Exclusive: Interview with Telstra’s Director of Retail Operations, “I have a freakout board”

Telstra is Australia’s largest telecommunication company, but also one of the largest retail businesses in the country. We sat down for an exclusive interview with Telstra’s Director of Retail...

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Telstra is Australia’s largest telecommunication company, but also one of the largest retail businesses in the country. We sat down for an exclusive interview with Telstra’s Director of Retail Operations, Andrew Smith.

This interview took place during the same week ABC announced the closure of 300 retail stores in favour of moving services online. In contrast, Smith says the company is doing very well, Telstra has seen a staggering 38 Million people visit their retail stores in the last 12 months and are actively looking for new real estate to expand the number of retail stores.

After changed the company over the last few years, that’s led to many more Australians taking us on as their chosen technology provider. That creates those great problems to have, like higher traffic flows, longer waiting times etc.

Smith says his career has hovered around Telstra retail for the past 7-8 years. The deeper he gets into the industry, the more he realises he’s actually in one best positions in retail in the country. The business is growing really well, and have local partners like David Jones and even partnerships in Indonesia. Commercially the company is doing well, which allows further investments like that of the Sydney Discovery Store, to better cater for customers.

In addressing the challenge of staying on top of ever changing consumer needs, Smith says they certainly listen to customer feedback, but then try and not only respond, but believe they can exceed what customers tell ask for. In terms of the Discovery Store, it has performed exceedingly well.

“Its 5 times over its business case in terms of what we need it to do”.

With a success like that, Telstra are now keen to roll out more of these premium retail experiences. Telstra now have 4 sites in what they refer to as ‘the new environment’, this includes the Test and Learn Center in Melbourne, Macarthur Square, Macquarie Center in Sydney and Cranbourne in Melbourne. The choice of locations delivers a diversity of locations across states, but also ownership models, some owned by Telstra and some owned by members of the community. This provided an ability to test the results across a diverse range of models to identify if the recipe would scale.

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Inside Telstra, they rely heavily on Customer Advocacy ratings, as in how often would you be to refer a friend to a product or service. Employee engagement scores are also good and a key measure of success and the health of the company so it’s far more than just the financial bottom line. As you can imagine there is a correlation between these numbers.

Telstra’s executive director wants to leave a lasting legacy – that this (Telstra) is the best place to work in the retail industry on the planet. To achieve this, Smith says the bulk of their effort goes into their people and ask themselves the question, 

“How do we make this place amazing for store team members to be able to serve customers and come to work everyday. “

An example of this is in their Melbourne Discovery Store, they’re looking at ways they can support people studying at University, home life, health and more. This philosophy follows an old saying in retail, “look after your people and they’ll look after your customers for you.”

In a constantly changing environment where products and services change rapidly, one of the biggest challenges of recruiting the right staff, people that welcome change, can deal the constant change and embrace it. In a large enterprise like Telstra with hundreds of stores and thousands of employees, the challenge of ensuring staff are able to deliver a great customer experiences with educated answers and product knowledge is a serious one.

“I have a freak out board”.

Smith says he has a whiteboard where he lists things that can legitimately keep him up at night. There’s a limit to 3 things, so if a more important thing comes along, one has to be resolved and removed. In such a demanding and stressful position, its a reasonable technique.

One item on the freak out board right now is the growing challenge keeping staying up to date. In particular, Smith says the amount of people coming into stores and asking “what is the Internet Of Things?” is exploding and the Smart Home is coming fast. He says they have to rethink how they train people and how they support employees as new connected devices roll out.

A key change Telstra is making is a move away from a process-driven environment, instead moving to a values-driven environment. This means they’re attempting to make the business work in a ‘common sense’ way. That means when an employee is discussing a solution with a customer, they should be able to just ‘follow their gut’ to recommend the right thing, instead of running off and reading a manual.

Something refreshing to hear is that members of staff from the Telstra experience store in Sydney were actually provided with devices like Chromecasts, Foxtel IQ3 and mobile products to take home to really understand it so they can speak from personal experience rather than a spec list. This is basically the same philosophy that we use to write educated reviews of products, often you need to live with something to really understand it and who should, or shouldn’t buy it. 

The Store Leadership team have smart homes, they have also taken rides in Tesla’s to understand how Telstra can help bring people’s connected lives together.

Smith says on the freakout board is the challenge of how this model would scale across their 372 stores and 80 business centres. Some products simply won’t be practical, like a smart washing machine or expensive smart TV. Telstra are still searching for the right solution, but believes Augmented Reality or Virtual Reality may hold the answer.

I tend to agree, that AR/VR has the best chance at being the ultimate solution for retail training for Telstra and many other businesses. You could run Matrix-style simulations where you’re presented with example customer experiences for training purposes and see if you understand the product at a level that allows you to answer 95% of the questions. The cost to the business would be a few AR headsets (probably HoloLens) with employees taking turns to get training and keep costs low. When a new product ships, new simulations get built and new training is released through Telstra’s intranet.

The opportunity here is that if Telstra does nail this virtual product experience, they could release some or all of this to consumers to also learn about new products. This would inform customer purchasing decisions. Imagine if you could see a smartwatch on your wrist and interact with it, to see if it really will work for you. With Oculus Rift and HoloLens, as well as solutions from Samsung and Sony on the horizon, this technology may not be that far off.

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When asked about how Telstra are dealing with an increasingly educated customer, Smith says they are happy to just do the order processing function, but have an opportunity to offer customers more. In the Sydney store, they have provided staff with tablets and integrated credit card readers that can take transactions anywhere in the store, rather than pooling customers around a sales desk. This strategy has doubled the traffic flow and halved wait times. While this looks like a great success, Smith says there’s still work to do.

Telstra haven’t yet connected customer experiences online at telstra.com.au with their in-store experience, but want to. Telstra are looking at how they could leverage beacons in-store, combined with suggesting products and information to benefit consumers, while increasing revenues. If they knew you spent 30 minutes looking at Smart home devices one day, then 3 days later was on the website, there may be ways that customer’s experience could be improved by leveraging their historical interaction with in-store products and vise versa. It’s not uncommon to combine an online and IRL experience to research and purchase a product, but the order and final place you make the transaction shouldn’t matter.

Smith says they are very aware of crossing the creepy line and need to tread carefully to make sure it’s a complimentary experience that helps the consumer.

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