All Systems Go: Eric Olafson’s “Seven Steps to Retail Success”

By Allan Pulga

Keeping customers happy and driving repeat business are complex tasks. To accomplish them, retailers must ensure they keep “all pistons firing” – every aspect of the operation has to be polished, every employee doing his/her job.

Good news travels fast, but bad news – about things like poor customer experiences – travels faster.

To keep your business in customers’ good books, Eric Olafson, CEO of Tomax Corp., a Utah-based retail software developer, suggests the following seven tips for tightening up your sales and planning processes to guarantee things run the way you want them to run:

1. Keep tabs on stock. “The average retailer’s out-of-stocks are 10 per cent,” says Olafson. “This means that 10 per cent of things your customers are looking for aren’t there on the shelves or available online. Unfortunately, that’s a lost sale, and potentially a lost customer if he or she goes elsewhere to fill that need.”

Olafson says this is where forecasting comes in. You need to understand how a specific item was selling at the same time last year, and also pay attention to recent trends. It’s a matter of “connecting the dots” between in-store merchandising and customer service.

2. Staff appropriately. It’s obvious, but not easy: Staff levels should match store traffic levels. Using sophisticated forecasting technology, retailers can predict what demand will be in the store, even to 15-minute intervals.

Follow employee availability, skill, experience to have your best employees on hand when the bulk of your customers are coming in to shop.

3. Match offers on customer needs in real time. Olafson is a big proponent of reward programs. “They provide instant offers and rewards based on shopping patterns and preferences.”

But a common problem with promotional offers, he adds, is that coupons and vouchers are often given at the checkout after the shopping visit is over. Olafson suggests giving customers personal swipe-cards that they can scan at a kiosk upon arriving at the store. “It’ll say, ‘Okay, you’re you,’ and bam, it’ll spit out all these offers that have nothing to do with the weekly flier, and nothing to do with some mass promotion.”

4. Let technology do some of the heavy lifting. “Some of the most promising marketing and merchandising options use simple technology that is becoming quite pervasive,” he says. “In some supermarkets, they’re experimenting with a shopping cart that – as you go down the aisle – identifies an RFID tag in the aisle and says, ‘Right now, we’re going to offer you a special promotion of this (brand of) ketchup.’ This lets you combine slow-moving items and your customer’s shopping history to create personalized deals.”

5. Make checking out simpler. Exxon Mobil gave its customers a way to pay for gas without fumbling for credit cards or cash: the “Speedpass.” Using a contactless pay system, Exxon Mobil customers can buy gas and other items by waving their Speedpass keyfob (linked to their credit or debit card) across a Speedpass terminal. Other retailers, like U.K. grocer Tesco, use similar technology to keep customers moving along faster.

6. Give store access via the Web. Online shopping may not be feasible for every retailer, but there are things you can do to give your customers Web access without having to set up fulfillment services, Olafson says.

For instance, some retailers sell items online, but require customers to pick them up at the nearest store location. Even if you don’t have the resources to allow online payment and ordering, you should use your website to drive traffic to your store.

“Letting customers see exactly what is in your store, including the specials, can help them prepare their shopping lists in advance.”

7. Grow interest in unexpected categories. “If you own a drugstore, your customers might think of you when they need over-the-counter medicines, tissues and vitamins, but you can add to your profits if by getting them to think of you when they need cosmetics, stationery and party goods,” says Olafson.

“Large chains do it all the time, by using reward cards to push customers into new-to-them categories. It’s all about anticipating needs.”