Mastering the three Ps: Palexy's complete framework to succeed in smart retail

by Anh H. Nguyen


Our definition of success


At Palexy, we LOVE delivering success. We are committed to it, obsessed by it. Our Customer Success team consists of bright, dedicated individuals united by the same goal: to ensure that our clients could use our product with ease, and get what they want from it.


The first step to delivering success is defining it.


For our clients, success often means accurate reports and a stable platform. That we could manage, easily. But we also like to go above and beyond, and encourage our clients to try out new metrics relevant to their business.


To us, success means empowering our clients to adopt metrics that help their business achieve long lasting growth. It means seeing our clients wholeheartedly embrace the data-driven approach to become the best version of themselves.


Delivering success is not always easy though.


Both analytics tools vendors and their clients know that the adoption stage is merely the beginning of a long journey. For a tool to work, first of all it must be used, correctly and consistently.


Specialized metrics, or input metrics are an essential part of analytics. The end users must get used to them and be comfortable using them to get results.


Why? Here is a quick recap on Input metrics vs. Output metrics.



The skinny on Input metrics





If you run a business, there are certain output metrics you look at in order to determine its performance: the revenue, the profit, the expenses. Those are goals worthy of attention, but what does improving them actually mean? When they change for better or for worse, do you know why? Can you repeat your success?


Those output metrics are also known as vanity metrics. They look good on paper. They make you feel good, too. But they are not actionable. Looking at them, in isolation, will NOT tell you what to do.


In order to truly and continually develop your business, what you need to consider, measure, and strive to optimize are input metrics. They are the driving forces behind your business’s achievement. They matter.

Input metrics will not always be obvious. Determining what they are is the first step towards your sustainable growth, and usually the hardest.


Speaking broadly, for our retail clients, we mostly measure and analyze four input metrics: the passerby traffic, the capture rate, the conversion rate, and the average transaction value. Together they come to form, in one elegant formula, the one output metric that most retailers value above all others:



Changing any of the above input metrics will drastically alter the end outcome. There are even input metrics that go into those input metrics. In working with many retailers from all over the region, we have seen many forms and nuances of input metrics. In many cases, a small change could make a big difference. For example, the on-time greeting rate could influence the Interaction rate, which influences the Conversion rate, and of course the Sales Revenue.


The best news is input metrics are controllable by you.


If you want to truly drive the commercial outcomes such as sales, profit, customer satisfaction, identifying and taking care of your input metrics should be your full-time job.


Expectations vs. Reality


It is always not the case, however. Too many times, the store managers/district managers resist using the new metrics because they either do not know how to or do not want to.


Buying a new product only for their end users to drop it is one of retailers’ greatest concerns. It also makes them less likely to invest in new products in the future. It is also a big fear of us, the vendors. It is one thing for our products to fail to live up to the expectations. It is another entirely for it to never have a fighting chance.


So the questions are: How do we nip that problem in the bud? How do we guide the end users to fully take advantage of our product? How do we instill confidence in the end users to achieve their desired outcome?


In working with many retailers of different shapes and sizes over the years, we have come to develop a playbook to do just that. But to our delight, many of our clients have also devised their own process and got amazing results. Their ingenuity and resolve to become more data-driven have inspired us and commanded our utmost respect.


In this article, we are sharing both our suggestions and our clients’ stories to help you approach new metrics without fear, get repeatable success, and become a stronger organization. Are you ready? Read on!


My framework consists of three Ps: the Product, the People, and the Process.


It is the complete solution that we provide our clients, in essence.


Like a three-legged stool, this framework needs all three components to be strong, even, and non-wobbly.


We provide the Product. But it is your employees (People) who will utilize it using a Process outlined by you to get results. So I am talking about those two components in my framework.



The human factor in adopting new products


Most of our clients are established businesses. They all have their own existing process and metrics that they are familiar with, so adopting new metrics may seem like a challenge, and sometimes a superfluous attempt.


The end users often have doubts.


“Why should I change? The old system is good enough.”

“It is too much effort.”

“What proof that the new system will work better than the existing one?”


We know that.


We also know that a product is only as good as the people using it. As passionate as we are about technology, technology tools alone do not solve problems. People do.


In order to use a new product successfully, the end users must have something different from experience or intelligence. They must have faith. Faith in the product, and faith in themselves.


Faith means everything when using a new product.


Where does faith come from, though?


Story Time 1:


One of our earliest clients is the biggest jewelry company in Vietnam with 300+ stores.


The top level executives strongly believed in the value of our product, but the store managers needed more convincing.


At first, the client only deployed our product to 30 of their stores, located in different areas. They held a mini-tournament among those 30 stores to see which stores got the best conversion rate, and offered some attractive rewards.


It was a form of gamification, and the results were outstanding.


The stores were extremely competitive. Using our product, they tried everything to get a higher conversion rate. Some even sent their employees out the front door to get more traffic, a metric we did not seek to improve. We did not anticipate that at all.


Combined with the higher conversion rate from our product, this made the sales revenue from those 30 stores soar.


The area managers took notice. Other store managers took notice. More stores wanted to adopt our product. All because the initial 30 stores were leading by a fine example.


So?


After getting our fair share of guiding end users, we conclude that faith comes from three things.


-Having a good onboarding experience.


-Witnessing others succeed, especially their peers. Seeing is believing.


and


-Getting good results themselves.


When your employees have faith, they are confident. They are empowered. They would surprise you with their intelligence and resolve.


You are to play the evangelist. You have to convert them.


Make it your priority to instill a sense of purpose, belief, and optimism in your employees when using a new product.


So my practical advice regarding the People component is:


- Use incentives smartly to motivate your employees to use a new product.

- Show the results, not tell. Better yet, let them get the results, feel the results, test the results by themselves.

- Encourage an immersive learning and sharing environment for your employees.


The last P: Process


Even when the People understand Why a new product is needed, they still need to know How to use it.


They need guidance. They need management support. They need cross-functional collaboration. They need accountability.


Those are collectively known as Process.


Have you ever been so excited to embark on a new diet, a new workout regimen, a new 12-step beauty routine, only to drop it halfway? We have all been there.


The number one reason people stop using a process is difficulty when following it.


If a process is too complicated, people are likely to either


A. stop using it altogether


or


B. using it incorrectly, which leads to poor results, which leads to them dropping it.


So my key takeaway is that for a process to work, it must be as simple and straightforward as possible.


Story Time 2:


3 years ago we rolled out a new product that had the same dashboard for both corporate manager users and store manager users. It was very comprehensive, with every single metric necessary for store optimization.


That dashboard made us proud.


And the corporate managers loved it. But to our disappointment, the store managers did not. And that was a huge problem, since they were the ones who actually had to look at it, take notes, and implement changes.


It turned out that for them, the dashboard was an overkill. The metrics they needed were buried among those reserved for high-level managers. They had a hard time navigating it. So they just ignored it.


When we simplified the dashboard into a mobile app that contains only the essential information for each store manager, the adoption rate among them rose dramatically. They started using the data from the mobile app more frequently, and then implementing changes at the store level, which led to positive outcomes across the whole chain.


The lesson we learned was that for the end users, the process should be as streamlined and painless as possible. It should contain exactly what they need, nothing more, nothing less.


Think about the Ipod. Think about Google. What do they have in common? Great UX. World-class design. Simplicity.


Story Time 3:


One of our retail clients appointed a new CEO, who was on the other end of the spectrum. We almost did not have to advocate for our product, because this CEO was obsessed with metrics. Like Pokemon, he’s gotta catch them all.


He wanted to measure every metric possible and turn them into store managers’ KPIs. His reasoning was that the more data they have at their disposal, the better they could improve the store performance.


We had no problem with it. But from our experience, too much new data could overwhelm and confuse people.


Our fears were confirmed: his employees had a hard time adopting the new process. Some completely refused to use it. Some even threatened to quit.


After we persuaded the CEO to only focus on a single use case with one KPI at a time, the results were much better. People had room to breathe! They were able to see the results clearly, and were much more enthusiastic to use the product.


It was a happy ending, and it also re-confirmed our belief that less is more when it comes to process. What you leave out is as important as what you put in.


So my practical advice regarding the Process component is:


- For the sake of your people, keep the process simple and focused.

- Focus on a single use case with one KPI at a time. Then use the results to expand to additional use cases.

- Always approach a new process from your end users’ perspective: what they need to do their job AND what they are comfortable doing.


Conclusion


Here I am following my own advice to keep this short and sweet.


Smart retail is a wonderful, logical, sometimes challenging step from traditional retail. It is our guarantee that almost any retail business could benefit from data metrics, and we are here, providing not only the product but the complete framework to make your smart retail journey easier!

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