We live in a time of tremendous and challenging technological disruptions. Yet it is also a time when the opportunities for business transformation are equally vast and impactful. This is particularly true for the retail industry.
The wave of change, which Cisco calls the Internet of Everything (IoE), is fast-moving, and retailers will need to adapt quickly or be left behind. After all, this explosion in connectivity — from 10 billion things today to 50 billion in 2020 — will demand a new paradigm: the IoE-Ready Retailer. And it will enable vast improvements in customer experience, employee productivity, and supply-chain efficiency, while allowing retailers to know their customers like never before.
Cisco’s research into this new dimension in connectivity among people, process, data, and things — and the overall Value at Stake over the next 10 years —presents some mind-boggling numbers: $14.4 trillion for the private sector overall and another $4.6 trillion for public sector organizations.
As per Cisco’s estimate, the retail industry will account for 11 percent of the total IoE private sector Value at Stake over the next 10 years — second only to the manufacturing industry. Cisco believes that success for retailers will hinge particularly on their ability to apply technology to improve the “people” and “process” aspects of their businesses, and to be able to offer unique, new connected experiences to the average shopper.
Cisco’s new research, which explores how the average consumer is thinking and adopting these connected experiences, uncovers some startling facts. Consumers now research, compare, and purchase products with one-click ease. The population of ever-connected, digital natives is increasing at unprecedented rates (60%+ year over year). This affords sellers with a wealth of real-time data insights that can help them stock the right products and present them in novel ways.
Walking the miles of aisles at the 2014 Consumer Electronics Show (CES) in Las Vegas, it’s easy to see how the Internet of Everything (IoE) is revolutionizing our lives. Super-smart homes, cars, drones, and all manner of entertainment are on display seemingly everywhere, along with a mind-boggling array of wearable, connected technologies.
But CES — and IoE — are not just about how we interact with cool gadgets. They are also about new ways to connect with the public-sector environment. And there are extremely exciting possibilities coming to life in our towns, cities, and communities.
Ultimately, these public-sector breakthroughs could have a profound impact. Just think about how much of your quality of life is affected on a daily basis — directly or indirectly — by parking, waste management, crime, public utilities, and government services.
Cisco predicts that $4.6 trillion of value will be “at stake” in the public sector over the next decade ($19 trillion for the public and private sectors combined), driven by “connecting the unconnected” through the Internet of Everything. We also estimate that 99.4 percent of physical objects that may one day be part of the Internet of Everything are still unconnected.
As I’m sure most of you know, Jon Stine presented this morning at NRF on the results of his fourth “Catch ‘Em and Keep ‘Em” survey, which is a highly respected study done each year to identify how shoppers are responding to retail technologies. As a followup to his NRF Big Ideas session, I’d like to reproduce here Jon’s blog on his findings and thoughts. Thank you, Jon!
Want Your Share of $100 Billion? Build Customer Trust
By Jon Stine
Trust. It’s a powerful human emotion that often drives our behavior. The level of trust, or lack thereof, between a retailer and its customers can literally make or break the business. Given the importance of trust, many retailers are asking: How much do customers trust retailers? What are the benefits of increasing trust? How do retailers gather the information needed to provide the personalized experiences many customers want, while maintaining and even building trusted relationships?
These questions are especially important given the critical juncture at which we find ourselves—the convergence of people, process, data, and things called the Internet of Everything (IoE).
To help retailers build customer trust in an increasingly digitally connected world, Cisco Consulting Services surveyed 1,174 consumers in its fourth annual Digital Shopping Behavior survey.* From a behavior perspective, shoppers are becoming more digital. In fact, eighty percent of respondents are what we call Digital Mass shoppers—people who research, browse, and purchase digitally. Within this group, Über Digitals, who almost always use a smartphone to shop, increased from 11 percent last year to 18 percent this year. Clearly, your customers are digital.
Before we discuss “how,” it is important to understand “why.” Our research showed $100 billion of IoE value was available for retailers in the United States to capture in 2013 by offering more personalized shopping experiences. If you missed your share, don’t worry. This number is expected to increase slightly in 2014. Realizing this value, however, isn’t easy.
When it comes to trust, retailers are starting from a low base. When asked, “How much would you trust these companies/institutions to protect your personal data and use it to provide something you value?” respondents ranked retailers second to last, at 31 percent—behind government agencies (37 percent), and ahead of Internet companies (18 percent).
Even so, shoppers want personalized experiences. When asked, “Which personalized experiences do you prefer?” respondents ranked promotions via touch-screen or smartphone first (Digital Mass: 46 percent; Über Digitals: 53 percent). This was followed by personalized products, personalized shopping lists, and personalized service.
So, how do we solve this dilemma between a lack of trust and the desire for personalized shopping experiences, which require the collection of personal information? For answers, let’s look at a few of the research findings.
Shoppers want personalized offers that are easy to use – Most people want to receive personalized offers via email at home. This suggests that shoppers — even Über Digitals — start the shopping process while they are in their home environment. The vision of in-store offers may simply not be in sync with the reality of shopper decision making and in-store behavior.
Shoppers are willing to share information – Both Digital Mass and Über Digital shoppers are willing to share past purchase history and basic personal information (name, age, etc.) with retailers to receive a more personalized shopping experience. Topping the list of acceptable information for retailers to use are time spent in the store, location in the store, and products you try but don’t buy.
Based on our experience working with many of the world’s leading retailers, there are three key takeaways and actions when it comes to building trust:
Shopper trust must be earned. Retailers can do this by delivering a clear data policy and making the benefits of providing personal information transparent and easy to understand.
IoE is already here. To capture your share of the $100 billion value at stake, develop a strategic plan that takes into account the information above.
Über Digitals are too important to ignore. Selling to these shoppers requires an architecture and infrastructure that can support their increasing expectations for connected, digital shopping experiences.
To gain even more insights into developing trust in an IoE world, take a look at:
* This year’s Cisco Consulting Digital Shopping Behavior survey includes responses from 1,174 consumers who are representative of the United States broadband population by age, income, and region. It is the fourth in a series of popular “Catch ‘Em and Keep ‘Em” studies by Cisco Consulting Services.
Superheroes and their super strengths have long captured our imaginations. And since many of these abilities are normal human traits stretched to a magical extreme, you may well have pictured how your own life would change with super speed, agility, or senses.
Today, such daydreams are getting just a bit closer to reality. And while such powers won’t necessarily save the world (yet), they will make some common activities, such as shopping, a bit more super.
Smartphones have already assumed a central role in the retail experience. Yet the current level of smartphone interactivity is just the beginning. Exciting new capabilities are transforming the ways in which we interact — connecting our physical world to digital dimensions in very simple and intelligent ways. We will see more intelligent connections emerging across the entire customer journey: consideration, purchase, and usage.
If it seems as if the roles of chief information officer (CIO) and chief diversity officer (CDO) rarely overlap, think again. In today’s hypercompetitive — and hyperconnected — global marketplace, inclusion, collaboration, and technology are merging as essential drivers of innovation and business success. And the relationship between the CIO and CDO may never be the same.
Indeed, fostering a policy of inclusion and diversity in your organization isn’t just the right thing to do; increasingly, it is also the profitable thing to do. And, it’s a clear business imperative, since great ideas come from all corners — and levels — of the organization.
In a Cisco survey of 7,500 companies, 93 percent of enterprises with a formal policy of inclusion reported that their collaboration technology investments outperformed their business value expectations. That’s just one example of the inclusion/diversity/value equation at work.