Oz Supermarket Innovation: Improving Customer Service And Business Operations

Business Operation

Discuss about the Oz Supermarket Innovation.

This paper answers two key questions about retail store operations including how innovation s used by an organization for business operations and what measures can be taken for improvements in customer service and business operations in a retail store. The paper takes the case of Oz Supermarket that sells stocks household, stationery and non-perishable items and has innovated its operations with the use of wave cards for its customers who need not stand in the queue to pay for their purchases thereby bring them convenience of shopping. This paper explores if there could be more ways for improving business operations of the organization and recommends certain ideas for improvement of existing system as well as implementation of new systems for customer service and operations improvement.

Oz Supermarket is a retail chain that stocks household, stationery and non-perishable items in its stores.  The company has innovated its delivery system by making it automatic for consumers such that they do not have to stand in the queues. Customers of today are busy in their lives and need faster services. They do not like wait in a queue but like to avoid the same. Thus, the use of PayWave can be very useful for the company as it allows the customer to not wait in the queue but only take the items for purchase and leave the store by waving the card such that it automatically makes the payment from the account balance against the cart items taken.

The company has implemented PayWave technology which allows store visitors to just fill in their carts and move out of store without having to pay at the counters. PayWave technology is a contact less payment system in which a plastic card with filled in balance can be used at a store such that a customer only has to wave the card to get the purchase of items completed.

The cart used for shopping by the customer would be connected with a prepaid card that the customer would be provided such that as soon as an item is added to the cart, the bill is charged to the customer. This amount getting deducted from their membership cards as soon as they go out of the store waving their cards. Trolleys contain RFID readers that enable this facility. If a new customer does not have an account with PayWave technology, a temporary cash deposit facility is available such that the retail store immediately issues a card that can be used by the customer for shopping. An alarm ring gets buzzed if the deposited amount is unable to pay for the items chosen. Besides the cart facility, there are also additional services provided by the company such as shopping summary at stations to view cart items and timed store car park which allows parking at low rate during non-peak periods and at a higher rate in peak hours (Reinartz, Dellaert, Krafft, Kumar, & Varadarajan, 2011). Addition of a cart that itself takes care of the billing and payment; the shopping experience can be very convenient for the shopper as well as fast.

Recommendations

Various other retail models of big organizations including Amazon, Carrefour, and more can be explored to identify various kinds of retail store innovations that are done in these stores such that the chosen organization can make use of their best practices for the innovation. Some recommendation can thus be used for making improvements in the current self-retail system of Oz Supermarket such as:

• Zero Moment of truth (ZMOT) is a concept launched by Google that can be used for capitalizing on the conversations between the brand and its consumers in the path to purchase such as conversations with sales person, review from customers, and direct interaction with the seller(Nielsen , 2013). This technological enhancement would allow the company to track the behavior of buyer throughout its journey with the retail store such that the customer needs, preferences, and challenges can be understood better which would help the company come up with plans to attract these buyers and serve them better.
• The retail store can make use of multiple channels and formats to reach out to customers rather than completely dependent on old brick and mortar model. For this, the company can allow customers to place orders online and come to pick the pre-ordered items from the store. Today, a lot of customers like to make purchases online the company can miss out on them if they did not have any online purchase facility. Thus, an option for online purchase can actually be very useful both for customer for convenience and for company for increasing store sales.
• The store can come up with a mobile application that can be used by the customers for surfing past purchase lists, record their purchase histories, recipes and so on. The mobile application can also be used as a guiding tool making a customer in the store through the process of picking, deciding quantities, and the schedule for delivery as per their chosen list of items. When a customer is provided with assistance from the use of mobile phone, it can make the shopping experience of the customer better and more enjoyable thereby increasing his or her satisfaction with the shopping at the store. With the enhanced shopping experience, there are higher chances of customer making purchases and becoming loyal with the retail store.

There can be several ways in which customer service can be improved at Oz super market in addition to adopting the procedures already mentioned earlier such as:

Establishing a communication strategy and implementing effective solutions: In a retail market, keeping operational costs under control can be a big challenge as it requires the business to have process efficiency and employee productivity intact. Communication plays a significant role in driving these as it would help store managers and employees stay focused on their work and collaborate effectively. Thus, installation of two-way business radios covering the entire store is recommended such that information like slow moving requests, out of stock situations, and customer complaints can be timely communicated to concerned people in the store so that any problems that are likely to occur can either be sorted out or tackled well.

Retail Markdown Optimization: retails face competitive pressures as well as have to deal with the frequent changes happening in the consumer preferences. The aim of the organization would remain to maximize their margins while they sell off the merchandize. If Retail Markdown Optimization is used for the OZ hyper store, it can help the company take right pricing and inventory decisions considering the constraints of the business. With this innovation, the company would be able o take decisions on what items would need price manipulation or what amount of merchandize to be stocked in which seasons. The store would be able to save from the mistakes in markdown such as too low price offering causing margins to suffer, too high pricing to lose revenues because of reducing demand or leading to an inventory that is leftover.   Sales forecasts are already done in the company butut may not exactly make any predictions about the impacts of retail promotions as these forecasts are incapable to taking the complete product life cycle into account. However, with optimal markdown decisions, the full product life cycle impacts can be judged and the full value of the merchandize can be realized (Marx & Erasmus, 2006).

Improve Customer Service

There are software applications available such as ones by oracle and SAS that can help do this helping retail companies to take decisions on inventory management and merchandize clearance for improving the product lifecycle pricing and promotion impacts (Oracle, 2015). This optimization incorporates demand variations as per demography or geography, identification of most profitable locations for inventory keeping, and creation of most profitable markdown events. There are already examples of big retail organizations using these software for forecasting and inventory or cost optimization that have resulted into an increase in gross margin and in sell-through after first markdown itself. Markdown optimization can help an organization in many ways such as to take more effective pricing decisions, improve store performance, achieve financial targets, and maximize profits. This can be an alternative for Oz store to incorporate so as to improve their operations and give the best deals to customers while at the same ensuring right benefit to the retailer (Dydacomp, 2014).

Besides the technology, the super store can also use other methods for improving their customer service such as:

Customer oriented culture: the super store can instil a culture in the organization which is oriented towards customer service and this would include realignment of management as well as the employees of the organization. To enable this from the start, staffing and selection process, structure formations, and customer satisfaction measurement processes can all be worked upon with focus on customer (Salmon, 2013).

Total Customer Experience: Instead of providing only basic and some add on services, the retail store can focus on giving customer a wholesome experience starting from the entry in the store to exit. One of the strategies that company is already using is use of wave cards so that customers do not have to spend time in queues waiting to pay for their purchase. However, there can be additional experiential benefits that can be provided to the customers to let them enjoy shopping such as appropriate lighting, smooth music, easy navigation layout, and so on that can enhance the customer satisfaction (CSSP, 2007).

Business operations of Oz Supermarket can be improved in different ways such as:

• Data Analytics: POS data can be analyzed to come up with merchandizing and promotion variations or customizations to suit the tasks of specific customer segments based on demographics of psychographics. In-store Experience video recordings can be analyzed using intelligence tools to understand what brings loyalty in customers and that insight can be used for refining and improving store loyalty programs(IBM, 2010).
• Automated inventory management: Automated inventory management may be installed at Oz for managing end to end process so as to improve the accuracy and efficiency of inventory management. The automation in the inventory management can include tagging accuracy checks, printing activities, sales floor or backroom layout designs, and pricing management. This can help streamline all the processes involved in inventory management starting from receiving of stocks from suppliers, put-away that involves coding and tagging of items, picking, packing, shipping, error free pricing management including pricing at item level and at shelf level, replenishment of inventory, and item tracking using codes for visibility. Benefits of inventory management can be increase in productivity because of elimination of most manual work, reduction on costs because of reduced human resource requirement, reduction in errors, increase in sales, increase in customer satisfaction, and protection of profitability of the retail store with prevention of lost sales and assurance of adequate pricing(Motorola Solutions, Inc., 2013).

Conclusions

The paper explored the case of Oz Super market that had installed wave cards for its customer to market their shopping experience easer by allowing them to take carts, take item and pay before leaving only with a wave of a plastic card making them avoid the standing in the queue. The paper explored if there could be more ways other than this innovation that can be used for improving business operations and customer service of the retail store. Some solutions were recommended such as customer conversation capitalizing using zero moment of truth, use of multiple channels, development of mobile application, data analytics, automated inventory management, establishing effective communication strategies, retail markdown optimization, development of a customer oriented culture, and creation of a total customer experience. All these strategies can be useful for improving customer satisfaction through improvement in customer service levels and enhancing business productivity with improvements in its operations.  Thus, these methods are recommended to be implemented for the Oz super store to get them both operational and sales benefits in the long run.

References

CSSP. (2007). Customer Satisfaction: Improving Quality And Access To Services And Supports In Vulnerable Neighborhoods. Center for Study of Social Policy.

Dydacomp. (2014). Drive Your Retail Sales Growth With Operational Efficiencies eBook. Dydacomp.

IBM. (2010). Increasing Sales, Improving Efficiency, Working Smarter in Retail. IBM.

Marx, N. J., & Erasmus, A. C. (2006). An evaluation of the customer service in supermarkets in Pretoria East, Tshwane Metropolis, South Africa. Journal of Family Ecology and Consumer Sciences, 55-67.

Motorola. (2009). Improve Customer Service with Instant Communication. Motorola.

Motorola Solutions, Inc. (2013). Improve Productivity And Customer Service In The Retail Store With Automated Inventory Management. Motorola Solutions, Inc.

Nielsen . (2013). Continuous Innovations: The Key to Retail Success. The Nielsen Company.

Oracle. (2015). Oracle Retail Markdown Optimization. Oracle.

Reinartz, W., Dellaert, B., Krafft, M., Kumar, V., & Varadarajan, R. (2011). Retailing Innovations in a Globalizing Retail Market Environment. Journal of Retailing , S53–S66.

Salmon, K. (2013). The Compelling, though Sometimes Elusive, Benefits of Markdown Optimization. Kurt Salmon.