OK, retail technologists. It’s the new year. Time for resolutions.
Grab the pencil (so you can revise, not erase) and the notepad, plug in the earbuds, and settle into your thinking chair. And take the first step in getting rid of those old bad habits.
Resolve to address those big, ugly, long-standing structural weaknesses that weigh you down like a ball and chain. Weaknesses like the non-integrated, multiple databases residing within the legacy applications. Like the oft taken-for-granted time-to-capability performance (caused by a legacy store architecture) that measures all-store roll-outs in years and gets a constant eyeroll and deep sigh from the SVP of Ops.
Resolve to look that ancient, deeply-customized application that you prop each year with more people and money squarely in the eye.
Resolve to lose weight. Heavy, power-sucking, PO-abusing CPU weight. Virtualize the data centers and start the process of removing CPUs (and all the break-fix maintenance costs) from the store. Thin is in. So is operational simplicity.
Resolve to demand value from your vendors – which, as we all know, is different from the lowest price. Demand that they help you solve specific business problems. Demand that they bring their best strategists and thinkers to the table.
Resolve to ignore all the one-off shiny technologies du jour. Easier said than done, especially with NRF around the corner, the marketing SVP sputtering that “everyone else is doing it,” and the CEO remarking that his nephew had one at Christmas. (Mobility! Smartphone apps! Tablets! Interactive kiosks! Ooooh!)
Resolve to embrace BYOD, and push it forward. Your corporate leaders of tomorrow won’t necessarily thank you. It’s just that they’ll be willing to work for you instead of the competition.
Resolve to toss out of the room any consultant or vendor sales rep who talks about “customer experience” without detailed considerations of your segment, your price point, your brand promise, and the overall customer journey by persona – all the way through service and loyalty. Resolve to ask them how many times they’ve visited your stores.
Allow me to suggest a must-read volume for all retail technologists: How We Decide, by Jonah Lehrer.
Good friend and UK colleague Lisa Fretwell tipped me off to this book, which explores – through entertaining narratives and occasional in-the-weeds psychology – the process by which we make decisions, and why certain decisions are made.
Obviously an important topic to those of us seeking to influence consumer behavior.
Two caveats: If you’re looking for a bullet-point guide on how to position your next in-store solution, this isn’t it. It also doesn’t (thankfully) boil down neatly into nifty PowerPoint slides.
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I have been asking myself why this personal technology revolution is so hard for retailers.There are a number of pretty obvious answers on the surface.
The pace of innovation, for one. Given that the standard in-store technology refresh cycle is often measured in decades, it’s more than a bit frightening to think that today’s all-store devices might be old school in six months.
The fact that it’s about more than devices and apps, for another. Smart retailers know that the operational implication of the revolution is a single-brand, multi-touchpoint, flexible fulfillment future. Which will be millions and years in the making.
Which is enough to give any CIO – let alone CEO – pause.
I wonder, though, if there’s not another big reason. One that’s buried deep inside the financial fabric of retail.
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Thinking about the intersection of the internet and the store, the mash-up of retail’s virtual and physical worlds.
And wondering if something as out-of-sight as the industry’s performance metrics will get in the way of progress.
When e-commerce entered retail life in the mid-1990s, it was understandably regarded as just another channel of distribution – indeed, as just one more store. With this perspective, the key performance metric was (and generally remains to this day) site revenue. Conversion, another key metric, was defined as site transactions as a percent of site visits.
This still makes sense – but at a narrow, misleading level, because e-commerce no longer defines the connected world for retail.
In this age of Google and Facebook, the primary value today of the Internet to the shopper – and to your brand – is less about transactions, and more about search. On the PC, on the tablet, on the mobile devices, amidst the aisles.
The Internet – and the search function of the ever-mobile Internet – is now the front door of the entire brand.
In this past January, according to comScore, Americans conducted 18.6 billion total search queries (roughly 11.9 billion on Google alone). That’s 81 searches per month for every one of the 231 million Americans said to be accessing the Internet on a regular basis. Last year, the search market grew by 12% – the sum of a 4% increase in searchers, and 8% growth in searches per person.
According to comScore’s February 2011 study, 58% of US consumers begin their shopping journey with search. According to the Pew Research Center’s 2010 research, a typical day finds 21% of American adults searching for product information – up from 15% just three years earlier.
Given that online transactions total just 7% of US annual retail revenue, much of that online search opens the door to a store-based transaction.
Which suggests a new set of metrics to complement the old.
E-commerce is going global as retailers from around the world take advantage of faster growth trends to discover riches overseas. For many brick-and-mortar and pure-play retailers, however, expanding e-commerce into a foreign country is unknown territory.
The common questions I get from retailers who want to start new country website operations include: Where should I expand, and in what order? How do I adjust my practices to meet different cultural norms? Which functions should be located at headquarters versus locally? How should the entire operation be governed?
To address these concerns and more, Cisco IBSG conducted in-depth interviews with leading e-commerce executives at many of the top global retailers and suppliers to understand the best practices they use to ensure online success globally. The resulting information described in a recently published paper titled, “The Global E-Commerce Gold Rush: How Retailers Can Find Riches Overseas” is pure gold for retailers wanting to grow global revenues with e-commerce.
