Making The Case For Store IT Upgrades

The competitive race to offer a superior customer experience through digital technology often hits a familiar bottleneck: aging and insufficient IT infrastructure. Self-service kiosks, digital signage, wireless POS, tablets with productivity enhancements and more require communications and networking capabilities that weren’t on the radar when stores needed only POS processing and basic phone lines. Fixing that requires infrastructure investment. How to make the case?

Executive management’s eye on the bottom line isn’t moved by the fact that “everyone else is doing it,” even though every retailer with a serious focus on the customer experience is, in fact, doing it. It’s far more prudent to build the case for store IT upgrades by leveraging two proven elements for a successful outcome:

1. Drive business value up by aligning IT projects with marketing priorities.
2. Drive IT project costs down by leveraging new, more flexible infrastructure.

The first element, aligning upgrades with marketing priorities, acknowledges the fact that implementing new technology for its own sake runs substantial risk that you won’t get to do that again. Nobody wants to be reminded later of having fought for digital signage that customers ignored. When marketing and IT initiatives are in sync, however, great things can happen — like compelling digital signage content that drives shoppers to the deals of the day.

The second element, reducing IT costs with new infrastructure solutions, is a reminder that some of the most important digital technology isn’t directly about the customer experience, but about supporting enhancements to it without breaking the bank. Communications and networking technologies that didn’t exist when stores needed only POS and phones are helping to revolutionize retail by driving the cost of digital marketing down to new lows.

Short version: Business value + cost reduction = ROI. Here’s the scoop on how to get there.

Aligning IT Projects With CMO Priorities

The arrival of digital technologies is sparking a natural alignment of CIO and CMO functions, which increasingly share a professional vocabulary. “Digital marketing strategist” has gone from obscure job title to hot commodity, capturing in three words the blurring lines between IT and marketing.

This is a welcome development for forward-looking CIOs who proactively partner with CMOs to launch digital projects with clear business value. Here are a few examples from EarthLink customers who are meeting specific marketing goals with new technology deployments:

• Having every phone call to every store of an upscale apparel retailer answered by either store personnel or a call center to capture lost sales, made possible by implementing a new voice over IP (VoIP) system.
• Eliminating long food-court order lines, which drive customers to competitors at peak times, by a fast-food retailer that deployed mobile POS for line-busting.
• On-floor stock look-up and delivery-time checks via tablet for a mattress retailer, so that a salesperson can tell an interested customer lying on a mattress that she can be sleeping on it tomorrow.

There are many more options for enhancing the customer experience, thanks to the explosion of digital solutions. The key is for IT and marketing to become joined at the hip and identify where they can best dovetail their goals and efforts.

Driving IT Costs Down With New Infrastructure

The solutions the CIO and CMO jointly advocate will inevitably impact the infrastructure needed to run stores. The best initial answer to “What will this cost?” is, “A lot less than in the past.”

New high-performance network and communications technologies are available at much lower cost than previously, and managed cloud hosting delivers faster, more efficient upgrades to applications and services. To leverage these breakthroughs for optimized investment, follow these five steps:

1. Choose the right network access type based on applications and location. Big stores with real-time applications may require T1s, but can use DSL or cable for backup. Smaller stores can fare perfectly well with far less costly high-speed DSL combined with wireless backup.
2. Prioritize applications with Class of Service (CoS) to maximize bandwidth use. CoS makes it possible to run multiple apps on a network with no problematic degradation of services, even during peak usage, to avoid expenditures for excess capacity.
3. Converge voice and data on a single network. Why pay for two networks when new technology eliminates the need? In addition to costing less, VoIP can deliver a wealth of digital advantages, such as advanced call routing throughout an entire enterprise.
4. Integrate security for PCI compliance. With the coming of PCI DSS (Payment Card Industry Data Security Standard) Version 3.0, it’s more important than ever for PCI compliance to be a top priority. Moving to a cloud-based firewall with MPLS eliminates the need for firewalls at every store and enables the private transmission of credit card transactions directly to the processor.
5. Connect stores to the cloud via private MPLS. By moving to the cloud, retailers can upgrade infrastructure without large capital outlays, and pay for only what they need, when they need it. To ensure fast, reliable and secure access, retailers can connect directly from the stores to the cloud via their MPLS networks.

A Final Note On Marketing-Driven IT Investments          

Gartner estimates that by 2017, the typical CMO will spend more on IT than the CIO does. For many progressive retailers, that spending eclipse will happen much sooner.

As marketing increases the purchase of technology and services from its own capital and expense budgets, the degree to which those expenditures are made outside the control of the internal IT organization vs. in conjunction with internal IT will depend largely on the CIO-CMO relationship. CIOs who join at the hip with CMOs will be in the best position not only to influence the positive outcomes of deployments, but to leverage those marketing dollars to relieve the strain that has plagued technology budgets since the invention of IT.

If you haven’t already, now is a great time to begin forming that alliance.

Greg Griffiths is the Vice President of Retail Solutions for EarthLink Business, where he leads the team of technical experts responsible for designing network solutions for large enterprise customers. Prior to joining EarthLink, Griffiths was Vice President of Marketing for New Edge Networks, a leader in IP-based WAN network services that was acquired by EarthLink in 2006. At New Edge, Griffiths led the company’s strategy to focus on the retail industry, and held overall responsibility for all aspects of marketing including branding, communications, demand generation, and channel strategy. Before joining New Edge Networks, Griffiths held operations and executive positions with Eschelon Telecom of Oregon, Frontier Communications, and Enhanced Telemanagement.