Posts tagged: recommendations

The iPad: A Retail Revolution?

There I was standing in line at the Apple store at 8:30 on the morning on April 3, waiting to pick up a brand new iPad. My mission? Check out this new device to see how retailers might use it to get ahead. Yeah, OK, and I really wanted one for myself, too. But I was legitimately interested in playing with it to determine good retail uses. And I definitely think there are some potentially revolutionary ways retailers can take advantage of the iPad.

Yes, it’s really something profoundly different

Understanding the value of the iPad starts with understanding why it is truly different than anything we’ve seen previously. Many of the attributes you might use to describe it have existed previously, but it’s the combination of those attributes that truly represents the revolution. The fact that it’s self-contained, light weight, and unburdened by a keyboard and a mouse means that it’s easy to hold and carry around. And it’s easy to share with others. It turns on instantly, and the battery lasts for a long time. The touch screen interface feels natural and intuitive. The apps it can run are powerful and capable of more functionality than most web pages. The combination of these attributes provides a powerful platform for retailers to leverage.

Here are just three ways retailers can leverage the power of the iPad:

Take catalogs to the promised land
For years, we’ve had visions of using technology to take catalogs to a new level. But online versions of our print catalogs just haven’t really taken off. Sure, we’ve added hyperlinks to make them interactive, and some have even incorporated multimedia elements, but the online versions really haven’t bested the old fashion print version. I believe a main contributor to the lack of the online catalog’s success is the fact that it’s just not comfortable and cozy to flip though an online catalog. Viewing on a computer screen using a keyboard and a mouse is not comfortable and convenient. The extra benefits of the interactive nature lose out to the lack of comfort in browsing.

But the iPad brings the comfort. It’s easy to sit on the couch and flip through pages with your fingers. It feels pretty natural. It doesn’t get hot, and it’s easy to just turn it off when little Suzy needs help with her homework and instantly turn it back on later with a single press of a button. Interactivity and personalization are possible with an internet connected device, of course, so catalogs created for the iPad can be extremely relevant, fun and informative. And they provide a direct connection to purchase capabilities. It’s really a beautiful thing. I believe catalogs that take advantage of these capabilities will be a huge hit with consumers.

Sales floor assistant
Part of the dream of true cross channel integration is the ability to bring the advantages of technology into the physical store in a way that can improve the shopping experience for our customers. Initially, some retailers used kiosks or POS-to-web integrations to provide these experiences. Lately, we’ve had lots of discussions about providing these capabilities to the mobile phones our customers carry with them into the store.

With the iPad, a sales associate can carry with her all the product data, the customer data, and the recommendations available online. Because the device is so easily shareable, she can easily pull up recommendations and hand them to the customer. She can show the customer how the brown lounge chair he’s viewing in the store would look in the red color that’s available via special order and place that special order on the spot. Or she can play a demonstration video of the food processor that struck the customer’s interest and easily show customer reviews. The possibilities are endless.

Virtual planogram and visual merchandising guide
Many retailers are still creating giant visual merchandising and planogram books, printing and binding them, and snail mailing them out to each store. It’s a costly process and not very flexible or efficient. Last minute changes mean reprints or sloppy additions to the original book.

With iPads at each store, we can send full color, highly customizable guides that are custom made for each store, if desired. They will be easy to carry to the racks, and they can even have built in check boxes to help track when the work is done. Efficiencies abound.

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Of course, there could be s significant capital investment to stock each store with set of iPads, and some of the consumer catalog capabilities I mentioned will not bear much fruit until the iPad is more common — or until the inevitable stream of competitive products hits the market and reduces costs. But there’s little doubt these types of devices will become fairly ubiquitous. And when they do, the retailers who are ready take advantage of the capabilities will be the retailers who come out ahead.

What do you think? Do these ideas seem nutty? What ideas do you have?


The Case to Cross It Up

For any retailer with more than one channel, becoming cross-channel is a critically important way to fully leverage its assets to provide a greater experience to its customers, which ultimately leads to more customer retention, brand loyalty and, of course, sales and profits.

In an effort to highlight and tackle the issues associated with implementing cross channel strategies, Kasey Lobaugh of Deloitte Consulting and Jim Bengier of Sterling Commerce pulled together a Cross Channel Retail Consortium of retail thought leaders that included executives from a cross section of retailers as well as some industry analysts, vendors and yours truly for a day of discussion this past Sunday on the strategy, tactics and challenges of implementing effective retail cross channel experiences for our customers.

Before I delve deeper into my thoughts on the day, it’s probably worth defining “cross channel.” Many times, “multi-channel” and “cross-channel” are used interchangeably, but I don’t think they’re the same thing at all. “Multi-channel” is simply operating in more than one channel while “cross-channel” is leveraging the strengths of each channel to create an overall customer experience that is greater than the sum of its parts. It’s 1+1=3.

Sounds great, right? So, why aren’t more retailers doing it?

Three basic themes emerged from the group:

  1. Lack of executive and board level understanding of the value of customers transacting in multiple channels (and, conversely, the negative affects that occur when customers are prevented from interacting with a brand across channels)
  2. Lack of incentives for various employees, from executive to front line staff, to encourage shopping across channels
  3. IT systems limitations

So, let’s tackle these issues one-by-one.

1. Lack of executive and board level understanding of the value of creating cross channel experiences

The group agreed that getting the buy-in of the CEO is critical. No one believed, and I certainly agree, that a strategy as all-encompassing as creating a cross channel experience has any chance at success without the CEO actively driving it. So, just get the CEO to support it. Easy, right? Not so much.

In my experience, the best way to convince a CEO of the value of any strategy is to show him or her how it will maximize profits. One retailer in the room was able to show the value of customers shopping in multiple channels pretty easily by tracking customer transactions in all channels through a loyalty program. Others were able to do the same in various degrees, but the general concern was the potentially high cost of discounts provided in exchange for such information. (I have lots to say about loyalty programs, but I’ll save that for another post). Janet Sherlock of AMR Research extolled the virtues of emailed receipts as an environmentally attractive and altogether less costly alternative option to harness ID’d transactions. I find that proposal extremely intriguing.

While transactions tell us about customers who completed transactions in each channel, they don’t tell us about customers who researched online to buy in store or customers who took a look at products in store before buying online, and the group longed for an industry standard metric that could be used to assess the amount of sales influenced by the another channel.

Another driver of CEO support is attention to the issue from the Board. One retailer said all it took was a bad experience by one 17-year-old granddaughter of a Board member to get the issue front and center. Funny how life is, isn’t it? Who could imagine that one young girl’s frustration can drive a strategic shift in a major national retailer? But maybe the lesson here is about the importance of getting decision makers’ heads out of the financial spreadsheets and into real-life experiences to help them understand how their companies are (or are not) serving their customers.

2. Lack of incentives for various employees to encourage shopping across channels

One retailer described the challenges of focusing on customer experience at a retailer that is driven by “an imperialist merchant organization.” (There was no way I could write this piece without including that quote.) Merchants, by their nature, tend to care a lot more about product than customers. But in the end, they’re generally heavily driven by sales, margin and turn metrics. There are many cross channel strategies can be implemented to help merchants drive these key metrics.

For example, the web has many selling capabilities that are nearly impossible to achieve in store because of physical constraints. Customer reviews are extremely popular online and customers regularly report using them to make purchase decisions (both online and in store); however, they are very difficult to make available in a physical environment. Some retailers are making them available via in-store kiosks, but the kiosks are a large capital investment to make if they’re not already available. But just about everyone’s got a computer in his or her pocket or purse these days. Let’s make more use of mobile phone technology to give people access to customer reviews, recommendations, wish lists, gift registries, etc. in store while they’re standing in front of the products.

There are also advantages in stores than can be leveraged online. Many retailers have incredible experts in their stores. How can those experts build content that can be used by customers and other employees alike to improve the shopping experience? How about security? Should retailers start to look for ways to accept payment in their stores for web orders when customers aren’t comfortable paying online? Believe it or not, there are still a lot of customers out there who aren’t comfortable using a credit card online, and in this economy there are more and more customers who aren’t comfortable or aren’t able to use credit cards period. But they’re still interested in buying from us, and we should find every way we can to help them do so.

3. IT systems limitations

There’s no question that IT legacy systems cause us a lot of trouble when we try to integrate our customer experiences. But I also wonder how many times we fall back too easily on such an excuse. I’ve written about my Tree Stump Theory previously, and it’s certainly prevalent in this case. We have a lot of compelling reasons why systems prevent us from implementing such key capabilities as the ability to accept returns of online purchases in store. But guess what? Our customers don’t know those reasons, and even if they did, they don’t care. While many retailers have found ways around the returns issues, just as many still have not. Either way, the case to prioritize such efforts should rely on some of the same techniques described above to make compelling cases to the CEO and the incent imperialist merchants.

Pure play retailers, and especially Amazon, continue to grow at rapid rates by pulling more and more market share. Multi-channel retailers have assets in their stores that pure plays don’t, but it’s going to take implementing true cross channel strategies to leverage those assets in a competitively advantageous way. Let’s cross it up!

What cross-channel strategies have you implemented or are considering implementing? What are the barriers to cross-channel in your organization?

Photo credit: Wikimedia Commons



Retail: Shaken Not Stirred by Kevin Ertell


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