No job is easy – well, none that I have yet come across – but I think those in the tertiary sector (AKA the service sector) are by far the most challenging. In fact, if we compared those organisations within the service sector that are directly serving the economy, I’d go as far as saying that retail is the most challenging of all!
This challenge has shifted over the years, however, as each sector has developed in strength and capability. Without a doubt, the primary sector (extraction and processing of raw materials) was once very difficult, until machinery improved the process. The secondary sector (broadly regarded as manufacturing) received transformational change through the industrial revolution. And now the tertiary (service) sector is benefiting from technology in ways we could never have imagined.
My career has been entirely based in the service sector, developing technology solutions to solve a variety of problems. Whilst at Tesco, I was lucky enough to work across UK store ordering and distribution, before finally heading-up the delivery of the technology roadmap for Tesco retail stores around the globe. Each area had its own challenges, but retail had something quite unique to grapple with. Customers.
So, how has technology changed retail and what has it meant for the people that work with it every day? The most significant example I can think of was the introduction of the barcode in the 1970’s – improving retail productivity exponentially overnight. Whilst I was too young to fully appreciate it, I remember seeing that change take place.
It’s only now, though, that I truly understand how impactful that technology was to an otherwise manually-intensive operation. It was a technological advancement that had universal applicability and has clearly stood the test of time. The reason barcodes have persisted so long is because they succeed in three very important ways:
1) The format is clearly defined and easily repeatable;
2) They can be read by humans and machines, where the numerical representation of the product barcode is displayed;
3) They are a virtually-transparent part of the customer journey and significantly streamline the transaction.
However, expectations are changing, and even the humble barcode is nearing the end of its lifetime in retail. Amazon Go perhaps gives us some insight into where retail will head in years to come – although I suspect we’re still 5 to 10 years away from the popular adoption of the checkout-free grocery store.
Most retail associates around the world aren’t working in the Amazon Go store and don’t have the luxury of this early-adopter approach to retail. In my experience, retail is suffering from a much more fundamental challenge; clear communications from head office to store, and between associates within each store. This problem typically manifests itself in the following ways:
• Poor notification and detail of product range changes and promotions;
• Late execution of tasks in-store (e.g. price changes and product recalls);
• Insufficient or too-many staff scheduled to work on shifts;
• Late or watered-down operational communications from central teams to stores;
• Too much time spent analysing reports instead of dealing with the problems by exception;
• Poor product specification and availability knowledge.
The list goes on, but ultimately this combination of problems results in a frustrated workforce and disappointed customers!
Of course, it isn’t just the act and timeliness of communication, it’s the channels through which those communications are sent that cause problems. If we’re going to continue to transform our service sector, we need to be bold in our approach to using the tools and technology at our disposal. Self-service checkouts, first introduced in 1992, were blighted by early concerns of poor customer experience through lack of interaction with store associates. Whilst studies have shown concerns from customers about the experience, the most significant in this 2014 study by NCR was for a larger bagging area, with ‘attendant is always available to help me if needed’ coming second on the list.
If we’re going to address the challenge of communication, we need to allow store associates to be connected at work. Use of a mobile device of some kind is clearly the easiest way to achieve that, and smart phones have by-far the greatest penetration into the population. Yes, there will be concerns about customer experience, but with smart phone saturation being so high, I don’t think it’ll be long before their use in retail will be as common-place as self-serve checkouts are today.