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Digitization Offers Hope to Besieged Retailers

These are especially difficult times for the retail industry.

For starters, several of retail’s marquee names announced store closings or layoffs following a disappointing holiday sales season. Retailers simply haven’t benefited from cheaper gas and a relatively strong overall U.S. job market —retail sales declined 0.1 percent in December from the previous month, according to the U.S. Department of Commerce.

Making matters worse, brick-and-mortar retailers are quickly losing ground to online giants like Amazon. According to a recent article in The New York Times, Amazon captured almost a quarter of all U.S. retail sales growth last year.

The retail industry’s comparatively low IT spending has also placed it at high risk of disruption by technology-savvy incumbents and digital-native upstarts. In fact, according to the Global Center for Digital Business Transformation (DBT Center), retail ranked third among 12 industries studied in terms of potential for digital disruption over the next five years.

Clearly, all of this should send a strong message to the retail industry. Yet, at least from a “digital transformation” perspective, the industry doesn’t appear to be listening. Although 56 percent of retail executives say digital disruption is a board-level or CXO concern, fewer than one-quarter are doing anything about it by actively disrupting their own businesses.

It is not altogether surprising, then, that according to a new Cisco study, retailers captured just 15 percent of their potential Digital Value at Stake in 2015. By comparison, financial services realized almost twice as much digital value.

There are, however, some excellent examples of effective digitization in the retail industry.

Digital Transformation in Retail from Cisco Business Insights

A perfect case in point is F&F, the clothing brand of U.K. grocery retailer Tesco.

F&F needed to address multiple challenges: limited floor space, little visibility into what customers did in stores, and poor customer awareness of F&F online.

Using a combination of in-store Wi-Fi and integrated mobile and tablet access for shop associates, F&F management can now track customer journeys and gain insight into customer behavior. Free Wi-Fi gave F&F the ability to track customer journeys in greater detail. It also provided a means to deliver curated content and context-specific offers directly to customers’ mobile phones, incorporating connected advertising.

Over three months, the number of customers logging onto Wi-Fi increased 50 percent. Customers spent roughly 30 to 50 percent of their physical dwell time online on personal devices, while also engaging with push offers. This engagement changed customer behavior, increasing dwell times and sales.

F&F was also eager to build its online customer base to augment its relatively small physical floor space. Key technologies in the store made this possible. Interactive kiosks allowed customers to order items online and have them delivered to the store or their home. This reduced the number of customers leaving empty-handed because their size or preferred style wasn’t in stock at the store. It also offered a strong introduction to F&F online—and to styles customers might not otherwise have seen. The brand has experienced a steady increase in online sales as a result.

F&F has also piloted “remote expert,” a means of providing virtual access to a style advisor who isn’t physically present in the store. Although associates on the floor are armed with tablets to help advise customers, remote experts offer personal styling advice. Using the same kinds of technology tools as next-generation workers, remote experts employ video conferencing to increase customer engagement—supporting sales, especially on higher-ticket items—and to promote F&F as a fashion brand.

For many retailers, the biggest challenge in becoming a digital business is figuring out where to start. Here are three steps to take:

  1. Evaluate where you are on the journey—are you using digital capabilities to enable operational efficiency, differentiate through improved business processes, or define new business models? There’s a good chance that you already have key elements of the required digital foundation.
  2. Build an investment plan to meet your business objectives. Prioritize the biggest areas of payback and plan short-term gains that can fund ongoing investment.
  3. Finally, use this investment plan to close the gap between the
digital capabilities you need and the outcomes you want. While the fundamentals will remain the same, your objectives and priorities may change over time.

The time for retailers to act is now.

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Financial Services and Retail: ‘A (Digital) Tale of Two Industries’

Over the past six months or so, many of my blogs have dealt with the hot topic of “digital disruption” — both as a threat and an opportunity for companies, regardless of industry.

Several industries already find themselves inside this swirling “Digital Vortex,” which possesses the potential to reshape industries faster than perhaps any force in history. The power of the Digital Vortex is undeniable: it will displace nearly 4 of the top 10 incumbents by industry over the next five years, according to a 2015 study by the Global Center for Digital Business Transformation (DBT Center).

MikeRiegelVASVortexPic1

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As part of its study, the DBT Center ranked 12 industries based on their potential for digital disruption. The No. 3- and No. 4-ranked industries — retail and financial services, respectively — provide a fascinating contrast in how industries are faring as they confront the Digital Vortex. Read More »

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Lead Cloud Disruption and Adoption. We’re With You.

We all know the right cloud solutions help organizations improve agility, accelerate time to market, and deliver cost savings.  But for customers, it’s not always easy to know where to start.  Between public, private, and hybrid cloud solutions, they need to know which choice is best for their business and what to do first.  They need a cloud strategy.

According to a new Cisco-sponsored IDC report (“Don’t Get Left Behind: The Business Benefits of Achieving Greater Cloud Adoption”), only 1% of organizations have fully-optimized cloud strategies in place.  Only 1%.

Help Customers Build Better Cloud Strategies

Here’s where customers need your expertise. And we want to help you develop this expertise.

Based on in-depth IDC market research and insights from over 3,400 organizations across 17 countries, we developed the Cisco Business Cloud Advisor — a framework to help customers translate in-depth research into actionable cloud adoption plans.

Now we’re making it available to you, our partners, to make your customer conversations easier.

Consider the benefits of showing customers how much they will gain and how much more competitive and productive they will be with a cloud strategy.  Collaborating with IDC, we analyzed cloud adoption levels by geography, industry, and company size.  Using the Cisco Business Cloud Advisor, you can provide cost and time-to-market improvement estimates based on an organization’s cloud adoption.

Once your customers understand the business benefits of cloud adoption, you can offer concrete recommendations, and strategy that includes real solutions and services — from your portfolio and ours — to help them meet their business needs.

Read More »

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Are the skills we have today be relevant tomorrow?

 

Woman in the workplaceAre we Disrupting Ourselves out of jobs? This blog is to provoke dialogue Read More »

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Are We Disrupting Ourselves Out of Jobs?

Much has been published in the industry about how automation will result in job loss e.g. the book, The Second Machine Age, as an example.

Further, the question is obvious as to whether or not the skills you have today will be relevant tomorrow?

Women at work
Such discussions have been occurring for the past several years since the financial crisis of 2008; and the question now pondered by enterprises and governments is :

  1. How do we grow the middle class?
  2. How do we provide skills to under-served communities?

Read More »

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