This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.
This time it is Steven Skinner who is VP of Cognizant’s Retail and CPG Practice. Previously, Steven served as a Strategy Partner in Accenture’s Retail practice, VP at Home Depot, and GM for Microsoft’s Global Industry Strategy Practice – so an entire career in the retail industry. Here he writes about how the physical shopping experience needs to evolve.
“We’ve seen it coming. We’ve known its coming. It is now here…so why are we so surprised and unprepared inside of the Retail Store by the rise of the new-age, smart, technology-driven shopping?
This wasn’t one of those trends like social media that came out of left field and hit retailers. We have seen the step-by-step progress of mobile technology in Retail, which began in the late 20th century and accelerated in the last decade (see Microsoft’s Smarter Retailing strategy circa 2004). Now we have seen full bore the rampant “consumerization” of IT at the shopper/consumer level. We have seen the power shift from store associate to shopper in terms of product knowledge, usage, substitutes and price points. Research tells us how “Generation Y” is influencing all other generations in the mass adoption of mobile technology, social media, and Internet-based commerce, along with the continued erosion of the mass media’s ability to influence shopper decisions. In other words, online/mobile/social shopping is no longer an emerging trend and the impact of this on physical shopping experience is increasing as you read this. Technology is changing the way consumers shop and the expectations of the new-age intelligent shopper will lead to make-or-break moments at the store. What now? Here are five ideas we have to extend the experience outside the store to within:
1. Retail must expand the concept of the store. The store must become “without boundaries.” We call it “Taking the store to the shopper, regardless of location”. Why is the shopper in aisle three treated worse than a shopper in a check-out lane or sitting at home? Think about that. The shopper making a purchase decision, but at the point of decision-making is given less information by retailers than any other channel. Why can’t the shopper receive store navigation maps with shelf assortments on his/her mobile so the shopper is guided through the browsing process while at the store? Better yet, why can’t the shopper have his “shopping recommendations” integrated with his online account and delivered to his mobile device or have access to time-based or location-based offers?
2. To enable number one, IT must embrace the shopper’s IT environment within its own retail store architecture. This “shopper architecture” must leverage cloud-based services to augment basic mobile device services to provide a rich and contextual shopping experience. Our shopper in the previous point would need the store’s Wi-Fi network and IT ecosystem to support the technology on his/her mobile device.
3. Retailers must embrace the mantra of “death to all fixed POS devices” (well, perhaps not all of them as they will have their appropriate place). But to the extent we can get more associates out from behind the POS and into “aisle three” to provide an improved shopping experience, we all know the positive impact on basket size and conversion rate with a shopper-assisted sell.
4. Why must coupon redemption (the third highest source of shopper irritation in the store according to our research) be manual? Wouldn’t it be great if the shopper showed up at the check-out counter (which, by the way, should be a mobile one) and the coupons from different manufacturers were applied automatically; and processed all the way through settlement? Retail should Automate and digitize everything. Similarly, why must return processes be so manual? Make it easy (they’ll love you for it. Sometimes your best customers are the ones who return the most!). Have the shopper log into a account on a returns ecommerce site, schedule a return , choose a credit or refund option and have them ship it to you from their nearest UPS or FedEx center.
5. Think of how Generation Y consumes technology with friends via social media and then how they consume it as a POS associate Monday morning (POS doesn’t mean “Point of Service,” by the way). We have seen evidence that high associate attrition is driven by this technology environment dichotomy. Retail needs to Embrace the Sunday evening experience on Monday morning. A cash register with a big-screen PC isn’t half as exciting as the cool gadget that fits into the palm of their hands and it doesn’t keep them behind the POS (and it helps manage attrition through a better work environment also). Generation X and older shoppers are also fast embracing what technology has to offer. After all, who wouldn’t like a faster, better and easier way to do the weekly grocery shopping or hunt for that elusive perfect gift for a special occasion?
Like other channels (social, mobile and the Internet), the new “Intelligent Store” is equipped to fulfill the expectations of more empowered consumers. Getting there requires at the very least the CIO, the Chief Marketing Officer , the SVP of Store Operations and the SVP of Ecommerce to determine how to best treat increasingly techno-savvy, data-driven shoppers. Most importantly, it allows for the CFO to keep the store as an asset on the balance sheet, not a liability. We think that is a good thing.”
Steven can be reached at Steven.Skinner@cognizant.com