Making the complex simple
Recently my children’s PTA Committee asked school families to fill a cake box with delicious home baking for a local community event. I am 100% pro-community and 100% pro-making my life as simple as possible, but on the assumption I had to fill the box with my own home baking, this was not an activity that was going to make my life simple.
Rewind to last year when the same request came through for the same event. I was flying back into the country from a work trip, arriving on a flight that got me home at 1am.
Home baking needed to be delivered to school between my 8.30am meeting 30 minutes away from school and the 3pm pick-up which I do maybe four times a year (my mother-in-law does it every other day).
Asking my mother-in-law to bake was taking the biscuit. I pondered buying a cake from somewhere local but only Nosh would have anything worthy and it didn’t open until 8am which is when I would be driving to my work meeting.
A problem shared is often resolved and I turned to Facebook where a friend suggested “Staple $20 note to box and return.” How simple. My baking couldn’t possibly sell for more than $20, the school got their funds. My life was made simpler. Problem solved.
Too often in retail there is a tendency to make the simple complex often because the business is trying to work around an unlikely situation.
A case in point. When I worked for a large grocery business I proposed that we offer a “freshness guarantee”, putting our money where our mouth was on how fresh our produce was. This was a major battleground where the winner could acquire market share across the entire shop. No brainer.
But the idea was kyboshed on the premise we would have opportunists bringing back their rotting produce just as it turned. Worse still, what if we had to pay up because the produce wasn’t fresh? And how do you measure freshness? Blah, blah, blah.
A rational person would say it was quite an unlikely scenario and if you simply delivered on your promise and had fresh produce, lo and behold, the obstacles disappeared.
It would be easy if you focused on stock management and staff engagement; good things actually happen when you empower the people who can make it happen. More to the point, it’s what we were supposed to be delivering anyway.
I take my hat off to businesses who make the complex simple; to those who demonstrate ability to think outside the box.
Here are two of my favourite.
Hippo Baked Munchies were launched into the Indian snack market in 2010 and became a runaway success with a philosophy of “Hunger is the root of all evil. So don’t go hungry.”
However the India’s snack market is disorganised with no inventory tracking so it was a scramble identifying empty shelves across 400,000 stores and keeping them stocked. Hippo turned to Twitter, asking their followers to tweet whenever they couldn’t find the snack in-store. Tweets poured in and empowered by the information, the sales and distribution network responded.
Hippo rewarded its followers with personalised “anti-hunger” hampers to thank them for their efforts. Nice touch. By using social media the business created a real-time solution to distribution and availability issues. A simple idea at minimal cost.
Magazine Luiza is the second largest department store in Brazil, and enjoyed a good bricks and mortar business as well as a strong online business, frequented by higher-income shoppers.
New growth could be fuelled through more stores and engaging a lower-socio where they had smaller market share and no significant retail footprint. A tough challenge when retail footprint was scarce and broadband penetration was marginally above nil.
Part of the strategy to tackle this growth opportunity was to establish community hubs where locals could shop online, assisted by real life sales assistants guiding them through the shopping process. These hubs - like internet cafes but better - doubled as community centres to access the internet, teach computer skills and offer support such as cooking classes.
Magazine Luiza created a physical manifestation of the store within these hubs with sales assistant service but without the footprint and systems and stock requirements of a store. Brilliant.
Magazine Você; your store was another innovation. Customers could create, via Facebook, a personalised storefront of their favourite products and share them with friends. They became virtual store owners, selling to their social network. Magazine Luiza collected payment and shipped the goods then rewarded the storefront owner with a commission. In late 2012 there were more than 70,000 users in the programme and conversion rates were higher than the retailer’s online store.
I can’t wait to see how this business will tackle their next challenge.
If that is making the complex simple, let’s jump to an example of the reverse. I recently returned a skirt to a major international fashion retailer. The skirt had ripped and when I spoke to a manager in the store they said there had been similar stories and it was a manufacturing fault. Bring it back in and they would replace it.
But I returned it to another branch where they said they couldn’t help me. They didn’t want the returns hitting their store and weren’t able to do a stock transfer from another store to replace my skirt as there would be a courier cost. Really? Where is the shopper in this process and why can’t we make it easy for sales staff?
It’s too easy to think of the myriad complex ways retailers have attempted to solve problems. Trust me I am not going to cut out my barcodes and keep them with my shopping receipt to enter a promotion.
But to end on a high note, Z has me hooked by offering forecourt service so I keep on getting on and not having to fill my own Remuera tractor’s tank. Simple. Labour realignment at a shoppers pain point = increased market share.
And avoid returns with Esprit.