Tuesday, July 19, 2011

In-Store Kiosk-Expanding Product Assortment

Many Retailers have put in Kiosks at their Stores but Kohl’s has a Kiosk that provides a good shopping experience. But, does it tie into overall Store experience or does it fit the profitability bill?

What it does?
*  Allows you to look for an item that you don’t find (size,color,pattern etc.) in the Store
*  Allows you to order it from the Kiosk and get it shipped to your home
*  Shipping is Free
*  Allows scanning an item to get the SKU
*  Allows use of Cards for payment

* It has a big screen with very well organized UI layout
* Easy to use
*  Has a broader and deeper assortment to offer than in Stores
Enhancing Store Experience?
Kiosks should enhance the overall store shopping experience; it shouldn’t become a standalone sales channel. Firstly, it should be located at the entrance (Kohl’s kiosks are towards the back end of the store near the customer care counter) so that customers notice it as they enter and plan to use it. Secondly, signage in the Store should direct people to the Kiosks to find an item they are looking for or where it is located in the store and then Order it if its is not available.
But most importantly, Kiosks make sense in a Store that sees lot of traffic and people want to avoid standing in queues. In the Store I went to, the CSRs were free enough to take me to another counter and bill me there. So, why would I need a Kiosk? I would need it only if I saw something in Store which I really want to buy and get it shipped free.
In that case, it would be interesting to note how much was Kohl’s losing in stores as ‘lost sales’.

Is the Objective met?
*  The point that needs to be analyzed is that how many customers use a Kiosk in Store? From what I saw, there was no one shopping at the Kiosk during my 1hour visit to the outlet. Frankly, how many people would go to a Store and then order an item through a Kiosk? They would rather order it Online.

Does it fit the bill?
When Kohl’s would track its sales pattern on Kiosks, they would try to fill in the gaps and replenish items that are frequently out of stock in the store; unless that is the rational behind putting the Kiosks.
The point is that Kiosks are profitable if used for slow moving items that are not economical enough to be replenished frequently in Stores. And, a Retailer with a large product assortment in Store would really find it helpful and profitable; but not a clothier. Personally, I don’t see a whole lot benefit in putting Kiosks for Clothing, footwear etc.
So, Retailers can use Kiosk to easily expand their product assortment in Stores. They need to put items on display in Store so that customers can feel and assess the quality and then they can allow ordering those items through Kiosks. For example, there are many items in Wal-Mart which are put in stores for display purpose but are not in stocked. Classic example is the iPad when it was launched.

It is profitable to allow customers to order items not found in store but ‘creating’ such opportunities to be profitable needs a Retailer to expand its product assortment in Stores.  Or conversely, Kiosks that allow ordering in store (for out of stock items) should be in stores with large product assortment and large store traffic.
And, once Kiosks are placed in Stores, they need to enhance store shopping experience and not become a standalone sales channel or a promotional signage.

Thursday, June 30, 2011

Pick Up Today? No, go order it again!

You search for an item in all your neighboring Stores but don’t get it then you research some more to figure out that it is sold exclusively through Wal-Mart. So, what do you do? You have three options ‘Site to Store’, ‘Pick Up Today’ or ‘Ship to Home’. But, ‘Ship to Home’ takes much longer for items to arrive and you decide to go with ‘Site to Store’. And, then you get greedy looking at ‘Pick Up Today’. So, you finally select the best option for yourself and submit your order. Wal-Mart sends you a confirmation with steps needed for you to pick up your order and it also asks for your phone number to send you confirmation mail once your order is ready to be picked up.
Everything is perfect to this point. So, what is the issue? One hour later you get an email from Wal-Mart that your order was cancelled because the item was not available! Wasn’t it precisely the point you opted for Site to Store and same day pickup? So, what happened? Inventory visibility issues? But, how can a feature like this be offered when there is a problem with inventory visibility? Well, it can and it did happen. And, for all you know, it can happen again.
Inventory visibility is one of the most crucial stepping stones for Multichannel logistics.
What is happening on the website is that the Inventory is not updated in real time correctly. I select a Store for ‘Store to Site’ (not all Store are eligible for this) and it shows an estimated time for Store pick up by adding 4hrs to current time. But, shouldn’t they check at the Inventory levels in the DC that supplies to the Store to show availability? They should; but as it appears, they are not doing it now. It seems there is a static calculation for estimated time, which doesn’t account for Inventory levels. But, when the item is not in stock even in the DCs, they have to cancel the order because:
•They cannot push the order pickup time because then it defeats the very purpose of ‘Pick Up Today’. However, as a Customer, I might rather prefer shifting the Order pick up date/time than going through the entire process of Ordering the product again.
•Second, the item did not have both the options ‘Pick Up Today’ or ‘Site to Store’. With ‘Site to Store’ option, Customer would have waited for Order Pickup confirmation mail, which would have arrived only when the items were available. If not, the order pickup date would have been pushed forward and Order wouldn’t need to be cancelled.
Wal-Mart, with its excellent Supply Chain capabilities cannot afford to do this. Solution is pretty simple- they shouldn’t offer ‘Pick Up Today’ if they cannot look at real time inventory in DCs and predict order delivery correctly. But, if they still want to stick to it, they should provide an option for customer to choose another delivery date if they can’t fulfill an order on the same day. But, cancelling an Order leads to bad Customer experience, it blocks money on the card for days and Customer has to re-order the items!

Thursday, November 13, 2008

Copyright or Right to copy, who cares anyways?

The whole concept of Copyright violation is so fuzzy that it has been creating havoc on the entertainment industry from time to time. Be it the infamous Napster case or the YouTube of today; copyright issue has been at the heart of this industry. It is a very complicated concept. As defined “Copyright is a legal concept, enacted by governments, giving the creator of an original work of authorship exclusive rights to control its distribution for a certain time period, after which the work enters the public domain”. But, there is a problem here, in all countries where the Berne Convention standards apply, copyright is automatic, and need not be obtained through official registration with any government office. As ruled by the US Supreme court, a Copyright, unlike a Patent, gives no exclusive right to the art disclosed; protection is given only to the expression of the idea—not the idea itself. Everyone is free to write about others’ ideas, as long as each expresses the ideas in his/her own way. Further, if there is only one or very few ways of manifestation/expression of an idea, courts should find the idea and its expression to be “merged,” and refuse to protect such expression in order not to grant a monopoly on an idea. So, in essence you cannot copy an author’s description, explanation, illustration, or depiction of a useful art and other ideas.
Now, the cover under which this entire copyright infringement game is played is what is widely known as ‘Fair Use’. Based on U.S. Copyright Office, there are four factors (listed in order of importance) which are considered for deciding whether or not a particular use is ‘Fair Use’. These factors are:
1. the purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes;
· Transformation is a criterion for deciding on this factor. A certain use of a work does not infringe its holder's copyright due to the public interest in the usage. It should be 'transformative' and not merely 'derivative'. So, it should serve a different purpose than the original work served for e.g. it could be a parody, a comment, a criticism etc.

2. the nature of the copyrighted work;
· This part refers to a work that is of ‘Public Good’. Hence, it could be something like dissemination of news, scholarly articles, etc. which are ‘factual’ in nature. Fair use does not apply to some works, such as standardized tests, workbooks, and works that are meant to be consumed. Also, the author's rights of first publication may be a factor weighing against fair use if a work is unpublished.

3. amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
· This factor takes into consideration the amount of the original content that is copied. This also considers ‘quality’ and not only ‘quantity’. For example, one cannot copy a part that is claimed to be ‘the heart of the matter’.

4. the effect of the use upon the potential market for or value of the copyrighted work.
· Though, this would be in continuation of the previous point, it deals with it separately. The more the original taken, the more is the negative impact on the market potential of the copyrighted product.

After saying all this, there are a lot of controversies and exceptions in all these points. So, at times, the copied material would lead to increase in positive impact on the market (in case of Radiohead, Dispatch etc.). Now, why don’t the companies go all out against YouTube? Is it because it keeps saying that ‘any material found violating copyrights will be removed’ and if you want to get a clip removed you have to go the whole nine yards to file a case for that video and blah blah blah? Or is it because it is a free publicity source? Or is it because you don’t want it to backfire like it did in case of Napster? Who knows it might just start something completely new, which would be completely out of control. Whatever be the reason, the fact is that YouTube is standing right there smiling and we all know for what reason. It does not validate the ‘purpose’ factor (most of the videos are purely for entertainment and directly copied and for the same purpose) and it does not adhere to the ‘nature’ factor (entertainment videos are in no ‘public good’). But, it does a good deal on ‘portion used’ and ‘market effect’ factors. The portion used is restricted to ten minutes and the quality of a .flv video is for anyone to judge. In fact, this is a ‘disruptive technology’ we all keep talking about all the time. Now, what happens in future is for us to wait and watch but for the time being, let’s just enjoy the bounty of YouTube!