There’s a saying attributed to Taoist philosopher Lao Tzu that is very relevant to retailers introducing new technology into the shopping experience: “The longest journey begins with a single step.”
In my last column, I focused on five low-hanging fruits that could yield immediate performance and customer-service improvements. These are, to a great extent, self-contained projects: They have an easy-to-define beginning and end, and the investment they require can be measured against a defined business gain.
But truly bringing next-generation touchpoints and technologies to life requires other investments in core technology systems that sit under all these areas and deliver content and functionality to the shopper through them. Exploring changes in these core systems is often daunting, with IT timetables that seem designed to put the kibosh on any immediate shopper-experience improvements.
In many cases, however, the tension between IT and the shopping experience is a natural one stemming from the tension between innovation (shopping experience) and stability (IT). Simply put, IT’s job is largely keeping the lights on, rather than opening up new areas to put new kinds of lights. And innovating the customer experience, even in that first critical big step, requires a collaborative and stepwise approach that is often difficult for retail organizations to achieve.
To aid in this process, this column is focused on some big (and scary to approach) technology systems that are critical to the shopping experience. Rather than dive headlong into the big-picture, store-of-the-future view, here are the top five steps to take on the long journey of IT infrastructure improvement that will yield the biggest results for the shopping experience.
1. Open up the transaction history of your point-of-sale (POS) system
Most retailers track everything that every shopper buys, but this information is often locked away in proprietary databases that are used only retroactively to analyze buying trends. There is a wealth of data in the transaction history that, with the introduction of new touchpoints like mobile phones in the shopping experience, can have tremendous value. Knowing that a customer is almost ready to buy a new pair of running shoes based on her past purchase history or that Thursday afternoons are the most popular time for shoppers to buy small kitchen appliances are the kinds of insights that, until now, were mere curiosities. But with these new touchpoints, this type of analysis will determine who should get which type of offer or content, and when and where they should get it.
2. Expand the role of your customer relationship management (CRM) system
For many retailers, CRM is just a fancy word for email blasts that are sent out periodically and not very discriminately. But the same system that can spam shoppers with “gosh, we’re glad you’re our customer, here’s a coupon” emails can deliver targeted information at any step of the shopping process. Instead of languishing under “direct” or “ecommerce,” CRM needs to be brought to the forefront of the store’s operation and enhanced to provide two-way tracking and communication between the retailer and shopper at every possible step. Imagine receiving a coupon for olive oil just as you realize that you need to buy more, or a retailer letting you know first that your favorite brand will be going on sale. These sorts of experiences are possible with today’s CRM, but it takes tomorrow’s vision to bring them to life.
3. Invest in product information management (PIM)
Want your digital signage system to show a high-resolution video clip to shoppers in your store of that gorgeous new product you’ve got featured on your website? Chances are that if you’re doing that today, you’re doing it using a cumbersome manual process that’s completely separate from managing the content of your website. Retailers generally have a decent SKU-based merchandising system, and advanced retailers organize this system around basic product attributes. But unifying a shopping experience across multiple touchpoints requires managing content across them, and that’s where a PIM system comes in. By linking content into the same systems that track products, retailers can deliver a rich experience around the product to any touchpoint, whether that experience requires structured data or visual content like HD video.
4. Improve the network infrastructure of your stores
Probably the least sexy part of IT is raw network infrastructure management. How much bandwidth does each store need? What are the peaks and how much is sustained? How many IP addresses need to be assigned to each store? These types of questions aren’t generally thought of by designers envisioning the next-generation shopping experience, but they are critical to the execution and performance of that experience. All of the new bells and whistles we’re talking about deploying will, without exception, do three things to the network in the store:
• Require more data and bandwidth – that beautiful HD content running on a video wall needs to be moved from headquarters into the store and kept updated, and that takes bandwidth.
• Increase the number of devices being managed – the next-generation shopping experience goes from having four or five cash registers to dozens of mobile devices, tablets, workstations, kiosks and digital signage displays.
• Require a “bubble” around the store with always-on wireless – mobile and tablet devices are far less useful if they can’t be mobile, so the network has to reach into all the nooks and crannies of the store where staff might need to go.
It’s the last point that is the most important (and easiest to fix): Stores supporting tablets and mobile devices generally need more bandwidth both in and out of the store (i.e. a “fatter pipe”) and more Wi-Fi hotspots to ensure that there are no dead spots where devices don’t connect to the network. While more bandwidth is costly, adding a few extra hotspots to ensure the whole store is live is a critical investment.
5. Create a sandbox store (or more than one!)
The first decade of the 21st Century was marked by retailers investing huge sums of money in store-of-the-future projects designed to give them a comprehensive blueprint for using next-generation technology.
These failed. Rather than a thorough plan for technology-based improvements, most retailers were left with a few isolated projects that generated positive ROI, and a profound disappointment with the store-of-the-future investment.
We need to learn a lesson from these expensive failures. Rather than focus on building out a reference architecture for a technology-based future, the best way to figure out what comes next is to do so in a live, controlled and small-scale environment where failure is not only tolerated but embraced. No substantive improvement can come from an environment where the smallest hiccup is punished as a failure. Innovation requires trying new things, and many of these efforts may be 90 percent there but require 10 percent tweaking in order to be successful.
The solution is a “sandbox” store with the right mix of store staff, a technology-savvy and tolerant customer base and relentless management focus on trying new things, keeping the best and discarding the rest. This approach differs greatly from previous store-of-the-future projects in that the output isn’t the grand, glorious blueprint for the future. Rather, it’s an ongoing series of innovations, each battle-tested in the real retail environment.
Of course, achieving the base necessary to support next-generation retailing, both from a systems and a processes standpoint, is a daunting task. Reaching that nirvana may well be out of reach for most retailers, but by taking simple, purposeful steps most retailers can begin generating a positive ROI that will demonstrate results along the way.
Jim Crawford (about.me/jimcrawford) is executive director of the Global Retail Executive Council (grec), an international association, and a principal at Taberna Retail, a global retail shopping experience consulting company.