“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
Connecting Dark Assets: An ongoing series on how the Internet of Everything is transforming the ways in which we live, work, play, and learn.
If you’re like me, you usually arrive at the airport for a business trip with no time to spare. Often, I find myself rushing to the airport from a meeting that ran late, or arriving at the crack of dawn after not getting enough sleep. So the last thing I want to deal with is trying to catch the shuttle from long-term parking — or even finding a space in the short-term lot. Some airports now offer valet service, but I’m always hesitant about picking up a scratch or dent when I give my keys to the parking attendant.
But if I were flying out of Düsseldorf, Germany, it would be a different story. This past summer, Düsseldorf introduced ParkingPLUS, which uses a valet robot called “Ray” to park your car safely and efficiently — with no risk to your paint job! Travelers just drive into the ParkingPLUS lot, and Ray takes it from there, measuring the vehicle and picking it up with a forklift-like mechanism. The robot transports the car to a back parking area, efficiently squeezing it into a tight space without trouble. And for travelers, the drop-off point is just a quick walk to the terminal.
Not only is Ray a very skilled parking attendant, it’s also a great example of how the Internet of Everything (IoE) “lights up” dark assets by connecting the previously unconnected. Because ParkingPLUS is connected to the airport’s flight data system, Ray knows how long you’ll be gone. This enables Ray to park your car in the best spot for easy retrieval. And if you change your return flight, you need only enter your new flight information into a mobile app to let Ray know when to have your car ready.
The Düsseldorf airport is the first real-world application of this technology from German company Serva Transport, which does not want to stop with airport parking. By installing its system into busy and congested urban parking garages, the company estimates it can increase parking capacity by 60 percent — saving time, energy, and aggravation as it reduces congestion and improves productivity.
But I’d be happy with the airport version, especially if it came to San Jose! With a connected robot valet, my travel days would be less stressful and more productive. The robot parking valet is just one more way IoE is lighting up dark assets — even dark parking garages.
Tags: airport parking, Cisco, Internet of Everything, IoE, parking valet, ParkingPLUS, robot, Serva
As I reflected on a very memorable Mobile World Congress 2015 during the plane ride home from Barcelona a few days ago, it became clear that the transformation Cisco has been seeing in the telecommunications service provider industry is now a global movement.
It’s not just happening in Europe, or Latin America, or Asia. It’s quite literally everywhere.
“Transformation through Innovation” was Cisco’s theme for this year’s Mobile World Congress, and at heart of our service provider strategy. It’s quite clear we’re onto something.
In countless conversations last week with leaders of forward-thinking global service providers in Barcelona, I heard two familiar themes over and over again –“Transformation and Innovation.” They’re all seeking to transform their architectures and businesses – and ultimately their customers’ experiences – to capture new opportunities in the Internet of Everything (IoE) era. In fact, the IoE – the networked connection of people, processes, data and things – is expected to create a $1.7 trillion market opportunity for service providers over the next decade.
With large networks that deliver mobile, video, collaboration, and other offerings to individual subscribers and businesses of all sizes, service providers are in an enviable position, sitting at the center of the IoE. They alone have the unique opportunity to take advantage of all kinds of new IoE connection types, and integrating them to deliver rich new applications, services and experiences.
What a truly exciting time to be in this industry!
That said, existing operational complexity can stifle service providers’ abilities to reduce costs and become more agile in bringing new capabilities to market. The reality is, today most new applications and services take months to roll out. If this pace does not rapidly accelerate, the entire industry will be left behind.
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Tags: AT&T, Cisco, deutsche telekom, DT, EE of the UK, IoE, Kelly Ahuja, mobile world congress, mobility iq, mwc, telecom italia, telefonica, telstra, vodafone
Many of you may have missed the recent presence of Cisco at DistribuTECH in San Diego last month, so that blog is summarized here and a link to the live blog is given at the end of this summary:
At DistribuTECH, Cisco had the pleasure of engaging with attendees, demonstrating how utilities the world over have worked with Cisco and our partners to reduce costs and deliver more services on a single, intelligent and secure platform. The IT model we shared is one that brings innovation to the Operational Technology (OT) environment, integrating information, data, people and processes – the building blocks for the Internet of Everything.
In the included video Bit Stew went on to talk about how they’re taking their software, embedding it in Cisco routers, putting it inside substations, allowing that intelligence and that automation to happen in real time, right at the edge of the network, yet tie back into cloud based systems. This technology is brought to life at major utilities such as BC Hydro, a Canadian electric utility in the province of British Columbia, which first introduced smart meters in 2011. Find out more by reading the whole blog below.
Read the blog here: Fog Computing Becomes Clearer with Cisco IOx Solution
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Tags: Bit Stew, DistribuTECH, edge computing, Fog computing, IoE, IoT, IOx, utilities