|Mobile shopping often requires in-store Wi-Fi|
Brick and mortar retail must adapt to compete in this new environment. A key component of this adaptation is delivering new IT solutions while leveraging the physical assets of the storefront, mixing the benefits of in-store product "touch-and-feel" with the personalization of e-commerce shopping. Merging these two worlds together will create an enhanced shopping experience through the use of mobile Internet devices, often connected through Wi-Fi networks.
Here are 5 retail trends that are driving Wi-Fi growth and new capabilities in retail organizations.
- Consumer Interaction and Business Analytics
Physical retailers have the most influence over consumer purchase decisions in the store, when they are standing in front of the product they are weighing whether or not to buy. Historically, this has been through in-aisle marketing and signage. However, customers are increasingly equipped with mobile Internet access and turning to external sources of information in real-time while within a retail store. This has been coined the emergence of the "smart shopper". These external sources of information are much more comprehensive than what the retailer can provide through traditional in-aisle marketing and signage, and this leaves the physical retailer at a big disadvantage.
Physical retailers are turning to multi-channel initiatives to enable in-aisle consumer interaction on mobile devices. Multi-channel is the broad alignment of in-store, online, and mobile retail channels into a cohesive experience and set of services for the consumer. It can also include mail-order, catalog, and telephone channels as well. This is accomplished through cross channel integration of back-end systems for product information, inventory, pricing, promotions, order fulfillment, and unified CRM (customer relationship management) systems for a complete view of the customer across all channels. It provides conveniences and benefits for the consumer such as consistent pricing, ship-to-store, ship-to-home, expanded assortment, unified checkout (in-store and online product), list and gift/wedding registry management, and more.
- Empowering Sales Associates Given the increasingly connected and smart shopper, consumers now have more product information than in-store sales associates in many cases. Yet sales staff are key to providing a great consumer experience in-store. Retailers need to empower sales associates with the depth of product information that consumers have, and to provide additional tools that facilitate existing and new services offered by the retailer.
- The In-Store Digital Experience
The in-store experience is critical to connecting and engaging customers with relevant merchandise and marketing information to capture their attention and turn browsers into buyers. Increasingly this means replacement of printed signage with one-way or interactive digital solutions that provide real-time, dynamically updated content that can be roll out in minutes or hours, instead of days or weeks.
Retailers are deploying one-way digital signage and electronic shelf labels in aisles and on end-caps, which can be updated immediately once changes have been decided by corporate staff, replacing long lead times for printing and distribution of paper signage materials. Digital signage is expensive, cannot be placed at every desired location, and locations requirements will change seasonally with product. Therefore, these systems will require portability. Running Ethernet cabling to every possible location is also not financially attractive, so these systems will rely on Wi-Fi networks for management, monitoring, and content retrieval. Interactive digital kiosks are migrating from fixed location solutions to mobile solutions as well.
Connected electronics require Wi-Fi for
product demonstrations and consumer interaction
Connected electronics allow retailers to showcase Internet-connected consumer electronics capabilities and increase sales. Consumer devices such as televisions, DVD/Blu-Ray players, gaming systems, music systems, computers, tablets, and smartphones are integrating more digital content and streaming services as core product features which drive differentiation and purchase decisions. Retailers will need to connect these devices to in-store Wi-Fi to demonstrate these capabilities to consumers to enhance the shopping experience. At the same time, provisioning and management of these devices will be challenging due to their lack of enterprise features, high churn rate (as product assortments change), and necessity for well-developed in-store processes and staff training.
- Expanding Branch Office Services
In order to remain competitive, retail organizations must deliver better customer service in their physical stores. This is accomplished by migrating away from traditional lean-branch operational models focused on cost reduction to a more sophisticated service-rich operational model within the store. Deploying integrated and context-aware services into the store for both sales associate and customer use will translate into a better shopping experience, return visits, and brand loyalty.
New services such as robust wireless telephony solutions can enable better availability and improve responsiveness of sales associates for customer assistance by tying service desks to every associate in real-time, as well as provide push-to-talk integration for integrated in-store communications. Digital video services over wireless enable increased security by providing real-time video feeds to in-store security personnel, and can enable videoconferencing for merchandise planning and collaboration with headquarters staff. Location based services allow retailers to provide relevant services to customers, such as targeted promotions that appeal to today's cost-conscious consumer or in-store navigation (wayfinding) to improve the customer shopping experience. Location services will also require the Wi-Fi network to be deeply integrated with back-end marketing systems, making it more integral to core retail business operation.
Traditionally, these types of services were only available within campus networks due to the cost of deployment into highly distributed branch offices. However, virtualization and deeper integration between network and application architectures are making these services available for branch offices at more reasonable costs.
Increasingly, retail Wi-Fi networks are providing more intelligent capabilities rather than serving as a basic network access mechanism. As a rich source of real-time and context-aware data, retailers are exposing Wi-Fi network information through APIs for consumption by broader enterprise services and applications. Wi-Fi networks are becoming highly-integrated with core business systems.
- High Availability
The modern retail branch Wi-Fi network must be highly available, even more so than the wide-area network (WAN) circuits back to the main office or data centers. This requires site survivability without loss of functionality. Survivability of historically centralized services such as directory, RADIUS, DHCP, and DNS will need to be to in place to prevent failure of local network connections and applications, service outages, loss of business functionality, and impact to core retail business operations.
High availability can be accomplished either through deployment of centralized services down to each branch or by installation of an intelligent wireless network. Deployment of services to each branch can be a very expensive undertaking, requiring physical or virtual server deployment, licensing, maintenance, data replication, higher WAN bandwidth, and extensive growth of management and monitoring tools for these distributed services. Alternatively, an intelligent Wi-Fi network can dynamically adjust for the loss of central services and provide site survivability for a period of time until those services can be restored. It can accomplish this through a robust software feature set that integrates RADIUS, provides credential caching with directory services, and dynamically monitors central services to intelligently transition to local network survivability when required. What's better is that this functionality is built into the network and doesn't require deployment of additional hardware, software, or management tools.
|The emergence of the "smart shopper"|
|Digital wallets can improve retailer|
"wallet share" and brand loyalty
Mobile payment and digital wallets can also be provided to allow consumers flexibility in payment options at point of sale. In lieu of a large hardware investment by retailers in touch-to-pay (contactless payment) solutions at the register, mobile payments can leverage mobile applications and guest Wi-Fi data connections to provide similar services at a fraction of the cost. And digital wallet solutions allow retailers to maintain "wallet share" for brand loyalty cards. How many times have you signed up for a retailers rewards card, only to find your wallet too thick, remove cards to save space, and end up without the card when making a purchase?
Imagine walking into a store, automatically connecting to Wi-Fi to easily research products, pricing, and availability, receiving personalized shopping offers on your phone tailored to your shopping history (if you're a loyalty customer) as well as tailored to your location within the store (leveraging location based services). Or perhaps you've scanned a 2D/3D barcode on a product to retrieve additional information on the website and being presented with a coupon in real-time for that very product. Retailers are betting that consumers will be interested in these types of services, which may sound invasive to privacy today, but may become normal in the not-too-distant future. Retailers will need to strike the appropriate balance between privacy concerns, use of consumer opt-in (not opt-out), appropriate use of data, and appropriate levels of consumer interaction to be successful.
There is often a fear that allowing competitive research that will negatively affect retail sales. However, consumer research and analyst predictions have shown that retailers do not need to have the lowest price as long as they are competitively priced or convenient:
Deloitte predicts that in 2011, 25 percent of North American big box and anchor tenant retailers will begin offering free in-store Wi-Fi access to shoppers... [and] cellular signals can be highly variable: weak signals and low speeds are common, especially deep inside a store. Without Wi-Fi, the in-store online experience is often frustrating and dissatisfying… When shoppers do in-store online comparison shopping, preliminary and anecdotal evidence suggests the likelihood of purchasing appears to go up, not down. A common reason why shoppers do not make a purchase is that they are paralyzed by the lack of knowledge: “is this item available elsewhere for a much better price?” When an online search reveals that competitor’s prices are similar, many shoppers proceed with the purchase at the store they are in, rather than drive around just to save a few dollars.Digital interaction with the consumer through mobile platforms enables retailers to remain competitive and continue to influence purchase decisions where they matter most, in-store. Multi-channel initiatives blend the personalization and convenience of shopping online with the touch and feel of physical products in the store; it allows the retailer to leverage their physical assets most effectively. Wi-Fi will be at the epicenter of this change.
Historically, only a fraction of retail sales associates have been provided with mobile devices, and those devices have enabled only a limited set of capabilities such as stocking, inventory management and product availability. One reason for this is the high cost of ruggedized mobile devices for use in retail. A typical high-speed scanner PDA can cost well over $1,200 each. In order to provide every sales associate with more information to help consumers, retailers are adopting lower-cost, feature-rich, smart mobile devices that provide more robust capabilities than specialized scanners. Mobile platforms built by Apple, Android, and third-party manufacturers are enabling this shift, along with a retail IT focus on enabling business processes in a more flexible, consistent, and re-usable fashion.
|Smart mobile devices and apps can empower sales associates|
Leveraging these smart mobile devices, retailers are rolling out new services such as expanded-aisle and mobile POS (point-of-sale). Expanded-aisle capabilities allow sales associates to easily retrieve additional product and assortment information for consumers from the retailer's back-end systems, show consumers rich media content such as videos and product demonstrations, send the consumer more information to their mobile phone or email in real-time, and seamlessly integrate with the retailer's e-commerce website to facilitate checkout and payment activities. Mobile POS capabilities allow the retailer to provide a better customer checkout experience in many situations. These include faster checkout for small basket sizes, flexible checkout locations throughout the store, easier checkout for large bulky items (e.g. furniture, appliances), electronic receipts, and relief of line congestion during peak hours without dedicating floor space to more register lanes.
Empowering sales associates with smart mobile devices on a larger scale than before will require a robust, well-designed Wi-Fi network that can handle greater capacity and is highly reliable. Like the old political slogan "a chicken in every pot," retail is adopting "a mobile device in every hand!"
Modern retail branch wireless networks must provide a high capacity, performance-rich, distributed, scalable, highly available, and stable architecture that also provides intelligent, context-aware services that integrate directly into back-office merchandising, marketing, and analytics systems. Wi-Fi networks are migrating from a best effort inventory focused service, to a core retail business enabler that demands much higher performance and service levels. Along with this shift, business partners and key stakeholders will take a much more involved and active role in determining network requirements to support core business capabilities. IT organizations must understand and navigate this change effectively to be considered business partners rather than an inflexible organization the business teams will seek to bypass.
This article originally appeared on the Cisco Mobility blog as a 3-part series (Part 1, Part 2, Part 3).