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The 2020 holiday shopping season is well underway. As we close out arguably the most challenging year on record for retailers, it is critical that you take the necessary measures to shore up your operations and finish the year (and kick off next year!) strong.
Don’t think for a second that COVID-19 is putting a damper on this holiday season: Deloitte projects that holiday sales will still exceed last year by a considerable margin of 1-1.5%. That’s billions of dollars in sales up for grabs.
So, how do you guarantee that your organization will get a piece of the pie? Leaning into technology during this time of year can offer added reassurance that you’re not overlooking sales opportunities or potential issues that could negatively impact revenue as your organization navigates the continued challenges of the pandemic. One great option is prescriptive analytics – the analytical software methodology that analyzes data to determine:
Prescriptive analytics provides you with the clearest, most timely picture of your organization’s readiness to maximize sales, not to mention profits and margins along with it.
Here’s a look at four key, customer-critical areas that prescriptive analytics can empower your people to improve:
1. Inventory accuracy
Consumers are unlikely to forget those empty store shelves they found when looking for staples like milk, bleach, hand sanitizer and flour at the height of the lockdown. You need to make every effort to keep them from re-living those out-of-stock experiences if you don’t want to lose them to your competitors. Yet, few things make replenishment harder than “phantom inventory,” whereby an inventory management system falsely claims a certain item is available, when in reality it is actually out of stock due to either a stocking error, theft, inaccurate adjustments, unreported damages or the like. Zebra’s own research shows that customers in this situation would likely stop shopping with you altogether.
Prescriptive analytics combats phantom inventory and other inventory inaccuracies by monitoring sales drops for popular items. If (1) the store shows plenty of inventory on hand for the item in question, (2) the item has historically sold better, and (3) similar stores show normal sales, the item more than likely is out of stock. Prescriptive analytics also alerts you to items that are in danger of running out on the shelf and instantly alerts your associates to refill them. This workflow is your best bet at keeping customers from experiencing a dreaded out of stock.
2. Online order fulfillment
If your organization has not already started beefing up its online ordering services, you are surely losing ground to your competitors. Utilization of e-commerce has never been higher, and all retailers are scrambling to increase capacity and productivity to stay on top of the added demand. Even dedicated fulfillment centers for ship-to-home orders will encounter difficulty keeping up with the sheer volume as customer expectations grow.
A key to managing demand for ship-to-home and click-and-collect orders is “outsourcing” the orders to local stores closer to the delivery point, especially during the times that said stores are less busy and have labor to spare. Better yet, this practice reduces the cost of transportation. Customers typically don’t care where their ship-to-home orders are fulfilled as long as they are accurate, fresh and, most importantly, delivered on time as promised. Prescriptive analytics helps by identifying stores with the optimal staffing levels, traffic and on-hand availability at certain times of day to fulfill orders for busier stores’ zones. The solution also identifies specific associates requiring training on picking, packing and shipping based on customer satisfaction, reported errors and more. This relieves pressure on both busier stores and your various fulfillment centers.
3. Health and safety protocol compliance
Until a vaccine becomes available, social distancing is here to stay and compliance remains just as important as ever. You and your organization as a whole must be mindful of “COVID-19 fatigue” among pandemic-weary associates who have a tendency to become lax about safety protocols. To avoid the potentially disastrous public relations (PR) crisis or financial loss from a customer or associate contracting the virus inside one of your stores, you need to keep a close eye on compliance for safety and sanitation protocols.
Prescriptive analytics helps to verify that your store associates are adhering to social distancing and cleaning protocols by monitoring your cashiers’ transaction rates. By comparing hourly transaction rates to current rates, especially in terms of the time between transactions or scans, prescriptive analytics identifies cashiers who are not enforcing social distancing or other safety/sanitation protocols. A cashier with a high transaction rate and little time between transaction headers (compared to other cashiers with the same level of experience at similar stores) is likely not asking his or her customers to stand the required distance apart. Alternatively, the cashier may not be sanitizing his or her register, conveyor belt, hands, etc. between orders as required. Fortunately, when the manager receives an alert from the analytics solution, he or she can immediately direct the associate to review the training protocols and adjust behaviors.
4. Cashier fraud and non-compliance
Since the lockdown began, budgets have gotten even tighter and every dollar counts. Combatting loss often starts at the register, at which many functions can be misused (whether to appease customers, commit fraud or just due to a training gap) and cause significant losses. Hundreds of thousands of these transactions are performed every day, including voids, refunds, manual discounts and price overrides. Many of them are perfectly valid, making it difficult to zero in on the fraudulent ones. The longer it takes to identify points of loss, the greater the costs.
Retailers are using prescriptive analytics to quickly identify cashiers who may be committing fraud or need more training. The Zebra Prescriptive Analytics solution, in particular, has a capability called “risk ranking” which, as the name suggests, ranks cashiers based on the number of “high-risk” functions each executes. These numbers are then compared to the average across their stores, regions, the company and other relevant clusters, and any cashier exceeding that average is flagged for investigation. For example, a cashier logging in a significantly above-average number of risky functions would be placed in the “high-risk” category, prioritizing him or her for a training (or an investigation, depending on the cashier’s behavior, trends or previous corrective action). Cashiers with lower, yet still-concerning numbers are grouped into lower-risk categories, typically “medium-risk,” “low-risk” and “no risk” for simplicity. The right solution will also identify suspicious circumstances around the high-risk activities, such as when specific managers are on duty (they may not be watching the cashiers closely enough), at specific times of day and more.
Securing your piece of the holiday-spending pie may be more challenging this year, but it’s not impossible. All you need is a smart investment in the right technology, like prescriptive analytics, to ensure you have the means (i.e. actionable intelligence) you need to maximize profits, compliance and revenue with minimal disruption to your operations and customers’ experiences.
Guy Yehiav previously served as the General Manager of Zebra Analytics, where was responsible for setting the organic and non-organic growth, leadership strategy, and customer success for the Zebra Analytics business unit.
He was formerly the CEO of Profitect, which Zebra acquired. Guy is a 25+ year veteran of the supply chain industry, and has held senior leadership positions at Oracle. He was previously the founder of Demantra US, which was acquired by Oracle in 2006.
Fluent in English, French, and Hebrew, Mr. Yehiav has a passion for teaching, which started with educating high-school students pro bono in his native country of Israel. He continues to teach pro bono, now as a guest lecturer on professional selling, entrepreneurship, and statistics for the Massachusetts Institute of Technology (MIT) and Babson College.
Mr. Yehiav holds a Bachelor’s degree in Computer Science & Industrial Management from Shenkar College of Israel and an MBA in Entrepreneurship from Babson College. He currently lives in Wellesley, Mass. with his wife, Maya, and their three daughters.
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