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Retail’s digitisation not all flash in the pan

Indianapolis – Circa May 2016: Kohl’s Retail Store Location. Kohl’s operates over 1100 Discount Stores I
Ratnakar Lavu (pictured right), is chief technology officer of US department store chain Kohl’s

The digital transformations of retail organisations is less about the sexiest, shiniest technologies and more about the less glamorous refinement of a company’s operations.

That’s according to Ratnakar Lavu, chief technology officer of US department store chain Kohl’s, one of America’s largest retailers with over 1,100 stores and annual sales in excess of US$19 billion.

At the recent NRF Retail Big Show in New York, Lavu said despite the abundance of flashy technology marketed, distributed and implemented over the last ten years in retail, it was incumbent upon the head of a team of 250 based in Silicon Valley and Milwaukee, to evaluate what was best for the company, irrespective of the latest gimmicks.

“There are so many technologies out there that we could be looking at, the shiny objects that we might want to go after…the way I think about overall innovation is what is going to move the needle for us in terms of the business?” he said.

With short and long term projects in mind, Lavu said a lot of digital transformation involved making the business internally faster, using technology and data to leverage interactions with customers more effectively.

Current projects on the agenda for the department store include machine learning, artificial intelligence and the use of chatbots to interact with customers through automation.

“Not only is it about the external customer, but internal customers too, because I also run operations for the enterprise. How do you transform the enterprise to think very differently?” he said.

The use of chatbots within retail is less to do with the commerce side, said Lavu, and more relevant from the customer service side of the coin. Using chatbots to help track orders and other predominant service bugbears is currently being tested by the retailer, aiming to eliminate the need for a call that automation can fulfil.

Chatbots can also help streamline operations internally. Lavu used the example of customers being required to call a help desk simply to reset a password, a task which automation could manage.

According to Lavu, examples of smaller projects currently implemented at Kohl’s that have gradually improved the organisation over time, include consolidating the payments and offers process, in addition to providing store associates with the tools to do click-and-collect orders via a mobile app with intelligence to ensure the fastest possible pickup within stores.

“One of the biggest issues within department stores is the ability to do payments then use all the coupons that customers have, scan all of them and [process] loyalty cards. It takes a lot of time within the POS environment,” said Lavu.

To deal with the problem, Kohl’s launched its own payment platform using a mobile app that allows customers to scan a QR code at the POS, which transfers the payments, all offers and coupons that are part of the wallet and also the loyalty card in one.

Given the size of department stores, navigation within stores also represents a big issue within stores which digital technology could be used to gradually transform.

“A significant portion of our merchandise is apparel, which is actually a lot more complicated [than] food, home and others where the SKUS are much easier,” explained Lavu. “With apparel, size and colour combination becomes a lot more complicated.”

To improve findability within stores, Lavu said the company is installing and upgrading its wi-fi within stores to provide a highly granular experience where customers can go directly to the exact location of an item.

Such technologies will turn average customers into the best kind for the department store chain, in conjunction with more innovations such as swapping mannequins for  in-store holograms which are being tested at the retailer’s Silicon Valley HQ.

Keep an eye out for Inside Retail’s coverage of the NRF Big Show in New York online and in our weekly and quarterly magazines, featuring big name retailers Macy’s, Neiman Marcus, Target, Kohl’s, Ikea, Target plus Sir Richard Branson’s insights and more.

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