For the past decade or so, the pendulum has swung too far toward the lion’s share of retail investments that were earmarked for the red-hot e-commerce space, Tulip Retail’s EVP of marketing Bill Zujewski told Sourcing Journal.
Now, retail is struggling to steady a listing ship amid shrinking unemployment numbers, job openings approaching nearly 7 million in July, and median household income inching up 1.8% to $61,372, according to new data released by the U.S. Census Bureau. The numbers paint a picture of a healthy economy and a growing body of shoppers who are primed to bring their increasing disposable income back into physical stores.
Retail apocalypse or not, the industry is very much in transition and many in the specialty retail game have figured out that it’s well past time to double down on their store investments. That is, after all, what differentiates brick-and-mortar retailers from the behemoth that is Amazon—although Seattle’s most feared company is steadily extending its reach into the real world.
This is one of the reasons why high-end retailers ranging from Michael Kors and Kate Spade to Saks Fifth Avenue have partnered with Tulip within the past 18 months to give store employees the tools they need to better serve today’s shoppers—specifically, robust apps on mobile devices. Claiming Tulip is the sole software provider exclusively focused on the retail associate, Zujewski said stores need strategic resources to cater to the customer when she visits brick-and-mortar—and to continue the conversation even after her store visit concludes.
Digitizing the proverbial “black book” is of increasing importance in the high-touch luxury and fashion verticals, which are the two sectors that most frequently flock to Tulip. With commissions providing much of their income, some shop associates would “go rogue” and use their personal email or SMS to stay in touch with customers outside the four walls, hoping to drum up the sales that account for their livelihood. Zujewski said it’s a desire to curb that out-of-book behavior and take a more streamlined, enterprise approach to clienteling that prompts retail clients to come calling.
Retailers are finally understanding that “those workers can be a marketing channel for them. They can send recommendations to customers after they leave the store,” Zujewski explained. And during a customer interaction, retailers that have used Tulip to connect their online stores with offline can offer an endless aisle of products if a desired item is out of stock at the store.
In the early days of digital commerce, the friction between stores and e-commerce stemmed from brick-and-mortar not receiving due credit for influencing or outright driving sales that ended up happening online. Tulip’s answer to that is to include the store associate’s unique ID in any links or product recommendations he or she sends to customers via text, email or WeChat, the popular Chinese messaging platform. An e-commerce report will document which sales were sourced from which store employee so that workers receive their rightful commissions, and the store is credited for spurring online sales, Zujewski explained.
Tulip has rolled out new enhancements designed to elevate the associate interations, including a new shop runner capability deployed by three clients for the holiday season that Zujewski described as a “sale saver.”
With shop runner, the customer-facing associate no longer must disappear into the depths of the stock room when the consumer wants to see a product that’s not available on the shelves. Instead, the employee can “broadcast” the SKU to another worker, who will deliver the item to the associate and customer. It’s just another way retailers can help face-to-face customer interaction feel more thoughtful and intimate.
Though early on, a number of retailers tried to build out their own software programs to manage store operations, they’ve abandoned those expensive and resource-intensive efforts. Retailers are in the business of selling, not tinkering with systems, Zujewski explained. What’s more, piecemeal software programs on the market might address one or two of a retailer’s brick-and-mortar pain points, but Tulip’s goal is to create a new category around store associate mobility, covering everything from chat functionality and mobile POS to task management and endless aisle.
Silicon Valley venture capital firm Kleiner Perkins—which has invested in eBay and Amazon—thinks Tulip is onto something, too, pouring $40 million in the Canadian firm last year to help the company build out its product roadmap, which includes developing robust reporting and analytics. For now, Tulip clients can see base-level reports, such as the number of orders placed, how many messages associates sent, associates’ actual sales versus goals.
“One of the holy grails of online is you know what every click is, what customers have done, and you’re starting to get that with store data,” Zujewski said, noting Tulip is partnering with Google for store analytics that can uncover trends and aid with profit-boosting upselling and cross-selling. “You’re starting to get real metrics and data from the store.”
Such data could include how long a customer engages with a store employee, which products or displays she interacted with, and how many browsers ultimately converted into buyers.
Tulip is building out its integration with the big platform providers, expanding on its partnerships with companies like SAP and Oracle with a new integration with Salesforce. The average deployment includes about five integrations, Zujewski said, because most of the information that retailers need is stored in their e-commerce, CRM or POS systems. The company also recently launched an out-of-the-box product geared a mid-sized retailers, the $50-million players who want plug-and-play clienteling functionality out of the gate, Zujewski said.
For many retailers, offering “VIP treatment” in the store is the key to driving sales and differentiating from what could be described as the soulless experience of transacting online. “Tools for clienteling are able to drive more traffic to stores and drive online sales,” Zujewski concluded. “We’re seeing anywhere from 2 percent to 5 percent increase in store sales after Tulip is deployed.”