How would data management and data analytics be used to handle transactional customer data and understand online consumer behaviour that could help Mint House achieve frictionless business operations? Identify and explain them based on the tools and techniques. (10 Marks)

Striving for a frictionless experience for the customers, employees, suppliers, or other stakeholders isn't just something that the digital era has enabled us to do. At this point, it's a requirement. Ultimately, the co-authors of this article found that the businesses that will survive after the pandemic are the ones who give us back our time. Way back before Jeff Bezos began delivering almost everything to everyone, there was another open question: Was ordering just a few things at a time from Amazon bad for the environment? The answer is a little surprising. While it's obviously more wasteful and damaging to place several small orders as opposed to fewer larger ones, it's also obvious that having Amazon deliver everything to everyone is a more sustainable option than going to the store ourselves. The Earth is thanking us for keeping our cars in the driveway. (We, in turn, would like to thank every single delivery person on earth.) Maybe Amazon was so named because Jeff Bezos may just reforest not only the Amazon but the planet itself. Who saw that one coming? Now another question arises: Which companies other than Amazon have come into their own during the pandemic and will thrive beyond it? While the idea of frictionless commerce is not new (see Amazon itself), we think that the argument about the forces of frictionlessness is very much so. Ask any CEO today about frictionlessness, and they'll rattle off one or two spots where they are focused on eradicating friction: Making the web shopping experience easier, facilitating data collection from consumers, allowing employees to work from home, or using digital connectivity to help squeeze the friction out of entire systems, such as distance learning or supply chains. The argument goes a step further: Striving for a frictionless experience for your customers, employees, suppliers, or other stakeholders isn't just something that the digital era has enabled you to do. At this point, it's a requirement. If you aren't reducing friction in every part of your business, you will soon be done. The reason is simple: When you remove friction from a process or a system, you give the people in that system back one of the only things that is utterly non-renewable, time. And as more and more time has been ironed out of almost everything we do, the most recent example being the elimination of commuting for much of the planet, people have realized that for far too long they've let someone else choose how they are going to spend their time. Those days are gone. Everyone values their own time more than they used to, and if you think you'll be able to get away with taking more of it than you have been allocated (by leaving too much friction in place), you are gravely mistaken. At the beginning of 2020, a business that offered you a real person in real time to help you with your needs would be considered a luxury and somewhat exempt from the forces of frictionlessness. Nobody was complaining about having an attentive waiter in a restaurant or having a hotel concierge who can tell you about the best restaurants nearby. Those days, before the pandemic started, were the old days. In the Covid-19 era, personal touch has become taboo. The forces of frictionlessness are now making their way into places we used to want or even demand humans. Let's set aside pure e-commerce companies for a second and focus on companies that have presence in the physical world. Some have already taken humans out of the equation. You don't really need to interact with anyone in person to rent a car these days. If you consider which companies managed to figure out how to respond to Covid-19 better than others, it's those who had already merged the digital and analogue components of their business. They're the ones who could pivot midway through the pandemic. A compelling example is Mint House, which has retooled the concept of the hotel. Instead of offering travellers a typical hotel room, Mint House converts former multifamily luxury apartment buildings, an idea that founder Will Lucas landed on when he realized consumer tastes were gravitating toward Airbnb-style accommodations. His average room size is three times that of the typical hotel room, with full kitchens and washer/dryers. When we asked how the company was faring during the pandemic, Lucas said, "It's funny that you're calling me to talk about frictionless business for your article, because I remember having the words frictionless luxury on the first slide of Mint House's fundraising presentation.' It all started back in 2017, when Lucas began trying to understand why it is that airports were able to do away with the mandatory in-person check-in process where we had to go to the front desk at the airport to get our boarding pass (and that was done 15 years ago) and yet 98% of hotels are still requiring a mandatory check-in process today. Turns out there are some interesting structural reasons that exist in the industry that make it very difficult (not impossible, but very difficult) to implement technology through the operating model. Today, Mint House's main edge over other hotels is that they have leveraged technology from start to finish to power the whole consumer experience. They've never had in-person check-ins or checkouts; you do it all on their app. They also have a bare-bones staff on location. Most guest requests don't require a person on site. The refrigerator is stocked with your customized order as well. "We're objectively safer in today's environment," says Lucas. "You don't even have to leave, and maybe you can deal with someone else to get your favourite amenities." The average four-star hotel spends 42.5 percent of revenue on labour. Mint House spends 10.5 percent. When Covid-19 hit, Mint House, like everyone else, saw bookings fall off a cliff and cancellations go through the roof. By the end of March, they had single-digit occupancy booked for May. Lucas was forced to lay off 20 percent of his team to try to save the company. At that point, though, a frictionless infrastructure allowed them to pivot. They pitched their no interaction check-in model to various target groups, including medical professionals, who soon made Mint House a home away from home. They became an office away from home for people who didn't want to work from home, and a home away from home for high-risk people who didn't want to return home and risk their families. Almost as quickly as reservations had vaporized, they reappeared: Average nightly stays went from 3 days to 21, and occupancy in April and May of 2020 was 52 percent and 68 percent, respectively, compared to an average of 15 percent for urban upscale hotels. It's not just Mint House that's thriving. It's most digital-first companies that have embedded a frictionless philosophy into their approach. Consider the men's athleisure (casual clothing designed to be worn both for exercising and for general use) company Mack Weldon. When the pandemic started coming to a head in March, CEO Brian Berger told us, the company braced for the worst. It expected customers to disappear and the economy to tank. And that was coming off a tough competitive backdrop anyway: For those in the online growth-advertising space, competition was high, the price of online advertising was high, and it was getting increasingly hard to scale. But then, as the broader economy ground to a halt, the cost of advertising plummeted, both online and off. For a subset of companies in certain categories, as customers settled into a "weird state of capture" in front of their screens, he said, they experienced a surge in demand. Berger told us that sales of key categories, such as men's sweatpants, were 30 to 50 percent above what they'd forecasted. But it wasn't just that. Everything turned in their favour: Advertising costs fell, demand rose, and conversion rates (the website visitor who becomes a buyer) rose. "It was the perfect formula," he says. How can a company sustain the higher performance that lands in its lap in a situation like Covid-19? It comes down to marketing prowess. Can you capitalize on opportunities? At Mack Weldon, they took the wins from online and redeployed them to radio and television. Both traditional realms suffered an exodus of major advertisers, and the company was able not just to find the right places to advertise but also to negotiate compelling deals. All told, the company's blended customer- acquisition costs have fallen between 30 and 40 percent since March 2020. And while they thought they'd be slashing budgets just a few months before, the marketing department is still spending at or above levels they'd forecasted pre-Covid-19, without any adjustments to the plan. They've handled the whole thing frictionlessly. Of course, there is friction standing in between many companies and frictionlessness. Not everyone can become Mint House overnight. So, what's the most frictionless way to become frictionless? If you're thinking that this all sounds like too much, remember that most of us just learned it's nothing of the sort. After a few weeks of wondering just how we were going to get work done while locked at home, those of us whose work didn't require being somewhere specific all eventually figured out how to get it done. Again, in a few weeks. In fact, the ease with which most of us in the information economy adjusted to the new normal has expedited even more frictionlessness to come. Most of us already preferred one airline, hotel, or other businesses that reaches us through the web, because of something about the digital component of the consumer experience. Now that we've all simultaneously realized the benefits of the digitization of office life as we knew it, the demands for a frictionless workplace are going to come like a tidal wave. But there's nothing to worry about because we should know how to do this. Friction needs to be eradicated everywhere you find it, and the co-author of this article did it successfully to give a good example of how it can be done. Lemieux (the co-author) founded direct-to-consumer home decor start up The Inside, in 2017 with the help of Kirsten Green and $1.5 million in seed funding from Forerunner Ventures. Armed with over a decade of industry knowledge, Lemieux found a digital printer able to print onto natural fibres, to residential hospitality standards and installed it in a factory she knew to be particularly nimble in the suburbs of Chicago. Using this technology, The Inside can create on-demand, custom furniture without holding any inventory. And the company has never looked back ever since, having opened new factories elsewhere as well to help with the surging demands. A customer can expect their furniture to arrive in fast-turnaround time: every piece is delivered within two to three weeks, since The Inside makes all its products in factories in North Carolina, Illinois, and Pennsylvania that ship directly to the customer. With most custom furniture brands, the wait is typically several months. As the company grew, Lemieux moved offices into a shared space in New York's Soho District in July 2018. Just over a year later, she realized that she wasn't attacking friction anywhere near as much as she could and moved again. In that second move, The Inside shed office phones, a showroom, all sorts of IT equipment, including printers and servers, as well as a rusty old elevator. Everything but computers and smartphones. Although Lemieux and the Inside recently parted ways in August 2020 (partially a result, she says, of the fact that she was becoming less engaged as the company aged out of its initial burst of growth), she cited that those essentials (computers and smartphones) were sufficient to handle its fast-fashion furniture business. Of course, interior design and furniture have always been influenced by trends in the fashion industry, but with the advent of social media, Lemieux believes that today's millennial consumers are treating their homes much more like their wardrobes, constantly bringing in new styles and updating their look. After all, homes are increasingly the backdrop to selfies and carefully art-directed Instagram posts. The $150 billion home furnishings market is ripe for a brand that can deliver customized products quickly and affordably to this millennial consumer. Right now, millennials make up 66% of first-time home buyers, and they are 34% of all home buyers. And 66% plan to purchase a new home within the next five years. Research also shows that this generation spends $1,500 on their living rooms alone, which is more than previous generations spent when they were at this stage in their lives. "In the past, there was this sense that you would decorate your home and be done, but to the modern consumer, the home is never finished: It's always a work in progress. We are constantly changing the way it looks, rearranging the furniture, bringing in new pieces, changing the colours of our walls. "It's not that hard to achieve frictionlessness. It's also way cheaper once you get there. Friction is what costs you; frictionlessness is priceless. In that way, it's very much like love: They both seem hard to find, but they're not. All you must do is look around you. And once you do that, you will find that everything is way easier than you ever thought it would be. Until recently, Mack Weldon had put off a move into opening a physical store because the necessary and rising costs of online advertising were eating too much of the company's marketing budget. The company has grown its business primarily via mackweldon.com and a handful of thoughtful selling partnerships including The Shop at Equinox, J. Crew, Todd Snyder, and Nordstrom. But with online showing improvement across all metrics, it looks like the digital business is going to fund the company's physical presence, with the opening of its flagship store in New York City's Hudson Yards when the right moment presents itself. Technologically driven, the store displays the Mack Weldon website on tablets to showcase information on the innovative fabrics used, loyalty programs offered, and company promises. Berger explains opening this store aligned perfectly with the company's mission to create a more convenient customer experience. This rings true especially for millennial shoppers who prefer a blended model of digital and physical experiences. The cohort gravitates toward a mix of trends, enjoying the speed of physical shopping experiences with the information and options available online. So, did Mack Weldon do well with its profits and sales from the Hudson Yard store? Yes, they totally crushed the numbers they had forecasted with the Hudson Yards store (they significantly exceeded the forecasted figures). But it turns out that they didn't need to staff a retail store to hit their targets. Their customers apparently don't require that staff, either. A flagship store is about more than sales, of course, but when it comes to digital hospitality or retail, it turns out that as customers, we want, more than ever, a frictionless experience where we get everything, we want with zero people involved. The digital-first company delivers exactly what we want exactly when we want it to exactly where we want it, and we want it all now