The Internet of Everything (IoE) is driving remarkable change and opportunities across nearly all industries. But few are as visible — and rapid — as the upheavals affecting retail. Today, retailers aren’t just competing with the store across the parking lot. Industry leaders face an expanding universe of mobile and virtual shopping possibilities vying for the attention of their customers.
Recent Cisco retail research shows that mobile commerce grew forty-seven percent in 2014 (Q2), far out-pacing e-commerce (ten percent) and total retail overall (three percent). And it’s not surprising, with nearly every customer using a mobile device of one type or another. Today, eighty percent of shoppers are now classified as “digital.”
Mobile devices — and rapidly evolving customer behaviors — are driving expectations for more fully optimized digital shopping experiences, in store and out. Yet traditional retailers have an exciting opportunity to meet this demand by offering hyper-relevant customer experiences that drive savings, efficiency, and engagement. In merging the best attributes of the physical store with the online experience, brick-and-mortar retailers can drive their own industry disruption. Read More »
Tags: analytics, Business Trends, CCS, Cisco Mobility, ciscochat, connected retail, data, hyper-relevance, Internet of Everything, internet of things, IoE, IoT, mobile, retail, shopping
“Let the buyer beware” is a sentiment that dates back well before consumer protection and truth-in-advertising laws. Yet, the issue of trust continues to permeate all areas of society today. A few weeks ago, I wrote about the “trust cliff” that affects the amount of information consumers are willing to share with retailers in order to have more relevant interactions.
Now, a new Cisco study on retail banking in 12 countries reveals a different kind of trust problem: consumers are getting less value than they expect from their banks, and this “value gap” is impacting customer trust.
The global financial crisis of 2007-2008 greatly damaged consumer trust in financial institutions, and brand equity has fallen along with it. In 2009, one year after the financial crisis, the world’s top 500 brands saw the value of their brands drop by 32 percent. For many banks, their brand value has yet to recover from pre-crisis levels.
But the roots of distrust go deeper than that. Our study shows that there is a fundamental disconnect between banks and their customers, and many customers no longer look to their banks to help them meet their financial goals. In fact:
- 43 percent of customers say their bank doesn’t understand their needs
- One in four would choose another provider for their next account or service
- Only 40 percent of respondents worldwide turn to a financial professional for advice, and of these, 28 percent believe the advice is ineffective
Meanwhile, a growing cadre of disruptive “non-bank” innovators is exploiting this value gap between banks and their customers. They range from technology companies such as Apple and Google, to retailers such as Amazon.com and Tesco, to mobile and digital-only banking services, payment companies, and automated investment services. A surprising 80 percent of consumers surveyed said they would trust a non-bank for their banking services. In eight out of the 12 countries surveyed, more consumers would actually trust a non-bank than their own bank.
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Tags: analytics, banking, CCS, Cisco, Cisco Consulting Services, data, digital, Financial Services, hyper-relevance, innovation, Internet of Everything, internet of things, IoE, Museum of Lasts, trust, value gap
Retailers once had a pretty clear idea of who shopped where and how they did it. After all, there were not that many options available for shoppers. Consumers would see an ad or peruse a catalog, and then visit the physical store with the hope that their preferred item was in stock.
These days, retailers understand there is an entirely new kind of shopper. Indeed, since the advent of e-commerce, retail complexity has increased exponentially, and today’s digital consumer navigates a wide range of channels and potential shopping journeys.
As a recent Cisco survey of retail trends discovered, e-commerce has added about 40 possible shopping options for a typical shopper. With the rise of the Internet of Everything (IoE) — the explosion in networked connections of people process, data, and things — potential shopping journeys will expand to 800 and beyond. Some of the new options coming into play could include mobile devices equipped for live Web engagements, checkout optimization, mobile payments, wearables, augmented reality, and drone delivery.
The variety of journeys available to shoppers is growing exponentially.
Source: Cisco Consulting Services, 2015
This sweeping digital transformation has dramatically altered the shopping behaviors of consumers, who now demand experiences that are contextual and hyper-relevant (enabling consumers to receive what they want, when and how they want it), whether in-store or out. As a result, retailers are reinventing their business models and rethinking much of what they once knew, including traditional customer segmentation.
Video: IoE in Retail: Hyper-Relevance through Consumer Context
Increasingly, we are entering a period that has been referred to as “post-demographic consumerism” in which consumption patterns are no longer defined by traditional demographic segments such as age, gender, location, income, family status, and the like. This presents a significant challenge to retailers already grappling with growing complexity in their operations.
For example, Cisco’s research reveals that Gen Y is far from monolithic. On one hand, Gen Y continues to accelerate the shift to online channels (faster than any other group): although 34 percent make more than half of all purchases online as they seek convenience and greater access to information, 54 percent would shop only in stores for the next month if they had to make a choice. Moreover, just as the physical store remains important to Gen Y, many seniors are shopping online or with mobile devices.
In short, consumer segments are increasingly fragmented and ephemeral. The sheer number of potential shopping journeys is growing exponentially, and the change is occurring faster than ever before. For an individual shopper, however, the journeys are also dynamic. Consumers are constantly shifting to other journeys as new innovations emerge —
and faster than retailers can respond. Compounding this, the velocity of innovation is increasing as IoE dissolves traditional barriers (for example, through the low cost of app creation, the Kickstarter-style funding model, and so forth).
Since every retailer is unique, and there is enormous variation across categories, each retailer must define its own target segments, and then be prepared for the rapid evolution of new “microsegments.” Cisco is working with retailers to define target segments and prepare for the evolution of new ones.
To enable the customer outcomes that will determine the winners of the IoE era, most retailers understand that they need to know their customers as never before and, critically, possess the requisite business agility to adapt. Fortunately, IoE and consumer analytics technology provide the platform to truly understand, engage and respond to their customer.
Analytics is a key competitive frontier in the IoE era, enabling retailers to provide consumer experiences, offers, and interactions that are contextual, relevant, and timely. Moreover, analytics empowers the retailer to respond dynamically to constantly changing customer behavior.
To succeed in this area, retailers need a technology strategy that captures data at the “edge” of the network — from mobile devices, sensors, video cameras, and the like — and analyzes it locally, in real time, to respond to fast-moving opportunities. By leveraging analytics and other key elements of IoE such as video and mobility, retailers can drive greater efficiency in each customer journey, offer real-time savings, and create a more relevant customer engagement.
As shopper segmentation blurs, analytics is critical to understanding the new digital customer. Old or young, rich or poor, all customers have value and want to interact with retailers in new, hyper-relevant ways. IoE-driven solutions are the way to do it.
Tags: Anabelle Pinto, analytics, CCS, Cisco, Cisco Consulting Services, connected retail, data, digital, hyper-relevance, innovation, Internet of Everything, internet of things, IoE, IoT, National Retail Federation, NRF, retail, shopping
Around the world, banking customers express similar frustrations: they believe the value they receive from their banks is declining, at a time when their trust in those banks already has eroded.
What’s more, according to a Cisco survey of 7,200 banking customers in 12 countries, four out of five customers would trust a non-bank, such as a technology company or retailer, to handle their banking needs. Some of those disruptive competitors are succeeding where banks fail: by engaging customers with convenient transactions and value-added services.
The Cisco study found that Internet of Everything (IoE)-enabled services can help restore the value customers expect from banking institutions. IoE — the networked connection of people, process, data and things — makes it possible for banks to offer a more relevant, engaging, and convenient experience for customers.
Of the $19 trillion in global economic value Cisco estimates IoE can create over the next decade, 7 percent ($1.3 trillion) is accounted for in the finance market and could be addressed with concepts included in this survey.
The digitization of business and society is happening at a rapid pace and people are looking for improved, digital services that make life easier. Banks need to embrace this pace of change and deliver relevant services or risk becoming obsolete in a market where other providers are stepping in to fill the gaps.
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Tags: analytics, banking, CCS, Cisco, Cisco Consulting Services, data, digital, Financial Services, hyper-relevance, innovation, Internet of Everything, internet of things, IoE, IoT, Wim Elfrink
In years past, a visit to the neighborhood bank branch often featured face-to-face meetings with a trusted advisor who would guide customers through their most challenging financial journeys — often over a cup of coffee. Today, many banks have ceded that privileged position of trusted advisor. While banks have made great strides in using technology to cut costs and streamline transactions, customer experience and engagement have suffered.
In a Cisco survey of 7,200 bank customers in 12 countries, 43 percent of customers said their primary bank does not understand their individual needs. As a result, many respondents feel that their choice is between bad financial advice or no advice all. Moreover, nearly one in four bank customers intend to choose another provider for their next financial product or service. Increasingly, that provider could be a non-bank such as Apple, PayPal, or a retailer. Four out of five customers would trust a non-bank to handle their banking needs.
Clearly, the perceived value that customers receive from banks is declining, along with their trust in banks to represent their interests. Banks are seen as commoditized — and replaceable — providers of transactions. Meanwhile, in the wake of the financial crisis of 2007-2008 and some well-publicized banking scandals, banks’ “trusted advisor” status has suffered. Moreover, it is easier than ever to switch to a non-bank that customers believe has a better understanding of their needs.
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Tags: analytics, banking, CCS, Cisco, Cisco Consulting Services, data, digital, Financial Services, hyper-relevance, innovation, Internet of Everything, internet of things, IoE, IoT