“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
As I’m sure most of you know, Jon Stine presented this morning at NRF on the results of his fourth “Catch ‘Em and Keep ‘Em” survey, which is a highly respected study done each year to identify how shoppers are responding to retail technologies. As a followup to his NRF Big Ideas session, I’d like to reproduce here Jon’s blog on his findings and thoughts. Thank you, Jon!
Want Your Share of $100 Billion? Build Customer Trust
By Jon Stine
Trust. It’s a powerful human emotion that often drives our behavior. The level of trust, or lack thereof, between a retailer and its customers can literally make or break the business. Given the importance of trust, many retailers are asking: How much do customers trust retailers? What are the benefits of increasing trust? How do retailers gather the information needed to provide the personalized experiences many customers want, while maintaining and even building trusted relationships?
These questions are especially important given the critical juncture at which we find ourselves—the convergence of people, process, data, and things called the Internet of Everything (IoE).
To help retailers build customer trust in an increasingly digitally connected world, Cisco Consulting Services surveyed 1,174 consumers in its fourth annual Digital Shopping Behavior survey.* From a behavior perspective, shoppers are becoming more digital. In fact, eighty percent of respondents are what we call Digital Mass shoppers—people who research, browse, and purchase digitally. Within this group, Über Digitals, who almost always use a smartphone to shop, increased from 11 percent last year to 18 percent this year. Clearly, your customers are digital.
Before we discuss “how,” it is important to understand “why.” Our research showed $100 billion of IoE value was available for retailers in the United States to capture in 2013 by offering more personalized shopping experiences. If you missed your share, don’t worry. This number is expected to increase slightly in 2014. Realizing this value, however, isn’t easy.
When it comes to trust, retailers are starting from a low base. When asked, “How much would you trust these companies/institutions to protect your personal data and use it to provide something you value?” respondents ranked retailers second to last, at 31 percent—behind government agencies (37 percent), and ahead of Internet companies (18 percent).
Even so, shoppers want personalized experiences. When asked, “Which personalized experiences do you prefer?” respondents ranked promotions via touch-screen or smartphone first (Digital Mass: 46 percent; Über Digitals: 53 percent). This was followed by personalized products, personalized shopping lists, and personalized service.
So, how do we solve this dilemma between a lack of trust and the desire for personalized shopping experiences, which require the collection of personal information? For answers, let’s look at a few of the research findings.
- Shoppers want personalized offers that are easy to use – Most people want to receive personalized offers via email at home. This suggests that shoppers — even Über Digitals — start the shopping process while they are in their home environment. The vision of in-store offers may simply not be in sync with the reality of shopper decision making and in-store behavior.
- Shoppers are willing to share information – Both Digital Mass and Über Digital shoppers are willing to share past purchase history and basic personal information (name, age, etc.) with retailers to receive a more personalized shopping experience. Topping the list of acceptable information for retailers to use are time spent in the store, location in the store, and products you try but don’t buy.
Based on our experience working with many of the world’s leading retailers, there are three key takeaways and actions when it comes to building trust:
- Shopper trust must be earned. Retailers can do this by delivering a clear data policy and making the benefits of providing personal information transparent and easy to understand.
- IoE is already here. To capture your share of the $100 billion value at stake, develop a strategic plan that takes into account the information above.
- Über Digitals are too important to ignore. Selling to these shoppers requires an architecture and infrastructure that can support their increasing expectations for connected, digital shopping experiences.
To gain even more insights into developing trust in an IoE world, take a look at:
* This year’s Cisco Consulting Digital Shopping Behavior survey includes responses from 1,174 consumers who are representative of the United States broadband population by age, income, and region. It is the fourth in a series of popular “Catch ‘Em and Keep ‘Em” studies by Cisco Consulting Services.
Tags: CCS, Cisco Consulting Services, Cisco Retail, data, Digital Mass, Internet of Everything, IoE, Jon Stine, nrf14, Personalization, personalized experiences, personalized shopping, protection, retail, Rose Depoe, trust, Über Digitals
In the past couple of years, cloud-based solutions have gone from the status of a brave new technology to a mainstream vehicle for delivering storage, application, infrastructure and other services. From a security point of view, consuming cloud-based services usually involves delegating security for the service to the service provider. This does not need to be as scary as it sounds – as long as you approach the service engagement with your eyes open, and arm yourself with pertinent requirements for the service provider to provide appropriate controls to protect your organization.
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Tags: cloud security, ncsam-2013, trust
Now that we’re in the midst of October 2013’s Cyber Security Awareness Month, it’s a good time to think about the connections between security awareness and trust. This discussion centers on three questions:
- How do we trust our computers and devices?
- How do we trust our vendors?
- How do we trust the infrastructure?
We ask these questions mindful that information technology does not stand still and is probably accelerating. Forward progress, however, is unsustainable if we can’t trust the technologies we use. I don’t foresee any scenario where technology progress will come to a halt, but there are many ways it can fly off the rails if we’re not careful. This may sound dire, but I remain an optimist by nature and believe we can confidently move ahead if we take the time to think about security and trust and act on our conclusions. Cyber Security Awareness Month is a good opportunity to think about this, and I have more to say in the video blog post below:
Tags: Cyber Security Awareness Month, ncsam-2013, security awareness, trust
How to encourage people to do what they say they’re going to do.
Trust is weaved into almost every aspect of our lives. I trusted that my car would get me to the airport this morning, that the pilots and crew would get me to Washington D.C., and that my cab driver would find my hotel. This all comes so naturally. So why does the role of trust in collaboration inside organizations remain such a mystery?
For more than 150 years, organizations have been organized in silos that breed internal competition for resources. The psychology of competing with your teammates for resources, in turn, encouraged an insidious way of working: passive-aggressive behaviors where humans work side-by-side but work subtly against each other even though they are employed by the same firm.
Trust anchors every successful collaborative team.
We researched at Cisco the most important factors in creating trust on collaboration teams, and the single most important factor is revealing: do people do what they say they are going to do?
As leaders, it is up to us to be overtly aggressive at vanquishing passive-aggressive behaviors and building real, human trust. We have no choice in our hyper-connected world where change is constant and work is increasingly global, mobile and virtual. As distance and time condense, it stresses out the calmest of us as we scramble to meet deadlines while working with people that likely we’ve never met.
So what’s the key to building team trust?
“Replace uncertainty with clarity. Articulate the team’s purpose and establish up front what you expect from each member.” The Collaboration Imperative
How to build a team charter
A team charter helps clarify a team’s purpose, role, shared goals and scope; a charter eliminates ambiguity of expectations. As leaders, we can make a team charter the focal point around which the team builds healthy collaboration habits.
It’s possible to move beyond your gut feel and hope trust develops on your team; it is possible to operationalize it. Trust is too important to, well, just trust that it’ll happen. To that end, we’ve found that a team charter is most effective when it is composed of five elements:
- Team purpose: describes specific challenges, opportunities or tasks the team will address (and also expectations).
- Team role: teams form for different reasons. Know why your team exists – is it to align a group around an initiative? Is it to execute a priority together? What are the different roles of individuals on the team? Read more about various team roles in Chapter 5 of “The Collaboration Imperative”.
- Shared goals: most collaborative teams have people from different backgrounds, functions and even companies. Make sure despite your differences, you’re all chasing the same goals. These goals allow you to create a specific definition of what success looks like and allow you to map your goals to performance management
- Scope: establish well-defined boundaries of what you hope to do. These “guardrails” allow you to say no to ‘scope creep’! This helps members determine their time commitment and helps the team as a whole stay on track.
- Establish ground rules. Put ground rules in place for team procedures and processes (including meeting logistics), how you use your time together, who makes final decisions, how to resolve conflict, and how respect and courtesy are paramount.
A team charter is a powerful means to enable trust-building on your collaboration teams. Keep in mind that a team charter should be paired with a common vocabulary. Sweat the details of your team’s vocabulary. Ask if everyone on the team has the same definitions in their heads for the vocabulary you are using to articulate the charter. Don’t let the definition of a word be the reason trust is derailed!
The management science is pretty clear here: teams that trust each other outperform teams that don’t. Are you outperforming?
Tags: collaboration, Organisational Culture, team charter, The Collaboration Imperative, trust