Exploring the Eight Layers of Matrix Retail

The age of Matrix Retail is already upon us and the only question to ask is will you acknowledge, understand, embrace, engage and tune all of the components of your company’s presence in the retail eco-system?

Or, will you choose to simply ignore them, continue in discrete multi-channel / abomni-channel mode and watch your competitors employ Matrix Retail methods to delight your customers, then dominate, devastate and ultimately destroy your business?

On a more positive note, we hope you opt for the former as the concept of Matrix Retail aims to help you bring about a state of zen awesomeness and retail customer joy as your business prepares to accelerate and break the e-commerce sound barrier.

Depicting something as pervasive and all encompassing as today’s real world digitally enabled retail environment is a tall order (especially for a graphically challenged logistics dude) but the above is my best representation to date of the eight layers of Matrix Retail which need to be enabled, interconnected and then tuned to fully deliver what I call ‘the logistics of customer experience‘.

Attraction and Engagement, Sourcing & Deployment, Policy & Pricing, Products and Presentation, Orders and Payments, Fulfillment & Logistics, Service and Feedback, Retention & Advocacy together form the component framework upon which to begin construction of your ‘Matrix Retail’ social business environment.

We will now touch on each of these components as a starting point for your Matrix Retail journey and at a later date each of these brief explanations will be expanded upon in more detailed posts linked to from each layer below. Please note to date Matrix Retail is not professing to be all inclusive but simply a solid framework or skeleton to get started upon which will ultimately support and integrate the many additional aspects and functionalities you may wish to incorporate in the future.

Advertising in all it’s glory and infamy has been around since ancient times of wall paintings, papyrus and Chinese songs using bamboo flutes to sell candy.

During the Middle Ages, many couldn’t read so store signs were often the images of the items in trade, a boot for the cobbler, horseshoes for blacksmiths and so on. In the 19th Century Thomas J. Barratt of London often called ‘the father of modern advertising’ made Pears Soap the world’s first legally registered brand.

Attraction has always been what it’s all about, regardless of medium from ancient print, leaflets, posters, billboards, direct mail, newspapers, radio, television, websites, email and now mobile devices and social selling ushering in a new age of consumer attraction and engagement. We are truly in an age of transition where multi-faceted approaches across all or some of these mediums are leading to maximum impact and attraction.

How do you get consumers to your store, your website or in touch with your online social salespeople? Perhaps these emerging roles and influencers are destined to become the ‘street callers’ or ‘town criers’ of old, operating in this most digital age?

The role and format of advertising, stores and websites in the Matrix Retail world are fundamentally changing and all need to be woven together by the brand to present a coherent and integrated Matrix Retail presence which is both consistent, unified and effective at execution regardless of touchpoint. Think of the digital world as a virtual extension of the bricks and mortar business and regardless of social platform retailers need to develop the digital capability to find and engage customers in these mediums. Beyond this, the capability to over time follow and move with groups of consumers as they migrate to new social platforms will be key to sustainable relationships and success.

Attraction and engagement are becoming much more personalized in both method and substance, no longer is brute force advertising and product a recipe for success. People want to see purpose and social meaning, or at a minimum social conscience, in how businesses they choose to deal with operate at all levels. Retailers demonstrating authentic social impact are rapidly becoming an attraction magnet and consistently outperforming those who choose business as usual.

Attraction will be about brands which are aligned with the consumer’s values, those brands truly interested in making a difference will have maximum impact. Consumers will be attracted not just by what you sell and how you sell it, but also by what you stand for.

More about the Attraction and Engagement layer of Matrix Retail will soon be found here as we continue to build out the Matrix Retail framework.

What are you going to sell? Where are you going to get it? Once you get it how will you deploy products in readiness for fulfillment to consumers?

Just a few of the key questions in the Sourcing & Deployment component of Matrix Retail. Do note that the answer to these questions will not necessarily be the same for all products or all companies. Let’s take a stab at some of these to get you started.

What are you going to sell? This used to be a much easier question based on the type of retailer you were, booksellers sold books, clothing retailers sold clothing, grocery retailers sold, you got it, groceries.

Today in alignment with the attraction discussion above, conscious brands are aligning their business with ideas and these ideas then naturally lead them to products befitting the brand. For example, Whole Foods and the concept of organic and healthy eating, or the new Canadian retail concept Terra20 focused on sustainable and environmentally friendly products, you get the idea.

However as organizations like Amazon are proving, it’s often not just about the products, it’s all about developing and then leveraging the customer relationship, service and experience. What began with Amazon in books has spread to cover most if not all categories of retail products.

Amazon have also been masters at deployment, positioning products as close to the consumer as posible to reduce costs and more importantly delivery lead times to consumers. In Fulfillment & Logistics below we’ll talk more about the related logistics network strategies and options for deployment for greatest Matrix Retail effect.

Sourcing options for products continues to evolve with direct to consumer shipping from offshore sources challenging even established players like Amazon and Walmart. Emerging players like Alibaba and LightInTheBox, who boast four day delivery from Suzhou, just west of Shanghai. LightInTheBox is an online catalog which includes 700,000 items and a website which supports 27 different languages.

Below in Products and Presentation we’ll talk more about how ongoing product deployment and replenishment at store and DC level might most effectively be changed to support the omni-channel world of Matrix Retail.

Watch this space as we continue to build out the Sourcing & Deployment facet of Matrix Retail.

Almost weekly now I am faced with abomni-channel retail experiences many of which have been brought about simply through inconsistent policy and pricing.

Pricing of products going forward will continue to become even more dynamic than it is today. In the emerging internet of things world, a Google search will likely soon show specifically all of the actual geo locations and pricing of the exact product you want based on geographic proximity to you. This will allow you and other consumers to quickly make the best buying decision based on most appropriate combination of price, timing of need, as well as the delivery or pick up options available.

As you can see from the above in a Matrix Retail world the whole pricing scenario will need to become much more fluid and dynamic, as well as the systems retailers will utilize to manage product price. Depending on where product is coming from, being delivered to and the expected service level of that delivery the price will and should likely vary.

Current one price fits all consumer models, with any variability covered by archaic and clumsy shipping policies, will most probably leave a retailer at a disadvantage to fleet footed and agile firms who are able to dynamically adjust pricing on the fly to best meet the consumer needs at the most competitive price.

Matrix Retailers need to be truly in tune with the journey buyers go through to acquire their types of products and ensure that their physical and virtual stores maximize every potential method of becoming part of that journey. Even more importantly once a consumer engages with your firm in any way, all touchpoints need to be consistent and frictionless regardless of mode of communication or channel. Any variances or conflicts in policies or pricing must be recognized and modified in order to prevent potential ‘abomni-channel’ incidents.

Those unsure where to find these conflicts can start with their feedback and complaints from consumers whose growing displeasure and impatience with cross channel conflicts continues to become more evident everyday. Have seen some firms who have created massive Buyer’s Journey walls covered in multi-coloured post it notes as they continue to discover, plan and resolve any sources of potential friction from pricing, policy or any other source in their combined online and physical selling environments.

And key to all of these omni-channel policies is to ensure that all staff, in every store, office, keyboard, chatroom or phone are trained on these policies and fully enabled by the supply chains and systems they need to make the customer happy.

Wider conversation around the Policy and Pricing components within Matrix Retail will soon be further expanded here.

Will these products be sold in your real world stores, virtual stores or both? How will you present products for maximum effect in your bricks & mortar and virtual stores? Most importantly how can you leverage the interaction between these worlds and your customer’s presence in both to maximum sales effect?

Through the concept of endless aisle and vendor drop shipping, even niche retailers are extending their assortment to leverage their trust and relationship with customers to sell goods in almost any product area without substantial investment.

Those who are watching category killer retailers like Best Buy, Staples, Toys R Us and Home Depot can attest to this growing trend of product expansion and endless aisle drop shipping growth. And now even Amazon the leader in product assortment expansion for e-commerce sales should be looking over their shoulder with global players like Alibaba and LightInTheBox ready to bring direct product sourcing from Asian markets right to the North American consumer.

As the lines continue to blur between online and bricks and mortar stores, these worlds need to be brought closer together and interlinked. As mentioned earlier, online virtual stores presenting products should also be staffed and these interactions leveraged to maximum benefit.

On the flipside if someone in a bricks and mortar store is not getting the service they need, a simple note on their smartphone to virtual reps should help to rapidly rectify this situation and connect them with the product and/or help they need.

Current methods of product inventory deployment with large store sizes and significant inventory on hand depth at the store may soon be a thing of the past for retailers wishing to succeed in an omni-channel optimized Matrix Retail world.

Likewise maintaining seperate inventories to support the stores and e-commerce needs independently will also leave retailers at a disadvantage from both in stock, inventory investment and logistics costs perspectives.

Retailers who take these two actions and improve their Internal Rate of Return on invested capital by reducing both store size, related costs, as well as on-hand inventory in stores will be positioned to win in the Matrix Retail world.

Furthermore, working from a single omni-channel DC inventory with rapid each picking and replenishment for both online orders and to replenish store sales will help to facilitate the above as well as helping to avoid lost sales from store stock outs and markdowns for dead stock product at end of season in stores.

More on the above approach can be learned from reading my post ‘Sharing Kevin O’Leary’s Omni-Channel Epiphany!’ published last year following his keynote at the Retail Council of Canada’s annual STORE Conference.

As you will note, the future of Product & Presentation continues to evolve in support of Matrix Retail and will link additional insights here going forward.

Order in any manner, from anywhere, at any time and using any type of possible payment should be the ordering and payment goal of all Matrix Retailers.

No small feat given the geometric growth of social network platforms, currencies (real & virtual) and other payment methods.

Based on the above, the key word in the order and payments lexicon needs to be ‘flexibility’. The dynamic world consumers live in means that things change and their needs for delivery, pick up, locations and other factors change with them.

Businesses which can best understand and flexibly accomodate the consumer’s changing needs will be best positioned to win in the Matrix retail world as expectations of higher levels of service continue to rise even higher.

Research is ongoing into order and payment platforms which can best meet Matrix Retail needs, and we’ll link to our findings here going forward.

Amazon’s secret sauce is in many ways their fulfillment and logistics capability especially their wide deployment into regional markets to provide maximum customer experience through minimum time to delivery gratification.

In a previous post I reviewed seven options for e-commerce product deployment and depending on your customer needs and desired level of customer experience. In developing your Matrix Retail logistics solution a combination of these methods can be employed as you complete and roll out your omni-channel logistics strategy.

Not only does your retail store network and online presence require optimization for optimal Matrix Retail but so does your logistics network. As discussed earlier, the creation and maintenance of seperate inventories for store versus e-commerce channels can be a distinct disadvantage with retailers like John Lewis and Office Depot already demonstrating distinct advantages from combined inventories.

In addition to consolidated inventory, inventory accuracy at all nodes is also key to be able to function in Matrix Retail mode and will once again state that RFID is the answer, period. Despite what the sceptics say, unless your product’s worth less than an RFID chip, go forward, put it in place at item level in stores and be ready for Matrix Retail.

Stay tuned here for further insights on the Fulfillment & Logistics aspects of Matrix Retail.

Unified customer service across all channels is the minimum point of entry for Matrix Retail.

As working on some of these social networks may be new to many firms, perhaps an overarching policy is needed as a starting point? When many discussed their complex social media policies for staff I would often default to a simpler maxim for staff when it came to working on social media and that was ‘Don’t be stupid!’

When it comes to social and other forms of customer service in a Matrix Retail world, as your firm works towards consistency in policies across all channels would suggest that a maxim of ‘Make the Customer Happy!’ be adopted as a guiding principle especially in cases of channel policy conflict.

As discussed above, Matrix Retailers need to staff and be present in the virtual world just as in stores. Today’s connected consumers do not consider it acceptable for retailers and brands to be ‘absent’ on social networks. This relates to both positive and negative discussions and feedbacks which take place. Goal should be one hour or less contact / acknowledgement, connecting to begin addressing of the issue and follow up actions as needed.

Customer service demands and sources of feedback will only continue grow and multiply representing the sum total of your company’s brand and reputation in the marketplace.

Matrix retail customer service and feedback coverage will be expanded here in future.

So you’ve won the customer and the sale based on employing growing capability in omni-channel Matrix Retail, but what’s next?

Now every means at your disposal needs to be employed to keep that customer and protect from all other possible competitors.

Reasonable follow up through electronic and direct mail means can foster the retention process and of course offering your best customers the best deals and experiences possible can only assist in growing the relationship.

Even better, leverage every opportunity to celebrate your relationship with every customer converting them into an advocate for your product and/or retail business.

Provide them with insider access to your Advocacy platforms where they can feel like part of your brand and share their excitement with the world.

Harnessing and releasing the power of advocacy whether from Customers, Employees or Influencers will be key to winning in the Matrix Retail world.

Keep an eye out here for more on the Retention & Advocacy facet of Matrix Retail.

Competiton in retail has always been fierce with only the fittest surviving, the shift to Matrix Retail is the latest stage in retail evolution with those rising to the challenge positioned to prosper and those retailers who ignore, or fail to make the leap, destined to slip under the waves of retail history.

Matrix Retail is about holistically designing your combined real world and virtual retail spaces in a consistent, connected and easily navigable manner seamlessly integrating digital and physical environments. Human-Centric design paired with an overarching brand purpose consumers can align with will ensure top of mind awareness and ongoing relevance in the marketplace. User interfaces, systems, processes, policies and supporting logistics will be tablestakes in the Matrix Retail future which in reality is essentially already surrounding us.

Most importantly effective service and feedback loops across all channels and mediums must be created and nutured as the basis for long term customer retention. Actively engaged customers and employees will further fuel and fan the fire of your business through sharing their ongoing excitement and advocacy for the brand.

Jeff Ashcroft

Stay tuned! In our ongoing expansion of the Matrix Retail concept more in depth posts on each of the eight layers introduced here will be made and linked to from each of the relevant sections above. If you feel you have ideas, products and expertise which will add to Matrix Retail please comment or reach out! Cheers! JA

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