Keith Jelinek of Berkeley Research Group: How To Create A Fantastic Retail Experience That Keeps Bringing Customers Back For More
An Interview With Orlando Zayas
Trust. Each of the items above need to have a vein of trust running through them. At the end of the day, the consumer needs to be able to trust the company and its products, and what actions the company is taking from a civic responsibility standpoint. Trust matters.
As part of my series about the “How To Create A Fantastic Retail Experience That Keeps Bringing Customers Back For More”, I had the pleasure of interviewing Keith Jelinek, Managing Director, Berkeley Research Group.
Keith Jelinek has held management positions and led and advised Fortune 100 retail companies to drive transformational improvements for more than thirty years.
Before joining BRG, he was a senior managing director in the Retail Performance Improvement practice of a global business advisory firm. Prior to that, he assisted the launch of the Retail Performance Improvement team at an international business management consulting firm, where he twice received the Achievements in Excellence Award for delivering results far exceeding client expectations. He has also held numerous interim management roles, working collaboratively with executives and boards to effectuate key strategic initiatives.
Mr. Jelinek’s deep retail experience is leveraged through his industry knowledge. While senior vice president of Inventory Management for Kmart Corporation, he was responsible for all aspects of dollar and unit planning, open to buy processes and controls, space management, replenishment, allocation, pricing, and markdown optimization. Before that, he held store operations positions with Thrifty-Payless Drug Stores.
Mr. Jelinek has been profiled by Supermarket News, National Association of Convenience Stores, CBS MarketWatch, Chain Store Age, Time, CNBC.com, RIS News, NPR, Women’s Wear Daily, the Wall Street Journal, and Reuters, among others.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I started in retail very young, collecting shopping carts from the parking lot and bagging items.
From there, I spent the next 25+ years in various operational, supply chain and inventory management roles at regional and national retailers, with last seven years at Kmart Corporation leading the Merchandise Planning and Merchandise Operations Team to exit from bankruptcy.
I never thought I would work in consulting and management advisory — I’d worked with and hired consultants, but never thought I would cross over to the consulting side.
When I left Kmart, I received a call from Al Koch at Alixpartners (Al was the interim CFO at Kmart during the bankruptcy process). He explained that the firm wanted to develop a Performance Improvement Team to help companies not in a bankruptcy situation. One of the key elements of their ‘secret sauce’ would be to bring in retail industry leaders who have had direct P&L responsibility, and teach them how to be trusted advisors to major brands. That was about 18 years ago, and it was pivotal in forming my career path.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
One of the funniest mistakes I made as I was first starting as a consultant was being too broad in what data we were asking for to conduct analysis. We developed a data request and were not specific on the attributes and data range –so it was a huge hassle for clients to get us data.
In one case, we expected the data to be delivered the next day, and after three days I followed up as we had not received any data.
The head of IT told me, “Well, what do you expect? We had to pull so much data that we had to go out and buy a hard drive and ship it to you overnight — you should receive it tomorrow.”
The lesson that I learned was to be very specific when requesting any type of information or data from a client and make sure that you understand how they attribute the data. Don’t waste their time or resources (and yours in the end) from having to plow through it.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I’m going to have to go all the way back to my grandfather. My mother raised me as a single parent with a full-time job. It was difficult to make money stretch to the end of every month — we were on food stamps and government assistance. There were things that the other kids had, like new high top tennis shoes, or the latest style of shirt or a new bike. I wanted to have those things, but knew that my mother could not afford them. So, at about 12 years old, I started a little business cutting lawns and washing cars in my grandfather’s neighborhood in order to have some money to afford a few of these items.
My grandfather gave me great advice. He said, “When you do a job for someone, make sure you give them 110%, never leave anything to chance. You are only as good as the last job you did for them and they won’t remember anything before that, so do your best, even if it takes you a little longer!”
He framed it up with a saying: “Customers are perishable!” I still live by that advice today.
Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
The book “The Goal: A Process of Ongoing Improvement,” by Eliyahu Goldratt. This book had a tremendous impact on me shortly after I began my consulting career. Not to give it away for anyone who has not read it, but it is a situational story about a plant in a town that is going to be shut down if operational performance is not turned around quickly. The book takes you on a journey of truly thinking about what constraints are, how to understand them, and how to think differently about changing the outcome. I have reread this several times, and have recommended it to many mentees over the years.
What do you think makes your company stand out? Can you share a story?
Berkeley Research Group (BRG) is a young company — we just celebrated our 10th anniversary in 2020. We have over 1,300 consultants across the US and internationally.
What makes us different is our expert-based model, with very specific experience that is aligned to each client situation. Our team is made up of true authorities on the industries we consult in.
We hand-select team members for each assignment based on their individual skill set. Our teams tend to be more senior, with a blend of line management experience, so we can get to the answers for our clients faster, and we don’t overrun them with junior resources. In our model, the team that interacts with the client through the selection process is the team who will work on the assignment — we don’t have a separate business development team that hands it off to someone else to deliver the results. That is unique in the consulting space.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Burn out is a concern in management consulting. For our type of work, pre-COVID, we are on the ground working side-by-side with our clients 3–4 days a week wherever they are located — sometimes this means flying to multiple cities in a week to visit multiple locations. This creates very long weeks where you don’t get home until Friday night or even Saturday morning if a red-eye flight is involved. This can cause burn out and is tough to create work-life balance.
My tips to avoid burn out would be three-fold:
1) Use a journal and plan your week out before the week gets started. I do this on Sunday afternoons. Look at your meetings and any overlaps, understand the team’s deliverables for that week, pull any work ahead where you can so you are not chasing it the last minute. There is little reason for a late night scramble of resources if you carefully lay out your work plan for the week.
2) Exercise. You can really only control the early morning, so get the workout in the gym or that run in early. Putting it off to evening usually only gets disrupted and does not happen.
3) Eat right and go to bed early to get at least 7–8 hours of sleep. As my grandfather once told me, “Nothing good happens after midnight.”
Ok super. Now let’s jump to the main questions of our interview. The so-called “Retail Apocalypse” has been going on for about a decade. The Pandemic only made things much worse for retailers in general. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?
The pandemic has forced many retailers to re-evaluate their go-to-market strategies, and really obtain a new understanding of their customers. Of course, many retailers were ear-marked as ‘essential’ and were able to stay open, while others were forced to close for some early periods. Those ‘essential’ retailers, such as grocers and home improvement companies, had to quickly adjust to consumer preferences and implement alternative shopping methods such as curbside pickup, home delivery and BOPIS (buy on line, pick up in store).
Other non-essential retailers, such as those in the specialty apparel and department store channels, were forced to conserve cash, stop all non-critical capital investments and determine how to retain their talented employees. These retailers saw their ecommerce operations soar and had to finetune how they would manage inventory and expand fulfillment capacity with the high expectation of home delivery. They were also forced to take a clean-slate approach to how they would operate stores and engage with the consumer once some of the restrictions were lifted.
What retailers learned was that meeting the customer’s needs, whenever and wherever they want, was king. Customers were no longer browsing and dropping into stores. They were on a mission, and wanted service in a clean and safe environment, and you needed to have the items they wanted in stock. Retailers learned that managing inventory was going to be critical, and that the excess in the pipeline and in stores with depth and too many choices would lead to reducing promotional discounts and markdowns. These learnings allowed them to improve profitability.
Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise retail companies and eCommerce companies, for them to be successful in the face of such strong competition?
Understand who your consumer is. If you have not recently mapped out a customer journey to understand their shopping experience, that should be your top priority.
Next, focus on your CRM capabilities. Sending a blanket email to all your customers is insane, and disrespectful.
If you don’t have a loyalty program, why not? What is the value-add for your business, what can you offer to attract and retain customers through a loyalty program?
You need to know which customers are at the top of your funnel, who your best customers are, what they buy and what items they buy together. Then, figure out how to segment them into consumer groups, i.e. which customers are shopping less frequently and why, which customers have not visited you for a long time. From there, game plan how to get them back. Also important is knowing how and why many customers are starting to shop online, but then abandon their cart.
Think critically about your ecommerce ecosystem. Is it friendly to multi-lingual customers, is your site easy to navigate, are product descriptions easy to understand, can the customer put an outfit together on your site? These are all essential questions to ask and know the answers to.
Next up, delivery. What are your promises for delivery? If you offer free two-day shipping with a minimum purchase, is your fulfillment facility set up to meet this? Are your order management protocols set correctly?
Make sure you have a simple dashboard of KPIs to measure. It should not be complicated, and make sure the entire organization shares them.
Remember, “customers are perishable!”
What are the most common mistakes you have seen CEOs & founders make when they start a retail business? What can be done to avoid those errors?
In my experience, a very common mistake is expanding too fast. Developing and expanding stores across a large geographic area or nationally too quickly is a recipe for a disaster. Once a retail concept and brand is developed, start with a few stores in a market and understand the customer, what they like, what they don’t like and how to be a truly successful omni-channel retailer. Get those basics down — and really make sure you have a solid foundation built on this understanding.
You will need to read, react and adjust and re-read, react and re-adjust over and over a few times until you get it right. It takes time to perfect this.
Then, carefully expand to an adjacent market — not one that is all the way across the country, which will only increase operating costs.
As you gradually move into new markets, make sure you understand the customer demographic and preferences before you open stores and put in product. What are the right sizes, is there a difference in climate, who are the best employees I need to attract and from what competitor? Can I provide the service that we have set as an expectation and promise and deliver on it?
This might be intuitive, but I think it’s helpful to specifically articulate it. In your words, can you share a few reasons why great customer service and a great customer experience is essential for success in business in general and for retail in particular?
Before you deliver a great experience, you first have to have a great product. If you have developed a brand, there is an expectation for a great product — that has to be #1.
Once you have a great product, it is all about the consumer and the experience. The organization has to be fanatical about the customer, understanding what data to constantly analyze to understand her or his choices and behaviors. Customers today have a proliferation of choices at their fingertips via laptops, desktops and mobile phones — the world is their oyster, and they can and will choose to buy most commodity products anywhere.
To land a sale and a longtime customer, you have to deliver an experience that is far above anyone else. That means that you stand for what your brand is about, you take back returns unconditionally, you know that the customer is king, and when they select on item online and you say you will deliver it to their home in two days, you do it. No matter what the cost. That’s how to retain customers today.
Consumers have a short memory. They only really remember that last interaction with you. If it was great, they will tell 10 of their friends, if it was bad, they will tell 20 of their friends. You want to make sure every interaction and engagement is above their expectations — tools and machines won’t do this alone. It has to be in the mindset of every employee — if it is not, you better replace them.
We have all had times either in a store, or online, when we’ve had a very poor experience as a customer or user. If the importance of a good customer experience is so intuitive, and apparent, where is the disconnect? How is it that so many companies do not make this a priority?
Too may companies experience rapid growth, expand too quickly and deploy layers and layers of management that remove them from interaction with the customer. The best companies I have had the privilege of working with have a culture of management never being too far removed from the customer. This means the head of stores does not sit in the office all week, they are in the stores 3–4 days a week, and never pre-announce their arrival.
Marketing is engaged with the customer, constantly holding focus groups, conducting customer surveys, understanding what the customer likes, what they don’t like, and sharing that data with the executive team.
Supply chain is constantly improving service delivery, looking to improve ecommerce fulfillment on the distribution center floor, or meeting a truck delivery at a store to see how the product arrives.
IT is fully engaged with the business units, sitting in various meetings, looking at how they make decisions, what data they are using, what data they are missing, and what they can do to improve efficiencies and accuracy.
Merchandising teams should also analyze data from customer returns — why did they return the item, was the size wrong, is the thread coming apart, did the color bleed in the first washing? How do you improve the product to minimize returns?
Can you share with us a story from your experience about a customer who was “Wowed” by the experience you provided?
We had a situation working with a CFO at a specialty retailer who wanted an outside perspective to help the organization analyze their store portfolio. We wanted to know what levers they could pull to improve four-wall profitability, and if profitability could not be improved, which stores should be closed once the lease expires.
Our team went beyond the typical four-wall profitability analysis and captured the retailer’s omni channel transactions in the shopping radius. We looked at where people lived who bought online and had the product shipped. We also wanted to know where the orders generated from that were BOPIS (bought on line and picked up in store) and what the market area demographics surrounding the store were (e.g. urban, suburban, population density, age, ethnicity and trends).
The team then pulled the data together into a BI tool with Tableau, allowing a market area dimensional view to truly understand store performance.
Next, we facilitated weekly meetings with executive leads from each functional area within the company over a six-week period, reviewing every store, identifying opportunities to improve profitability, such as product assortment changes, to match the demographics or optimizing labor to improve customer engagement.
At the end of the project, the client was pleased with not only the outcome (i.e. having an executable roadmap), but also the way the team interacted across all functional areas and getting cross-functional involvement. It ended up being so much more than just a typical real estate exercise — it was a transformational effort.
Did that Wow! experience have any long-term ripple effects? Can you share the story?
As a matter of fact, yes. Not only did the management team fully execute the roadmap over the next three years, but the CFO asked us to engage with the company again on several other challenging projects such as improving store labor and customer engagement, improving ecommerce fulfillment operations and reducing working capital through development of assortment planning and allocation effectiveness tools.
The CFO moved to a new retailer, and based on the experience he had with us, called us in to help them with a similar situation.
A fantastic retail experience isn’t just one specific thing. It can be a composite of many different subtle elements fused together. Can you help us break down and identify the different ingredients that come together to create a “fantastic retail experience”?
To constantly improve upon the retail experience, it’s critical to understand the customer journey — and ask the tough questions that will force you to improve. Here are some key questions to consider:
- It starts with how the company presents its brand and acquires customers, and once customers are engaged, where are they engaging? In-store, mail/catalogue, digital, mobile, or an app? How are you catering to them in a meaningful way in each environment?
- Think critically about how each environment works for the customer, and what might be negatively impacting the experience. Are you giving them a way to submit feedback so you can improve?
- What changes need to be made to improve the journey? Is there an easier way to link across channels to be truly omni-channel focused?
- What can the company do to add innovation to branding, sales processes (such as CRM), personalization, etc.?
- What are the major hurdles and pain points causing emotional barriers for the customer that need to be mitigated?
- How do you enhance the lifetime value of the customer, and identify customer milestones?
- What KPIs should be measured and prioritized? If you have more than five, that is too many!
- What testing and pilot plans are in place to operationalize findings and continuously improve?
This process needs to be constant. You should always be focused on optimization and improvement. It is not a project approach, it is the lifeblood of the company.
Ok super. Here is the main question of our interview. Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.
First, the product. If you don’t have a product that fits the consumer’s needs, you don’t have a business. The product needs to be able to either solve a problem for a consumer they know they have, or don’t know they have. It also needs to be on trend in terms color, style and fashion.
Second, customer engagement. How you interact with the customer and make them feel important, as we outlined in the customer journey is critical. Know your customers. When they engage in the store, whether it’s when you scan their loyalty card or credit card, give them recognition and thank them by name. If they engage thru a digital platform, leverage their previous data to provide “hand-picked” personalized items and messages. Let them know you know and remember them, and recommend items for them that are specific.
Third, Omni Channel Capabilities. You need to be able to engage with your customer wherever and whenever. Make it a 360 degree user experience. Whether purchasing something to ship and pick up at store, same day delivery, ship to their home, gift giving and shipping to another address, ensure that every process is easy to navigate, easy to transact, easy to track, easy to cancel and easy to engage with someone if they have a question.
Fourth, sustainability. It is becoming ever more important to consumers to understand what actions retailers are taking to reduce their footprint on the environment. This not only involves emissions, but also packing materials in products, and the potential for trade-in/resale items.
Fifth, trust. Each of the items above need to have a vein of trust running through them. At the end of the day, the consumer needs to be able to trust the company and its products, and what actions the company is taking from a civic responsibility standpoint. Trust matters.
Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
One of the biggest challenges I see today is the elimination of the middle-class that is pushing some people into affluency and even more people into poverty. We live in a country with incredible richness and resources, yet the population of those with the greatest needs continues to accelerate. Many of those live in food deserts and suffer from poor health due to poor nutrition and lack of access to grocery stores and fresh food. We need more retailers in the food and grocery space to bring fresh and affordable options to food deserts. This does not mean high-end “to go” options, rather, this means basic proteins, produce and packaged goods in smaller sizes for those that are trying to make ends meet. No one should go to bed hungry in this country.
How can our readers further follow your work?
This was very inspiring. Thank you so much for the time you spent with this!
About The Interviewer: Orlando Zayas is the CEO of Katapult, an award-winning omnichannel payment platform. Zayas is known for his revenue growth strategies and visionary leadership in the eCommerce and retail space. His future-forward expertise has led companies such as GE Capital, Safe-Guard Products International, and DRB Capital. Zayas is also highly committed to providing educational opportunities to underprivileged communities through his philanthropic endeavors. Zayas’ business insights are regularly featured in publications such as Forbes, Entrepreneur Magazine, Retail Insights, and more.