Retail

3 Things To Consider In a Beacon Deployment

Create: 02/21/2016 - 12:00

Retailers with brick and mortar locations are starting to look at Internet of Things technology as a way to ramp up sales and build loyalty with customers. BI Intelligence reported last fall that beacons would help retailers propel $44 billion in sales by 2016, way up from $4 billion in 2015. But where to start deploying beacons withing the parameters of retail use.

Let’s look at beacon technology for the retailer aiming to strengthen customer retention and improve store layout and product selection. With proper planning and guidance from the solution provider, beacons can address and satisfy objectives, including retaining customers, improving loyalty and making ordering from the manufacturer more efficient. 

Beacons are battery-powered Bluetooth devices that broadcast an identifier. They transmit unique signals multiple times per second. The beacons search for customer devices — such as smartphones — that are within a certain established perimeter with which to communicate. For the entire strategy to work, customers must have downloaded the retailer's app, which is tuned to receive the broadcast from the retailer’s beacon. A mobile engagement platform is layered on top of that retail app, which then pings the cloud to determine what content it should deliver to a customer within its perimeter. And the customers always have the choice to opt-in, or out, of receiving information.

A good place for solution providers to start is to look at a list of beacon manufacturers, which includes vendors such as Kontakt, Tod, Accent Systems (pictured) and others. Find the vendor that has a solution best suited to meeting your clients' goals, offers you support and is financially stable. Then:

  1. Test Your Deployment Plan.  In the case of multiple stores, roll out beacons in one store and learn from the experience. In a one-store location, try it out in a single department at first, if practical. The retailer will make discoveries about what actually works and apply those lessons when expanding the deployment. For example, the client may find that frequency of offers is  too great, irritating shoppers -- or that the information they are receiving is irrelevant. 
  2. Train the Associates. Work with the retailer to train the salespeople on the solution. Everyone in the store shold know how to use the information the beacons provide to increase purchases. For example, beacons will alert salespeople when customers using the store’s app enter. An associate should know how to access that customer’s shopping profile to tailor suggestions appropriately. In addition, all employees should be familiar with the store’s app. 
  3. Think Outside the Box. Encourage your retailer to use the beacon technology as a communications platform that goes beyond product pushing. The platform can surely inform about new products and special offers or events. But it can also provide services, such as informing when an out-of-stock item is in or when an order is ready for pick up. 

Solution providers are the first stop on a retailer’s journey into the IoT. Help your retail customers by being prepared to offer and implement beacon solutions that will better position them in the race to outsmart the competition.

Why You Need In-Memory Computing for IoT Solutions

Create: 02/15/2016 - 12:00

Not that long ago, solution providers could offer the ability to derive intelligence from data as a nice-to-have feature for customers. Today, as machines are increasingly more connected to each other and to customers' internal computer systems, it is becoming critical that all the information collected is analyzed and used. Customers' want to see a return for all that storage they bought, and all the software in which they've invested. That's where operational intelligence comes in. 

OI can handle fast-changing data better than traditional methods. The Internet of Things has created a vast, quickly flowing stream of information that threatens to bury companies that are actually trying to make use of the data they are now able to — or are planning to — collect. In-memory computing helps solution providers meet those challenges by implementing solutions that have less latency and are scalable.

[See also: In-Memory Computing Changes the Way Businesses Compute and Compete: http://buff.ly/1SvcGMu]

Why bother?
IoT solutions offer customers in transportation, retail, construction, transportation, etc., the ability to track inventory, projects and other deliverables quickly and efficiently. IoT can save costs and make the workday far more efficient. But, if the hardware isn’t up to par, the data crunching is a slow and laborious process. And if solution providers’ customers can’t get their data in a timely manner, their IoT investment is worthless. So, solution providers face the challenge of not only extolling the virtues of IoT technologies, but also must prove it is a faster, more efficient way of doing business more intelligently.

In-memory computing addresses the challenge of speed. The founder of ScaleOut Software, William L. Bain said in-memory computing can significantly speed up processing, resulting in potential new revenue streams, for solution providers as well as their customers:

[In-memory computing] can analyze a terabyte of continuously changing data in a few seconds and can ingest and analyze events from millions of sources within milliseconds.

Uses for OI and in-memory computing include the ability to quickly:

  • Provide factories real-time data on the health of their factory equipment. Predicting problems and troubleshooting in advance of a potential shutdown saves the costs incurred when manufacturing lines are stalled.
  • Give retailers the tools to be more successful against e-commerce competitors.  The data collected by retailers can be analyzed to give brick and mortars the same depth and breadth of customer knowledge attained by their online competitors. 
  • Offer fleet management companies a means to not only track deliveries but also  lower costs. By monitoring drivers’ habits, fuel costs can be better contained. Possible solutions may include driver training or reevaluation of routes.

Following is an infographic from Intel that shows how implementing OI via in-memory computing can maximize the potential of IoT technologies.

4 Ways IoT Technology Can Transform Retail

Create: 01/31/2016 - 12:00

IoT technology is transforming the retail sector quickly. Retailers that do not embrace modernizing their systems risk being left in the dust by more agile companies. That agility lets retailers be more responsive to customers' wants -- and fulfilling those desires drives sales. One often-cited example of this type of implementation are memory mirrors which let customers virtually try on clothing. The devices help customers consider many more than when customers physically change clothing. Neiman Marcus has dubbed its exclusive version of this technology MemoMi. Here are some other examples of how IoT technology can revolutionize the retail experience. 

Retailers Like Rite Aid Drive Sales Through Beacons

Create: 01/19/2016 - 12:00

With pharmacy chain Rite Aid's announcement earlier this week that it would implement beacons in all of its 4,500-plus outlets across the U.S., the wireless technology got a substantial boost. Where once retailers asked their solution providers, "what is the value in using beacons?" today many stores are wondering, "how do I use beacons to enhance my customers' experiences?"

Before this week's announcement, Macy’s had been the retailer with the largest number of beacons deployed. Rite Aid debuted proximity beacons in each of its stores in a partnership with inMarket. (inMarket uses existing retailer and brand apps to beam offers to customers. The company says it has more than 42 million monthly users actively participating in its beacon program.)

There is clearly an uptick. According to the 2015 Store Operations Survey by Retail Touchpoints, nearly 46% of retailers either now have or plan to use beacons in their stores. And by the end of 2016, Business Insider predicts beacon-driven in-store revenue is estimated to hit $4.1 billion for the top 100 retailers. Even among smaller stores, the technology will be a significant factor: Beacons will influence $44.1 billion in 2016 sales. That’s the equivalent of one percent of total U.S. store sales.

For now, most beacon implementations are being deployed in pilot programs on a small scale, as retailers try to understand how the technology can foster customer engagement. So far, analysts report that the biggest barrier to adoption is getting consumers to turn on the Bluetooth capability on their phones.

Most solution providers are familiar with beacons, the small, Bluetooth-enabled devices that are affixed to walls or countertops inside stores. They are proximity-based; a beacon sends Bluetooth signals to customers’ smartphones once they are within 50 to 100 feet of the device, automatically triggering personalized coupons, special offers and loyalty rewards. A general rule of thumb is that one beacon is required for every 5,000 square feet of store space.

The challenge for retailers is in determining how to get customers to engage with beacons. Shoppers need to be enticed to opt-in, and the benefits must be more than the offering of free Wi-fi. Retailers such as Macy’s offer promo codes, exclusive sales events and other perks that improve the shopping experience and strengthen the customer’s bond with the store.

While it’s easy to see how getting some push promotions from retailers might be considered intrusive or creepy, there are substantive ways the technology could make its mark in a positive manner:

  • By providing customers information about price, reviews, performance
  • By offering customers sales floor support that augments associates’ efforts
  • By measuring what types of products receive the most (or least) foot traffic.

Once the shopper is “recruited,” retailers can focus on making the shopping experience dynamic and personalized. For instance, a female shopper who just left the shoe department might receive a text message alerting her that UGGs boots would be 10 percent off for the next 30 minutes. Sending such selective incentives may provide the reluctant shopper just the motivation needed to close the sale. 

In addition, increasing numbers of shoppers want to use technology to “shop smarter.” A 2015 Mercator Advisory Whitepaper survey sponsored by Discover and reported by Payment Week found:

... of 1,000 credit cardholders who own smartphones, 53 percent reported that they would like to receive special offers and discounts at selected merchants when shopping in or near their stores. 

Beacons can offer in-store shoppers the efficiency of shopping online, but with what many might consider additional benefits. In-store shopping is more social, ideal for those who want to see products up close and personal — and who want to share their experience with others. Via beacons, shoppers can often combine online efficiency with the benefits of in-store shopping.  

Increased efficiency, personalization and customer insights — that’s the road trip beacons will embark on this year with retailers.

The Trickle-Down Effect of IoT In the Supply Chain

Create: 01/14/2016 - 12:00

When selling Internet of Things solutions to retailers in 2016, solution providers should focus on three benefits, beginning with supply chain efficiency, which leads to optimized inventory and ultimately results in customer satisfaction. 

The use of connected software and hardware in retail differs from implementations in other areas. In retail, the IoT solutions’ impact begins at the product manufacturer and infiltrates the retail experience through the point when the customer leaves the store with the product in tow.  All the connected points along the way provide the retailer with data reflecting the status of the products’ manufacture, delivery and popularity.

Supply Chain Efficiency
While ERP and supply chain management (SCM) have co-existed in many companies for a while, IoT improves those solutions by intelligently connecting people, processes, data and products through devices and sensors. Those types of solutions can range from automating the manufacturing process to improving visibility within the warehouse. 

No more wondering if products can be manufactured to meet demand on-time: With IoT technology, retailers can pinpoint where materials are, when they will arrive and even the route they are taking to get to the warehouse. Beacons, sensors and RFID tags are all tools to help streamline the supply chain. 

[Delivering Immersive Retail Experiences]

Information about materials with RFID tags, for instance, could be transmitted to the cloud, where the retailer can analyze that data. Shipment delays or material shortages can be addressed at the earliest moments. Delivery vehicles equipped with sensors could be notified of traffic tie-ups before becoming delayed, enabling them to reroute and remain on schedule. In retail, a shipment makes many stops along the way before reaching the end customer, including the manufacturer, suppliers, distribution center and the retailer. IoT connects all those pieces, making communication efficient and meaningful. 

Optimized inventory = Sales Lift
Getting inventory correct has come a long way from when department stores would close for half a day and expect associates to work into the wee hours counting items on the shelf. Smart shelves, for example, keep track of inventory, advertise directly to consumers and update prices in real time based on demand is one tool in solution providers’ retail portfolios. The shelves have sensors embedded in them, and they notify store managers when products are out of stock. Being out of stock can cost an establishment 4 percent of annual sales, according to Harvard Business Review.

Not only do such smart shelf solutions stem the flow of loss associated with “out of stocks,” but they also add revenue: According to figures from Intel Corp., for every 3 percent uplift in inventory management, retailers can expect a 1 percent increase in sales. That’s a great ROI.

Customer Satisfaction
The goal of all improvements must be to improve customer satisfaction. Think it’s a bunch of hype? Accenture has found that 66 percent of customers switch companies due to poor service. And Harvard Business Review reported that 48 percent of people who had negative experiences told 10+ people about them. So getting shelves fully stocked and inventory aligned to meet customers’ desires should be a priority for retailers.  In addition, solution providers should not only be able to provide hardware including RFID tags, beacons, digital signage and POS solutions, but also the analysis of IoT-generated data necessary to improve the customer experience. Such solutions might include smartphones linked to loyalty programs and in-store text offers made using proximity marketing and connected to inventory data. Customers can be led to relevant products, dynamic video displays can be customized and mobile checkout enabled.

Retailers must look at the entire scope of their inventory — from inception at the factory to delivery at the store. Even then, retailers that truly value loyalty know the job is not finished after the cashier bags an item. By deeply connecting with shoppers and understanding trends specific to a demographic as well as an individual, both retailers and consumers will benefit.

The IoT Offers Millennial Shoppers a Personal Touch

Create: 12/30/2015 - 12:00

Many of the young shoppers out enjoying some "retail therapy" this holiday shopping season were millennials. And, despite the plethora of reports documenting how difficult this group can be to reach for retailers, attracting these shoppers is lucrative and justifies the effort: some estimates suggest they have a purchasing power of more than $170 billion annually.

The smartphone is, unsurprisingly, the preferred shopping tool by millennials. But, in an attempt to drive customer loyalty, too often, retailers respond to millennials hyper-connectivity with over-communication. Many dollars are spent drowning these prospective customers in email and texts. However, without the requisite work in data analytics to determine exactly who should receive the messaging, all that investment is wasted. Worse, it can backfire by casting the retailer as overly aggressive. Enter IoT to gather retail data and boost sales.

IoT Gateway To Millennial Sales Engagement

However, done correctly, personalized marketing is spectacularly successful: according to Yahoo Advertising, 73 percent of consumers are more likely to shop with businesses that use personal information to deliver relevant shopping experiences. And mobile advertising can drive consumers through the marketing funnel faster: Reports have found that millennials are open to mobile ads introducing them to a new brand, product, or service.

Here are several types of implementations solution providers can offer retailers to help them connect with their Millennial customers:

  • Connect the store shelf and the inventory room. The combination of store shelf sensors, smart displays, digital price tags and high-resolution cameras lets retailers view products that are on the store shelf as well as in the back stock room, and link those two sets of information. The retailer can determine what products are selling best with this market segment and adjust accordingly.
  • Deliver on-the-spot promotions and coupons. Everyone loves a coupon, but as it turns out millennials are especially thrifty. By using beacons to determine shoppers' proximity to the store, retailers can entice nearby shoppers to stop in. In addition, brick and mortars can tie in customer experience data gathered through beacons to push customized content onto smart displays within the stores or shoppers mobile devices. 
  • Maximize in-store flow management. Retailers can use customer data they've already collected on millennials and use it to enhance their shopping experiences. By leveraging smart cameras, beacons and microphones, brick and mortar retailers can organize departments that are tailored around how this demographic prefers to shop.

While hyper-connected customers embrace the digital experience, the retailer’s plan must be optimized to meet shoppers’ expectations. Hyper-connected customers pop in and out of the different segments that make up the omnichannel. They may start shopping on a laptop, comparing brands and prices. They may use social media to gather reviews, and go to a physical store to gather in-person information, before ultimately purchasing via a smartphone. They are demanding as well:  To them, the ease of shopping online should not be compromised in-store. It will be a different experience, but not a more difficult one. A Deloitte study found that 19 percent of millennial buyers use “buy online, pickup in store” options, compared with 12 percent non-millennials.

Don’t Forget The Human Part Of IoT Solution

To meet such expectations, sales reps at brick and mortars will become more necessary than ever, and being connected with inventory systems and customer relationship management tools will be vital. At the same time, the retail landscape will become more automated. In reality, hyperconnected customers want to engage, but at specific times. Sales reps will be expected to cater to customers’ unique needs. Through the use of IoT technologies, retail associates will be able to engage with customers at a more in-depth level. And, they will understand what customers want through behavior analytics, self-disclosed data and inferred information.

How Retailers Can Navigate the Holiday Craze with Ease into 2016

Create: 12/21/2015 - 12:00

December is one of the most important periods of the year for retailers, and technology is arguably the most crucial tool driving increased sales throughout the holiday season and beyond. The Internet of Things (IoT) can enhance the customer experience allowing retailers to operate more efficiently and achieve higher profits. While IoT may often seem like another trendy buzzword, the reality is that IoT is already making a very real impact on retail. In fact, IoT will play an important role this holiday season and into the new year – enabling retailers to take advantage of an increasingly tech-savvy consumer base.

Beacons
One of the most talked about IoT technologies currently impacting retail are beacons (sometimes referred to as iBeacons after Apple’s spec). Beacons are a low-cost piece of hardware that utilize battery-friendly, low-energy Bluetooth connections to transmit messages directly to a smartphone or tablet. This information is used by retailers from pushing targeted coupons or deals when a user is near a store, to calling up detailed product information by a customer touching their smart phone to a product in store. Beacons can also be used to gain insight into user shopping habits and frequency at retail locations. For example, retailers can access granular data to see which products sell the best and why which can be valuable insight when it comes to planning sales for busy shopping events during the year. National brands like Target and Macy’s are already implementing beacons to enhance the buying experience of their consumers this season and beyond – paving the way for others to follow.  

Mobile Payments
Another influential technology becoming a large part of the retail economy is mobile payments. NFC (Near field communication) technologies like Apple Pay and Samsung Pay, allow consumers to check out at brick and mortar retail locations quickly and securely. Mobile payment technologies can reduce point of sale frustrations and make in-store purchasing a stress-free experience. During the holiday season, this will expedite the checkout process, reduce long lines, and simplify the payment process. Since Apple Pay also enables in-app payment on a customer’s smartphone, the ability to quickly complete a purchase via their phone without ever having to enter payment or shipping information is a game changer. Now consumers can complete purchases without ever having to leave a retailer’s app or even create an account, making app-based selling a valuable channel for retailers.

Point of Sale
The amount of purchase time spent in stores is cumbersome and tiring. An increased presence of mobile technologies at point of sale will become more prominent as both large and small retailers adopt tablet or mobile checkout methods to create a more distributed point of sale presence. In this age of the on-demand consumer, long lines and a long wait can mean a missed sale. To combat consumer impatience, especially during the holiday season, retailers have begun to roll out mobile points of sale, where a team member is able to check out customers anywhere in the store and send them on their way, avoiding any headaches. 

IoT Device Sales
The last aspect of IoT in retail that will continue to soar is the sale of IoT devices to end users. With the Home Automation market valued at over $5B in 2014, there will be more and more consumer interest in Phillips Hue, Nest, and a wide array of products compatible with platforms like WeMo and Wink. Wearables like fitness trackers, Apple Watch, and Android Wear devices, will also see an uptick in sales which will be a boon to a wide selection of retailers.

So, how will IoT bring success for retailers this holiday season and into 2016? Beacons will help with customer engagement by selectively triggering location-based events that will positively impact buying behaviors. Mobile payments and new point of sale technologies will streamline the buying experience. Lastly, we will see a surge in actual IoT device purchases across all retail segments. These technologies will not only help retailers remove customer pain points, but also help increase sales, and keep consumers happy during the hectic shopping season. For retailers, IoT technologies will be the gift that keeps on giving into the new year. 

How IoT brings ROI to e-Commerce

Create: 12/16/2015 - 12:00

E-commerce is no doubt a reliable retail strategy that connects sales to ROI.  One can look at the success of Amazon for the obvious example.  Amazon holds the most market capitalization value among US retailers, including Wal-Mart. Its astonishing growth has also established fertile ground for Internet of Things (IoT) strategies to influence how current ecommerce retailers achieve ROI.

The planning of IoT sensors is meant for establishing the right degree of automation and convenience tailored to customer experience and business operations. Addressing customer experience and operations was how Amazon became successful.  But Amazon also was buoyed by heavy investment while maintaining a business plan where it would not see a ROI within 4 to 5 years of its launch.

The ecommerce marketplace has evolved since Amazon’s introduction.  Ecommerce retail vying to be “the next Amazon” have to be nimble to scale into profitability. The 24-7 “always open” nature of online retail is no longer a novelty like it was when Amazon first launched. It is coveted from customers.  Amazon has shown the value of “always open”, with other major retailers like Wal-Mart finding ways to emulate it.

[Download a whitepaper: Intel Products, Polutions and Services Enable Secure and Seamless Solutions for the Internet of Things.]

Another change has been the scale of online customer response.  Online retail is buoyed by major holiday sales. While this tactic is not new – for years retailers have relied on Christmas shopping seasons to cap annual revenue – the volatility of the sales is. USA Today, for example, reported that Black Friday sales are influencing Cyber Monday deals – to the point where Target’s website failed with  high demand at its site.  Such periods of extreme revenue require better management of marketing assets and supporting operations. 

Here's how IoT sensor strategies address the “always open” phenomenon and revenue volatility.

Duplicating the Convenience of “Always Open”

IoT-ready sensors can coordinate agile marketing and information content to duplicate the customer expectations from a “always open” online experience.  Seeing store information in a tablet or smartphone in proximity to a beacon should feel as effortless as being online at home.  Luxury brands rely on this speedy effortless as a quintessential quality in blending their retail store experiences with what customers see online.  For example, Nordstrom tracks Pinterest pins to identify trending products, then uses in-store displays to show consumers what interests their peers. The displays are aimed at encouraging shoppers to purchase on-trend merchandise.

Preparing for Volatility

IoT-ready product and shelf sensors can produce data metrics that reflects how a retailer’s supply chain responds to massive inventory swings.  Retailers with stock-out issues can deploy predictive analytics to understand optimization models. The end result is better resources that account for seasonality and make the customer experience better. 

Retailers have relied on RFID sensors have been used for several years.  But much of the usage has involved more one-way monitoring or manual verification when used.  New sensor applications and messaging protocols have increased two-way communication, influencing other operations behind an ecommerce site.  The shift to take advantage of two-way communication is underway - eMarketer noted that 29% of retailers have incorporated beacons into their stores. 

Naturally, IoT usage creates more data that reveal customers interests and needs. Unlocking those needs also means retail competitors must invest in advanced analytics solutions to remain relevant with those customers. Such increased competition means ramping up corporate assets in luxury firms that have long relied on brand recognitions and isolated scales of quality. Ferrari’s recent IPO announcement implies such escalation from a bird’s eye view of corporate strategy.

Fortunately, most retailers will not have to issue publicly traded stock to be better. Instead, they should take advantage of falling sensor and computing prices and align their support for online sales.  Recognizing that success is more than products sold on a website is what made Amazon successful. The Internet of Things has ushered in the next generation of what that success will look like.

Out-of-Stock Problems Costly for Retailers

Create: 12/13/2015 - 12:00

Despite the overall rosy report for online shopping this past November 30, aka Cyber Monday, out-of-stock rates on that day reached an historic high, with 13 out of 100 product views showing an out-of-stock message. That’s two times the normal rate. That’s a huge revenue opportunity lost because retailers fail to have accurate tools for forecasting.

Clearly, there is work to be done. The market potential is enormous: Adobe’s 2015 online shopping data for Cyber Monday found a record $2.98 billion (12 percent more than in 2014) was spent, marking the largest online sales day in history. Thanksgiving Day through Cyber Monday drove roughly $11 billion in online sales, a 15 percent increase year-over-year, with brick-and-click retailers seeing the strongest growth in sales year-over-year. Adobe noted that each of the first 18 days in December are expected to be $1 billion sales days.

The holiday inventory problem simply underscores what happens year round. Loss from overstocks in North America is estimated to cost retailers $123.4 billion annually and out-of-stocks $129.5 billion, according to a study from IHL Group, commissioned by OrderDynamics. Those numbers are actually an improvement from prior years, as retailers adopt better forecasting technology.

In a consumer survey, GT Nexus reported that 75 percent of shoppers encountered an out-of-stock moment at a store in the last 12 months. The record online was not much better: 63 percent of consumers experienced an e-commerce out-of-stock.

Considerable revenue is lost by not meeting customer demand and not having inventory available. Of course, retailers are aiming to avoid being stuck with merchandise, and overstocks are costly errors in inventory management as well. But with retail turning to omnichannel strategies that leverage the intelligence of the Internet of Things technology, the problem should be top of mind for solution providers, particularly because customer satisfaction takes a nosedive when products are unavailable, no matter where the sale is consummated.

Customers expect to find a product at the store of their choosing, and when they do not, it erodes their loyalty to that retailer. Click-and-brick retailers might be able to offer a product online with free shipping to the customer’s home, but sometimes the hot product is just not available, period. (Try ordering L.L. Bean Boots, for example.)

Customers might be forgiving in a case such as Bean’s, where the product is handmade. In fact, the items perception as exclusive may even be enhanced, to a degree. But a short supply of mass-produced items will simply irritate customers. That’s particularly true during the holiday season, where customer loyalty and happiness is crucial; some retailers depend on the end of year madness to account for a quarter of their sales. 

IT infrastructure to manage inventory is itself in short supply and that is costing retailers dearly. The GT Nexus study found that 55 percent of in-store shoppers who suffered a stock-out became “lost sales.” Translation: They purchased the out-of-stock product at a competitor, or not at all.

Improving supply chain visibility is mission critical for retailers heading into 2016. As shoppers become more selective — a hallmark trait of the Millennial customer — it will become increasingly imperative for retailers to implement technology that will allow not only tracking from manufacturer to shelf, but also the prediction of trends and the analyzing of loyalty data. Gathering and crunching sales data from the 10 months prior to the start of holiday shopping kickoff will provide valuable customer insights, for example popular styles, sizes and colors for individual stores. In that way, retailers will be able to order more precisely to match their customers’ preferences and avoid losing sales to competitors. 

IoT Solutions Keep Retail Focus on the Customer

Create: 12/01/2015 - 12:00

While the Internet of Things can streamline operations, optimize inventory and assist in cutting costs, the most important benefit retailers can gain is improving the customer experience.

The road to ruin is littered with retailers that cut costs at the expense of customer service. New York City based department store Abraham & Straus (A&S) comes to mind, and, although it departed 20 years ago, its decline was so dramatic that its worth sharing briefly, as a cautionary tale. 

A&S opened its doors in 1893, which means it was able to withstand the Great Depression, among other economic crises. But by the early 90’s, the store was starting to show wear and tear. Competitors such as Macy’s used “one day sales” and loyalty prmotions to lure away customers. A&S tried to step up, but sales were plummeting and there was no incentive to invest in what was becoming a rapidly outdated shopping experience. There was nothing special or unique at A&S and shopping there was largely unsatisfying as the store continued to cut back on associates and inventory. The displays were scantily stocked and, in the event a product was available, no employee could be found to ring up a purchase. 

So, in 1995, after numerous closings and some store conversions to Macy’s, A&S closed up shop. 

It’s easy to think that technology is the means to all success, but, in reality, happy customers are the key. Technology is the set of tools that can get a retailer there, with added benefits of streamlining and cost cutting. But, for instance, while kiosks can save a retailer the cost of a cashier or two, it should consider reivesting that savings into well informed associates that can function as personal shoppers (thanks to data analysis) or into personalied messaging offering unique discounts or shopping access (thanks to beacons). As a recent Gartner study discussed, the basics — well stocked shelves, relevant products, helpful associates and smooth checkout — should be in place for success. Those can each be improved by using technology; however, the focus must always remain on customer satisfaction. 

“Well established technologies, such as electronic shelf labels and RFID used in the past in the back office for stock management, are now being used in innovative ways at the front end to enhance the customer experience,” said Miriam Burt during Gartner Symposium/ITxpo 2015

It’s important to note she said “enhance the customer experience,” rather than “reduce cost of carrying inventory.” Electronic shelf labels (ESLs) can be extremely helpful in managing inventory, but that is not a strategy for long-term success. If a retailer’s goal is solely to maintain little to no inventory rather than to track customer trends, the result will be sparsely populated shelves with customers potentially turning to the competition should the size or style be unavailable. Instead, retailers should implement such technologies with the goal of improving the customer experience; tracking buying trends using ESL will ensure a store is aware of popular items and can stock accordingly.

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