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.
In the world of retailing, innovation has always been part of the driving force to success. Whether it is new store formats, new merchandise or new technologies,
Tesco, a leading global retailer, has been working with Cisco and Cisco IBSG to drive innovation in retail. Recently Lisa Fretwell, Cisco IBSG senior director for retail wrote in her blog titled “Every Little Helps” – Cisco IBSG and Tesco about her experience working with Tesco on next generation network and collaboration.
In this video exempt from a recent Cisco roundtable titled “The Power of the Network in Innovation”, Paul Mountford, Cisco SVP Global Enterprise Markets and Mike McNamara, CIO of Tesco discusses the power of the network in innovation.
One of the delimmas that faces retailers today is the need to control costs and innovate to support new ways to providing a compelling shopping experience across all shopping channels.
In Jon Stine’s recent blog Big Pipes and Lean Stores, Jon talked about the store evolving into a living breathing web site. Just like a highly dynamic web site with rapidly changing content and integration to other channels, stores will need to replicate that functionality to serve the new generation of consumers. Retailers with traditional inflexible store IT infrastructure will find it very difficult to adapt to this dynamic environment in a cost effective manner.
Guest Brian Kilcourse, Managing Partner Retail Systems Research and Jon Stine will discuss the retailers who retailers must face this dieimma head on.
Michael Heffler, Retail Solutions Manager and Bart McGlothin, Retail Solutions Architect will present how retailers can rely on the network to reduce costs and increase flexibility.
In areas including Lean Store and Lean Data Center, this involves projects such as as simplifying and moving IT equipment from the store to the data center and leveraging virtualization and centralized management of IT services in the stores .
By moving to a network-based architecture with a belt (back-up) and suspenders (survivability) to deliver services, this strategy can help retailers evolve to a private and public cloud services platfom in the future.
Steven Ross, Vice President of Technology, Chico’s FAS, Inc. is our special guest and he will present on his experience with dynamic architecture and working with Cisco data center technologies.
I learned long ago that demography is destiny for retailers.
Baby booms mean more diapers and formula, more home remodels, more school supplies. The aging of Baby Boomers means more traffic for drug chains and grocers with pharmacies. Growing Hispanic populations mean different assortments in grocery and different scents in soaps and personal fragrance.
After working with Tesco for more than four years, I’ve learned that the company has a proven recipe for success: combine a strategy of unrelenting focus on customers with a mantra of better, simpler, cheaper—better for customers, simpler for employees, and cheaper for Tesco. The results speak for themselves. With operations in 14 countries, Tesco has become the world’s third-largest retailer by revenue, and second when measured by profits.
Tesco has a saying that it uses with customers—“Every little helps.” From the beginning, the Cisco® Internet Business Solutions Group (IBSG) has embraced this phrase to guide our work. This is an important reason for our success as we team with Tesco executives and employees, in conjunction with other Cisco groups and technology partners, to develop innovative strategies that help Tesco grow internationally, improve collaboration, and, of course, operate more efficiently.
IBSG has worked in lockstep with Tesco on their journey to become the world’s most innovative retailer…..