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New Study Tells Retailers: Win Consumers’ Trust to Deliver the Hyper-Relevant Experiences They Want

As Cisco’s chief marketing officer, an important part of my role is to build and maintain the trust of Cisco’s customers.In fact, “brand promise” ultimately relies upon the trust consumers have placed in a brand. Customers who are loyal to a brand will trust that the next product or service introduced under that brand will fulfill the brand promise. However, trust can also have more widespread impacts that affect an organization’s ability to compete and to provide the innovative customer experiences required in the Internet of Everything (IoE) era.

This week at the National Retail Federation’s “Big Show” in New York, Cisco released a new study that uncovered some unique insights about shopping behaviors and attitudes among U.S. and U.K. consumers in the digital age. The findings point to the need for retailers to provide “hyper-relevant” shopping experiences that deliver value to the consumer in real time throughout the shopping lifecycle. Hyper-relevance comes with the ability to dynamically compare real-time customer information with historical data, and the resulting insights allow retailers to improve operations and the customer experience. At stake, according to our research, is an estimated profit improvement of 15.6 percent for an illustrative $20 billion retailer that builds agile business processes for turning these insights into value.

Our research shows that consumers are looking for retailers to deliver hyper-relevance via three value proposition categories: efficiency, engagement, and savings. In the area of efficiency, for example, 77 percent of respondents said they would be “somewhat” or “very likely” to use a solution to optimize the checkout process. In terms of savings, 79 percent indicated a willingness to take advantage of in-store offers provided via digital signage, while 73 percent said they’d like to receive special offers through augmented-reality solutions. And, in the area of engagement, 57 percent indicated a desire to learn more about products in the store by using augmented-reality capabilities.

One of the points I found particularly interesting is that consumers are relatively willing to provide certain types of personal information to retailers—such as name, age, past purchasing history, interests, and hobbies—in order to get a more personally relevant shopping experience. But beyond this basic information, there is a “trust cliff,” a steep drop-off in willingness to share certain types of personal information. A significant 16 percent of respondents were not willing to share any personal information at all.

This trust cliff presents an interesting conundrum for retailers. On one hand, our study shows that customers want personalized and contextually relevant shopping experiences. But on the other hand, they are reluctant to share the very information that can help provide these “hyper-relevant” experiences.

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The Last Traffic Jam and Other Lasts the Internet of Everything will Make Possible

By 2030, an average American household is expected to incur traffic-related costs of $2,301 per year, a 33 percent increase compared to 2013. In fact, the annual price of traffic in the U.S. and Europe will soar to $293 billion by 2030, a rise of nearly 50 percent from 2013. Additionally, traffic conditions around the world only seem to be getting worse as well. Doesn’t sound too promising right?

Cisco and its partners are looking for ways to reduce these costs and eventually make everyday challenges like traffic jams, a thing of the past through the connection of people, process, data and things in an Internet of Everything era. And while the next wave of the Internet is sure to bring us some pretty amazing ‘firsts’, we are pretty excited about the “lasts” we could create. Imagine the last blackout, the last oil spill, or even the last hungry child. With that in mind, Cisco has launched a new campaign that focuses on “The Museum of Lasts.” Jenny Rooney in Forbes wrote a great article on our new campaign and “the lasts a connected world enables”…see here.

Think about everyday life situations you would love to live without. Traffic jams, long checkout lines, or my personal pet peeve: a missed delivery (especially when I am waiting for my children’s Christmas gifts!) The “Museum of Lasts” introduces a glimpse into how the world might change for the better if we all think bigger, work collaboratively and disrupt to make these “lasts” a reality. The Internet of Everything is enabling these “lasts” by connecting the unconnected, through the intersection of technologies such as data analytics, cloud solutions, security, collaboration, mobility, data center, and application centric infrastructure. All powered by an intelligent network.

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Let’s Talk Firsts and Lasts

For 30 years, we’ve been helping change the way people work, live, play, and learn. During this time, our world has advanced faster than ever.

It seems like yesterday when we saw the introduction of the Macintosh, the first-ever consumer machine with a mouse and graphical interface. Then, just two years later in 1986, Cisco introduced the Advanced Gateway Server, or AGS.

This breakthrough multiprotocol router became the foundation for moving traffic across networks. In 1990, researcher Tim Berners-Lee developed HTML—the official language of the World Wide Web and the spark to make the Internet mainstream.

Today, it’s hard to remember life before the Internet. The industry has come a long way, and so have we.

We owe our founding to Len Bosack and Sandy Lerner, two former Stanford University computer technologists, who set Cisco on an incredible journey as a networking and Internet pioneer.

In 1995, less than 1 percent of the world’s population connected on the Internet. Today, more than 40 percent connect online.

We’ve seen businesses transformed and economies modernized. The way we buy and sell products has changed—so has their design, production, and distribution. It’s as if no industry has been untouched.

In the next 30 years and beyond, we’ll see everything become connected—people, process, data, and things. This will expand our understanding of the world and the experiences we have, and we’ll generate new ideas and discover new solutions.

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In Retail, Insight Is Currency, and Context Is King

Today’s retailers face a rising tide of change, disruption, and challenges, all driven by technology. As their business landscape is upended, many are struggling to adapt to changing consumer behaviors, competition from disruptive innovators, and exponentially increasing complexity.

The source of much of this disruption is the Internet of Everything (IoE). IoE is the networked connection of people, process, data, and things, and Cisco projects these connections to surge from 13 billion today to 50 billion in the next decade. For retailers, that means a sharp increase in the potential channels, devices, and shopping journeys that are available to consumers. Increasingly, retailers must meet new demands for relevant, efficient, and convenient shopping experiences, whether in-store or out.

IoE_Retail_Figure_Journey_3-2

But for traditional retailers, IoE also presents tremendous opportunities. At the National Retail Federation’s “Big Show” in New York this week, I have seen a great openness to change and innovation. As I see it, traditional retailers are ready to step into the IoE era, but they will need the right ecosystem of partners to guide them through the transformation and help them make the right investments.

To better understand these opportunities and the changing competitive dynamics in retail, Cisco recently undertook a comprehensive, three-pronged study consisting of original research, economic analysis, and interviews with retail industry thought leaders. Released this week, the first wave of primary research findings includes 1240 consumer responses from the United States and the United Kingdom.

A key theme that emerged from the research was that today’s consumers demand new kinds of digital experiences, both in-store and out. In our survey, we presented respondents with 19 concept tests — everything from digital signage and same-day delivery to mobile payments and augmented reality. Above all, we found that shoppers seek a hyper-relevant experience — more so than a hyper-personalized one. In short, efficiency and savings are more important to them than personal engagement.

In our survey, 38 percent of respondents identified greater efficiency in the shopping process (e.g., ensuring items are in stock, speeding checkout times) as the area retailers most need to improve. By contrast, 13 percent sought improvements that would lead to a more personalized shopping experience. Read More »

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A Grammy-Class Outcome to the Rockstar Patents

Today’s definitive agreement for purchase of the Rockstar patents by a subsidiary of patent clearinghouse RPX Corporation, with simultaneous licensing of the portfolio to more than 30 technology companies, including Cisco, represents a victory for common sense. It also puts to rest a wayward and misguided business model that threatened to add costs to industry and consumers with no benefits to innovation or economic development.  This step should also send a strong message to companies who toy with the idea of “monetizing” their patent portfolios through transactions with private equity and non-practicing-entities, or by shaking down other industry participants: They will find themselves isolated. In short, they will end up as net losers if they initiate a game based on short-sighted greed.

We’re taking a different approach. Working with RPX, we devised a licensing model where even those who chose not to join with more than thirty of their peers in this purchase will still have the chance to license on comparable and fair terms.  Kent Walker, the general counsel of Google, was instrumental in pulling this together. Brad Smith and Bruce Sewell, the general counsels of Microsoft and Apple, deserve huge credit for working with the other Rockstar members – Blackberry, Ericsson and Sony – to reach a consensus that produced this positive result.

The origins of “Rockstar” are found in the smartphone patent wars that began several years ago. While we have no quarrel with companies using their patents to stop the copying of differentiating features without permission (and in fact commented favorably on the direct Apple-Samsung litigation), the driving up of patent valuations as each side in the war sought to bulk up for battle ended up serving no one other than lawyers and middlemen. Rockstar’s litigation strategy turned out to be inconclusive, keeping many lawyers very busy but with little money changing hands to date.

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