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Engaging Shoppers with Intelligent Stores

November 24, 2011

For retailers, the future of shopping is here and many are scrambling just to keep up. Ushered in by the onslaught of mobility, social media, and online commerce, the rampant consumerization of IT is creating a power shift from associate to shopper. Increasingly, consumers on the floor know more than the sales staff about the store’s products and price points — and competing offers.

Some retailers are responding with clever innovations. Old Navy deployed a mobile payment checkout device over Christmas. Nordstrom and Home Depot announced large-scale mobile solutions for their associates to help digitally enabled shoppers. And we’ve all seen Apple apply IT to out-retail pretty much everyone else.

But many retailers seem a bit overwhelmed. How do they adopt an intelligent-store strategy that incorporates associates, shoppers, changing technology, new consumer behaviors, and the store itself? Our research suggests five key strategies.

Create a store without boundaries. Take the store to the shopper, regardless of the consumer’s location. Why should the shopper in aisle three be treated worse than a shopper in a check-out lane or sitting at home? Shouldn’t all shoppers receive customized shopping recommendations, based on past behavior, integrated with their online accounts and delivered to their mobile devices? Shouldn’t every shopper have access to time-, loyalty- or location-based offers, whether in the store or walking in the park?

Create an IT environment based on the “shopper architecture.” Leverage cloud-based services to augment basic mobile device services to provide a rich and contextual shopping experience. Our shopper in aisle three would need the store’s Wi-Fi network and IT ecosystem to support the technology on his or her mobile device.

Get away from fixed POS devices. Well, maybe some of them will have their place. But if we can get more associates out from behind the POS and into aisle three to provide an improved shopping experience, we know the positive impact of a shopper-assisted sell on basket size and conversion rate.

Automate and digitize everything. Why must coupon redemption (the third-highest source of shopper irritation, according to our research) be manual? Wouldn’t it be great if the shopper showed up at the check-out counter (which, by the way, should be a mobile one), and coupons from different manufacturers were applied automatically and processed all the way through settlement? And why must return processes be so manual? Make it easy. Sometimes your best customers are the ones who return the most! Have the shopper log into a returns ecommerce site, schedule a return, choose a credit or refund option, and ship their returns from their nearest UPS or FedEx center.

Replicate the personal social media experience. Think of how a Generation Y associate consumes technology with friends via social media on Sunday evening at home, and then how she consumes it as a POS associate Monday morning. Big difference. Research has linked high associate attrition with a poor technology environment.

Focusing on the online channel alone means changing your competitor set to Amazon. That is a battle most retailers will lose. Creating this new intelligent store requires, at the very least, the CIO, the chief marketing officer, the SVP of store operations and the SVP of e-commerce to determine how to best engage with increasingly digital-savvy, data-driven shoppers. Doing this right will allow the CFO to keep the store as an asset on the balance sheet, not a liability — a move shareholders would surely reward.

Steven Skinner, is Vice President, Retail Practice, Cognizant Business Consulting.

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