In the fast-changing world of retail, the future is never very far away, and preparing for it is a full-time job. The Retail TouchPoints Connected Consumer Series, held March 14 to 17, featured nine webinars that provided attendees with a detailed, data-filled roadmap to a fast-arriving future.
Speakers from Accenture, RSR, EKN Research, Bronto, Aptos and other industry leaders shared actionable insights into such hot topics as:
• Bringing Digital Convenience Into The Brick-And-Mortar Environment;
• Leveraging The Internet Of Things (IoT) in Real-World Retail; and
• Using New Tools To Engage With Connected, Time-Starved Consumers
Recaps of the sessions’ highlights follow this complete list of the #CCSeries 2016 sessions, which are available on-demand:
Bringing Digital Convenience Into The Brick-And-Mortar Environment
Leveraging The Internet Of Things (IoT) In Real-World Retail
Using New Tools To Engage With Connected, Time-Starved Consumers
I. Internet Of Me: Investigating The New Rules And Realities Of Retail Personalization: Personalization Remains A Moving Target For Retailers
Consumers crave personalization, but retailers are continually playing “catch-up” when it comes to actually providing it. That’s the blunt assessment of Nathaniel Fry, Retail Managing Director at Accenture, and he has the data to prove it, from a November 2015 Accenture global survey of both consumers and retailers:
- 47% of consumers can’t wait to receive real-time promotions, but only 7% of retailers send them;
- 42% of consumers want the ability to automatically credit coupons and discounts; 16% of retailers can do this; and
- 37% of consumers want to use a shopping list, in-store item locator or navigator, but while 31% of retailers offer mobile shopping lists, just 4% provide virtual smartphone apps to help consumers navigate their stores.
“Retailers have spent a lot of money on systems that are optimized for the purposes they were built for, but today’s customers expect all those systems to talk to each other,” said Fry during the session titled: Internet Of Me: Investigating The New Rules And Realities Of Retail Personalization. “Consumers don’t want to have to log in and out of multiple systems, or even deal with associates or agents who have to use multiple screens to accomplish something.”
How can retailers achieve the types of personalization shoppers want when customer expectations continue to evolve? Fry recommended creating a continuum of options for different customers’ preferences, from full service to self-service, along with limited service that takes elements from each. The challenge, he said, “is that retailers need organizations and processes that enable this continuum.”
Fry’s co-presenter Shelley Bransten, SVP of Retail Industry Solutions at Salesforce, identified three megatrends that companies need to be aware of as they reimagine retail for the Internet of Me:
- Me2B: “The consumer is now telling the retailer how the game will be played, and the rise of Fitbit, Instagram and Instacart indicate that consumers want retailers to know them and make things easy for them,” said Bransten.
- The Store Strikes Back: “By 2020, 80% of retail will still happen in stores, but 100% of that store-based retailing will be touched by digital,” Bransten continued. “Stores need to be reimagined, as experience centers like Nike’s Fitness Centers; for fulfillment purposes; or as ‘last-mile’ centers, which we see with e-Commerce players opening physical stores.
- Shopping Deconstructed: There are now multiple apps and sites for different elements of the shopping journey, from research and curation through payment and delivery. Retailers need greater agility, Bransten explained, “to build and quickly deploy shopper and employee apps, and to test and learn quickly what will work.”.
Bransten acknowledged that these won’t be easy transitions for retailers, and recommended looking for “the moments of truth that really matter for the customer” in setting priorities. “Consumers want value for their money; product availability, meaning you have what I want when I want it; and their expectations of service and experience. Investing in one of those three will make a difference within your company.”
II. Top Trends And Takeaways From The 2016 Shopper On The Street Surveys: Shoppers Desire Connected, Consistent And Convenient Experiences
Rising consumer expectations have forced retailers to optimize all sales channels: 57% of shoppers made their most recent discretionary purchase inside a store, while 39% most recently made a purchase via a brand’s e-Commerce site. With more channels to browse and purchase from, retailers now must offer:
• Connected experiences across all channels;
• Consistent pricing and promotions in-store and online; and
• Convenient customer service and order delivery/fulfillment options.
To capture shoppers’ attention (and dollars) and stay ahead of the curve, retailers must continue to refine their brand experiences and strive to achieve these goals.
During the session titled: Top Trends And Takeaways From The 2016 Shopper On The Street Surveys, Dave Bruno, Marketing Director at Aptos, revealed interview results from 300 shoppers in three major U.S. markets. The interviews took place on the streets of Los Angeles, New York City and Chicago, with the Aptos team asking shoppers six questions about their shopping experiences.
Amazon Has Growing Role In Purchase Research, Consumer Inspiration
The various ways shoppers research their purchases now has a strong impact on the modern shopper experience. Although 32% of consumers researched their most recent purchase via a web site, 22% specifically researched their recent purchase via Amazon.com, illustrating how Amazon has become a significant early stop along the path to purchase.
Amazon’s growing influence is undeniable, with 39% of consumers turning to the company for product information and inspiration. Considering 44% in total say they go online for this purpose, Amazon clearly has dominant control over online product research.
Three Takeaways Retailers Must Follow
Based on the study results, Bruno provided three takeaways for retailers as their brick-and-mortar and online strategies evolve to meet changing consumer needs:
- Take advantage of every bit of information compiled (inventory, reviews, CRM, related items, etc.) to keep consumers away from Amazon;
- City dwellers like the flexibility and security of lockers as pickup locations, so be sure to account for the unique needs of high-density markets in fulfillment offerings; and
- Take full advantage of stores as fulfillment and pick-up options, but do so carefully. Store fulfillment costs can escalate quickly if not well managed.
While consumers are expecting a mix of connection, consistency and convenience to drive the retail experience, they also are very much into deal-hunting for products. In fact, 74% say price is the number-one motivator influencing them to purchase a product.
When it comes to fulfillment expectations, 56% identify shipping, delivery and pickup flexibility as a top-three purchase influence, while 42% still look to convenience as a top-three purchase influence.
BRINGING DIGITAL CONVENIENCE INTO THE BRICK-AND-MORTAR ENVIRONMENT
III. Demystify In-Store Shopper Behavior With Location Analytics: Creating A Vibrant In-Store Culture Through Store Intelligence
While retailers are reaping the benefits of mobile and e-Commerce sales, some are overlooking data-gathering opportunities in the store that can paint a more complete picture of shoppers and their journeys. The webinar titled: Demystify In-Store Shopper Behavior With Location Analytics revealed how retailers can use store-based intelligence to understand the core of their customers.
“The retail store you know today is about to be transformed into a dynamic hybrid between the brick-and-mortars of the past era with the communications of today,” said Keith Swenson, VP of R&D at Fujitsu North America, who presented along with Sahir Anand, VP Research and Principal Analyst at EKN Research.
Five Tools For Increasing Customer Knowledge
According to Anand, 50% of retailers are unable to uniquely identify in-store customers. To help address this issue, he highlighted five ways to understand the core of the customer through store intelligence:
1. Track Inventory Insights, such as out-of-stock rates, knowing where your inventory turns out and understanding critical selling times. This product data is critical because “abandonment of sales has gone up 2x in stores in the last six to 12 months, compared to online and digital, where it has somewhat improved,” said Anand;
2. Monitor Customer Experience/Traffic, which retailers can correlate with weather and merchandise placement in stores;
3. Improve Employee Productivity/Engagement: “An engaged employee is a master at delivering great service,” Anand noted;
4. Analyze Retail Execution: Retailers need to constantly ask how effective their store plans are, and ensure that key store operations are aligned with customer behavior and insights; and
5. Uncover Omnichannel Insights: Omnichannel has moved beyond simple Buy Online/Pick Up In-Store; today’s consumers want to have every ordering and pick-up option at their disposal, and they also expect easy access to product information.
Solving In-Store Problems With Data
Retailers already are using POS data to better understand customer and employee behaviors in-store. But to gain a more complete picture, retailers also need omnichannel and social media data.
“While 70% of companies capture structured and unstructured data, only 20% of retailers use both data sources in some way, shape or form,” said Anand. “No retailer today is capturing everything they need to in order to get a view of their customers. [Retailers must] go beyond traditional data boundaries.”
In order to access the right data at the right time, retailers must start sharing customer insights with store associates, since they should be empowered to know more than the customer. In general, retailers should be reaping the benefits of in-store personalization and context. Connected devices such as mobile phones, WiFi, in-store cameras and RFID can provide deep insights into creating a seamless customer experience.
“We’re all familiar with the traditional customer engagement patterns, but consider what a world would be like when this is extended to include mobile devices that the customers and the sales associates are always carrying, and which can be smart enough to fine-tune the behavior to the individual context of each person,” added Swenson. “Shopping in the coming decades can be transformed into something we can barely recognize.”
IV. The Digital Disconnect: How To Match Online Convenience In the Store: Align The Store To Match E-Commerce Convenience
With the convenience economy becoming the norm, retailers are being forced to shape their offerings to fit changing consumer expectations. As many as 71% of consumers have said they either “agree” or “strongly agree” with the statement that they find shopping online more convenient than in a store.
The session titled: The Digital Disconnect: How To Match Online Convenience In The Store, focused on the challenges retailers face in bridging this gap between channels and digitizing the brick-and-mortar store. “The way that we do that is by utilizing consumer data and creating that single view of stock to deliver a more tailored and connected interaction with the customer as they walk into the store,” said Paula Da Silva, Senior VP of Sales at CitiXsys. “This includes offering processes such as alternatives when a product isn’t available in the store, rewarding the customers, and certainly creating that nurturing shopper value.”
A consumer study conducted by iVend Retail, the retail management suite platform from CitiXsys, revealed that consumers are more likely to have a problem-free experience when shopping online. While only 50% of shoppers said the in-store experience goes smoothly, 67% said the same about the online shopping experience. By the same token, only 18% of shoppers feel the online shopping experience needs improvement, while twice that number (37%) feel as contented with the in-store experience.
Da Silva recommended retailers move toward creating a single stock pool to meet consumer fulfillment expectations, rather than dedicating stock to each individual channel. While extra “safety stock” typically accounts for 60% of a retailer’s entire stock, the move to a single pool reduces this overstocking by 20%. Other benefits include:
- Avoiding merchandise stagnancy and stock-outs;
- Saving merchandising costs;
- Achieving a single version of merchandise status;
- Better warehouse management;
- Consistent customer service in whichever channel shoppers prefer; and
- Avoiding “store-as-showroom” syndrome.
Debbie Hauss, Editor-in-Chief of Retail TouchPoints, also presented during the webinar, highlighting case studies from brands such as Under Armour, Timberland, Lowe’s, The Home Depot, Pie Five Pizza, Tom’s of Maine and Raven + Lily. Each case study illustrated how these retailers were able to merge the physical and digital sides of their brands successfully. Hauss also discussed the need to enhance mobile commerce offerings as a way to improve the shopping experience across every channel.
“It’s so important to bring mobile commerce into the store to achieve the omnichannel goal of improving the in-store experience,” Hauss explained. “Improve the shopping experience no matter where the shopper is starting their journey, whether it’s at home on a laptop, or on a mobile phone outside or inside the store.”
V. Leveraging Technology To Become An Omnichannel Champion: Cloud Solutions Empower Omnichannel Strategies
Today’s retailers must be nimble and innovative in order to remain competitive. Unfortunately, retail technology can be cumbersome and slow to enable change. But in today’s landscape, retailers must choose wisely and leverage modern technology to empower their business and achieve omnichannel goals, using tools such as:
- Mobile POS;
- Predictive analytics; and
- Updated retail associate platforms.
These were among the topics addressed during the session titled: Leveraging Technology To Become An Omnichannel Champion. The discussion featured insights from Jennifer Sherman, Senior VP of Product and Strategy at Kibo Software.
Consumers Demand Delivery Options
The digitally demanding consumer is here. More than 60% of U.S. consumers research products online before they go in-store, according to research from Kibo. One in four consumers look up a product’s availability for in-store pick-up, and more than half (60%) will make a purchase elsewhere if their preferred method of delivery is not available from their regular retailer.
“Customers expect to see the product,” Sherman said. “If it’s not in-store, they’re not coming. If you can get them in the door, they will buy more and spend more than planned, but you need to get them in the store.” But there is a caveat: “They will also go spend that money at your competitors; they will go to the better source.”
Cloud Solutions Enhance Flexibility
By opting for cloud-based, third-party solutions, today’s retailers are able to reduce IT burdens and hardware costs, and also scale up or down quickly. Cloud solutions also are linkable to mobile POS systems. Associates can fulfill orders with greater accuracy through advanced order routing and analytics, enabling the retailer to operate with less “dead” stock. Cloud-based solutions also offer retailers the flexibility and safety of upgrading their systems without utilizing a large IT department or replacing expensive and cumbersome hardware.
To maximize cloud benefits, Sherman recommended that retailers take advantage of solutions that implement next generation innovation in predictive analytics. Such solutions enable retailers to:
- Heighten product relevance through the use of big data;
- Anticipate next clicks to deliver ultra-relevant products and content;
- Capitalize on hidden shopping patterns to drive engagement and sales; and
- Anticipate replenishment and re-purchase levels.
Another area that’s critical to omnichannel success is advanced order routing. Responsive order routing tools can easily be configured to maximize inventory usage and profitably manage orders. In addition, changes in order routing can happen in real time, or different environments can be preconfigured to be called into action at a predetermined time, such as Black Friday.
With these innovations, cloud-based solutions bring retailers closer to customers’ desires to have their shopping needs met, exceeded and perhaps even predicted.
“Omnichannel gives us a holistic customer experience,” said Sherman. “Look at the lifetime value of customers across all channels. See what is working and what is not working. Above all, ask yourself, ‘How are you serving your consumers today?’”
VI. Tackling The 4 Pitfalls Of In-Store Fulfillment: Maintaining Profitability While Meeting Customer Expectations
Retailers know that in order to survive and thrive in today’s competitive landscape, they must get products to shoppers as quickly and seamlessly as possible. To meet the fulfillment demands of today’s shoppers, many stores will be transforming into fulfillment centers, enabling retailers to leverage inventory from the enterprise.
However, many retailers overlook obstacles and poor customer experiences that stand in the way of a successful in-store fulfillment strategy, including:
- An incomplete view of the supply chain and product availability in stores;
- Islands of technology in the store;
- Limited integration between store support systems; and
- Inefficient processes for store associates.
These were among the issues addressed during the session titled: Tackling The 4 Pitfalls of In-Store Fulfillment, featuring insights from Roger Falkenstein, Territory Manager of HighJump.
In-store fulfillment can help retailers meet rising customer expectations around product delivery, but companies need to ensure that they maintain acceptable profit margins when they add new service offerings. “Profitability is the challenge for any retailer,” said Falkenstein, adding that the four basic principles for keeping costs under control are:
- Eliminating inefficient task management by providing exceptional leadership;
- Achieving a complete view of inventory;
- Having a solid POS system in place; and
- Establishing good communication across channels.
Kicking The Fulfillment Buckets
To operationalize these principles for in-store fulfillment, retailers need integrated, scalable systems that eliminate separate “buckets” for:
- Store shelves;
- In-transit and back office stock;
- Distribution data; and
- Merchandising allocation.
In addition, retailers should work toward centralizing data from major operational and back office systems, including POS, ERP, order management systems, planograms, warehouse management systems and store applications.
Muddled or slow in-store processes will drive customers to another retailer’s door or web site. This is increasingly likely during holiday rushes, when sales volumes through e-Commerce channels can increase five to 10 times compared to the rest of the year, said Falkenstein.
Within the store, retailers need to have real-time access to inventory location and availability, including perpetual store inventory, to ensure shoppers are satisfied.
Well-Trained Associates, Strong Leadership And Communication Are Key
In addition to keeping inventory updated and available, retailers must address inefficient task management practices, Falkenstein said.Sales associates, whether seasonal or full-time, need to be properly trained in order to perform efficiently and avoid being frustrated when facing today’s highly knowledgeable customers. This can only be achieved through strong leadership.
Above all, “customer experience trumps everything,” Falkenstein noted. For example, retailers need to clearly communicate any order changes to customers and to provide confirmation for ordered products. “The ultimate goal is to provide the high level of service that your customers expect. Information communicated across the enterprise needs to be accurate and in real time to provide this service.”
LEVERAGING THE INTERNET OF THINGS (IoT) IN REAL-WORLD RETAIL
VII. Connected Retail: Building The Business Case For IoT: Channel IoT Excitement Into A Solid Business Case
As the demand for inventory maintenance, convenience and personalized customer engagement continues to grow, retailers are considering the Internet of Things (IoT) as a means to meet these requirements. But are they really taking advantage of all that the IoT has to offer? The session titled: Connected Retail: Building the Business Case for IoT, revealed tips for maximizing the IoT’s potential in retail.
What Do Retailers Expect From IoT?
When it comes to implementing new technologies, retailers tend to be very conservative, according to Nikki Baird, Managing Partner at Retail Systems Research (RSR). But somewhat surprisingly, they expect the IoT to impact their businesses in a significant way: RSR’s research showed that 42% of retailers “strongly agree” that the IoT will drastically change the way companies do business within the next three years.
“Retailers are most interested in the customer-facing side of IoT,” said Baird. “You would expect retailers to think that this is about saving money, but it’s about making money through creating compelling customer experiences.”
RSR asked retailers to rate opportunities for IoT to have an impact on their businesses. The top three answers were:
- Maintaining inventory accuracy in stores (49%);
- Closer engagement with consumers through their Internet-connected devices (43%); and
- Maintaining system-wide visibility (40%).
Creating A Business Case For IoT
Baird warned that a potential pitfall for retailers is deploying IoT technology without first establishing the ROI they expect to achieve. “One of the challenges and risks around IoT is that if retailers go into this with the perspective that IoT is just something that needs to be done, they are going to find out in the end that they may have spent money without clear direction towards delivering value to the company,” said Baird. “Throwing sensors out into the environment isn’t going to make you competitive, it’s how you use these things all together to deliver a customer experience that retailers want to deliver.”
There are plenty of examples of IoT experiments done by retailers — from smart mirrors and badges to beacons and RFID tags. But according to Oliver Guy, Retail Industry Director at Software AG, they don’t get very far past the experimental stage. “The reality is, it’s because the business case doesn’t stack up,” said Guy. “The problem in retail is the multipliers are so big, it makes it really expensive.”
To justify a business case for IoT, Guy said the benefits must outweigh the costs. He used electronic shelf edge labels as an example.
“In a typical retail environment, you already have existing functions like in-store inventory in real time, price and promo optimization and real-time POS streaming,” said Guy. “By connecting these existing elements with electronic shelf edge labels, we potentially have the ability to create a use case called ‘real-time offer alignment’. All of a sudden, the benefits become supplemented by new things, such as increased sales, reduced stock-outs and increased margin.”
USING NEW TOOLS TO ENGAGE WITH CONNECTED, TIME-STARVED CONSUMERS
VIII. Retail-On-Demand: The Impending Disruption Of E-Commerce: Chat-Based Apps Represent The Next Phase Of E-Commerce
E-Commerce is evolving to the point where consumers don’t even have to browse a retailer’s web site to shop. New platforms emerging in the social space will change the face of what we’ve known in online retail.
In the webinar titled: Retail-On-Demand: The Impending Disruption of e-Commerce, Bronto Software’s Matt Davis explained how social and chat-based apps have become the newest consumer platform. He also provided useful guidelines for retailers looking to introduce such apps:
- Look at how each app is positioned. Each one has a niche that can help retailers decide which one would be the best fit;
- If you don’t want to commit, test the waters with “buy now” buttons; and
- Consumers will shift to the channel with the least friction within their digital habitat, so retailers should have an idea of what their customers want.
Messenger Apps Morph Into Personal Shoppers
Consumers are no longer using their social media platforms simply to stay connected with friends and family. Many social channels are now set up as one-on-one chats with a sales representative within platforms such as Facebook Commerce.
These messenger-type apps allow businesses to connect with shoppers on a more personal level. Think of it as a digital personal shopper that shares answers to questions and provides details and shipping updates on orders.
“This really represents a shift now to where chat is starting to become the center of this kind of brand or product retailer interaction, directly with the customer,” said Davis. “The digital storefront has a lot of different paths for customers and how they connect to retailers.”
WeChat is another app using this model to sell its goods. This platform, which has a large following in China, uses a chat model similar to Messenger and has its own payment system called Tenpay for transactions. The app allows retailers to design their own “storefront” and features an easy-to-use drag-and-drop layout. According to Davis, Chinese electronics company Xiaomi sold 150,000 smartphones in 10 minutes through WeChat.
“Buy Buttons” Allow Consumers To Shop On Social Media
If a retailer already is using social media channels to promote its products, Davis believes the next step could be implementing “buy buttons,” which allow consumers to shop as they browse their feeds. Twitter Commerce allows retailers or brands to include a “buy button” with product-related tweets, and Pinterest features “buyable pins” for select pins.
As many as “93% of pinners use Pinterest to plan purchases, and 87% bought something because of Pinterest, as of last year,” said Davis. “If you look at these [stats] and you’re a retailer or marketer, it doesn’t take a rocket scientist to figure out that the evolution of Pinterest into an e-Commerce shopping platform really makes a lot of sense.”
There are so many new ways to engage with shoppers on social media, it’s up to the retailer to leverage them. “This is an exciting time right now,” said Davis. “It’s awesome for consumers and more lucrative for retailers.”
IX. How To Sell More With Email: Why Retailers Need To Move Away From Batch-And-Blast Marketing
Traditional batch-and-blast emails just won’t cut it in today’s high-expectation retail environment. On average, open rates from triggered emails are 49% higher than classic “bulk” email, while click-through rates are 135% higher.
In the webinar titled: How To Sell More With Email, Tom Mairs, Global Lead for Pre-Sales at SparkPost, discussed:
- Tips on what retailers should look for in a modern email service;
- Why bulk marketing is outdated and no longer effective;
- The difference between typical commercial bulk messaging and targeted, transactional emails; and
- Case studies from Glassdoor, Disney, Twitter and Dotster.
Send Event-Driven, Targeted Emails To Establish ROI
Email remains a top marketing channel for businesses: 48% are including email in their budget in 2015 — and for good reason. For every $1 spent on email marketing initiatives, businesses achieve an average ROI of $44.25.
To generate this type of return, however, retailers must understand what makes targeted, transactional emails tick. Typical commercial emails often come with a standard template with minor substitutions, and are aimed at a targeted segment of thousands of email addresses.
On the other hand, targeted emails use templates based on event-driven consumer data, without the need for segmentation. The message is sent to an individual based on an event such as a purchase or profile update.
“You have knowledge that because I live in a relatively cold region of the world, and I am a business professional, that I’m looking for some particular types of clothing,” Mairs said. “In this particular case, the seller can now send me a very targeted, detailed message with samples based on my preferences. It knows that I just happen to be looking for a new wool suit to go with my ensemble. It’s very personalized not just from a data point of view, but from an activity and interaction point of view, and that’s critical.”
Additional events that drive targeted emails include:
- Anniversaries or birthdays;
- “Friend” or adjacent events;
- Browse history; and
- Abandoned cart.
Mairs indicated that while many businesses are still hesitant to gravitate toward newer email delivery systems, there is one aspect they should take into account: it’s not about them or the product they sell; it’s about the recipient customers and their current needs. Mairs’ final piece of advice to retailers was to keep consumer data in its own space, and warned that businesses must act in real time if they want to remain relevant.
To pick up even more insights and expert opinions, tune into the complete #CCSeries webinar sessions, available on-demand. Detailed statistics, survey findings and customer use cases are all part of these nine lively presentations. Register for one presentation and you can access all.