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Design Thinking For Retail Innovation

  • Written by  Anitha Rajagopalan, Happiest Minds Technologies

0aaaAnitha Rajagopalan HappiestMindsHaving worked with the retail industry day in and day out, I have come to terms with the constant transformation that takes place in this world. However, the virtues that can hold the focus of your customers are ‘quality’ in quantity, ‘personalization’ between the usual, and ‘innovative value’ out of the molehill which is a constant amidst all the transformative change. Many a time, however, technology leaders fall short of asking the right questions to their business counterparts for a profitable quarter.

After contemplating I realized that what they could be missing is ‘empathy.’ It is predicted that the year 2018 is the year of ‘Digital Transformation through empathy.’ And Incidentally, we do have a powerful framework at hand — the much talked about Design Thinking methodology, which allows you to empathize with your customers to find out their real need before creating something for their adoption.

This article will outline how the Design Thinking framework reminds us to put users/customers back in focus in five steps — Emphasize, Define, Ideate, Prototype and Test.

1. Empathize:

Many organizations today, while making a product, tend to plan product features around the latest launched technology. Consider for example recent launches in the mobile industry. The innovation being marketed is a ‘notch/ bezel’ vs. ‘bezel-less’ experience, but is this what consumers want? These products might attract a lot of buzz but a discriminating customer might think twice before investing in this incremental improvement in experience.

The need is to start building a product based on a core need of your customer. Empathize with them. Design Thinking framework reminds you to act while ensuring you are constantly focused on the human at the other end of product expecting certain value. It starts with an interactive and open-ended interview with your end user. If a retail insights officer were to apply the framework when talking to his business heads, he should ask questions that help decipher:

  1. What’s the burning issue that they need to solve? And why?
  2. Does the business leader have enough information on this key question, both from the 10,000-foot level to the desired level of granularity?
  3. If not, then what is missing?

2. Define:

The next step is to define the problem statement. Problems could be concerning the lack of the most important metrics, aggregated views, competition insights and so on. However, the user needs to make fast decisions and provide information, like what alerts or notifications provided promptly, with adequate data backing, could enable pre-emptive actions in the business process for better cost control, productivity improvement and/or profitability.

For example in a retail scenario, some problem statements that a user or leader from store operations could seek answers to are as below:

  1. Are there any high-value customers in store currently that my store associate should attend to?
  2. How can I identify my online customers in-store and improve their in-store experience?
  3. How is the response to my promotional campaign and signage in store?

Similarly, the online or omnichannel head could ask questions such as:

  1. Are we getting the required ROI from the different digital marketing channels?
  2. How do I keep track of my most profitable and loyal customers?

3. Ideate:

At this stage of Design Thinking, you know the need of your end user and it is time for some brainstorming and collating ideas on possible solutions.

When you have an ecosystem empowered with different technology layers like IoT, AI, big data and so on, it is very easy to get carried away and forget about the actual business case. We need, however, to stay focused on the user and continue to ideate and come up with as many paths as possible (good or bad) to solve the problems soon — and avoid the pitfall of ‘technology for technology’s sake’.

For instance, if you need to crack ‘customer identification’ in-store to provide your customers with timely recommendations, then it can be achieved in three steps:

  1. Identify existing customer in-store
  2. Choose most relevant recommendations
  3. Deliver recommendations

Let’s discuss the first step — ‘Identify existing customer in-store’ in detail, as it is the most critical part of solving this problem. There are multiple ways to address this:

Approach A: An associate in-store can simply stand at the point of sale kiosk or near the entry and explicitly ask customers to log in by using their online customer ID. This way they can get better recommendations based on their activities and shopping pattern online.

Approach B: A more technologically driven approach would be to identify customers through the store’s mobile app, assuming that it is already installed on the customer’s phone and is reachable through bluetooth. Once this connection is achieved, your customers get to see all the personalized recommendations in-store just like when shopping online.

While both of these approaches are workable, it entirely depends on the business stakeholders to debate meticulously and choose one based on the enterprise’s specific business context, technology maturity, spend capability, openness to change and time to market. 

4. Prototype

With all the gathered information and after churning out some workable solution ideas, it is time for some prototyping. While prototyping, you get a chance to produce an inexpensive scaled-down version of product and discover loopholes if any, in current design. The early failure points would help you understand which part of the design needs more work, and time to detail out the specifics. It gives a real sense of workability for the solution and provides a fair idea of how the end product/solution is likely to shape up.

For instance, lets visualize a prototype of ‘Customer identification in-store to provide timely customer recommendations,’ through kiosk approach (Approach A). The prototype of the solution would involve someone at the POS asking customers to type their email IDs in an Excel sheet, a digital tablet or a physical notepad.

5. Test

So finally it is time for testing the prototype by end users. Once the end users start using it, you can understand if they are embracing the solution as it was intended and observe bottlenecks/points of improvement.

Going back to the example where for ‘Customer identification in-store’ we had prototyped the kiosk solution (Approach A), you could note down metrics over a day and observe how many customers were open to sharing their email ID – either on the Excel sheet, tablet or physical notepad.

This exercise would give a real sense of acceptance of the idea at the grassroots level — both from the associate’s perspective, on their willingness to ask customer for their email ID, and from the customer’s perspective to share the information. Thereby you capture points of failure from a culture and process perspective and devise means to overcome failure points in your real solution.

After being a follower and observer of Design Thinking for some years now, I have no qualms in saying that this process is purely focused on end customer, realistic solutions and action-oriented methods. It helps transform the retail space and enables retailer leaders to deal with complexity and focus on humanizing the solutions. So go ahead and leverage Design Thinking for solving your next big retail problem.


 

Anitha Rajagopalan is a Principal Retail Industry Consultant and Omnichannel / Retail Analytics professional at Happiest Minds Technologies. She has 13 years of IT industry experience spanning Strategy and Domain Consulting, Product Management, Client Relationship Management, Requirements Management, Business Analysis and Thought leadership. Her expertise and interest lies in enabling retail organizations to build transformational Digital Commerce and Omnichannel Business Capabilities leveraging multiple technology levers. Her knowledge of omnichannel functional areas include e-commerce, flexible fulfillment, distributed order management, customer loyalty, in-store personalization, proximity solutions and mobility.

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