In The Headlines

Mobile Apps Are Changing the Business of Repair

Field service problems are something everyone is familiar with. At the worst time imaginable, your washing machine starts making noises it should not and then stops working completely. You carve four hours out of your day to await a technician, who shows up late and then discovers that a needed replacement part must be ordered.

It is the kind of snafu that companies are increasingly trying to avoid by adopting software that diagnoses equipment problems like cracked pistons—sometimes before they happen—and helps workers better schedule house calls. Instead of using paper, spreadsheets, and email, the nation’s estimated 20 million field technicians—the people who fix appliances and tinker with wind turbines—are shifting to mobile apps for scheduling, submitting reports, and identifying the parts they will probably need for upcoming repairs. “The client relationship changes,” says Gary Johnson, a Vice President at shipping and logistics firm Pitney Bowes, of how his service teams can answer questions more quickly and in more detail after his company started rolling out the technology four years ago. “And our employees benefit hugely.”

Business interest in field service apps and data services is fueling a parallel boom in supplying the technology. Sales in the category are expected to reach $5.1 billion by 2020, more than double the figure from five years earlier, according to research firm MarketsandMarkets. General Electric, for example, is betting big that the technology will be in greater demand in the coming years. In January it closed a $915 million acquisition of ServiceMax, one of the better-known players in the field service technology sector.

GE plans to link offerings from ServiceMax with its existing Predix technology, which collects data from Internet-connected industrial equipment and then predicts when it will need maintenance before it actually breaks. Microsoft, SAP, and Salesforce.com all sell rival apps and services, as do niche players like ClickSoftware.

Before the acquisition, GE had firsthand experience with ServiceMax as one of its customers. Over three years, GE has saved almost $100 million by using the software to coordinate schedules more efficiently for its army of 40,000 repair and maintenance workers, says Jim Fowler, GE’s Chief Information Officer. If you consider what the industrial conglomerate cut in expenses over that time by also more accurately predicting what parts were needed for repairs, the savings grow to $200 million for just the GE Power services division, which does maintenance for power-plant and water-treatment gear that the company sells. “It’s the right parts at the right place at the right time,” Fowler says.

Of course, getting field workers to change from using pen and paper is not always easy. And the initial cost of implementing field service tech can cost millions if an organization needs to buy mobile devices for thousands of workers. Still, Pitney Bowes is a big believer in the technology, which, Johnson says, has improved the company’s overall efficiency. For example, field workers now get updates about what repairs they will likely have to make for customers so they can bring the needed parts with them. And because they have tablets or smartphones, workers can look up any information they need about how to fix problems and, as a result, do their jobs more quickly. Those benefits translate into another bonus: Field technicians can schedule appointments within smaller time windows—welcome news for customers who hate waiting around—because technicians can more accurately predict their arrival.

Adopting field service technology has also helped Pitney Bowes more easily collect data that can reveal ways to make its business operate more smoothly. For example, the company can identify which teams close customer tickets the quickest and whether a product should be redesigned, based on a flood of customer requests for repairs. Yes, the analog era is quickly ending for field technicians who make home, office, and factory calls. For many of their customers, the changes cannot come fast enough.

Citations

1. http://for.tn/2l0aNsm – Fortune
2. http://bit.ly/2lOAJvp – Business2Community.com

Smart Mirrors: Retailer’s Next Tool to Match e-Commerce?

Since e-commerce began threatening stores during the last decade, retailers have been trying to make their locations operate more like the web. Yet despite splurging on the latest bells and whistles, they have mostly failed and fallen further behind their online rivals. Recent efforts—such as QR codes, which call up merchandise information when scanned with a smartphone, and internet kiosks, where shoppers can browse a retailer’s online store—are either too far ahead of, or behind, shoppers technologically, so they have not been embraced, says Brendan Witcher, an expert on retail strategies at research firm Forrester. Plus they do little to improve the actual shopping experience, he says. “If you just deliver tech for tech’s stake, people will test the novelty of it, but it won’t stick.”

Oak Labs, a startup founded in 2015 by former EBay executives, is focused on fixing what is wrong with brick-and-mortar retailing. The San Francisco-based company started with the dressing room, which seemed as good a place as any given that shoppers have long complained about its lines, lackluster service, and bad lighting. What happens inside those few square feet of real estate matters—a lot, in fact: Shoppers who use fitting rooms are almost seven times more likely to make a purchase than those who simply browse the sales floor, according to research by Alert Tech.

Oak Labs’ first product is a dressing-room mirror that can offer an experience like this. A woman enters with jeans and a blouse. Sensors read the radio-frequency ID tags on the clothes and display the items on a touchscreen embedded behind the glass. A recommendation engine—like those ubiquitous online ones—suggests complementary pieces such as shoes and a belt. The customer can choose a language other than English and adjust the lighting (options might include “dusk” and “club”). If an item does not fit or the color is not right, she taps the mirror, which triggers a request on store clerks’ mobile devices. The technology is not designed to replace salespeople, says Healey Cypher, Oak’s Chief Executive Officer and a Co-founder: “We want to make their jobs easier, make them more effective.”

Retailers can buy one of Oak’s mirrors for $25,000 (the price falls for larger orders) and pay a monthly licensing fee for the software. Or they can sign a five-year contract and pay $7,000 to $9,000 a year. The mirrors are being tested by a handful of upscale retailers, including Ralph Lauren and Rebecca Minkoff. Early results show that people buy more while spending less time in the dressing room, Cypher says.

Those stats may improve as the company rolls out a feature in coming weeks that allows shoppers to wave their phones in front of the mirror and make a purchase using Apple Pay or Android Pay. If an item is not available, a customer can access the retailer’s website with a few taps of the mirror, purchase it, and have it delivered. “There is that shopper who wants a private, anonymous experience of self-service,” says Rebecca Minkoff co-founder and CEO Uri Minkoff. “That’s the e-commerce experience. Why not carry that into the store?”
This type of technology could help stores catch up to data-rich e-Commerce. Rebecca Minkoff, which has Oak’s mirror at two of its shops, learned that a leather jacket was tried on 70 times in a week but never purchased. Half the shoppers asked for a different size using the touchscreen, meaning there was a fit issue. “You can really learn some truths other than what’s sold,” says Uri, who, along with his sister, has a small stake in Oak Labs and advises the company.

Even with the promise of new data and a sales boost, the likelihood of a product such as this going mainstream remains an open question, says Forrester’s Witcher. Amazon.com made a splash last year with plans for a store that eliminates checkout altogether, but the e-commerce giant has money to burn. At the Rebecca Minkoff store in downtown Manhattan, sales associate Mercedez Yasmeen says the mirror has been a big advantage. Introverts love that they are not bothered, and extroverts love showing off the mirror to the point that they will have “Snapchat parties” in there, she says. And the language options are a big help when tourists visit the store. On a block that includes luxury titans Louis Vuitton and Fendi, “it’s nice to have something that sets us apart,” she says.

Citations

1. http://bloom.bg/2lT7Xai – BusinessWeek
2. http://cbsn.ws/2lOwO1q – CBS News

The Good News Is . . .

• Americans bought more new homes in January, a sign the housing market is healthy despite higher mortgage rates. The Commerce Department says new home sales rose 3.7% to a seasonally-adjusted 555,000 units. That is 5.5% higher than a year ago. Solid job gains and some signs of rising wages have driven up consumer confidence. Sales of existing homes jumped to their highest level in a decade, according to data released earlier this week. Analysts suggested a jump in mortgage rates since the fall may be prompting many buyers to accelerate purchases to get ahead of any further rate increases.

• Kaiser Aluminum Corp., a leading provider of wireless telecommunications in the U.S., reported earnings of $1.27 per share, an increase of 111.7% over year-earlier earnings of $0.60 per share. The firm’s earnings topped the consensus estimate of analysts by $0.11. The company reported revenues of $332 million, an increase of 4.7%. Management attributed the results to strong growth in orders from the aerospace segment.

• Burger King owner, Restaurant Brands International, said it will acquire the Popeye’s restaurant chain in a deal valued at $1.8 billion. Under the terms of the deal, Restaurant Brands will pay $79 a share in cash for each share of Popeye’s. Analysts believe that the Popeye’s acquisition would provide Restaurant Brands with a concept that provides steady organic and unit growth in both the North American and overseas markets. Popeye’s has shown stronger performance worldwide in the past two years compared to Restaurant Brands’ Burger King and Tim Horton’s chains.

Citations

1. http://bit.ly/NyyDuL – U.S. Dept. of Housing and Urban Development
2. http://cnb.cx/2lwnm3s – CNBC
3. http://bit.ly/2muw66F – Kaiser Aluminum Corp.
4. http://cnb.cx/2m7TxmS – CNBC

Planning Tips

Guide to Home Appraisals for Refinancing Your Mortgage

When you refinance your mortgage, everything hinges on the appraisal. If your home’s value is so low that you are underwater, you cannot refinance. If your appraisal value puts your home equity at less than 20%, you will get stuck paying for private mortgage insurance or bringing cash to the table to do a cash-in refinance. What is more, you might not get the lowest interest rate, since lenders consider borrowers with less equity to be riskier. If you are thinking about refinancing, you should understand the appraisal’s essential role in the process. Be sure to consult with your financial advisor to help you plan for your refinancing home appraisal.

What Is a Home Appraisal? – An appraisal is a licensed or certified professional’s opinion of a home’s value provided by a disinterested third party. The appraiser gets paid for providing the service of valuing your home but has no stake when it comes to whether you are able to refinance as a result of the value he or she arrives at. In a refinance transaction, the appraisal protects the bank by ensuring that it does not lend the borrower more money than the property is worth. If the property later goes into foreclosure for any reason, the lender wants to be able to resell the property and get its money back. The appraiser visits your home to measure its dimensions, examine its amenities and evaluate its overall condition both inside and out, taking photos of the exterior, the garage, and every interior room. He or she then examines the records of properties similar to yours—ideally properties in your neighborhood that have sold recently. Based on the home visit and these records, the appraiser arrives at a professional opinion of how much your property would sell for if you put it on the market. The bank uses this value, along with your income, assets and credit history, to determine how much it will lend you.

How Home Appraisals Work in Today’s Market – Three types of refinance transactions do not require an appraisal. Neither the Federal Housing Administration’s streamline refinance, nor does the Veterans Administration’s Interest Rate Reduction Refinance Loan require one. In certain cases, the Home Affordable Refinance Program does not mandate one, as well. All other types of refinance transactions require an appraisal. Federal regulations dictate how lenders and appraisers must behave throughout the appraisal process. They require appraisals to be conducted independently and free from inappropriate influence and coercion. Loan officers and brokers cannot select the appraiser, nor can the borrower. Borrowers also cannot submit an appraisal that was performed for a different lender, though they may tell the bank that another appraisal exists, and the bank can request the appraisal report directly from the other institution. The lender often will order the appraisal through a third party called an appraisal management company. The appraiser should have local knowledge of the area and is expected to follow the Uniform Standards of Professional Appraisal Practice issued by the Appraisal Foundation, a professional organization, though these standards are not law.

Home Appraisal Fees – Appraisal fees vary by state, but appraisers must charge customary and reasonable fees for the area. Expect to pay $300 to $500 for an appraisal of a standard single-family home. More complex properties are more expensive because the inspection takes more time. You must pay the fee up front at the time of the appraisal, not at closing; regardless of whether your loan closes, the appraiser still did the work. While the fee may seem worthwhile if it enables you to get the refinance terms you want, it can seem like a waste of money if a low appraisal means you cannot refinance.

Improving Your Chances of a High Appraisal – The value the appraiser gives your home largely depends on the recent sales prices of comparable properties. Having your home and yard in a neat and clean state is important to avoid the appearance of wear and tear on the property. The appraiser evaluates the following:

• exterior and interior condition
• total room count
• functionality, including interior room design and layout, and functional obsolescence
• improvements to kitchens and baths, windows, the roof and the home’s systems (heating, electrical and plumbing) over the previous 15 years that make the home more up-to-date, functional and livable by today’s standards
• condition and age of the home’s systems
• exterior amenities such as garages, decks, and porches
• location
• unappealing features, such as an exterior appearance that is inconsistent with the rest of the neighborhood.

It’s a good idea to point out features that may not be immediately apparent that could potentially add to the appraiser’s opinion of value.
Before the Appraiser Comes – Preparing your home for an appraiser’s visit is different than preparing it for a prospective buyer. When you are opening your home to a prospective buyer, you want to trigger emotional responses. As a seller, you want that buyer to be able to imagine how happy and comfortable they will be there. No such subjective considerations apply to an appraisal. But freshening up the home’s paint, both inside and out, can help, as can clearing away clutter to allow full access and viewing of all areas of the home, including the basement. If the tax records are incorrect, point that out. Otherwise, it is the appraiser’s responsibility to discover problems and ask questions where warranted.

Citations

1. http://cnb.cx/1K68zBn – CNBC
2. http://bit.ly/2lEMRgm – Bankrate
3. http://bit.ly/1k5xkfM – Investopedia
4. http://bit.ly/2lEOvyi – LoanDepot.com
5. https://nerd.me/22wlTqM – NerdWallet.com