NRF 2024 - Lessons from the C-Suite

Modernizing the In-Store Experience with Unified Commerce

Tune in to the NRF 2024 Big Ideas Session sponsored by PredictSpring, where leaders from Lovesac, Steve Madden, and Bouclair share insights on their point-of-sale journey and the impactful shift to a Modern POS that has invigorated their businesses.

Transcript:

Nitin: Few minutes intro both about the company Lovesac, a little bit about the background, and then obviously about yourself.

Chad: Yeah, certainly. So my name is Chad Best. I'm SVP of customer experience operations for Lovesac. Lovesac just celebrated their 25^th year. We are a furniture brand based out of Stamford, Connecticut, not too far from here. Our claim to fame is a patented high end modular couch line called Sactionals. Makes up a majority of our sales and we operate across our Ecom platform. We have over 270 brick and mortar physical locations across the country, all domestic at this time. We operate a group of kiosks, mobile stores. We do some stop and shops with partners as well. 

And then we also partner with Costco and perform hundreds of ten day road shows across the country as well. My role specifically focused on the customer experience and bringing that to life. But I start all the way back at real estate and site selection. From there, I also oversee all the sales, daily operations, training for all of our physical locations, a commercialization team that brings products and services to life for our consumer and then finally post purchase all the way through our customer service team as well.

Nitin: We'll transition to Oz. And Oz, the same thing again. Maybe a little bit about Steve Madden and then your role. 

Oz: Sure. Good morning, everyone. Great to be here. So my name is Oz. I'm the CIO at Steve Madden. Steve Madden is a fashion brand. We do footwear, apparel and accessories. We have different channels of sales. We have a big wholesale business where we sell Steve Madden and some of our other brands to large retail chains. We have our own e-commerce business and we have our own retail business. 

I'm responsible for all technology for all three channels. Recently we deployed PredictSpring in our Mexico division. In Mexico, we have about 37 stores that are currently running PredictSpring live for about a year now. We're also looking to do some changes in our US operation and we're getting ready to deploy PredictSpring in our US stores and really excited about the whole transformation process and the Omni channel and everything that we're going to talk about in this panel today.

Nitin: Thank you. Thanks, Oz. Let me introduce Jonas. And Jonas was kind enough to fly from Canada. Jonas would love to both get an introduction about Bouclair, which many of our US friends may not be aware of. Obviously it's very popular in Canada. But then also about you.

Jonas: Okay, so I'm Jonas, the Chief Operating Officer of Bouclair. Bouclair is a home decoration and small furniture retailer. We have 54 stores across Canada, but the weight of it is in Quebec and Ontario. We have an e-commerce website which is around one third of the business our USPs are. We have Montreal based designers that curate and design our collections. We offer next day delivery in Quebec and soon in the greater Toronto area. 

And a few years ago we reworked our stores to offer a very modern in store experience. My role as chief operating officer is to set up the company for success post COVID. So we have different consumer characteristics. The consumer always looks for the best value, has zero patience, limited loyalty, and one of the key enablers is digital transformation, AI analytics, cloud based systems like the PredictSpring which we deployed a year ago.

Nitin: Just a quick intro about me and then I'll kind of switch gears. 

So I'm Nitin Mangtani. I'm the founder and CEO of PredictSpring. Before starting PredictSpring, which was just a little over a decade ago, I ran the Google shopping team for seven years back in early 2005, 2006, early days of Google. Many of you may or may not remember Google shopping used to be called Froogle in those early days and kind of seeing the full journey there where there was a huge kind of push towards ecommerce, which is rightly so, because back in 2005, ecommerce was still not mainstream. And the buzz word was ecommerce replatforming. Everyone wanted to replatform or platform, and we kind of went through that journey for almost a little over a decade. And the unfortunate side effect was we kind of took the eye of the ball on the retail stores. 

And if you think about the consumer journey, consumers are not thinking when they walk into your store, they're not thinking online or store. They are associated with your brand and who you are and what has happened in the last five years and COVID definitely showed the vision of true Omnichannel, whether it's buy online pickup in store, or buy online return in store. With so much return fraud going on, one of the best answers is buy online return in store. You're able to verify the receipt, you're able to physically see the goods, but more importantly, you can try to upsell the customer and convert that return into an exchange instead of a simple return. 

And so what happened in the last three, four years, stores became a much more important strategy for all the retailers. And it's good, full circle. We see the value. And personally, even though I represent a company which builds a modern POS product, I'm the first one to say it's not about stores or e-commerce. 

In fact, it won't be fair on any technology vendor to speak one or the other. It's about unified commerce. So that's kind of really the focus of the panel today. 

But first and foremost, we'll kind of follow the same pattern. We'll start with you, Chad. What was the motivation for looking for a modern POS? And maybe at the high level what were one or two really anchor points that drove that decision?

Chad: Yeah, absolutely. There were certainly a couple of things that were really weighing heavily on our mind, the first of which is that we were growing quite quickly. We went public in 2018 and our business was really just outpacing the experience that we were offering in our physical locations. And so we knew that it was time to do something, but we also were experiencing some extreme latency issues, some timeouts during the payment process. By the way, not a good time to have a timeout if you're responsible for sales. 

And anyway, we knew that it was time to make an upgrade, and so we wanted to be able to start selecting a partner that would allow us to really connect the journey for us, because the furniture buying process is lengthier than a traditional cash and carry item. And so we selected PredictSpring, really to help us to begin to connect those journey points and kind of begin building a bridge to the future. 

The other one for us was during the pandemic, we saw just a really dramatic shift in how customers started to shop. So for a period of time, we closed our physical locations, and it really allowed us to kind of see with a spotlight on it, how our customers wanted to interact with a brand. And so we knew that the Omnichannel at that point was more important than ever. We'd always been talking about it, and we were on kind of a slow progression, but it really turbocharged how we were thinking about it and our path to get there. And so rolling out a modern POS like PredictSpring was certainly one of our biggest steps to begin on that journey.

Nitin: We'll go to Oz and maybe Oz a little bit about your journey and have you started thinking about modern PS? I still remember that conversation a year and a half ago with you, but it will be great for the audience to hear. 

Oz: Sure. So for Steve Madden, we had Omni channel capabilities before PredictSpring. That's something we have up and running even before COVID but we were looking to make improvements. Like Nitin said, we want usability, we want speed. We wanted to streamline the experience for the customer in the store. We wanted to make the process easier for the store associate before. 

In order to achieve Omnichannel, our store associate had to work on different applications. They had one application for selling, one application for returns, one application for fulfilling ecommerce order shipping. And really we wanted to streamline that whole flow and make it easier for the store associate. We also wanted more mobile experience. Our X Store POS is a great system, but it's not that mobile. I mean they have some solutions for mobile, but they're not exactly what we were looking for. 

Additional reasons for making the change is we wanted to switch to the cloud. We wanted to have something which is API native, something that will be easier to integrate to third parties to really enhance the 360 experience. If it's integration to CRM, if it's integration to loyalty programs, auto management. So cloud based API architecture, that was really important to us and obviously in addition to everything we discussed in the beginning, which is the most important thing, is the customer experience, connect with the customer and making the process seamless and easy for the store associate.

Nitin: Thank you. Thanks Oz. And it's interesting, and I'm sure many of you, and maybe a quick kind of question, how many people have either started the journey going from legacy POS to a modern POS or have already done that, finished that journey, or are in an RFP stage? One of the three basically. I'm just curious to see, because our thesis is that in the last three years, there's been a huge transition from legacy to modern POS. Because people have been. POS is not a new thing. Everybody has a POS and whether we go back as. Back even 20, 30 years. Right? Every store has a POS. 

So I'm curious, in the last three years, how many of you have either started the journey or converted to a modern POS? Thank you. That's an interesting kind of insight here. Around 25% or so of the audience. And this is again, out of 70% because the rest are not in retail. Well, let's switch gears to Jonas and hear the Bouclair experience. And by the way, this screenshot, actually, thank you. This is the Bouclair store. It's a huge store in Canada. You can go there for home decor. And these are just amazingly crafted stores. And that's a PredictSpring POS deployed there. I'm not as great as in my French, but this is deployed in English and French. But Jonas would love to hear your experience.

Jonas: Sure. So we decided to embark on the new POS for three reasons. The first one is the addition of Omnichannel capabilities, the employee experience and the customer experience. And I will give you a few statistics. So, Omnichannel capabilities. Our furniture is quite bulky, so what we see is that buy online pickup in store represents more than 50% of our ecommerce. 

So it's very important that it goes smooth and quick for the customer. We also have a lot of returns and exchanges. So every month we have around 16,500 returns in store. And with our previous PVS, it took 4 minutes, and now it takes around 45 seconds. So we save 800 dollars every month, which we can reinvest in helping our customers or setting up our store. And the returns are referenced, so we have a lot of data that we can analyze after the fix. Why did they return? Did we upsell to something else? 

And then the third capability is the endless aisle. So sometimes the consumer, they want to buy six dining chairs, and we only have four in stock, or they don't have the means of transportation, so we can close the order on the spot for the customer experience. Besides that, our old POS looked awful and was not in line with the experience that we want to offer. The biggest game changer is the mobile POS so we can be in the store, check out a customer or check the inventory in real time, anywhere. And this doesn't only give a good customer experience, but it also helps us to up staff during events like Black Friday. We can easily add more people without adding more checkout counters. 

And then last but not least, the employee morale is much better now because they had to learn and work with old systems that never worked easily. So now they have a modern system, which is a bit like their iPad at home. So they're very happy. And this is the most important one. We cut the training, the onboarding, from five days to two days. So we were able to save 50% of the onboarding time of new associates, thanks to the modern POS.

Nitin: Thanks, Jonas. Yeah, it's fascinating. I mean, as I was hearing Jonas mention about these stats, like the return, the buy online return in store, which is an amazing use case, taking that from four and a half minutes to 40 seconds, if you internalize, obviously there's a huge saving on associate productivity, but also just the customer experience. To me, there's a term which I didn't coin, and there's a term which I was kind of taught almost two decades ago, anticipointment. So when you go to a store, there's a lot of anticipation. There's excitement that I can buy something right now. I can feel it. There's a different level of anticipation and fun when you're in a physical store because, you know, you can walk out of that goods right there. 

And the problem is, when the technology hinders you or if there are long lines, you kind of get disappointed pretty fast. You kind of go from this anticipation to disappointment and enhance the word, and you want to avoid that. And I'm not saying technology is the answer for everything, but at least it should not be the reason for your problems. 

And so it's just fascinating to hear these stats and the benefits of the modern POS and why industry is kind of moving away from these very dinosaur style legacy POS to more modern mobile first POS companies. 

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Nitin: And if you had to put a pin on it, you're like, you know what? That's what really delivered the value, going with a modern POS. And we'll do the same thing. Chad, we'll start with you.

Chad: Yeah, I'll give you a couple quickly that were surprises initially. First is training of our associates and our associate experience. We used to spend several days in some cases for our part time associates weeks training how to do POS and POS workarounds, and not the case with PredictSpring. Once they learn the product, within about 30 minutes they're up and running and off to the races. They're able to quote and transact for us. So that's been a game changer for us in our associate experience. 

And then the second, I would say, is really just our quotes and our quote quantity. Because speed has been unlocked with PredictSpring, we've seen a dramatic increase in the amount of quotes that we're writing because we are able to get to more customers. We can spend more time with those customers, so we're writing higher ticket sales, but we also just have more in the pipeline because of customers doing multiple spaces, multiple homes, et cetera. So it's been a tremendous unlock for us in a couple of those key areas.

Nitin: Thank you. And those of you in home furnishing quotes is a huge part of the shopping journey. You most likely will have a quote and then you'll kind of convert into the full purchase because you might think about it, discuss it with your partner, your friend, your roommate before you make that purchase decision. So, how do you streamline that thing was a huge part of our deployment of modern POS with Lovesac. Thank you, Chad. Oz, what was one or two things that stood out for you as you kind of deployed the modern POS?

Oz: I would say the mobile POS capabilities, being able to move around the store with the iPad, that's a big advantage that we were looking for. I agree. With the ease of training and the speed of training, it did improve quite a bit. Since we train an associate, within no time they're able to start executing transactions. I would say these are the main two things.

Nitin: Thank you. Thanks. Oz and I actually recently visited one of your stores in Mexico during the holiday break in Polanco in Mexico City, and it was just fun to be in that store and see the whole experience.

Jonas: Well, I already gave away our metrics, but I can get you another one. So we offer next day delivery and this is only possible because we do fulfillment from store because we only have one warehouse in Montreal, so if we wouldn't have fulfillment from store, we could never make the delivery the next day. And this is a game changer in the system.

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Nitin: I want to hear one kind of, again, one line, if you can give us from your lens. Obviously AI means a lot to us. From PredictSpring, we launched an AI based voice assistant. 

So a lot of times when you're dealing with technology, you don't know - how do you navigate the menu or where the answer is. Now you can simply speak to a PredictSpring POS and say, create a cycle count for me. Can you please look up Stacy's profile? Do we still have those brown shoes in stock, size ten? So you could simply speak to our POS now, I'll give you all these answers, and that's really a big announcement. We did, and I believe we are the first ones to launch an AI based voice assistant when it comes to the POS industry. But I also want to hear, and that's something which obviously our customers are benefiting. Outside of that, maybe a one line, what do you see? AI? What's one area? Where do you think AI will give you the value or you wish it can solve some of your pain points? Chad, again, we'll start with you.

Chad: Yeah, quickly. So I think in the retail space, I think a lot of brands are using AI on the customer service side of the business a lot, and certainly something that I'm thinking a lot about. But really the true unlock for me is trying to figure out how to get AI to be able to leverage it. In our associate experience, how can we provide them with the tools and the information that they need so that they can give that customer, no matter where the customer is in their journey, physical touch point, online, et cetera, that we're really able to answer their questions, have the knowledge that we need consistent message at their fingertips. So to really just leveraging AI to help us do just that, first contact resolution.

Nitin: That's awesome. Thank you, Oz.

Oz: I didn't know about this feature. With the search, we're going to try that and see if it works. So we haven't started implementing that yet, but we are using AI in analytics mainly. Really, we want to improve our inventory planning and our replenishment efforts, and that's where AI can help the most at this point, I'm sure. There's still a lot to improve and a lot to achieve with AI. And like Nitin said, we're looking forward to seeing where we can incorporate that in the store associate experience and help them perform better.

Nitin: Thank you. Thanks, Oz. That's insightful. Yeah, we want to give you the Chat GPT for store associates. Really change the productivity of the associates with a POS device. Jonas, how about you?

Jonas: Well, that's the downside of being last in line. But we also are starting a pilot next week on customer service. So we will send the question of the customer or policies, the customer specific information, and a number of historical customer service cases to GPT and we ask them to pre formulate an answer for customer service agents. And we're very positive that it's going to move the needle a lot. And then next to that, we're piloting AI to create visuals and stories and descriptions. And that is also something our marketing department is actively exploring.

Nitin: Well, we're going to run out of time, so we're going to miss out on the last slide and we're going to cheat. So one of my favorite TV series recently has been Yellowstone. So this is going to be part of Series 2. So we'll see you guys at the next conference.

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