Retail Convergence

Retail Convergence - A Changing Landscape

There is a large movement in retail toward what is now being called Convergence. Convergence is the blending of channels into a single concept that leverages components from all consumer touch-points into a single set of processes and procedures that act the same, regardless of the consumer touch-point. 

While one could argue that this is simply Omni-channel, this would not extend the vision far enough. Convergence is not just about the unification of channels, it is about the unification of activities and interactions across all touch-points, including what have been perceived as channels in the past, but are becoming increasingly difficult to link to a specific system or business unit. An example of this convergence is the use of mobile devices while in a retail store, either through third-party solutions such as a Google search, or through mobile applications residing on the consumer phone itself.

Convergence comes in the form of data, commerce, and interaction. Data being a natural progression of the movement toward a single version of the truth for unified data, with commerce coming in the form of the endless aisle and DOM capabilities, while interaction imbues the benefits of engagement and messaging across all touch-points in a centralized process and vision.

As a recent Forrester article pointed out, a majority of sales today happen in the world of a blended on-line and in-store interactions. Sales begin on-line through eCommerce or social engagement, move to the store, and sometimes back to eCommerce again before a purchase is made. While Omni-Commerce is a portion of this customer lifecycle, not all interactions with a brand come in the form of purchases, or even as a lead-up to a purchase. Interactions may be related to brand awareness, service or follow-up, ratings or comments on-line, recommendations to friends, and a host of other aspects of a customer journey that are largely out of the control of the retailer or brand. 

Convergence is an attempt to unify processes and procedures, as well as technologies to combine all channels into a single concept rather than a recognition that channels even exist. It is to Omni-Channel what Omni-Channel was to Cross-Channel.  The movement form Cross-Channel to Omni-Channel was to break down the walls barriers of the channels, so they could function in tandem, whereas Convergence is the breaking down of the silos of channels themselves.

How will this impact retail and retail technology?  It will impact overall retail in a very dramatic fashion, in that the lines between channels will no longer exist. Commerce online and in the store will be seamless, with orders being placed on mobile devices while in a store, and baskets being shared between customers and associates to build the perfect outfit. Marketing will provide a queue of consumer messaging which can be delivered by any touch-point, and when performed can trigger the next communication, which is also oblivious and uncaring as to the next customer touch-point.

Influencing the customer journey will become the primary goal of a retailer, and providing tools to assist retailers in influencing the journey will become the principal purpose of retail technology companies. 

The next few years will fundamentally change how system and process are managed in retail, and for those not progressive in their thinking, there is a serious risk to success on the horizon. 

Clienteling and the Male Shopper

Clienteling in Menswear

While clienteling is an applicable skill in most service-focused retail, with my 15 years in retail management in the men’s apparel industry I thought I would write a little bit about how to apply capabilities of clienteling to the menswear business in particular.

As I have discussed in previous articles, clienteling is a colloquial term that came about to describe the activities a sales staff might take with their clientele.  As such, it is a verb which describes the actions an associate takes to better service their customers, and to establish long lasting relationships. In practice these activities can be grouped into two buckets: collection of information that establishes a learning relationship, and the personalized actions one takes based on this information.

While the menswear business is not unique, the shopping habits of men and women are often different. In fact, according to an article by Jay H. Baker Retail Initiative and the Verde Group titled “Men Buy, Women Shop”  the differences are significant. Women enjoy the shopping experience, and more often look at shopping as an experience, while men look at is as a necessity, something to accomplish quickly and with little interaction. For men shopping is a means to an end, while for women it is in fact often the primary goal.

This can be a critical distinction in how to service male shoppers in nearly any retail environment. The quicker you can assist the customer in locating a product, the more likely you are to make a sale. So how is this relevant to clienteling? Isn’t Clienteling about regular interaction with the hopes of bringing the customer into the store more regularly, providing them recommendations of add-on items, and providing targeted personalized communications?  Yes, that is precisely what clienteling is designed to do, and in fact what it is highly effective at doing entirely because of the male shopping habits. If a retailer embraces these tendencies, they can in fact become even more effective in clienteling.

Here are a few simple rules:

1.  Help men to shop.  While this sounds common sense, it is not the act of helping the male shopper when he is in the store that is particularly effective, it is helping him before he arrives in the store. Schedule appointments if possible, but even if not possible, at least plan in advance. Put outfits together that are specifically aimed at what you know about the customer, and do your cross-selling in the form of coordinating items prior to the visit. Check for wish list items, notes and preferences to be sure you have all information that is relevant.
2. Understand what motivates the customer by asking questions and making note of their propensities. This is covered more as a sidebar to this article called “What Motivates Men to Buy”. Use these primary motivators when selecting products, and don’t be afraid to remind the customer of the added benefits they may not have considered. With each interaction, engage customers so you are equipped with more knowledge the next time. Note sizes, preferences, lifestyle, and add items to wish lists.  
3.  Facilitate the customer’s ability to get in and out as quickly as possible. Have a fitting room ready, get a fitter queued up in advance. Use look book tools to find where a product might be in the enterprise if not in stock, and work with the customer so items can be shipped directly to the customer.
4. Schedule the next follow-up. As men like to visit stores less often than women, they typically are less likely to come back if they have an issue. Set a follow-up a week out to be sure the customer is satisfied. Also schedule an outreach 3 or six months out to remind you to reach out to the customer and get into a scheduled routine. For products with limited lifespans such as dress shirts, set a replenishment – even if its two years out. Knowing when a customer needs to replace their wardrobe enables you to get ahead of the customer, so that they don’t shop the competition to replace these items
5. Contact the spouse. Women do a disproportionate amount of apparel shopping, so working with the wife or significant other can pay dividends in the form of more frequent visits, both from the customer and the spouse. While there is still often a need for the customer to enter the store (clothing that needs alterations for example), having the spouse as an ally can pay dividends in bringing the customer into the store, and women are far more loyal to their sales associates, so this also helps to solidify relationships.

By understanding the shopping habits of the male menswear shopper can help to increase sales through effective clienteling. Leveraging your knowledge of these habits can help to increase frequency, increase units per transaction, and most importantly, increase customer loyalty and satisfaction.

Effective Principles of Clienteling

Clienteling

The word clienteling came about as a rhetorical use of the noun clientele. It was used to describe activities one might take when working with their clientele, and is used now primarily as a verb to describe those activities. The word Clienteling now also describes initiatives or programs (manual or software-based) which revolve around these activities, much like CRM describes solutions for managing customer relationships.

Looking at the broader definition of Clienteling, I often define it as a philosophical approach to better serving ones customers (clientele). An approach focused on highly personalized service that is established over time through a learning relationship.

While the verb clienteling might describe most activities associated with the sales process, the more common activities can be summed into three key elements:

1. Access to information to assist the customer while in the store 
2. Customer profile enhancement (likes, preferences, wish lists, etc.)
3. Personalized customer communication (outreach)

While personalized communications finds itself last on the list, it is in actuality the primary goal of a long-term Clienteling program. It is through the successful completion of the other two items, however, that this communication becomes meaningful and effective.

The Customer Life-cycle

As described above, relationships are established over time. Selling is like any other relationship in that the more you know someone, the more you understand their needs and wishes. You don’t learn everything about a person in a single encounter. But over time, as the relationship matures, your understanding of them improves, and your ability to relate to them and to guide them improves as well. It is through the enhancement of the profile over time, that the communications can be more targeted and meaningful for each and every customer.

The following graphic highlights how a customer/associate life-cycle can change over time. From the first time encounter, whereby the associate needs to identify the immediate need, to a long-term relationship, where they are able to anticipate needs, make personalized suggestions, and follow-up regularly.

The Pareto Principle

Any Clienteling initiative should be designed in such a way as to get the most benefit for the least cost. The Pareto Principle states that roughly 80 percent of the effects of an activity are derived by 20 percent of your efforts. This principle holds true for retail as well, where for most retailers roughly 80 percent of all sales come from 20 percent of the customers. This 20 percent are the most loyal customers, and most often shop the most categories of merchandise. 

With this general understanding in mind, many clienteling activities focus almost exclusively on the Top 20% of customers. The logic being that an increase in sales of 10% with this segment represents an increase of 8% for the enterprise as a whole. It would take an increase of 40% in sales for the remaining customers to equal this same 8%. Obviously the cost to reach 80% of your customers is also significantly higher than for the 20%, so this approach makes sense on a number of levels.

There are three items to consider, however, with using this approach exclusively:

1. Over time customers attrite, albeit at a much slower rate with the 20 percent, so a focus solely on this group of customers at the exclusion of other will see your pool of customers diminish
2. First-time customers may take some time to qualify as a top customer, and without appropriate guidance from the store associate the relationship may never mature to this point
3. These customers are most often already your loyal customers, and may already be benefiting from some form of Clienteling, so the gains might not be as immediate as with customers previously ignored in these efforts  

So, while there is tremendous benefit to focusing on these top customers, you can see that this effort alone will have diminishing returns over time. For this reason, it is important to also nurture elements of the 80 percent, but to do so in a highly targeted and strategic manner. The most effective approach is to focus most energies on the top tier of customers, but to design targeted in-store “campaigns” around segments of the remaining customers. These in-store campaigns for non-clients might include one year follow-ups, replenishment items, birthday/anniversary wishes, in-store events tied to past purchases or noted wish lists and preferences, etc.

The below graphic demonstrates these principles. In this diagram the word Customer defines a consumer that may not be in an associates “book”, while the word Client defines consumer that belongs to an associate’s book (or multiple associates’ books).      

     

Note:To a large degree the success of clienteling activities, and most specifically outreach, is tied to basic math. The more of your clientele you work with, the more successful you will be. While the old manual process only supported a limited book, and therefore the same customers were contacted over and over; this has changed dramatically with clienteling applications.  If we assume the average associate has 125 customers in their client book, and reached out to each customer every 2 months, that will consist of 750 interactions. While that number sounds good at first, if you break this down to the workday it is far less impressive. This 750 communications averages only three a day. By augmenting this list of clients with targeted customers, an associate can double their outreach without losing focus on their best customers.   

Putting It All Together

The typical customer life-cycle goes from a first-time buyer, to a repeat customer, ultimately to a long-term client. It is the goal of every retailer to move customers from point A to Point B, and eventually to Point C.  Working exclusively with customers who have reached Point C in the life-cycle has immediate value, but diminishing returns if new customers are not brought through their own journeys.  So the question becomes, how do you focus most efforts where they have immediate benefits, but not at the expense of those efforts that will pay off in the future?

This is accomplished by designing a program that enables the associate to keep their primary focus on their top customers (their Client Book), but to augment this activity with pre-defined scheduled and automate campaign types that support the nurturing of a larger segment of customers based on customer needs, life events, interests, and other relevant and personalized outreach.

Quantifying Clienteling

Quantifying Clienteling

I have been involved in dozens of Clienteling projects over the years, and am quite actively engaged in consulting on the topic with retailer to this day. One question that invariably arises is how do you go about quantifying the results of clienteling efforts?  If we are going to commit to a broad-sweeping change, how can I know if the efforts will work, or are working?

While it is a simple question, the answer is a bit more complex. This is the case for a number of reasons.

First, many retailers that have previously implement Clienteling did so with the intent of using this heightened service as a competitive advantage over their competition. As such, they are hesitant to discuss real-world successes, as they are content to be among the few who reap the benefits for as long as possible. So while there are clear benefits, you are unlikely to get much detail on them.  

Second, many of the retailers that undertake a new software-based clienteling initiative have already been practicing clienteling activities manually; so any measurable gain can really only reflects the incremental value of systematizing an already existing practices – not the entire gain of performing an activity versus not performing an activity. For retailer that are looking to implement clienteling for the first time (manual or software), the potential gains are even greater.

Third, many factors can impact the sales at a given point in time including staff, product, management, weather, Marketing efforts and events, seasons, etc. Isolating the value of one specific initiative if often fairly complex, especially as retail typically has numerous initiatives design to impact revenues.

So how then can we measure the effectiveness of clienteling?

The Scientific Method is the most accurate way to measure the success, or lack of success, of new methods, practices, or activities. Using this Scientific Method a retailer would identify “like” customers, associates, stores, etc. then divide these combinations into two groups – a study group and a control group. Using the study group they would then take the new actions, and in the control group continue to perform business as usual. Regrettably, as described above, there are so many factors that can impact sales that the combinations of these various factors make the Scientific Method impractical if not impossible.  

There are, however, a number of useful measures that can be used which in their combination serve to be more scientific in their approach, and help to quantify the value of Clienteling. 

1.        Affiliated Sales – affiliated sales is a concept that tracks the sales as a percent of total sales which can be attributed to “Affiliated” clients.  An affiliated client is one who belongs in a store associates book. A common measure for this ranges from 20-40% depending on the retailer. High-end luxury retailers tend to be on the higher side, while mid-priced retailers more toward the lower side of this range. What makes this number perhaps less valuable, however, is that simply affiliating with more customers can grow this number, even if no actual clienteling actions are implemented.
2.       Outreach Sales % – whereas Affiliated Sales does not focus on the actions taken by an associate, Outreach Sales shifts the focus primarily to the impact of a very specific activity – outreach communication. Outreach Sales % is a measure of the percent of all business that happened in a defined time-frame as a direct result of a personalized communication from an associate. If an associate proactively reaches out to a customer, and the customer makes a purchase (within a defined time-frame such as 14 days), this is then considered to be a direct result of the outreach. This is then expressed as a percent of total sales for the time period (most often 1 month). This is a common metric I suggest tracking, as it is rewarding measuring the effect of the efforts, and not just the activity.  This Outreach Sales number most typically ranges from 15% to over 25%, meaning that as much as 1 in 4 dollars can be a result of associate outreach activity. An interesting point of note on the topic of outreach is that one to one personalized communications coming from the store associate are far more effective than those coming from the Marketing department. In fact, a very typical response rate (making a purchase) to a personalized communication falls in the range of 12-20% -- exponentially better than even the best marketing campaigns.
3.       Affiliated Outreach Sales – an argument can be made that many of the customers who received an outreach communication may have wished to shop regardless, and therefore even this number is not 100% proof of the effectiveness of personal outreach to a customer. Affiliated Outreach Sales attempts to address this issue head-on. It is a measure of only those customers who are affiliated, and then looks at the percent of business derived from the affiliated customers who received an outreach communication in comparison to the percent of business for those who had not received a communication. A recent 1 month analysis showed that associates had communicated with approximately 1/3 of their affiliated customers, and this third represented 2/3 of all sales to affiliated customers. Literally ½ the number of customers generated twice the sales for the given month demonstrating the clear value to associate outreach communications.       

While the above metrics help to prove the viability of Clienteling, they are not always the only metrics tracked in a clienteling initiative.  In fact, the most common measures used to gauge the success of Clienteling are much more common statistics most often already in use. It is the impact on these metrics that helps to demonstrate the benefits of the initiative. Some of these include:

•          Total Sales
•          Average Transaction Value
•          Items/Units per Transaction
•          Margin
•          Sales Per Hour
•          Customer Frequency

Looking at these measures on the whole provides the most value in gauging the success of a program, but looking at these metrics as they relate to a specific set of customers (for example affiliated customers, prospect lists, targeted segments used for outreach tasks, etc.) can provide even more insight, and can help to prove the value of the efforts being performed.

Over the years I have been involved in a number of Clienteling deployments, and have had the pleasure of monitoring their success through most of these performance metrics. By focusing efforts in the store toward a specific measure, all of the above metrics can and have been impacted by clienteling activities with great success. 

Clienteling - A New Clienteling Platform

A New Clienteling Platform

You might enjoy this video on the new Raymark Clienteling solution. It's an impressive solution capable of running on iPads, Android, and Windows devices, and accessing data from within a retail organization.

Expect to hear more about it in the coming months.

#Clienteling has never been better.



Learn more here...

Clienteling Pilots - Avoiding Six Potential Pitfalls

Clienteling Pilots

Avoiding Six Potential Pitfalls

Executive Summary

Today’s economic challenges have more and more retail companies looking for opportunities to increase top-line revenue with in-store initiatives. The promise of increased sales through Clienteling is extremely attractive in attaining these goals. However, capital is more constrained than ever, inducing senior managers to look for early proof that projected returns for any new technology or process improvement are in fact achievable. These cash starved organizations are equally concerned with the up-front costs associated with any new revenue-enhancing investment. As a result, more companies are looking to start small and pilot technology initiatives in order to justify the expense of moving to a company-wide roll-out. They are in essence “buying an option” against the total cost of this large scale investment.Pilots typically have a few important advantages:

• Lower initial investment
• Knowledge and Feedback (KPI’s, Business Process, Training Requirements) 
• Subject to specific conditions, a way “out” if the pilot is not successful

However, pilots often have distinct disadvantages – not the least of which is gaining adequate corporate focus and alignment with core organizational objectives. Since pilots necessarily have a smaller initial investment, often they do not gain appropriate levels of visibility across key areas of the enterprise. Similarly, because many pilots are approached as a “test” of a solution’s capabilities or usefulness, the initiative can be marginalized suffering from inadequate organizational priority, resources, focus or planning. If corporate goals, measurements and success-based accountability are not put into place early and consistently communicated to all constituents regularly, pilot initiatives often wander aimlessly. This results in many solutions never being given a real opportunity to provide their potential corporate value. 

Pilots require specific goals and a well defined path that the “rank and file” can follow to achieve success. Defining, communicating, measuring and managing your team will require a well designed change management processes. While the final roll-out of an implementation may be designed differently than a Pilot program, the Pilot must have a comprehensive multi-disciplined program as its foundation, which includes appropriate caveats, goals, rewards and risk identification.

The objective of a pilot needs to be exactly the same as the objective of the future broader full roll-out, albeit on a smaller scale. As a result, a significant percentage of the work needed to ensure long-term enterprise success must be performed early in the pilot initiative. To do anything less undermines the validity of the test, and can actually negatively impact the likely success of a subsequent roll-out.The six pitfalls to avoid during a Clienteling pilot include:

• Lack of Executive Sponsorship / Involvement 
• Lack of Defined Goals and Measurements of Success 
• Inadequate Resources, or Authority/Accountability Disconnect 
• No Mitigation Strategy for Potential Impediments 
• Lack of Full System Integration 
• Unmanaged Cultural Change / Lack of Program Design 

By recognizing these potential pitfalls in advance and by developing a plan accordingly, retailers can be assured of seeing the true benefits of a pilot, and can feel confident that their results are truly indicative of an enterprise wide roll-out. 

Six Pitfalls to Avoid

What follows is a discussion of six common pitfalls to pilot initiatives that may limit the success of a pilot, and negatively impact the desired results. The common theme throughout pertains to effective planning and execution of a cultural change management program. Unfortunately, well-intentioned retail decision makers often embark on a pilot, inspired by the promise of dramatic business improvement without a clear understanding of what it will take to change the established cultural norms and behavioral patterns to make the project a success. All too often the amount of preparation and oversight required to deploy a pilot is deeply underestimated. Failing to recognize and address these pitfalls will lead to less than optimal pilot results or, in extreme cases, failure of the pilot to succeed in any meaningful feedback for a subsequent rollout. 

 

1. Lack of Executive Sponsorship / Involvement

Executive sponsorship, and the specific understanding of this sponsorship to all constituents at the store level and above, is imperative to pilot success. The pilot initiative must be elevated as a top agenda item for senior management. Without top-down ownership of the initiative, other store priorities (i.e. floor moves, markdowns, staffing issues and other operational tasks) will inevitably supersede the extra effort of learning and using a new tool. While these other operational tasks are important, they don’t generate incremental revenue. Simply put, Clienteling is just too important to growth to be vying for leftover mindshare. Once store personnel understand that senior management is fully invested in the outcome of the pilot, in-store commitment and willingness to strive toward success increase exponentially.

Keeping the team aligned and committed requires consistent down-stream communication from Executive Management that highlights pilot objectives and projected business benefits. As with any new initiative, results are ensured by instituting accountability down the chain of command.

2. Lack of Defined Goals & Measurements of Success

Without clearly defined goals and a means to measure progress your pilot initiative is likely to wander aimlessly. If you want an associate to get from point A to point B, it is imperative that you tell them precisely where point B is, and that you ensure that they have the tools and abilities needed to reach that destination.

In order to determine the specific Clienteling activities that will provide the greatest benefit, start by articulating your corporate goals, and extrapolate that into specific in-store goals. It is important that the number of initial goals is limited to that of top objectives that can be reasonably achieved; usually 2-4 goals are best. Once the goals have been established, determine how the success of these goals is to be measured and how these Key Performance Indicators (KPI) will be communicated. In-store goals should map directly to a corporate goal.

     Example     
     Corporate Goal = Increased Frequency
     In-store Goal = Outreach results related to Potential Lapsed Customers

After appropriate measurements are determined, the method to deliver ongoing feedback must be instituted for each level of the organization. Corporate and store level KPIs should be visible to executive management, while individual associate and store level metrics are available to the associate, store manager and regional managers.

3. Inadequate Resources or Misaligned Accountability

Constrained capital often plays a major role in choosing to implement a pilot prior to committing to a full roll-out. When resources are tight it is common to staff a pilot with resources borrowed from other projects, and on a part time basis. While appropriate for some roles, it is important to note that there are two critical roles where this will have a significant negative impact. The two roles that require dedicated resources are the IT/Technology Project Owner, and the Business Owner.

Typically, there are an array of technology skills and resources that must come together to implement a Clienteling initiative, but ultimately there is one individual that must own the technical success of the project. This person’s role is to manage all technology aspects of the project, to test and validate all aspects of the project, and to act as the liaison between the stores, IT and the vendor. While this role is not likely to be a full time job for the entire life cycle of the engagement, there are times when the initiative will take up the majority of this person’s workday or workweek. Coordinating the internal efforts involved in integration, implementation, testing, validating, etc., require time and a single minded focus.

The business owner is perhaps the most critical individual resource in most in-store initiatives, pilot or otherwise. This person acts as the coordinator, helping to finalize the overall project as it relates to KPIs, Best Practices, Training Strategy, Communication Strategy, Monitoring Strategy and total program execution. This individual also needs to coordinate the efforts of the Users for application configuration, data validation and User Acceptance Testing.

While it is not uncommon for this person to fall outside of the direct store chain of command, this can create significant issues if not managed properly. This is true for two reasons:

• Accountability – If the stores do not feel they report to this person, the individual has no authority to hold the stores accountable.

• Priorities – While this initiative may be a major priority for the company, without direct involvement from the appropriate chain of command, other day to day tasks, always seem to be of higher priority. 

For these reasons, it is recommended that the business owner is either from the store chain of command, or that Executive Management communicates very explicitly how important the initiative is, and remain fully engaged from the goal setting, training and accountability aspects throughout the life of the pilot. Ideally the Business Owner should report directly to Executive Management related to the initiative. Division/Region managers must also be involved in the planning and execution, and held accountable the actions of their stores, and the prioritization of the initiative.

4. No Mitigation Strategy for Potential Impediments

There are an array of potential impediments to a project that range from overcoming existing cultural issues, to technology shortcomings, to process conflicts, to available resources. Every corporate culture is different, and each retail organization is supported by existing processes and tools. For this reason, there is no easy cookie cutter approach to identifying impediments. Instead prior to moving forward, the business must undergo a thorough analysis of existing processes, technologies and current culture to identify such issues.

Once the potential issues are identified, a mitigation strategy must be defined for each of the key elements. This strategy can then be put into practice and communicated throughout the entire lifecycle of the project.

The following is a brief list of potential impediments:

     1.      Competing agendas and processes

     2.      Unique technology restrictions (lack of access to data, etc.)

     3.      Resources

     4.      Culture and Attitude

Competing Agendas

Of the four potential impediments, competing agendas is the most common, and has the greatest risk of negative impact. When there are competing agendas, associates will tend to gravitate to what is comfortable, or known. This can create unspoken resistance, which is often difficult to identify. If an old technology or manual process delivers some of what is the scope of the pilot, or associates are rewarded for using different methods, or DMs or RMs stress different priorities, there is immediate ambiguity and resulting risks to the project. For this reason, all potential competing agendas should be identified and addressed prior to the pilot initiative.

• Features of the application currently available through other technology
• Features of the application currently available through manual processes
• Reports or key metrics where associates, managers, GMs DMs and/or RMs are being held accountable that may be inconsistent.
• Areas where the current incentive plan may conflict with the initiative
• Cultural issues related to client interactions 

Unique Technology Restrictions

While not often a critical impediment, there are certain technology restrictions that should be identified and addressed in the overall strategy and program design. Examples of such restrictions might include the absence of wireless infrastructure or dead-spots in the stores (mobile only), poor data integrity between existing systems, or legacy POS incapable of running web or third party applications. While some of these restrictions may continue to exist during the pilot (i.e. duplicate customers in the database), they must be managed to eliminate negative feedback or pilot performance. In some cases, simply acknowledging an issue and describing the future roadmap is all that is needed.

Resources

The number of resources in the store is rarely an issue with a pilot (or at least not beyond the constraints with which the store is already faced), however getting IT and Head Office mindshare can be a major problem. As discussed above, the alignment and accountability of resources is critical.

While the above discussion focused primarily on those that will effectively manage and motivate the in-store staff, there are a few other key stakeholders where lack of involvement will hinder a project’s success. Continued involvement from resources in the following functional areas is typically required in a Clienteling initiative:

• Marketing 
• Loyalty / Rewards
• Training 
• Merchandising 

Each of these business areas has a vested interest in the success of most in-store pilots, and each should engage early in the process, and remain engaged through the life of the initiative.

Culture

Cultural issues abound in many retail environments. Some retailers have a very strong sales culture, while others do not. In some environments the “Rock Star” associate is left to do what they wish, while in other environments associate behavior is quite regimented. Ultimately the retailer knows their business best; so a review of strengths and weaknesses must be done using an “introspective lens”. While existing cultural issues should never prevent a successful initiative, they must be recognized and addressed as part of the overall strategy of engagement to assure the appropriate level of buy-in from the associates and management.

5. Lack of Full System Integration

With pilot initiatives there is often a desire to go live with as little capital outlay as possible, attempting to identify business benefit for the least cost. After all, this is a pilot. One element that is often stricken from the pilot budget is fees related to full system integration.

Examples include:

• Direct tie into POS to launch the application
• Direct 2-way access between pilot initiative and other systems – (i.e. POS for client add, client search, etc.)
• Push task capabilities from current Loyalty or CRM system
• Real-time access to product quantities, or product price per store
• Access to data from external sources such as Alterations, Sends,UPS, FedEx, etc.

While lack of integration is unlikely to prevent achieving some level of success for the pilot, there are significant shortcomings inherent in not performing this work, and this should be recognized as a potential impediment to seeing all of the benefits. While it is often not possible to give the associates everything they want on the first day, it is critical that associates understand the long-term intent for the clienteling application and to have some visibility into the roadmap for the future. These system-related issues cannot become excuses for associate to not use the solution.

Perhaps more importantly, lack of full system integration does not provide a completely valid test in comparison to the solution that will be rolled out. Since in most cases, the final solution is to be fully integrated, such a pilot initiative is not reflective of this end state. While it is true that a partially integrated pilot solution should show even greater results once fully integrated, there is a risk of less than optimal pilot results without approximating a final roll-out environment whenever possible.

6. Unmanaged Change / Lack of Program Design

While listed as the sixth potential pitfall, unmanaged change can be the most important item on the list. It is last only as it encompasses aspects of nearly every other item mentioned before it.

Possibly more than any other initiative in retail, successful Clienteling is rooted in cultural change. The change required comes in the form of what is done, how it is done, and how it is managed. While many top associates understand the benefits to clienteling, and likely perform certain best practices today, Clienteling is about institutionalizing core best practices in a manner that is manageable and measurable. It is a combination of process and practice re-engineering.

Without proper change management in place, any pilot is likely to meander; producing less than the desired tangible results. In a worst case scenario, resistance and/or complacency from the stores may become so great that the pilot never truly gets off of the ground. In this situation the retailer is left with very difficult decisions about how to proceed – knowing the benefits of Clienteling, but not being able to prove the results.

While the above five potential pitfalls will impede successful cultural change, even if all five of these have been sufficiently addressed, change will not happen without effective execution.

In general, any change management program must answer three fundamental questions:

1. What are the specific goals?
2. What activities will accomplish these goals?
3. What are potential impediments, and how do we address them?
4. How will associates be engaged, and buy-in accomplished?

Without first answering these questions, the retail organization is failing to lay down the appropriate foundation to develop a plan. Without a planned, measured approach, execution will be ineffective and change will not happen.

Inadequate cultural change management is most frequently a result of insufficient planning and execution of one or more of the following:

• Communication – what is to be communicated, to whom, when and how?
• Training – what will be trained to which segments of associates, at what time, by whom, and how? 
• Monitoring / Feedback – what will be measured, by which method, provided to whom and in what time intervals? What are follow-up measures based on various metrics? How are people recognized, rewarded or held accountable?

Clienteling is all about change management. A complete change management program must be created before attempting to go live in the stores.

Conclusion

Pilot initiatives have very valid business goals and are based on sound business reasons. Unfortunately they are also faced with unique challenges, and if not managed properly are likely to generate less than desired results. Avoiding the six most common pitfalls can assure a successful pilot that generates significant, tangible results. The six pitfalls to avoid include:

1. Lack of Executive Sponsorship / Involvement
2. Lack of Defined Goals and Measurements of Success
3. Inadequate Resources, or Authority/Accountability Disconnect
4. No Mitigation Strategy for Potential Impediments
5. Lack of Full System Integration
6. Unmanaged Cultural Change / Lack of Program Design 

By avoiding these pitfalls through effective change management program design, a retailer can effective manage the activities of the associate, and attain the final end results they desire.