific, and then believed it will apply broadly to various markets around the world. (It won’t.)
Stay sharp. Educate, educate and re-educate yourself and your team. Mobility is changing at the speed of light. One seismic shift we’re seeing is the growing acceptance of enterprise device leasing, and just one year ago, nobody would touch it. Imagine if a company owned 10,000 smartphones at approximately $200 a piece in current value – that’s $2 million in assets in the field that are sitting on the balance sheet tying up business capital, when they could be an operating expense. If you’re not staying up to speed, the enterprise does not know what’s available, and your company will end up paying too much.
As you traverse the wireless ecosystem for your global enterprise mobility program, your organization will never know how hard it really was – but you’ll know the true magnitude of all that you’ve achieved.
By Dr Gregory Hill, Head of Business Analytics, Brightstar Australia
Data Science and machine learning algorithms are transforming the big data community. The growth in big data is well known, across all industries and business functions, in particular telecommunications. However, one of the biggest complaints from telcos is they are drowning in customer rich data and are struggling with effectively using the insights to improve day-to-day operations and their supply chains.
Unlike general FMCG supply chains, telco supply chains have rich datasets about customer preferences and behaviours. This means there is a huge opportunity for operators to use data science to gather, aggregate, store and analyse these trillions of bytes of customer likes and dislikes. According to IDC, improved customer experience and customer service are ranked as top business priorities in Australia. Telcos are under mounting pressure to improve their data analytics expertise and processes and actually use these insights to deliver a wireless supply chain that enhances loyalty and provides the truly tailored brand experience customers are demanding.
Dr Gregory Hill, Head of Business Analytics at Brightstar Australia, explores the top industry trends in big data in Australia and provides some top tips for operators to embrace the power of data science to improve their supply chains. How can they best gather business insights from the big data behemoth to enhance their operations and wireless supply chains, and most importantly their consumers’ loyalty?
• Recognise big data
Operators are a major step ahead of other retailers or FMCG companies, because they have such close relationships with their customers. They have access to some very powerful insights that are gold dust and can be used to offer a truly personalised customer service approach. Improved technology makes it possible to collect, retain and analyse data that otherwise would have been discarded. Plus, new advancements in data science allow professionals to use more sophisticated techniques to integrate big data to a level unseen before.
• Upskill in data science
According to LinkedIn, in 2014, statistical analysis and data mining was the no 1 hottest skill that got people hired. And the Harvard Business Review claimed that data scientist will be the sexiest job of the 21st century. A new approach to business management and data analysis is being seen across Australian businesses, which is based on science, mathematics and statistics. There is a growing emphasis on hypotheses, algorithms, cause and effect, and experiments to extract knowledge from large data volumes, and this is set to keep growing. These data mining techniques are used by a new breed of data scientist to interpret rich data, investigate problems and provide exact solutions. Data science is used by many retailers, for example, to pinpoint what customers want, how they buy, and what they might be interested in buying in the future. These skills are hot property and data analysts with business know-how are in such high demand and low supply that they are earning almost three times Australia’s average salary. To capitalise on this opportunity, most Australian universities are now offering graduate degrees in data science and analytics.
• Use insightful algorithms
Another hot topic is the growth in automation, and using algorithms to classify, predict and optimise customer interactions. For example, if an algorithm is being used at a retailer to predict which stores were going to run out of a popular item, it could automatically send a signal to the supply chain to push more stock to those locations. Doing this manually for all stores and products would be very time-consuming. This is fuelling much debate around the best way of combining automation and human judgement to create optimum results. For operators, automating small-scale decisions based on structured data can be a sure fire way of improving costs, quality and timeliness – and delivering a great customer experience.
• Visualise the data
Communicating all of this information clearly and efficiently is another discipline we’re seeing a big growth in. This involves building compelling visual representations of complex data. Using graphics, maps, tables, diagrams, graphs and charts are all ways of making big data more accessible and usable to non-mathematicians and non-scientists in an organisation. Well-crafted data visualisation helps uncover trends, develop insights and explore scenarios. Underpinning all of this is story-telling – working across teams to uncover the story behind all of this data and communicating it in an engaging and simple way.
From a business perspective, data science is an integral part of analytics that encompasses data mining and business intelligence. But what do these emerging trends and science mean for the wireless supply chain?
• Streamline omni-channel
All of this data and scientific analysis is geared to achieving the Holy Grail: a seamlessly positive customer experience. Allowing customers to interact across multiple channels is an expectation that must be met by retailers. Better knowledge of competitor pricing, demand trends and customer buying preferences (online and in-store) can initiate sales and promotions that help avoid losing business and retain customers. This also impacts customer service and enables telcos to provide a more tailored interaction, while improving supply chain efficiency and creating a “smart supply chain”. Using analytics tools, such as cloud-based platforms, enables a real-time optimised experience, which is crucial to achieving this.
• Supply chain demand
With such close relationships with customers, telcos can use rich transactional data to accurately predict supply and demand and ensure optimum supply chain efficiency. Supply chains need to move away from being product forecast driven to become customer demand driven. For example, when a new smartphone is launched, businesses can use data on who is using a similar product, what stage they are at in their contract, how much data they use, what accessories they’ve bought, and other preferences to predict peaks of demand and ensure adequate supply. So, ordering the right product, sending it to the right place, at the right time and with the right price point will help improve speed, accuracy and scalability of order fulfilment. The essence of demand shaping is knowing about your most profitable customers and products, and protecting and promoting them. Consumers will not be disappointed by an “out of stock” notice and retailers won’t have excess product piled up in their store rooms, so it’s win-win for everyone involved.
• Design a winning portfolio
Data scientists can also help with product design and ensure a portfolio meets customer requirements. For example, a retail phone store in a small country town is likely to stock different products to one in a CBD location, because customer demand will differ – features like enhanced network connectivity and being ruggedised may be more important in a rural or remote setting than colour variety. Knowing the trends and predicting behaviours based on insights means the right phones, accessories, bundles and services are all available across all channels, when the customer demands them. It’s important to use data science algorithms in customer segmentation and clustering. They can tell which customers are the lowest cost to serve and which are likely to buy the highest profit products. Creating a balanced menu of bundled offers based on data to address customer needs across brand, price, function, accessories and value-added services (eg insurance and upgrade programs) is key to success.
• Integrate internally
Most telcos have their own large analytics departments, working across Customer Relationship Management (CRM), Marketing, Business Intelligence and Reporting. Ensure they are feeding into the right people on the supply chain, so the company is working together end-to-end. Use data and modelling on the customer and how they are using products to tailor offerings. By working with the relevant teams, this insight can be used to drive the supply chain and ensure customers are at the heart of everything the business does. The current crop of big data and analytics tools provide a way to integrate data from sales, marketing, action of customers, product reviews, competitor information, warranty data and supplier status in real-time to make demand-driven supply chains a reality.
Big data is transforming all industries and business functions, including telco and supply chain, and data science is the next wave of innovation set to hit the industry. For telecommunications, harnessing this new approach will position them at the forefront. Unlike general FMCG supply chain, telco supply chain has rich datasets about customer preferences and behaviours. Harnessing this is a big opportunity and ensuring telcos are using the right technologies and platforms to manage and drive it into the supply chain to improve the telco’s customer experience is imperative.
Dr Gregory Hill is Head of Business Analytics at Brightstar Australia and a member of the Industry Advisory Board at Melbourne Business School’s Centre for Business Analytics. Brightstar, a SoftBank Group Corp. subsidiary, is the world’s largest specialised wireless distributor and a leading provider of diversified services focussed on enhancing the performance and results of the key participants in the wireless device value chain: manufacturers, operators and retailers. In 2014, Brightstar reported global net revenues of more than US$10 billion and employs about 9,000 people on six continents. For more information, please visit Brightstar.com.
By Jonathan Reay, Supply Chain Director, Brightstar Australia
Today’s consumers are demanding more from brands than ever before. They want bespoke products, services and a positive experience immediately and are not prepared to take second best. This represents a big opportunity for companies to exceed service and customer expectations by providing a truly individual experience, no matter the product choice, channel choice or touch point.
However, this consumer demand is also colliding with a supply chain that isn’t ready and can’t keep up. Businesses are under mounting pressure to improve their supply chain expertise and leverage it to deliver faultless customer experiences, build loyalty and deliver real business value and ultimately competitive advantage.
This disparity is a warning sign to brands that now is the time for them to step-up and ensure they are committed to understanding consumer trends, analysing their end-customers, providing a tailored supply chain, and using innovations to stay ahead of competitors.
How do businesses achieve this and unlock the power of their supply chain to meet the growth in consumer demand? There are five key consumer trends that will have implications for the supply chain, and that brands should watch over the next 12 months:
1. Give customers what they want, when they want it
Today’s consumer has an incessant need for a tailored retail experience across all touch points. They have a well-defined vision of what they need and want from their retail supply chain, and if brands don’t provide a positive experience that gives them this individual service they will shop elsewhere – so the pressure is on.
One place where we are seeing this is with expanding delivery options. Increasingly, consumers are demanding more choice in this area. We’ve seen an explosion in different methods, as brands quite rightly tailor this to the customers’ needs: same day, specified delivery windows, after-hours and weekend delivery. Similarly, where consumers want to receive their goods is changing: in-store pick-up, storage lockers, home address, pinpoint delivery to exact location, changing location mid delivery and delivery to business addresses.
Consumers now want everything instantly and are placing even greater emphasis on the value of a brand, so businesses need to ensure they have the supply chain in place to deliver. An ill-equipped supply chain will struggle to stay ahead; businesses are choosing to widen their focus rather than looking to outsource for expertise.
Retailers must adapt their delivery networks to cope with these shifts in when and where rather than relying on yesterday’s model. If your business cannot evolve, then the risk of losing market share grows because your competitors and customers won’t sit still.
2. Reverse is just as important as forward
In the retail market space, reverse logistics is becoming increasingly prevalent. Consumers want the choice to be able to return their goods just as easily as they received them. Be it a recovery satchel sent to their office, returning their goods to a physical store or pre-booking a courier pick-up via the brand’s app, the options are endless and means the difference between a positive or negative brand experiences.
A fully functioning reverse logistics program provides many opportunities for business improvements, from customer service, optimised returns processing and positive corporate social responsibility. It also provides positive revenue sources such as recycling, refurbishment, donations and environmental disposal or most notably, repackaging and reselling in secondary markets.
Many businesses compare the amount they spend on reverse logistics to other supply chain activities and decide to invest in other resources that provide a greater return. As a result, they just focus on reducing the cost of reverse. However, reverse logistics is less than 4% of a business’s overall supply chain cost and we’re seeing some interesting opportunities retailers can leverage if they change their cost-focussed view.
So how does this need for a returns program to be just as good as a forward program affect the supply chain? Businesses have two choices – develop a program internally or outsource. Either way, an important best practice is to set the reverse program up entirely separate to forward logistics. You can leverage expertise off forward and reverse for vice versa, but it’s critical to manage each independently to ensure success for customers and the wider business.
3. Offer customers access to the “long tail”
In traditional retail, a company has a physical bricks-and-mortar store where they’ll stock the best-selling products. However, consumers now require access to a “long tail” of products, and companies must provide these in a convenient and competitive manner. More and more retailers are using online and virtual inventories as a way of providing extra product options, most of which will have low demand, and choice to consumers.
For example, if this week’s new trend is gold high-end smartphones stores will stock lots of the gold smartphone. However, they can only carry limited stock in-store from a capacity and a working capital perspective and therefore other SKUs may miss out. Thought also needs to be given to the consumer who wants a red one – if the store doesn’t have it in stock do they turn the customer away? The most successful retailer will encourage consumers to browse its “long tail” on an online catalogue in-store via a virtual inventory and then place their order in-store as well. This allows retailers to offer a range of products without having to keep them in stock– providing consumers with a wide choice, but without the inventory risk to the retailer.
By embracing this trend and being in a position to offer consumers as much choice as possible, retailers won’t get left behind and can open the door to more revenue opportunities. Relying too heavily on bestsellers and trying to pick the next winning product means there is a risk of too much inventory.
4. Delivering in style
Shoppers want unique experiences with brands. They want to feel special and to form relationships with them, and for brands to successfully retain brand fans and attract new evangelists, they need to deliver this on a consistent, ongoing basis. Gone are the days of a one-size-fits-all approach. In the wireless space, in particular, we’re seeing an evolution in tailored experiences, but companies should be doing even more to deliver a seamless end-to-end experience.
Part of this is the way goods are delivered. Consumers want deliveries completely tailored to their needs and they are willing to pay for the convenience. This includes same day delivery, after hours/weekend deliveries, SMS notifications of delivery status and set-up of equipment at home. They also want the comfort and convenience of shopping online at home or work and the ability to collect their purchases in-store. In the very near future, mobile devices will be ordered and then they will arrive pre-loaded at the consumer’s destination with full settings, images, contacts all in place.
For this to work effectively, personalised supply chains will need to be developed. A unified point-of-sale inventory system will be required to enable same day deliveries, for example, and fully integrated relationships with logistics partners will be essential in getting delivery information sent to consumers.
5. Product lifecycle is shrinking
The product lifecycle is shrinking and this can’t be more apparent than with smartphones, which have one of the shortest lifecycles of any product in consumer electronics. It’s getting shorter by the minute, with shelf life reducing by almost 50% since 2005 to a current average of 8-10 months*. Mobile phones can last as few as four months on the shelves and this is creating a lot of pressure for brands to remain relevant.
In addition, as functionality expands exponentially, smartphones are cannibalising other product lines – for example cameras, portable gaming devices, navigation tools and media players – to command a greater share of consumers’ wallets.
Vendors, manufactures, retailers and consumers, plus the rise in online shopping, are all driving this trend with consumers now having more access to more products both in Australia and globally.
While greater consumer choice opens up opportunities for retailers to showcase a wider range and portfolio, the frequency of product introduction reduces the lifecycle and limits opportunity.
The shrinking life cycle also creates a variety of pressures on overall profitability for retailers, due to supply chain inefficiencies, promotional inequities, brand awareness and demand for a supply chain capable to fulfil the shrinking lifecycle. To overcome these challenges, retailers will need to adjust to consumers’ changing habits and demands for faster access to newer products. They will struggle to remain relevant and maintain product pricing levels. If price erosion is not provided from vendors through the supply chain, then products will be removed from portfolios – potentially prematurely. The cost of introducing new products will need to be managed closely, because retailers face high inventory and demand risks trying to pick the next hero product. Customers demand the next best thing and brands must remain profitable to provide these offerings to satisfy customer demand.
Consider using product performance and data analysis tools, to be able to respond quickly to accelerating and declining products and optimise return on investment through improved inventory placement and analysis on portfolio performance.
There are clearly some dynamic trends emerging in consumer behaviour with a range of different disruptions set to change the current supply chain landscape. Retailers will have to adapt to these trends both in-store and online – many highly disruptive to their current business models – to keep pace with an extraordinary rate of change. The range of profitable opportunities that exist for those retailers that are nimble enough to respond to the movements of a tailored supply chain are endless. It is now much more than offering warehouses and trucks. Brands need a bespoke, solutions-based approach that can quickly respond to the changing landscape and keep one step ahead of competitors.
Jonathan Reay is Supply Chain Director at Brightstar in Australia. Brightstar, a SoftBank Group Corp. subsidiary, is the world’s largest specialised wireless distributor and a leading provider of diversified services focussed on enhancing the performance and results of the key participants in the wireless device value chain: manufacturers, operators and retailers. In 2014, Brightstar reported global net revenues of more than US$10 billion and employs about 9,000 people on six continents. For more information, please visit Brightstar.com.
Since 2008, the editors of FierceWireless (one of the top U.S. wireless trade publications) have been compiling a list of the top female stars in the wireless industry in the U.S. As part of the latest edition of their “Most Influential Women in Wireless” list, Chief Administrative Officer, General Counsel and member of the Brightstar Board of Directors Catherine Smith was named as a “Woman to Watch” for 2015.
“FierceWireless is a very respected wireless trade publication, and I’m honored to represent Brightstar and equally humbled to be considered an influencer in our industry,” Catherine said. “Our industry is fascinating, futuristic and evolves rapidly, and I’m one of many people here at Brightstar who make significant contributions to advance the global industry on a daily basis. We attract some of the most diverse and creative minds on the planet and leverage our position at the center of the wireless ecosystem to solve some of the most relevant challenges of the mobile world we live in.”
FierceWireless selected Catherine as one of the up-and-coming women in the industry who may not be as widely known as those on the “most influential” list, but are certainly powerful players behind the scenes. These women may oversee important business units or head up smaller, lesser-known companies, yet are definitely catalysts within the mobile industry.
In her role at Brightstar, Catherine is responsible for leading the global legal and human resource organizations with local presence in 50 countries and operations in 100 countries. Additionally, her influence resides in more places than the boardroom. Her leadership role at Brightstar makes her one of the highest-ranking African-American women in the wireless and telecommunications industry. She speaks publicly on the need for diversity of thought within large corporations, and she embraces and champions the benefits of diversity and inclusion within the global company, making Brightstar a success in the global marketplace, where its customers represent virtually every demographic background. She also stays involved by giving back to her local community, and she regularly speaks at Miami-area events about empowering women in the workplace.
Want to find out who is this year’s list of influential women? Click here to see the full list.