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Knowledge Management in Retail:Power to the Frontline


Are your customers and employees getting the right, consistent and satisfactory answers to their questions? Customer satisfaction and employee productivity can be highly improved with the use of efficient knowledge management practices and systems in a retail organisation.

“What is the difference between this TV model and that one? It looks the same and has the same features, but there is a significant difference in the prices of the two.” How many times have you heard a customer asking this question at a consumer electronics retail store? The answers from the store associate could be: “I need to check with the person in-charge”; “There is no difference except that one is a lower model and the other is higher”; “I am not assigned to this department”; “Here, you can read both the brochures”; or “The higher priced is the latest model.”

In today’s business environment, it is essential for retail stakeholders, be it customers, employees and even vendors, to get consistent and accurate information at the appropriate time and from the right place. A retail organisation is a constantly living and learning environment. The knowledge touch points in retail are immense and have the possibility of extending exponentially with each customer interaction, product transaction or supply chain network activity. It is imperative for retailers to weave together a fabric of processes and systems to effectively capture information, convert it to knowledge and disseminate it to relevant stakeholders in the retail ecosystem.
Knowledge management is highly imperative for international retailers who are opening shops in India. These companies will be setting up new operations, addressing a diverse customer base, recruiting new employees and will need to rapidly scale the learning curve to gain market share and profitability. These performance parameters are driven by a retailer’s ability to adapt to local settings. It is necessary that prior experiences, insights and practices in other markets are leveraged throughout the organisation to support the operations in a new market.
The challenges for retailers remain in the fact that there is a lack of proven models which can help retailers strategise, execute and measure the effectiveness of knowledge management initiatives.

Creating Retail Intellectual Capital
Many retailers have not yet put in place the initiatives to transform enterprise information from sources into a structure that eventually creates retail intellectual capital. Knowledge management in many retail organisations is still limited to initiatives such as product information management, information and best practice availability on employee portals and compliance information on vendor portals. The end result is the creation of a huge repository of content which can be accessed by the internal stakeholders. It will not be off the mark to call the prevalent situation as “knowledge challenges related to managing knowledge.”
Retailers should take a phased approach towards knowledge strategy, knowledge execution and knowledge measurement into the overall corporate objectives. This ensures a continuum, momentum and traceability of multiple initiatives that arise from the strategy. Knowledge management initiatives in a retail organisation should be strategised primarily from three perspectives – customer knowledge capital, human knowledge capital and operational knowledge capital. These perspectives should be bound to organisational metrics related to customer satisfaction; employee productivity and supply chain lead times, respectively. Various programmes arising out of these initiatives can be tracked back to the organisational objectives.
While deciding on organisational programmes related to knowledge management, it is necessary to identify and prioritise the business areas for which a knowledge management programme has to be implemented. The next step is to finalise a few business processes in these business areas where knowledge management can be applied. In each of these identified processes, it is beneficial to have estimated the current knowledge needs, availability and accessibility of the information to facilitate knowledge. Some of the most potential and immediate benefits of knowledge management can be realised in business processes within the store.
The processes chosen will also depend on the segment of retail. For a consumer electronics retailer, it is very essential that store associates are well equipped with knowledge of the product. This will comprise of product specifications, features, pricing options, usage, demonstration videos and also tips to converse with the customer and close the sale. This could also extend to connecting the customer with a product expert who can converse with the customer through video.
For fashion retailers, the store associates should have handy information on various fashion trends, material used in the products, videos from shows for luxury fashion, fabric care information, etc. Analytical components can be used to suggest upsells or cross sells using past purchase information of the customers.
Generating Targeted Messages for Employees
The purpose of knowledge management is not solely limited to enabling customer interactions during a sale. Employee skills, competencies and assessments can be made available to managers to enable capability planning. Targeted messages can be generated for employees or employee groups to roll out organisational or departmental initiatives. Participative knowledge management can also be introduced for various business processes in the supply chain with the use of collaborative workflowsAfter identifying and prioritising the various processes, a retailer needs to identify the sources from where information needs to be made available or generated. The sources of information can be humans (internal or external) or objects, which  could range from enterprise systems to barcode scanners. These sources will need to be tapped in a planned and inclusive manner to ensure that the knowledge pool within the organisation does not dry up.
While selecting the software applications to enable knowledge management, adequate considerations should be given to the scalability of the application. The knowledge elements within a dynamic industry such as retail increases rapidly and the application should be designed to scale fast as per the needs of the business. The application should be able to facilitate a convenient storage, retrieval and dissemination of both structured and unstructured data. Unstructured data such as store video feeds, training podcasts, and customer comments on social media should be stored optimally. There should be a mechanism to quickly search in both structured and
unstructured data.
The knowledge management application should not function in a silo and serve only as a content repository. The application should conveniently integrate with other enterprise applications such as those used for decision support, HR, enterprise performance management and other systems. The accessibility of the system is also a key parameter.
Fresh Content
An aspect that many retailers overlook is the approach to how content is kept fresh, relevant and enthusiastic. Retail headquarters have many senior personnel with ground-up experience in retail. These subject matter experts should be encouraged to share experiences, best practices and FAQs. The experts can also conduct live video forums or respond to ad hoc queries from various quarters of the organisation. Incentives or rewards programmes can be created to boost content generation and moderating activities voluntarily.
The knowledge management initiative owners will need to publish regular updates for the entire organisation such as most popular, newly added and testimonies of how organisational knowledge helped solve a business issue. A regular report should also be published for department or unit heads related to the usage of knowledge management tools within their respective functions.
Knowledge management initiatives within a retail organisation help create a uniformity and consistency at all locations of the organisation. These initiatives give a sense of confidence to the store associates in a way that expertise, knowledge and guidance are available at an arm’s length and on demand. The results that can be realised pertain to reduction in lost sales, improved employee productivity and increased customer satisfaction.