Concealing Your Shame

 There is no shame in not knowing; the shame lies in not finding out. – Russian Proverb

Customer expectations of brick & mortar retailers are changing.

Most retailers are failing miserably at meeting those expectations with regard to providing information about stock availability at their stores online.

I’m not talking about whether or not they have sufficient stock to meet customer demand – it’s even more basic than that. When a customer is looking to visit your store can you even properly tell him/her what your stock status actually is?

Recently, I decided to anecdotally put one particular store to the test on this. I chose this store for the following reasons:

  1. They actually publish their store on hand balances online for all the world to see in real time.
  2. They offer a “buy online, pick up in store” option.
  3. I visit the store fairly frequently and it’s about 1 kilometre from my house.

On the day of my “study”, I only had 2 items I needed. Before leaving, I called up the pages for those items on my iPhone and went to the store. When I got there, I refreshed the pages to retrieve the most up-to-date stock information and compared that number to what I actually found on the shelf. After that, I wandered around the aisles and picked a few other items at random and did the same thing.

Now before I share the results, there are some rather significant caveats that I need to mention:

  1. The inventory is updated in real time, but obviously it’s based on POS transactions. When I did the “physical count” on the shelf, it’s certainly possible that some other customer had picked the item off the shelf but had not yet paid for it.
  2. The study was performed on a busy Saturday afternoon about 4 weeks before Christmas. Not exactly ideal timing for ensuring that the store was stocked neatly or that there wasn’t a lot of product floating around in customer baskets as per point 1 above.
  3. I know that this store has a very large back room and doesn’t keep separate on hand balances for shelf stock and backroom stock. In cases where my count is short, it’s certainly possible that the product was in the back room or displayed elsewhere in the store.
  4. When I got a count discrepancy, I did not ask the staff for help in locating the “missing” items. As I mentioned, we are only weeks away from Christmas and I wasn’t about to waste people’s time finding items that I had no intention of purchasing.

The first item on my list was a carbon dioxide cylinder for our SodaStream. Note that I’ve attempted to crop out any information that would reveal who the retailer is (logos, shelf tags, product identifiers, etc.). This won’t stop some of you from recognizing them, but I can’t do much about that.

Okay, back to the SodaStream cylinder. When I reached the shelf and refreshed the page on my phone, here’s what I got:

Wow, 337 units in stock! (As an aside, this retailer almost always shows the aisle number in the store where the product can be found, which is stellar – not sure why it’s not shown in this case, but it’s a product I buy often, so I knew exactly where to go).

Now here’s the shelf:

You can’t see them all in this image, but the actual count was 18 units, far short of 337. Obviously this is either a massive inventory record error or there’s a pallet of them on a secondary display or in the back room. So long as they sell fewer than 18 per day, buyers of this item will be happy.

RESULT: INCONCLUSIVE

The second item on my list was a large, bark deterring dog collar for my mother-in-law’s dog (it uses vibration or noise to deter barking, not electric shocks, so don’t judge me!). As you’ll see below, my phone told me to go to aisle 56 to find 1 unit:

Unfortunately when I got to the aisle, there was none to be found. I spent a few minutes searching all of the overheads, pegs and bins in this aisle and one aisle over in each direction and couldn’t find it.

RESULT: FAIL

While in aisle 56, I picked another random item (mulberry scented dog shampoo) and looked it up on my phone:

And here is the shelf:

6 units – right on the nose.

RESULT: SUCCESS

Now, how about this Bissell Little Green pet stain remover?

This item is on promotion for $25.00 off and I found an end aisle display with 12 units:

…and one more unit in the home in aisle 60:

So that’s 13 on the shelf vs 32 units reported on hand. But because this item is promoted, there is almost certainly more in the back room to replenish the shelves.

RESULT: INCONCLUSIVE

On to aisle 17 to check out the Stanley chalk line reels.

Hoping to find 5…

…and 5 it is.

RESULT: SUCCESS

You get the picture (no pun intended). I also documented a few other items in the same way, but I’ll spare you the photographic evidence:

  • Richard Self Adhesive Drywall Tape: 3 online, 4 on the shelf (RESULT: PRETTY CLOSE)
  • T.S.P. Heavy Duty Cleaner (400g): 10 online, 4 on the shelf (RESULT: FAIL)
  • Soft Glide Cabinet Hinge: 12 online, none to be found anywhere (RESULT: EPIC FAIL)
  • OOK Picture Hanging Kit: 14 online, 13 on the peg (RESULT: PRETTY CLOSE)

In summary:

  • There were 3 failures out of 9 (I’m counting “Pretty Close” and “Inconclusive” in the success column for fairness)
  • 2 of those 3 failures could have resulted in a lost sale on that day (i.e. the reported on hand was > 0, but there was no stock to be found on the sales floor).
  • With regard to the bark deterrent collar (one of the items I actually wanted to buy), there’s more to the story:
    • When I got home, I ordered the item for in store pickup and the on hand immediately dropped to zero
    • Later that day, I received an email notification and a phone call informing me that the item wouldn’t be available for pickup until the next day
    • From this, I’m surmising that they couldn’t find it in the store and had one delivered from a nearby store overnight
    • The next day, I picked up the item at my home store – lost sale averted

So what was the point of all this and why did I choose “Concealing Your Shame” as the title? Am I trying to shame this retailer for what (anecdotally and with all of my previous caveats applied) looks like imperfect performance?

Au contraire!

Store on hand accuracy is not easy to achieve and this retailer is to be highly commended for their confidence and willingness to be as transparent to customers as possible.

No, the shame is reserved for those retailers who have on hand balances readily available in their systems but choose not to share it. I guess the thinking is that you can’t fail if you don’t try.

I say it again: customer expectations are changing.

If you’re afraid to share your on hand balances with your customers, I have 2 questions:

  1. Why? (you already know why)
  2. What are you doing about it?

Last Mile Delivery: Really Folks?

 

One way to boost our will power and focus is to manage our distractions instead of letting them manage us. – Daniel Goleman

shiny_object

Okay, first a confession out of the gate. The title, quote and image above might lead you to believe that I’m judging last mile delivery (and the broader omni-channel retailing discussion that goes along with it) as a ‘shiny object’ distraction.

I know that’s not entirely true. But I believe it is at least partially true.

To be sure, retail is changing and it’s changing rapidly. Customers want more choices in terms of how they make purchases and how they get those purchases to their homes – and they aren’t super keen on paying a lot more for these choices.

Retailers who put their heads in the sand and don’t actively address these challenges will (and in some cases already do) find themselves in serious peril.

Where is last mile delivery headed? It’s still evolving – but getting into those details is not the point of this discussion. I’m going to stay in my lane. At the risk of oversimplifying things, a sale is a sale and the supply chain planning challenge is to have the product available where the sale will be fulfilled.

The beef I have is that all of the discussion about last mile delivery seems to be making the blanket assumption that retailers have everything aced right up to the last mile.

As if to prove my point, I received an unsolicited email today (God only knows how many supply chain related online publications have my email address at this point) asking for my participation in a survey with the title: “Can we solve the last mile?” The opening two sentences read as follows:

“The last mile is bearing the brunt of the eCommerce boom. Yet, it represents a great source of angst and expense for retailers and last mile providers alike.”

After that is a ‘sneak preview’ of survey topics that focus solely on last mile problems – the implication (likely unintended) is that the challenges in the last mile are completely independent of all the activities that precede them.

Retail out-of-stocks have been a major problem since they started measuring it (8% on average and double that during promotions). The most prevalent cause cited by all of the major studies is inventory management and replenishment practices at store level. Not surprisingly, the lack of attention on solving for these causes means that they haven’t yet magically vanished. Perhaps someday, if we keep wishing really hard…

It’s pretty clear that ‘non Amazon retailers’ will need to make use of their bricks and mortar store network to enable whatever last mile delivery options they intend to pursue. How will they be successful in that regard with such abysmal out-of-stock performance and no idea what the accuracy of their electronic on hand records are (if they even have them at all)?

The day is coming when customers will expect to see store on hand balances on your web page before they submit a ‘click and collect’ order – what happens when the website says you have 3 in stock, but there isn’t any to be found when the customer goes in to collect?

Finally, we can’t lose sight of the fact that the ‘omni’ in ‘omnichannel’ is a latin prefix meaning ‘all’ or ‘every’. One of those ‘every’ channels is customers walking into a store, getting a cart, selecting products and paying for them at the checkout – kickin’ it old school to the tune of 91.5% of total retail sales.

Yes, e-commerce is growing like crazy, but it’s going to be awhile yet before online selling is truly dominant in retail as a whole.

And if (when) that day comes?

Again, I’m not suggesting that working out the last mile won’t be critically important. I’m just saying that retailers still have some work to do in getting basics right (like being in stock and knowing how much is on hand) in order to make it all work.