Co-Authored by: Shaun Kirby, CTO, Cisco Consulting Services
The IoE promises to revolutionize industries by providing access to a wealth of previously hidden information obtained from a myriad of new connected sensors fused intelligently by novel real-time analytics. Retailers have seen early success by connecting dark assets in stores, warehouses and other venues. This week at the Retail’s Big Show by the National Retail Foundation, Cisco shared specific stories about cutting edge IoE use cases in retail operations, , along with the release of a comprehensive, three-pronged research study on IoE in retail. Read More »
Tags: Cisco, Cisco Consulting Services, Internet of Everything, IoE, NRF, retail, Shaun Kirby, Tony Shakib
As Cisco’s chief marketing officer, an important part of my role is to build and maintain the trust of Cisco’s customers.In fact, “brand promise” ultimately relies upon the trust consumers have placed in a brand. Customers who are loyal to a brand will trust that the next product or service introduced under that brand will fulfill the brand promise. However, trust can also have more widespread impacts that affect an organization’s ability to compete and to provide the innovative customer experiences required in the Internet of Everything (IoE) era.
This week at the National Retail Federation’s “Big Show” in New York, Cisco released a new study that uncovered some unique insights about shopping behaviors and attitudes among U.S. and U.K. consumers in the digital age. The findings point to the need for retailers to provide “hyper-relevant” shopping experiences that deliver value to the consumer in real time throughout the shopping lifecycle. Hyper-relevance comes with the ability to dynamically compare real-time customer information with historical data, and the resulting insights allow retailers to improve operations and the customer experience. At stake, according to our research, is an estimated profit improvement of 15.6 percent for an illustrative $20 billion retailer that builds agile business processes for turning these insights into value.
Our research shows that consumers are looking for retailers to deliver hyper-relevance via three value proposition categories: efficiency, engagement, and savings. In the area of efficiency, for example, 77 percent of respondents said they would be “somewhat” or “very likely” to use a solution to optimize the checkout process. In terms of savings, 79 percent indicated a willingness to take advantage of in-store offers provided via digital signage, while 73 percent said they’d like to receive special offers through augmented-reality solutions. And, in the area of engagement, 57 percent indicated a desire to learn more about products in the store by using augmented-reality capabilities.
One of the points I found particularly interesting is that consumers are relatively willing to provide certain types of personal information to retailers—such as name, age, past purchasing history, interests, and hobbies—in order to get a more personally relevant shopping experience. But beyond this basic information, there is a “trust cliff,” a steep drop-off in willingness to share certain types of personal information. A significant 16 percent of respondents were not willing to share any personal information at all.
This trust cliff presents an interesting conundrum for retailers. On one hand, our study shows that customers want personalized and contextually relevant shopping experiences. But on the other hand, they are reluctant to share the very information that can help provide these “hyper-relevant” experiences.
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Tags: analytics, Cisco, Cisco Consulting Services, connected retail, consumer, customer experience, digital, hyper-relevance, Internet of Everything, IoE, National Retail Federation, NRF, privacy, retail, shopping, smart retail, trust
“Mike” may be an avid golfer who enjoys meandering through the sporting goods section of his local retailer. But he would be a very different shopper the morning his plumbing fails and threatens to flood his basement. In such a context, efficiency rules, and it is critical for the retailer to speed his shopping journey — from product research to fast checkout and payment. Friendly, by-name greetings offering prompts for new golf products on Mike’s smartphone would seem irrelevant at best, and intrusive at worst.
Checkout optimization, in-store sensors, augmented-reality solutions, and real-time analytics at the “edge” of the network are just a few of the capabilities that could give the retailer a clear picture of Mike’s shopping habits in that particular context — time, place, and situation — while helping Mike meet his plumbing crisis in a timely and efficient manner.
In effect, Mike is one customer, but he can be many different shoppers. And retailers need to know them all. Technology — specifically Internet of Everything (IoE) solutions that connect people, process, data, and things — is the way to do it.
To better illuminate the competitive dynamics and opportunities for retailers, Cisco this week shared its fifth annual retail consumer survey. Released at the National Retail Federation (NRF) “Big Show” in New York, the study includes a survey of 1240 consumer respondents from the United States and United Kingdom. Later this year, Cisco will release the complete global findings from 6,000 respondents across 10 countries.
At NRF, we also met with retailers from around the world, who shared their successes and challenges. Technology, of course, can be a headache for retailers. From disruptive innovations to rapidly changing customer behaviors, today’s retailers are challenged on multiple fronts. As the Cisco study found, however, IoE-enabled solutions offer retailers an opportunity to provide their customers with hyper-relevant experiences that blend the best of online shopping with the advantages of the in-store experience.
The key is to gain insight into the real-time nuances and context of the many shopping journeys available to consumers. That requires investments in the right technology. But how can retailers avoid the kinds of investments that have not paid off in the past?
In the Cisco study, we tested 19 IoE-enabled shopping experiences, spanning all stages of the shopping journey and addressing many maturing digital enablers, including video, mobility, and analytics. Overall, consumers indicated that they are very interested in using these applications to get more value. The table below illustrates our respondents’ interest level in the 19 individual concept tests, along with the financial opportunity from each of three value proposition categories: efficiency, savings, and engagement. Our economic analysis revealed that roughly two-thirds of the total potential opportunity (or $208 million for an illustrative retailer with $20 billion in annual revenue) comes from applications that deliver greater efficiency for consumers.
In the United States, disruptive innovators (e.g., Groupon, LivingSocial, Gilt) have successfully targeted consumer savings, which has served to exacerbate margin compression for retailers in some categories. We are now exploring these trends in Europe, Asia Pacific, and Latin America. We find that most incumbent retailers, by contrast, are investing heavily in solutions that engage consumers at all points of their shopping journey, including bringing them into the store and cross-selling and up-selling to them (indeed, this is the underlying strategy of today’s discount wars).
Consumers have always been preoccupied with savings. So
it is no surprise that savings remain the area of most interest to our survey respondents. Efficiency, however, is a close
second in terms of interest. When asked about the areas where they would
like to see improvements, 39 percent of our respondents
identified the process of selecting and purchasing goods, showing a need for greater
ease and efficiency. By contrast, only 13 percent sought improvements that would create a more personalized
In this year’s survey, consumers made it clear that experiences must be efficient, contextual (that is, reflecting a shopper’s individual situation, real-time environment, history, and so forth), relevant to real-time needs, and easy in which to participate. In the retail environment, such situational awareness is essential to creating a better customer experience. Retailers must increase the value to the consumer throughout the shopping journey, demonstrably providing a combination of efficiency, savings, and engagement.
By exploring these solutions today, retailers can begin to realize a new level of innovation and competitive dynamism. And customers like Mike can look forward to getting their plumbing fixed ASAP (and maybe even return to the store later that day to try out some of those new golf products).
Tags: Anabelle Pinto, analytics, Cisco, Cisco Consulting Services, connected retail, consumer, customer experience, digital, hyper-relevance, Internet of Everything, IoE, National Retail Federation, NRF, privacy, retail, shopping, smart retail, trust
One of the hottest topics at NRF this week has been delivery systems. Recent research by Cisco Consulting has found that delivery is one of the top concerns of not only retailers, but of shoppers as well. I now have personal experience of this: Just before the holidays, my husband and I ran an experiment: Living digitally for a few days, shopping online, using only available delivery systems.
Day 1 – Now, I order just about everything online except for groceries. However, my husband orders very little online, although he is a fan of eBay. The first question he asked was, “What about groceries?” I said we would order from Safeway (where I used to work before coming to Cisco). His next question was, “Well, that’s great for our basics, but what about the specialty items we get from Trader Joe’s, how are we going to get those?” He solved this problem himself by finding Envoy, a store-agnostic delivery service.
Amazon, Amazon Fresh, Google Express, Instacart, eBay Now!, Deliv… so many delivery options, though not all available in our area. The first order of business was to buy groceries. However, I needed to sign up for a delivery service – up until then I had purchased everything online except for perishables, and I must say that I was a little embarrassed that I had never ordered from my alma mater, Safeway. So, I started there and was pleased to see that my Safeway id/password combination worked as well as giving me the option of free delivery, free water, and paper towels if I ordered within 24 hours. I love promotions and rarely pay full price for anything, but even more I love FREE.
Next, I signed up for Envoy to cover our Trader Joe’s and Whole Foods order, but found that I could only order from one at a time for $10/month each, with a service fee of $10 + 10% of my grocery bill. That seemed a little pricey.
That same evening, the washing machine broke, and my husband proceeded to determine how to best to repair it. Here we had a pleasant surprise, as we found that we could order a new part online for $35 (as opposed to or purchasing it locally for $90). So, that was a no-brainer… he placed the Amazon order with a scheduled arrival of mid-next week, labor not included.
Day 2 – I had scheduled our grocery order to be delivered between 11:00am and 3:00pm, and for my flexibility received a $6 discount. At 4:00pm, after a day of continuous meetings from home, I wondered where our order was and asked my husband to contact Safeway. At 5:00pm, I learned that our very first grocery order was stranded on a broken-down truck with no ETA. Finally, at 6:30pm a very apologetic driver contacted me, indicating that he was picking up all of the orders from the broken-down truck and would be arriving in about 30 minutes or so depending on traffic and the pelting rain. Then, I paused on our experiment to go get a pedicure (can’t order this online, yet).
That evening, all the groceries were delivered as ordered, with the exceptions of one item out of stock (one of the Just for You offers) and the condition of the avocados, which were definitely overripe.
Then we discovered we were out of firestarter logs. A quick check on Amazon found what we were looking for, with a promise of a Sunday delivery. Sunday, really?
Day 3 – My email box was becoming overwhelmed: I had received no less than 126 unique retail offers during the last 48-hour period. The most popular promotion was free shipping by online and multichannel retailers, with discounts on shipping from 20% to 50%. With all the noise, it was hard to tell which retailer or service was which.
Now I needed to deal with a few returns on the holiday presents I had been buying online. The easiest included free returns with a shipping label included in the package or printable online, or the ability to return directly to the store. The most difficult required a phone call, followed up by an email with an RMA (return merchandise authorization), and a requirement me to pay for the return. (I won’t be buying from that retailer again.)
Next, I was ready to mail my holiday cards. I thought since the mail is delivered every day to our house, I would be able to order stamps online. Guess how many days it takes to deliver stamps to your home: 7 to 10 days, plus 1 to 2 days extra due to the holiday season. There is certainly a disconnect between departments at the USPS. I hate to send out my holiday cards late!
Day 4 – Fortunately, I had remembered to order all of the items I needed to prepare my appetizer for a party that evening. And, Amazon delivered on its Sunday promise! Our firestarter logs appeared on the doorstep before noon.
Day 5 – Done! We lived for 5 days entirely digitally (except for the pedicure). How did it go? We found that:
- Living digitally requires planning ahead; even when new services are intended to provide same day service, they are not widely available
- Living digitally needs to be a family affair with extra coordination
- Service and delivery fees vary widely
- Returns can be challenging and time-consuming
- You’re dependent on the selections of the in-store shopper (i.e., the avocados)
Differentiation is still a major challenge. However, I would say that customers want the same thing they want in the store: a friendly, convenient shopping environment. Delivery services need to meet customer expectations on timing, and keep returns simple and convenient. Products ought to be in good condition, and fees need to be minimized. The challenge, obviously, is how to make this work financially.
Other delivery options are increasingly available, such as in-store pickup of online orders, locker-based pickup systems, etc. Keep an eye out for my upcoming paper on delivery systems – Cisco has some exciting ideas coming around this!
In the meantime, check out the new white paper on shopper trends.
Tags: #nrf15, amazon, amazon fresh, delivery, envoy, groceries, NRF, retail, returns, shoppers, trader joe's
It’s NRF time again! NRF, the retail industry’s biggest conference, is back in NYC this week. Big data and analytics are still top of mind this year in retail, but the hot topic added to the mix is the use of beacons powered by Bluetooth low energy (BLE), enriching your engagement with customers and helping you make smarter business decisions.
Once again, Cisco Connected Mobile Experiences (CMX) is here at NRF this year. We’re ready to show you how you can leverage real-time analytics, location innovations (including BLE technology), and our app development platform to optimize operations, boost customer satisfaction, and increase revenue.
If you’re coming to NRF this week, check out our demos at Booth 2052 and learn how Cisco CMX can transform your retail business.
Tags: analytics, beacons, BLE, cmx, mobile, mobility, National Retail Federation (NRF), NRF, retail