It's an exciting time to be a retailer. In addition to the announcement made on Monday at the National Retail Federation's Big Show in New York City that retail sales are forecasted to grow 3.4 percent this year, the show also demonstrated that retailers will soon be better positioned than ever to offer customers a seamless, innovative, and convenient shopping experience.Different from last year's show where I got a sense that most retailers shared a collective understanding of the importance of investing in the customer experience, this year's show showed more of a willingness to improve the customer experience.
In fact, I saw four major themes yesterday that will drive the expected improvements that we should see this year.
1. The seamless enterprise. Largely driven by mobile, retailers will truly start to connect the dots for consumers and remove all barriers. Some vendors unveiled new offerings designed to help retailers create an exciting, seamless customer experience across multiple store touch points.
NCR, for instance, unveiled its Advanced Store software that will help retailers bridge the gap between digital and physical channels and help retailers market to consumers at the point of sale.
Rich Chavie, vice president of marketing Retail/Hospitality at NCR, says with this offering, every device is connected, from digital signage and kiosks to POS and tablets used for checkout. "From a consumer perspective, this will change the dynamic," Chavie said.
First Data discussed its "Universal Commerce" positioning for how it helps retailers evolve its commerce efforts to connect consumers' virtual wallets with account and coupon management, to loyalty programs, advertising, and checkout. Dom Morea, senior vice president of advanced solutions and innovation at First Data, says there's a need to close the loop in commerce and take the friction out of redemption. "It's a new environment; it's a framework that envisions change that happens at the point of sale," Morea said.
HP also showcased its Seamless Customer Experience. The demonstration was HP's representation of an ideal store environment where every retail touch point--be it the point of sale, a digital display or a retail-ready tablet or kiosk--engages with the customer in a consistent and integrated way.
"Many retailers are working toward creating a much more interesting environment for shoppers with the goal of improving and differentiating the entire shopping experience," said Ray Carlin, vice president and general manager, Retail Solutions Global Business Unit, HP.
2. Direct relationships. Sounds familiar, but I think we may finally be at the doorstep to having the capabilities to providing effective point-of-consumer-driven purchasing and one-to-one interactions.
Largely driven by mobile engagement, consumers have become spoiled. We want results and answers yesterday. In response, a number of vendors are offering solutions for merchants to bypass the Group-Ons and Foursquares of the world and send geo-targeted "daily deal" offers directly to their consumers.
Digby, for instance, launched Digby Localpoint, a mobile platform that enables location-based marketing, analytics, and commerce for retailers. The solution enables a retailer through its branded app the opportunity to create geo fences around its stores and even near the stores, which allows them to see when their customers who have the apps walk in their stores. They then can push a deal or communication through the app. "It allows retailers to build direct relationships with their customers," said Don Lowden, vice president of marketing at Digby. "They now can send localized offers and measure the effectiveness." Lowden predicts that the loyalty card will soon be moving into the app environment.
3. Digital screens do double duty. I overheard someone yesterday who said, "We live in a digital world until you walk into a retail store and you're transported to the 1970s."
Well the interiors of stores are about to get a boost into the future. NCR's Chavie says consumers will start to see changes at the front end of stores in terms of how companies offer self checkout and digital screens and kiosks throughout the stores will play multiple roles. For example a single kiosk can be used for an endless aisle display, a bridal registry, self check-out, or employee check-in. "They will never be idle," Chavie said.
NCR SelfServ Checkout Convertible, for example, switches between self- or assisted-service checkout modes, based on a retailer's operating model and customer traffic. This switch is accomplished through a swivel mount design and a secondary display and pin pad for associates. With this solution, retailers can optimize their checkout capacity and store floor productivity during both peak and non-peak times.
At Intel's booth, a number of retailers including Kraft, Macy's, HSN, and Petrobas, demonstrated how they're leveraging signage to improve the customer experience. Macy's, for example, is testing the Beauty Spot at four of its stores in an effort to assist shoppers in finding and evaluating cosmetics and fragrances. Shoppers can use the stations to get detailed information about beauty products, as well as download information to their mobile devices about cosmetic trends, new products, and seasonal promotions.
And Petrobas, the largest energy provider in Brazil, wants to transform all of its gas stations through digital signage. The company has been testing stations that have RFID tags placed at every bay, They recognize cars that carry RFID readers and can alert the drivers when they are due for an oil change, for example. Each pump has digital signage that offers messaging or offers in the stores. Once in the store, the refrigerators include digital signage that present different offers and there's even a kiosk that dispenses directions since Petrobas has determined that asking for directions is the biggest reason that drivers enter the stores.
Because the stations are full-serve, the idea was to get customers out of their cars and into the stores to spend money. Within the first month and a half of testing, Petrobas has seen a 20 percent increase in foot traffic and a 10 percent increase in sales.
4. Customer experience by design. More than ever design will play an integral role in the ever-evolving customer experience. Intel's Chris O'Malley, director of retail marketing, said design is very important right now. "People are realizing that rather than be a detriment, technology can be part of the design," he said.
NCR's Chavie added that the new focus on design is driven largely by the marketing organization now owning the customer experience, rather than the IT department. "I'm spending more time talking to the CMO than I ever have in the past," Chavie says. "There's an influence of market researchers and designers at designing the customer experience to create a different experience. As a result, we won't be limited by the technology as the channels converge."