When one software company buys another, it is very rare to find a combination that doesn’t result in some overlap or some pieces that come with the deal that just don’t fit right into the vision of the combined footprint. At RedPrairie’s user conference last week, it became clear that they pretty much know what they’re going to do with almost every single piece they’ve acquired in the last year — and their plan to get there is better measured in months than in years.

There is one example in particular that struck me, and that is, bizarrely enough, clienteling. I bet you, like me, thought that clienteling as an application was both limited to high-touch retailers and pretty much a covered topic — not much happening on the clienteling front.

Wrong. In fact, RedPrairie has a very particular view about the value of clienteling, and has very interesting plans for how something that may initially sound like a CRM app actually fits hand-in-glove with the company’s retail strategy.

To understand it, you first have to understand how RedPrairie views workforce management. Just as RSR has been saying for a while now, RedPrairie views employees as assets, and labor budget as an investment in those assets. What is the return that is expected? Why, sales naturally — but in the context of labor, you should be thinking of those sales in terms of conversion rate.

Last year I wrote up a case study presented by Finish Line at RedPrairie’s user conference, where they examined and found a direct correlation between the amount of time an employee spends with customers in the store and conversion rate. It’s a Goldilocks kind of correlation — too much, and you’re investing labor that doesn’t yield a return, and too little, and you’re hurting any chance of hitting your sales goals. And it’s not about straight hours of people in the store — it’s about an investment in selling time. If an employee is doing inventory or straightening racks, they’re not spending time with customers and it doesn’t count against time to conversion.

The idea is catching on, and more retailers are looking at labor through the lens of conversion, but it’s a hard view to take on the business. Why? You have to start with what kind of customer experience you are delivering. That’s tough because while many retailers can express what they think their customer experience strategy is, what they’re actually delivering in stores may be well off the mark, and at least in my personal experience, I’ve found that they don’t tend to ask the right questions in customer satisfaction surveys to get to the issues.

So, some retailers are starting to invest in labor, with the intention of goosing conversion and thus sales. When the investment occurs, but the sales don’t come, that leads to some hard questions: where did we go astray? Are we getting the traffic we need to hit our expected conversion rates? Are employees actually spending enough time with customers to help them? Are we really delivering on the customer experience we’ve set out to deliver?

According to RedPrairie and its partner, Workforce Insights, when some retailers start looking at labor through the lens of conversion rate, they’re finding that over the last decade they’ve cut labor to the point where they don’t have enough associates on the floor to have any shot at achieving their customer service strategy. In some extreme cases, execution management has revealed that there isn’t even enough labor in stores to deliver on non-selling work, even if no customers walked through the doors. I know I can think of a few customer service experiences that I’ve personally had that reflect this reality.

Retailers have created a Folgers Coffee moment for themselves when it comes to labor — you know, the one that Starbucks exploited to radically change the face of coffee beverages (and the price). If you’re not familiar with the analogy, store-bought coffee companies, over the course of years, decades even, replaced their coffee with fillers in a race to a low-price floor. Each incremental cut yielded bottom-line benefits, and the overall knocks to product quality year-to-year were so subtle that they were easy to ignore. But eventually, store-bought coffee became so bad that when an upstart Seattle company came in offering premium coffee, with a premium experience to go with it, consumers not only rushed to pay the premium price, they did so happily — gratefully.

When it comes to the customer service experience, I believe retail has hit its Folgers moment. But how do you break the cycle? This is where RedPrairie’s two-pronged strategy between execution management and clienteling suddenly looks very unique — and promising. First, execution management not only helps retailers reveal whether their expectations for associates are realistic or not, it helps them improve non-selling processes — by helping retailers streamline or eliminate store tasks that just aren’t efficient or value-added in the store. But in the larger context of workforce management, when you have enterprise workforce management visibility, you can start asking some really interesting labor questions, like, “Should this activity be done in the store or in the DC? “ And it makes sure you have the information you need in order to actually answer that question with a degree of assurance. Is it worthwhile for a store employee to put apparel on hangers, or (even though it might cost a little bit more to ship it this way) is it actually more effective to have DC people do it for less and give that time back to the selling floor?

The second prong to the approach is clienteling. Once you’ve made sure that store employees are focused on the right work — selling — how do you make sure that they have the best tools at hand in order to excel at that task? Well, there’s clienteling. And it doesn’t have to be the in-depth CRM that I always imagined. What percent of store help involves locating products? Either on the shelf or in an out of stock situation? If you think of either in-store save the sale or in-store fulfillment of a sale that comes from another location as part of the customer service experience, then all of a sudden you have Clienteling Lite — which, for RedPrairie is called Store Center and is truly a light version of the clienteling asset it gained through Blue Martini/Escalate.

Pretty cool, right? I definitely thought so. Suddenly all that stuff that RedPrairie has been saying about the importance of considering labor and inventory together makes perfect sense.

As a coda, in a session between the retail marketing team at RedPrairie and some of us retail analysts, there was a somewhat perplexing exchange with a couple of my colleagues from other analyst firms. Both of said colleagues (from two different firms) were pressing RedPrairie on the advisability of a strategy that enables ship from store. Both of them seemed to be coming from the viewpoint that it’s too expensive to ship from stores, both from the shipping/handling costs (you’re adding another shipping cost on top of product that has already been shipped to a store and has that cost built into it), but also in terms of the opportunity cost of having a store associate fulfill a function that a cheaper DC person could probably do more efficiently — that it would result in a negative impact on conversion rate.

My gut reaction was “But isn’t ship from store converting a sale? “ Setting costs aside for a moment, if you’re able to capture a sale you might otherwise have lost because you can access inventory you might otherwise not have been able to get to — I mean, that sounds like you’re IMPROVING conversion, not undermining it. But — it does require a more holistic view of the world than just the four walls of the store.

However, you can’t set costs aside forever, so let’s get to that. First of all, I’m not saying that you should be shipping canned peas from grocery stores. There are specific retail situations where it may very well be more profitable to ship from store than lose a sale — especially when you’re not far from marking that item down. Especially when the probability that you’ll sell that item at full price — or even a marked down price — at that location gets more remote by the hour. Sounds like fashion to me.

Second, if you start doing a lot of ship from store business, you might find it more efficient to staff for it — and to pay something closer to a receiving person than a sales person while you’re at it. You might find that some stores are better at it than others, or just designed better to support shipping. Yes, I am hedging — you might, you may. But you’ll never know if you just look at the problem from one store’s perspective. You have to look at it from the enterprise’s perspective. To quote Mark Fodor of Crossview, “Why would you not sell something you know you have to someone you know wants to buy on the off chance that another shopper MIGHT buy it eventually? “

And third, there’s the Amazon problem. The Amazon problem is summed up in two words: Amazon Prime. Consumers pay basically a membership fee to get free shipping. I’m really curious as to why I haven’t seen any retailers respond to this — maybe it’s because they can’t leverage their store inventories as well as they’d like, but if it were me, I’d offer a competitive, loyalty-based option, similar to Best Buy’s RewardZone. Buy in — maybe not for $75, but I guess price points will vary depending on the retailer — and get free shipping from both online and store. Hit a certain tier of spending and not only do you get free outbound shipping, you’ll get free returns shipping. If the retailer prices it right, they’ll have funded a portion of where we seem to be headed to begin with: free shipping for all. If people have bought in, they have an incentive to buy from you, if only to make sure they get their money’s worth.

So that was a long rant about an important topic. The main theme that runs through it all, however, is the same: you have to have an enterprise view into these challenges or all you’ll do is sub-optimize. If you think of clienteling as solely CRM, you’ll lose. If you think of ship from store as solely a distraction from store selling — well, I think you’ll lose there too.

We’ll put a link to this article on Facebook this week, so if you have any thoughts on the topic, I encourage you to comment on it there.