My recent post (Software and Human) Help Wanted in Overwhelmed Retail Stores talked about how much attention (and IT investment) retailers pay to their merchandize planning and supply chain optimization processes as compared to their store-level task execution, even though this is where “the rubber meets the road.” I concluded my post with the fact that there are dozens of retail workforce management (WFM) vendors and solutions, but not many have the required store-level task management capabilities.
Enter Reflexis Systems
One of the few viable task execution options would be Reflexis Systems, which was founded in 2001 in Dedham, Massachusetts (US). Today, Reflexis is both a pioneer in technology and the market share leader in the retail task management space with its products being used in over 80,000 stores, and by 5.3 million store associates in 20 countries (as customers in France and Italy have just been added to the roster).
There is an anecdote about the company’s founder and CEO Prashanth Palakurthi going shopping and being unable to find much of the wanted stuff in a store in late 2000. He was astonished to see the store manager inundated with stacks of paperwork in the back room.
“Inspired” by that poor customer experience, Palakurthi came back home with an idea for a software product which he then discussed with his close business partner, and thus was born Reflexis. The vendor’s name indicates its founder’s intent to ensure that store-level action reflects (mirrors) a retailer’s corporate HQ strategy.
The vendor had immediate successes with two of the biggest names in retail: Staples and The Home Depot. These retailers were reportedly delighted to relatively quickly reduce the clutter in their stores and see significant improvements. For example, Home Depot has reported a five percent increase of ticket size by making store employees more productive via Reflexis’ tools. This translated to approximately $1.5 billion in additional annual revenue.
As for Staples, Reflexis’ easy to use, role-based user interface (UI) has ensured that the solution is used by all Staples employees. In fact, Reflexis Task Manager (formerly called RetailAction Manager) has been voted the best software implementation by Staples users (reportedly, 88 percent of the stores felt no training was necessary). With Reflexis, Staples reportedly realized the following benefits (totaling US$2 million in annual hard and soft savings):
As Reflexis gained experiences with these customers, it realized that an unmanageable flow of communication was a direct function of compartmentalized corporate planning processes amongst the design, supply chain, allocation, merchandizing, finance, and operations departments. The vendor went about fixing this problem by building a workflow system and a workload optimization module at corporate, vendor, and store operations levels in 2003.
At that time, Reflexis had more customer success, including some well-known names in Europe. For example, B&Q, the largest do-it-yourself (DIY) specialty retailer in Europe and the third largest in the world, estimated that it was wasting more than £2 million a year in stock preparation and range review execution as a result of HQ-to-stores miscommunication and task mismanagement. B&Q attributed the subsequent savings to the removal of unnecessary tasks and increased efficiency in its store operations (this story was reported by Computerweekly).
For its part, as part of its research into the store-level execution problems retailers face, Reflexis had surveyed 200 store managers working at several chains, and 98 percent of them complained about over-analysis of data. Judging by the high piles of paper on their desks, they should have all been PhD scholars.
In the mid-2000s Reflexis built on the task management solution by developing software for task compliance auditing (Reflexis StoreWalk) and key performance indicator (KPI)monitor/response (Reflexis KPI Activator). Both of these solutions were built on the same Java-based technology infrastructure as the mother Reflexis Task Manager product.
By introducing these solutions on an integrated platform, Reflexis took the concept of task management to another level than most of its competitors’ solutions, which are little more than simple “to-do” checklists for retailers. Here are some of the key reasons why many of the best-known retailers in the world have selected and implemented Reflexis:
Tasks that get sent from HQ to stores through Task Manager include promotions, recalls, new product introductions, human resources (HR) related projects (such as new health care enrollment programs), and basically anything that comes down from corporate. This can also include more complex projects with multiple tasks that have to be executed in a certain order such as an entire seasonal campaign (e.g., the “Back to School” season with specific promotions for specific departments).
When retailers talk about task compliance, they mean making sure that the stores do what the HQ office intends. Reflexis can accommodate this in the following two ways:
The aforementioned surveys are typically created by the staff in the HQ office. During initial implementation, Reflexis product specialists work with the customer to build appropriate surveys and show them how their own employees can build them. Surveys can either be built from scratch by power users or end-users can also build them using templates.
The surveys are generally completed by regional and store managers but can be answered by department managers too or whoever the company wants. The surveys can be about anything the retailer wants – compliance with safety rules, store appearance, loss prevention policies, etc.
In 2007, Reflexis acquired Atlanta-based Enfotrust, a provider of task management for mobile workers in the field. Enfotrust had significant experience in implementing solutions on handheld devices. The acquisition has enabled Reflexis to implement and support new mobility solutions on devices such as the iPhone, iPad, and BlackBerry devices, and offer these software products as SaaS (or “cloud”) solutions.
In addition to the technology and functionality mentioned above, even more important could be the culture of customer service that is embedded into Reflexis’ DNA. For the past five years, the vendor has been rated by retailers in independent surveys such as the RIS News LeaderBoard above all other WFM software companies in dozens of customer service categories, such as recommendation, ease of implementation, quality of support, return on investment (ROI), technology innovation, and more. In many instances, Reflexis has been rated number one overall, above all other much larger retail software companies including Microsoft, SAP, Oracle, and so on.
Many of the company’s employees are even literally married to their jobs. Namely, Reflexis CEO is happy to point out how many intra-Reflexis staff marriages and newborn children (“Reflexis babies”) have happened since the company’s inception. While this fraternization amongst the employees might be an HR manager’s nightmare in many other workplaces, in Reflexis’ case it shows its employees’ commitment to their work (a labor of love, so to speak), while also not forgetting about their personal and emotional needs (at least, they love both their work and coworkers).
All joking aside, Reflexis has helped some of the biggest and best-known retailers in the world increase their revenues by 2 to 5 percent in 21 weeks or less. For example, the product was implemented in as little as four weeks at Sony retail outlets.
Moreover, Burlington Coat Factory saw task compliance going up to about 94 percent, with a 95 percent reduction in corporate-to-stores emails in late 2007 after implementing Reflexis. Earlier, the retailer was unable to even measure these metrics. For its part, Hannaford Bros. Co. has reduced product recall times from five days to three hours and reduced shrink by several dollar million a year.
Broader WFM Aspirations
In conversations with its customers throughout the first half of the decade, Reflexis heard many of them express dissatisfaction with their legacy labor scheduling and time and attendance (T&A) solutions. They often described their systems as slow and hard to use. They also said that the labor schedules that their legacy systems generated were not meeting their needs for the following three reasons:
After hearing this feedback from numerous customers, Reflexis determined that there was a business opportunity to expand its solution offering to cover not only the “execute” phase, but also the “plan”, “measure”, and “schedule” phases. In 2006, Reflexis introduced its first labor scheduling and T&A solution. Rather than being yet another retail WFM solution, Reflexis tried to be an equivalent of Apple’s iPhone-like breakthrough product for retail “work management.” Unlike other solutions, Reflexis offers the following:
Reflexis claims that its integrated suite, the Retail Execution Management platform, has been received with enthusiasm by retailers. In 2010, the company saw record customer growth (over 30 new deals), and since entering the labor scheduling retail market, Reflexis has steadily gained in market share in the retail space. The latest IHL Group report shows that Reflexis is in the top four in market share in the labor scheduling space, and the company continues to win new customers.
These recent new WFM wins are in contrast to Reflexis traditionally winning the vast majority of standalone task management deals, but most of these were situations where retail WFM was already in place. The majority of Reflexis’ customers are still using only its task management capabilities. To be more accurate, 15 percent of the vendor’s customer base are labor scheduling customers, and 20 percent are T&A customers, many implementing both modules.
The jury is still out on how successful Reflexis will be in its much broader new charter. The company will now have much wider competition, such as Kronos, SAP, Oracle, JDA Software, Opterus, Tomax Corporation, RedPrairie Corporation, Natural Insight, WorkPlace Systems, Infor Workbrain, CyberShift, etc. It will certainly take some time for the WFM platform to become as mature as its Task Management counterpart.
For the first time in its history, Reflexis took on US$6 million in debt funding in 2010, to sustain its expansion and pay off the acquisition of Enfortrust. Since its inception, the company has been deliberatly committed to hefty research & development (R&D) spending (40 percent of revenues).
Part 2 of this series will analyze Reflexis’ current state of affairs and conclude with an in-depth discussion with the company’s knowledgeable (and witty) executives. Until then, your comments and opinions with regards to typical retailers’ issues and solutions are more than welcome. I would certainly be interested in your experiences with various retail software tools in general and with Reflexis in particular.