Intelligence Amplification: How to Dramatically Increase Your Brick-and-Mortar Retail Store’s Profit Margin

Optimize BOPIS/BOPAC Operations, Improve In-Store Customer Experience, Reduce Employee Turnover and Inventory Shrinkage, and Drive Profitability with Intelligence Amplification for Retail

By: Rob Cox

The COVID-19 pandemic changed in-store retail forever. While many experts say the pandemic sped up online trends that were already well underway (like digital customers), there is one trend that saw exponential growth in brick-and-mortar stores: the need for Intelligence Amplification.

Intelligence Amplification (IA) is vital for retail, as today’s retailers need to collect significant amounts of data on transactions and interactions with customers both online and in physical store locations.

In order to reap the full benefits of technology for customers in their stores, retailers must focus on Intelligence Amplification and harness the ability to turn data into actionable information and recommendations for frontline retail employees to ultimately improve customer experience and your company’s bottom line.

In fact, when used correctly, Orion’s Intelligence Amplification can potentially double the profit margin of a brick-and-mortar retailer. Keep reading to find out how.

There are five emerging trends that have spurred the urgency to implement Intelligence Amplification for retail. If you already understand why IA is important for retail, go ahead and skip to the next section of this blog for Practical Applications of IA in Retail or email me at [email protected] with the subject line “Retail Intelligence Amplification Blog” with any specific questions you might have.

1. The Rise of Click-and-Collect Sales (BOPIS, BOPAC)

Curbside pickup - BOPAC and Intelligence Amplification for Retail - Orion

Consumers are increasingly buying online and picking up in stores (BOPIS) or at the curb (BOPAC). Studies from Business Insider show that U.S. shoppers spent $72.5 billion via click and collect last year, a 107% growth rate over 2019. In 2021, those numbers are projected to increase to $83.5 billion and reach $141 billion by 2024 — a 95% increase over 2020.

In Q2 of 2020 alone, Target saw a 700% increase in BOPAC sales and Best Buy attributed 41% of its $5 billion bump in online revenues to BOPIS and BOPAC, according to Retail Customer Experience.

Studies from Salesforce found that retailers with creative pickup options — curbside, in-store, drive-through — grew 21% more than retailers that didn’t offer these options last year.

In addition to the current growth, 20% of customers would use BOPIS even more with reduced wait times, and 25% of customers said items not being ready would be a reason not to use a store’s BOPIS in the future.

Chart icon - Retail intelligence amplification by the numbers
Click and Collect By the Numbers
  • 21% growth over stores without click and collect
  • 2020: $72.5B spent
  • 2021: $84.5B projected
  • 2024: $141B projected
  • 20% of customers would use BOPIS more with reduced wait times
  • 25% of customers said items not being ready would be a reason to not use BOPIS

How Does Intelligence Amplification Help?

Intelligence Amplification helps frontline retailers eliminate BOPIS and BOPAC wait times with practical applications like in-store picking alerts, item location, inventory management, order status and customer arrival notifications, and more. Read the Practical Applications section of this blog for more information.

 

2. Connected, Smarter Consumers Demand Better Experiences

The Connected Consumer requires Intelligence Amplification for Retail brands - Orion

Consumers today are more connected and informed than ever before. Today, shoppers are doing their homework before even entering the brick-and-mortar store, exploring products, competitive prices, and availability. They’re often researching on their smartphones, which have become the new “front door” to the physical store. Shoppers enter stores already knowing exactly what they want and what they expect to pay for it — and they’re often more informed about specific products than an average retail associate.

The X factor? Improved customer experience for the connected consumer by engaging with a more informed retail associate who has access to real-time information.

Salesforce’s State of the Connected Customer study found that 80% of consumers say the experience a company provides is as important as its products and services, and 67% of customers say they’ll pay more for a great experience.

Studies from PricewaterhouseCoopers found that 82% of consumers want more human interaction with companies in the future and that 59% of consumers feel companies have lost touch with the human element of customer experience.

Despite this, 51% of customers say most companies fall short of their expectations for great experiences, and 57% of customers have stopped buying from a company because a competitor provided a better experience.

Chart icon - Retail intelligence amplification by the numbers
Connected Consumers and Customer Experience By the Numbers
  • 80% of consumers say the experience a company provides is as important as its products and services
  • 67% of customers say they’ll pay more for a great experience
  • 82% of consumers want more human interaction with companies in the future
  • 59% of consumers feel companies have lost touch with the human element of customer experience
  • 51% of customers say most companies fall short of their expectations for great experiences
  • 57% of customers have stopped buying from a company because a competitor provided a better experience

How Does Intelligence Amplification Help?

Intelligence Amplification improves customer experience with practical applications like inventory lookup, connecting to subject matter experts (SMEs), price verification, and omnichannel customer personalization — all while keeping frontline retail workers’ heads up and hands free. Read the Practical Applications section of this blog for more information.

 

3. The Rise of “Phantom Stockouts”

Phantom Stockouts lead to frustrated consumers - Intelligence Amplification for Retail - Orion

Every retailer wishes they could avoid stockouts, but stockouts are becoming more and more ubiquitous with every passing year.

A study from the Harvard Business Review of 71,000 consumers found that when stockouts occured, 40% of customers either didn’t purchase an alternative product or purchased the product they were looking for from a competitor.

And the problem is only growing. That same study found that stockout rates have reached 8% worldwide, and at a 40% abandonment rate, retailers are losing over 3% of sales.

Phantom Stockouts

Another study from the Harvard Business Review found that 16.7% of stockouts are caused by phantom stockouts: when the supply chain gets the products to the right store, but customers cannot find them because the products are in the wrong place.

That same study found that companies’ profits would have been 25% higher without phantom stockouts.

Stockouts don’t just cause issues with customer satisfaction and your bottom line — they affect your employees as well. Misplaced products hurt customer experience and reduce employees’ productivity.

Chart icon - Retail intelligence amplification by the numbers
Phantom Stockouts By the Numbers
  • Stockout rates have reached 8% worldwide
  • 40% of customers didn’t purchase an alternative product or purchased a product at a competitor’s store
  • Stockouts cause over 3% of sales losses
  • 16% of stockouts are caused by “phantom stockouts”
  • Retailer profits would be 25% higher without phantom stockouts

How Does Intelligence Amplification Help?

Intelligence Amplification reduces phantom stockouts with practical applications like inventory lookup, item location, in-store picking, real-time communication with store team members, and more. Read the Practical Applications section of this blog for more information.

 

4. High Employee Turnover and Low Engagement

Intelligence Amplification for Retail Employees - Orion

Since the COVID-19 pandemic, retailers must focus on driving profitability now more than ever before. Brick-and-mortar retailers tend to have net profit margins in the neighborhood of 2.8%. Two areas where retailers can focus and drive real, tangible profit with Intelligence Amplification are in reducing employee turnover by increasing employee engagement, especially considering retail labor costs average 20% of total revenue.

High Retail Employee Turnover

Retailers have large seasonal fluctuations, contractors, and high turnover rates. These factors only increase the need for frontline retail workers to be trained and upskilled quickly and effectively.

How bad is turnover in retail? According to the National Retail Federation, the average employee turnover for all U.S. industries is around 19%, but the turnover rate for retail is over 60%. An additional study from Korn Ferry found that of all retail positions, hourly store employees have the highest turnover rate at 65%. It costs a full 16% of their salary to replace them.

Turnover in retail stores is costly. Improved onboarding and training are an absolute must in today’s retail environment where optimizing employee time-to-productivity is essential.

Low Retail Employee Engagement

To make matters worse, retail employees are already disengaged. Quantum Workplace’s Employee Engagement Trends Report found that only 65% of retail employees are engaged, a daunting statistic for retailers looking to turn a significant profit.

On the flipside, organizations with engaged employees have 24% lower turnover, 10% higher customer metrics, and 28% less shrinkage. Retail Customer Experience found that retail employees who are engaged and motivated generate 69% more revenue than those who are not.

Chart icon - Retail intelligence amplification by the numbers
Retail Turnover and Engagement By the Numbers
  • Retail labor costs average 20% of total revenue
  • Average U.S. turnover rate: 19%
  • Retail turnover rate: 60%
  • Turnover for hourly retail employees: 65%
  • 16% of salary to replace hourly employee
  • Only 65% of retail employees are engaged
  • Engaged employees have:
    • 24% lower turnover
    • 10% higher customer metrics
    • 69% more revenue

How Does Intelligence Amplification Help?

Intelligence Amplification onboards, trains, and upskills frontline retail workers quickly and effectively and drives employee engagement, productivity, and profitability with practical applications like connecting workers to training manuals, subject matter experts (SMEs), and best-practice guides; relaying information about in-store promotions; and more. Read the Practical Applications section of this blog for more information.

 

5. Increased Inventory Shrink and Employee Theft

Inventory shrinkage - Why retail companies need Intelligence Amplification - Orion

The National Retail Security Survey found that shrink costs retailers 1.33% of sales, on average, which is a total impact on the overall U.S. retail economy of $46.8 billion.

That same study found that 33.2% of inventory shrink was due to employee theft, the leading cause of shrinkage right behind shoplifting (35.7%).

The small disparity between employee theft and shoplifting is deeply concerning, especially when you consider that this is another engagement problem. Quantum Workplace’s Employee Engagement Trends Report found that organizations with engaged employees have 28% less shrinkage.

Chart icon - Retail intelligence amplification by the numbers
Inventory Shrinkage and Employee Theft By the Numbers
  • Inventory shrinkage costs retailers 1.33% of sales
  • Inventory shrinkage impacts the overall U.S. retail economy by $46.8 billion
  • 33.2% of inventory shrinkage is due to employee theft
  • 35.7% of inventory shrinkage is due to shoplifting
  • Organizations with engaged employees have 28% less shrinkage

How Does Intelligence Amplification Help?

Intelligence Amplification should reduce employee shrinkage with more engaged and better trained employees by using practical applications like connecting workers to training manuals, best-practice guides, and SMEs; item location; in-store picking; inventory management; real-time communication with store team members; and more. Orion’s IA also provides voice alerts to managers and retail associates when integrated to the store’s surveillance technology and theft or suspicious activity is detected. Read the Practical Applications section of this blog for more information.

By using Intelligence Amplification, you put deskless workers in charge of optimizing business processes with real-time access to systems, data, and subject matter experts.

 

Practical Applications of Intelligence Amplification for Retail

Intelligence Amplification for Retail - from Orion

At Orion, we’ve used Intelligence Amplification to connect deskless workers to the rest of the digital enterprise and optimize several retail operations.

Here Are Just Some of the Ways Leading Retailers Use Orion’s Intelligence Amplification:

Connect to Training Manuals - Intelligence Amplification from Orion

Connecting to Training Manuals and Best-Practice Guides

(Associated Trends: Customer Experience, Employee Engagement)
With Orion’s Intelligence Amplification, deskless retail workers connect to training manuals and best-practice guides to directly tap into company policies and procedures. Orion’s Intelligence Amplification helps front end point-of-sale (POS) retail workers answer questions in real time like:

  • How do I redeem a gift card at the register?
  • How do I open the register?
  • What if the item doesn’t scan?
  • How do I handle a bad check?
  • How do I use this piece of equipment?
  • And more
Intelligence amplification for in-store promotions - Orion

Scaling In-Store Promotions

(Associated Trends: Employee Engagement, Productivity, and Profitability)
Orion’s Intelligence Amplification makes it easy for managers and front end and sales employees to learn about new promotions at store, regional, and national levels. Orion’s IA helps frontline retail workers answer questions in real time like:

  • What are current promotions?
  • How does the promotion work with our loyalty program?
  • What is the best way to sell this promotion?
  • And more
Price verification - Intelligence Amplification from Orion

Price Verification

(Associated Trend: Customer Experience)
Orion’s voice-activated IA can easily verify prices for customers while keeping customer-facing retail associates heads up and hands free. IA empowers retail workers who want to improve customer experience to easily answer questions like these, so they never have to break eye contact with your customers:

  • What is the correct price for this product?
  • Are there any promotions for this product?
  • Has there been a recent price change for this product?
  • How does the price of this product compare to our competitors?
  • And more
In-store picking for retail - - Intelligence Amplification from Orion

Item Location and In-Store Picking

(Associated Trends: BOPIS/BOPAC, Customer Experience, Phantom Stockouts, Inventory Shrink)
Orion’s Intelligence Amplification technology makes it easy to quickly and effortlessly find the correct products for customers whether those customers are in the store with them, buying online and picking up in store (BOPIS), or at the curb (BOPAC). Orion’s IA accounts for display changes and foot traffic and helps front end, sales, inventory, delivery, and curbside retail employees answer questions like:

  • Where can I find this product?
  • Can you remind me to get these products at a certain time?
  • What is the fastest way to find all these products?
  • Can you list all of the products from heaviest to lightest?
  • And more
Retail notifications - Intelligence Amplification from Orion

Order Status and Customer Arrival Notifications

(Associated Trends: BOPIS/BOPAC, Customer Experience)
Orion’s IA connects to your omnichannel backend systems and uses voice alerts to notify your frontline associates when your customers’ orders are ready for picking and fulfillment. Intelligence Amplification delivers the right notifications to the right employees based on role, location, availability, and other factors. Orion also alerts associates and managers when customers are ready to pick their items up in the store or at the curb, so customers receive a memorable, seamless experience. Orion’s IA can help retail employees answer questions like:

  • Which customer orders should we fulfill first?
  • How soon should the customer be at the store/curb?
  • Is this customer’s order on track to be fulfilled on time?
  • Which associate is the best choice to fulfill this order?
  • And more
Inventory management - Intelligence Amplification from Orion

Inventory Management

(Associated Trends: BOPIS/BOPAC, Customer Experience, Phantom Stockouts, Inventory Shrink)
Your backend systems, managers, and back office have the broader picture of inventory optimization, but harnessing their metrics with Orion’s Intelligence Amplification empowers retail workers to stay heads up and optimize inventory (like fresh food replenishment) while they are on the floor. Orion’s IA can help frontline retail workers answer questions like:

  • How much of this item do we have in stock?
  • Are there any different sizes/colors of this item in the back, nearby?
  • When does this item need to be changed out?
  • And more
Real-time video and surveillance in retail stores - - Intelligence Amplification from Orion

Real-Time Video and Surveillance Technology Alerts

(Associated Trend: Inventory Shrink)
Orion’s IA alerts managers and retail associates whenever your store’s integrated surveillance technology detects possible theft or suspicious activity. These alerts can be triggered by voice command, integrated video surveillance, geofence breaks, Internet of Things (IoT) sensors and connected machines, and more.

Subject matter experts - Intelligence Amplification from Orion

Connecting to SMEs

(Associated Trends: Customer Experience, Employee Engagement)
Sometimes a customer’s question is too nuanced for your backend systems or requires a level of product understanding that is still reserved for a specific set of people (like sommeliers) — that is where subject matter experts (SMEs) come in. Orion’s IA can connect your frontline retail workers to SMEs in any store or headquarters around the world — regardless of region or native language — and help them answer questions like:

  • What is the perfect TV for gaming?
  • What should I wear to an upcoming formal event?
  • What wine pairs well with filet mignon?
  • What guitar did Jimmy Page play on “Stairway to Heaven?”
  • And more
Personalization for customers - - Intelligence Amplification from Orion

Customer Experience and Personalization

(Associated Trend: Customer Experience)
Above all, Orion’s IA helps frontline retail workers improve customer experience. IA helps deskless workers identify high-value customers, makes personalized recommendations for those customers, and keeps employees heads up and hands free while providing the highest level of omnichannel customer service possible.

Using these Practical Applications of Intelligence Amplification and some of the studies above, Orion’s voice-first intelligent collaboration platform can dramatically increase the profit margin of a brick-and-mortar retailer. Email me at [email protected] with the subject line “Retail Intelligence Amplification Blog” to learn how we’ve helped leading retailers realize the value of Intelligence Amplification built into their collaboration solution.

How Soon Can I Implement Intelligence Amplification for Retail?

Intelligence Amplification is available for your retail store today. Orion is instantly deployable on any device your store might be using, including Zebra and Samsung.

Radios, multiple devices, and push-to-talk (PTT) applications can’t connect to backend systems, IoT sensors, or knowledge bases, and they certainly can’t harness the power of your IA like Orion.

Orion’s voice-first intelligent collaboration platform not only solves for multimodal communication and operational control, but for process automation, analytics, and of course, Intelligence Amplification, as well.

Orion retail customers who use our Intelligence Amplification technology dramatically optimize BOPIS/BOPAC operations, improve in-store customer experience, reduce employee turnover and inventory shrinkage, and drive profitability. This is because we built our collaboration solution with the goal of connecting and empowering the deskless workforce — not just making machines smarter.

As technology advances continue to transform every industry, it’s imperative frontline retail workers aren’t left behind. Intelligence Amplification becomes not only the way to increase your store’s productivity — but could very well be the variable that stands between you and blowing past your competition.

Achieving Intelligence Amplification for your organization is as simple as investing in a voice-first intelligent collaboration platform that connects your retail frontline workers to systems, data, and SMEs in real time. And it’s possible today.

Want to know more? Let’s talk.

This blog post is the second of a series of posts about Intelligence Amplification, where I dive into specific examples of how Intelligence Amplification serves deskless workers in industries like retail, hospitality, manufacturing, oil and gas, the military, and more. If you have any specific questions, email me at [email protected] with the subject line “Retail Intelligence Amplification Blog.”