Talking to (and Learning from) a Retail Store Execution Software Leader - Part 2

Part 1 of this blog series introduced Reflexis Systems, whose task execution solutions have helped over 110 retailers and their suppliers worldwide execute their strategies and increase profits. The article analyzed Reflexis’ genesis and evolution from a task management specialist to an integrated retail workforce management (WFM) platform provider.

Reflexis’ Retail Execution Management platform features labor budgeting/forecasting/scheduling, time and attendance (T&A), task management, and key performance indicator (KPI)/compliance solutions to enable retailers to align their store labor/activities to corporate goals and institutionalize best-practice responses to real-time metrics. As mentioned in Part 1, Reflexis’ customers, many of which are Top 250 global retailers, have reported improvements in store-level compliance with corporate strategies; higher productivity of merchandising, field, and store management; and increased sales and profitability.

Reflexis' Current State of Affairs

Reflexis’ 350 employees are based in the company’s following offices: Dedham, Massacusetts (headquarters) and Kennesaw, Georgia, in the United States (US), and London, United Kingdom (UK), Leusden, the Netherlands, and Pune and Chennai, India. With six offices located in four countries on three continents, Reflexis has created a sizeable geographic footprint in retail store execution software solutions.

Mid-size to large retailers (that is, with at least US$500 million in annual sales) are the vendor’s sweet spot. Reflexis has more than 120 customers (some which have multiple store banners, or divisions in the retail lingo) in North America, Latin America, Europe, Asia, and Australia.

Reflexis solutions support all eight-bit language character sets, and currently support English, French, Dutch, Italian, Spanish, and Russian Cyrillic out of the box. The company can relatively easily translate into other languages, because it has a common code base across all languages, with the language text contained in a separate data store. That is to say, support for other eight-bit languages can be extended by supplying the translation for each interface element. Third-party tools are not required for such a translation.

Reflexis has close partnerships with IBM, Motorola, Research in Motion (RIM), Control Module Industries, and Cisco, and is in discussions with several other large technology companies. The company does not typically work with system integrators (SI’s) or value added resellers (VARs).

A Frank Discussion with Reflexis' Sassy Management

What follows now is my discussion with Reflexis’ top management during my recent visit to the company’s head office. My prodding questions and Reflexis’ straight-shooting answers are as follows:
PJ: What are your main product lines/modules, and what has been selling best of late?

Reflexis: We offer one integrated Retail Execution Management platform of task management, labor scheduling, T&A, and KPI/compliance solutions. Our first customers have obviously implemented task management, and many of them are now coming back and selecting or have already implemented our newer labor scheduling and T&A solutions.

Most of our new customers are implementing the entire platform. In most cases, they start out by implementing the solution that they have the most pressing business need for, such as labor scheduling if their old system is causing significant problems. Because we offer an integrated platform, they can start out by implementing one module, and then easily add others later.

PJ: What percentage of your customers are in the cloud? Is that a factor (order winner or qualifier) yet?

Reflexis: Our solutions have always been Web-based solutions that can be implemented in traditional “behind the firewall” or cloud computing models. About one third of our customers are currently implemented in “the private cloud” (although we are in multi-tenant architecture).

At first, most of the customers that wanted cloud were smaller retailers. However, in 2010, we saw a big shift. The majority of retailers, including Global Top 100 companies, either specified a cloud computing implementation or inquired about it as an option. Cloud computing implementations have been available from Reflexis since 2001.

PJ: What is your strategy towards social (Web 2.0 and Enterprise 2.0) tools and roles-based user experience, and their deployment for your target customers?

Reflexis: Our solutions have always been role-based. For example, in our task manager solution, we provide retailers with the ability to give each role in their company (e.g., corporate planner, regional manager, store manager, department manager) an interface that is tailored to the information they need to see on a daily basis, in the way they need to view it. We are investing research and development (R&D) resources and discussing with our customers to see how we can integrate social networking applications such as FaceBook and FourSquare into our workforce management solutions.

PJ: What were the major highlights and messages from your recent user conference?

Reflexis: Never in the history of the world have consumers been better armed with product and price information, thanks to mobile technology, social networking, and the Internet. Retailers need to transform their store workforce from being transaction focused to becoming trusted customer advisors. The way to do this is to free employees from inefficient and mundane tasks (like spending half their workday reading and responding to emails, reading and writing reports, and so on) so they can spend more time with the customer.

They also need to provide store employees with tools that enable them to sense what customers want before they come into the store so that they can better respond to their needs. That is the only way retailers can provide an environment that brings joy into retailing and inspires their employees to succeed.

We gained more than 30 new customers in 2010, a record for the company, and we think more than any other workforce management company in the retail space. We have seen this demand continue in 2011. We continue to invest significant R&D into making our solutions available on the plethora of new smartphones that are coming into the market.

PJ: Although you won over 30 brand new deals in 2010, what issues/challenges are still keeping you awake at night?

Reflexis: Given the Boston Bruins' stellar championship season, we are now worrying whether or not the New England Patriots' season will start on time. All joking aside, we continue to talk to our customers about what new functionality they need and how we can make our products better. Our products can do wonders in theory and practice, but only if and when the customer’s organization is ready to deploy and use them properly.

PJ: Is task management still the breadwinning product and door-opener for Reflexis? What else is selling well?

Reflexis: Task management is not the only door opener any more, though we continue to increase our market share in this space. A lot of our new customers are starting out with labor scheduling and/or T&A. It’s looking like it will be about 50/50 in 2011 between labor scheduling/T&A and task manager.

But, as mentioned earlier, many customers are selecting all of our solutions, and implementing them in order of what their most important business needs are. Because we built all of our products so that they are easy to integrate with each other, we provide our customers this flexibility.

PJ: What is your message to retailers where task management is not the top priority? In other words, how do you compete with the broader WFM suite providers (e.g., that also offer talent management, etc.)?

Reflexis: Scheduling the right person at the right time is no longer sufficient by itself. The real pain retailers need to solve is to have the right person scheduled at the right time, and doing the right thing to increase sales and improve customer service.

PJ: How did you justify your foray into developing your own T&A software, much later than others and in an already crowded (and perhaps commoditized) market?

Reflexis: Our customers told us the ROI they were seeing in stand-alone point solutions had flatlined. By offering an integrated platform that includes T&A and labor scheduling, we make it easy for retailers to do things they could not do before, such as do what-if analysis of a labor schedule based on pay rates for specific employees that come from the T&A system. This provides much more accurate payroll forecasts, because they are based on actual pay rates, not on average hourly pay estimations.

PJ: Given your huge R&D investment (40 percent of your revenues) and hardly any marketing investments, how do you ensure that the business will be sustainable in the long run?

Reflexis: Actually, about 60 percent of our business is due to customers who left one retail company, went to another one, and recommended Reflexis. As long as we keep meeting customer expectations by implementing solutions on time and on budget that solve their business challenges (as mentioned in Part 1), we’ll continue to win.

PJ: Is there anything you are at liberty to volunteer on the company's future moves, i.e., new functional scope, verticals, etc.?

Reflexis: We discuss on a consistent basis with our customers, analysts, and academia how we can improve our products. We are looking into entering new verticals that have similar business and workforce management challenges that we have solved for retailers.

PJ: What is your exit strategy? Going public or becoming a part of a broader ecosystem/platform?

Reflexis: In the long term, either going public or being acquired, but that is in the distant future. Right now our focus is to continue to delight our customers.

PJ: Can you think of anything else that you would like to add?

Reflexis: We mentioned earlier about how retailers need to do a better job of sensing their customers’ needs before they are even in the store. In other words, retailers should enable their store employees to become proactive instead of reactive. We are in discussions with several potential partners about how we can work together to enable retailers to do this.

Dear readers, what are your views, comments, opinions, etc. about the current economic climate in your region/industry and about your approach to workforce management? What are your best practices as well as experiences with particular retail WFM applications? If you are a Reflexis user, I would appreciate hearing about your experiences with the product and the company.
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