We recently posted a customer case study with Kiddicare, an award-winning e-retailer in the UK. Continuing their track record of innovation, Kiddicare is opening a series of superstores in the UK focused on creating a multi-channel experience for parents (who put a lot of time and energy into buying all the things that children need). Kiddicare purchased the physical stores that Best Buy abandoned in their unsuccessful efforts to expand in the UK and capitalized on these assets to create some amazing “store of the future” experiences for their shoppers. Nearbuy is a key component of this new, multi-channel experience, helping Kiddicare create an easy-to-use guest Wi-Fi network complete with automatic authentication for returning users. Nearbuy also helps Kiddicare tie their customer profiles together so they have a single view of the customer, enabling Kiddicare to market to the shopper based on all their methods of shopping. Nearbuy deployed this service in conjunction with the store’s Cisco-based (NASDAQ: CSCO) WLAN and is integrating data with Kiddicare’s instance of Salesforce.com (NYSE: CRM).

Our big predication for retail this year? Personalization. It’s been around on the web for over a decade, spearheaded by Amazon. For many, the key usability feature on Amazon is the product recommendations based on previous purchase history. I personally find it incredibly helpful that Amazon remembers what I bought and lets me know about other items that are similar, adjacent, and even just purchased by others who bought the same product that I did. As an example, I recently bought a TV wall mount bracket and Amazon was there to recommend that I also buy that new power drill I had been looking at and of course a set of new bits that I would need to drill holes. Original basket size: $25. Final purchase amount: $75. This type of personalization is a major differentiator and sets many of the pure play e-commerce providers apart from their brick-and-mortar competitors.

Well, we believe that a new form of personalization is going to come to a store near you...soon. Most multi-channel retailers have already incorporated personalization into their web sites thanks to technology platform like ATG (NASDAQ: ORCL), GSI Commerce (NASDAQ: EBAY) and start-up RichRelevance. Now we are seeing the beginning of integrating this technology into the in-store shopping experience. Retailers are already able to collect vast amounts of information from POS and loyalty programs. Now the challenge lies in tying this past purchase behavior with the presence and identity of a shopper once they enter a store. Most organizations want to make shopping an omnichannel experience, one where an online profile is also added to the offline data about a shopper. Their ideal shopper experience is that once you enter a store, you can get product recommendations based on who you are and what you bought across all channels with that retailer.

Personalization leads to an increase in sales for the retailer and a better, more productive experience for the shopper. It’s a true win/win scenario that justifies the cost and expense for even the largest retail organizations to undertake.

Smartphone-toting shoppers and their impact on retail are making big headlines these days with several articles and studies about “showrooming” - when shoppers browse retail floors to test-drive products, but ultimately make a purchase from Amazon or another online source. Retailers are already experimenting with tactics to combat the more fear-inducing aspects of this new behavior, but they may find a better return by improving their own digital interactions while the shopper is in the store. To that end, some retailers are trying to entice shoppers to use their guest Wi-Fi instead of cellular data.

The future of retail is an “omni-channel” experience, which means selling to consumers on all channels –online, mobile and in-store – simultaneously. 

Retailers of all categories are trying to understand the massive transformation in shopper behavior brought about by the mobile internet, none more than the electronic retailers like Best Buy.  The author of this article, Christopher Krywilak, expertly puts it that retailers need to sell to the shopper in all the different channels they offer, simultaneously.  It is no longer a viable strategy to assume that shoppers won't have every piece of information about a product or service in the palm of their hand.  Retailers must embrace showrooming and devise new strategies that leverage the shoppers ability to conduct all the research they need, right there in the aisle of the store.  

One interesting concept is how to turn showrooming behavior into a financial reward for the brick-and-mortar retailer.  At the end of the day, the intent of manufacturers is to sell their wares, independent of channel.  Retailers play a critical role in allowing consumers to touch, trial, and feel products before they make a purchase decision.  If a retailer can prove their role in a sale, manufacturers will be willing to compensate them.  We see this today with retailers charging for shelf space, in-store signage, etc.  There is no reason Best Buy shouldn't be able to report the number of units of products they sell direct to the shopper and the number of units they were part of that sales process.  With the appropriate in-store technology, the Best Buy's of the world will be able to report on their value in selling to the consumer.

Link: Best Buy and showrooming: If you can’t beat them, show them - Mobile Commerce Daily - Columns via www.mobilecommercedaily.com

 

The cloud. Big data. Analytics. If you think these are just marketing catchphrases you're missing a big opportunity - and a trend that gives retailers a leg up on their fast growing internet-only rivals (watch out Amazon!).

Analytics has become one of the major driving forces behind retail over the last few years.  Retailers have learned that the more they understand about their customers, the better they can service them and more likely they can create valuable repeat and loyal shoppers.  Along with this trend of gaining better insights, shoppers have also increased the amount of due diligence they perform before buying products, and mobile technologies are a key enabler.

This last Monday, at the NRF show in New York City, we announced the availability of a captive portal solution that brings a new slant to traditional retail analytics.  With over 40% of the population carrying smartphone devices (and growing), retailers are deploying guest WiFi networks that improve the overall shopping experience in their store.  With these new networks comes an amazing opportunity for the retailer to even further understand their customer.  In his blog post Andrew von Nagy stated: 

Analytics are the un-sung driver behind retail Wi-Fi hotspots. As I have previously written in 5 Retail Trends Driving Wi-Fi, retailers want to know who their customers are in order to tailor the in-store shopping experience which helps drive customer satisfaction and ultimately increased sales and profit. Consumers are increasingly using and relying on digital communications while in the store to perform product research, price comparison, and to make purchases. Retailers want the same reporting available from physical stores that they already get from their websites. The ability to tap into this information by offering free Wi-Fi to shoppers and report on usage is one of the main reasons retailers are offering hotspots in increasing numbers since late 2010.

Use of mobile devices in the store brings together the best of the online and offline shopping experience.  Shoppers want to seamlessly navigate between these channels and retailers want to be able to understand how these channels converge and how to provide the best experiences.  With these new use cases, Nearbuy provides a window for the retailer to learn more about the shopper and where to focus their energies.

From mobile payments to enhanced loyalty programs, location-based coupons and in-store mapping, the smartphone is one of the biggest game changers for retailers since the advent of the credit card. But if you think about the smartphone as an independent piece of technology you’re really missing the point: with the right infrastructure in place, the smartphone can not only level the playing field between brick-and-mortar and internet retailers, it could actually reverse the trend of market share going to online stores. Let me explain.

Amazon announced that December 10th is the day that their physical store competitors officially become show rooms for Amazon.  Amazon is offering up to $5 off products if a shopper is willing to go into a brick-and-mortar store, look at a product, then buy it on Amazon.  Amazon has long represented a threat to the traditional retail sector, but for the most part it was only a direct threat to those retailers' online channel.  As shoppers have adopted smartphone technology, Amazon is capitalizing on the blurring of these retail channels and now can attack retailers where it hurts the most, within their stores.  

I have written a bit about how online is growing rapidly but still only represents a small percentage of any retailers overall sales volume.  The soft underbelly for most retailers has been that store environment, where the lions share of any annual sales takes place.  With smartphone technology Amazon has found a very interesting way to disrupt the physical store channel and potentially attack a market that is 10x the online business they pursue today.

So how will retailers respond?  

Our first recommendation is that they better get a handle on how big of an impact this is making today.  Most retailers understand that their store business is being cannibalized today by shoppers purchasing items on their smartphones from within their stores, but no one knows how to measure this.  Does it happen once a day or once a second?  Retailers need to figure out in a hurry how often this is happening and measure this trend over time.  Nearbuy has some specific ideas on how to accomplish this through guest WiFi networks - helping retailers understand exactly how online content is impacting the store experience (i.e. what content is of the most interest, what are shoppers searching for, etc.).  These analytics will allow retailers to truly quantify the impact of Amazon and other online content sources on the store shopping environment, and can help power them to defend such tactics.  With knowledge comes great power...

Second, retailers better figure out how to offer a mobile in-store solution that provides an even better experience than the Amazon apps.  Price transparency is the tip of the iceberg here, table stakes for a converged multichannel experience.  So retailers need to play off their strengths and leverage the fact that they have the shopper in their store.  Any mobile offering they role out needs to integrate store staff, local inventory, and the fact the shopper can get immediate gratification from buying the product from the store.

2012 is going to be a very exciting year for retail and as shoppers we will see fundamentally new and exciting ways to shop that leverage the best of the offline and online channels.  Retailers who plan on being successful are going to have to take this new mobile fight to heart.

The NRF recently released a post with their top 10 trends for the holiday shopping season. With most retailers expecting a disproportionate amount of annual sales in the Nov - Jan timeframe, these trends exemplify the strategies of most major retail chains.  Many of these trends focus on what is happening within the macro-economic sphere (GDP is up, jobless rate is slightly down) and how that impacts shopper sentiment.  What I found to be really exciting were the areas where new technologies (versus market conditions) are starting to impact and change consumer behavior and how these are making their way into retail trends.

1st nugget of gold:

Today’s consumer has high expectations – they already assume retailers will be offering low prices or strong promotions, and they want to know what they’re going to get on top of that. This “price plus” shopping mentality is all part of the value equation, which incorporates price with other elements like quality, convenience and service.

Shoppers expect more.  Even as times get tough and people look for the best deal, service and overall value of the shopping experience rises to the top.  Online retailers have such a cost advantage over brick-and-mortar stores yet the vast majority of commerce still happens in the real world.  This lead is shrinking at a double digit rate for the physical store, but the cause is much more than just cost.  The "experience" matters and retailers must find new and innovative ways to delight their customer.

2nd nugget of gold:

Half of Americans with smartphones will use their devices for holiday shopping this year, according to our survey – primarily to research products or compare prices but also to find retailers’ information like store hours and locations. Consumers will also use phones while shopping in stores to read reviews or redeem coupons – while a smaller number (16%) will actually use their phone to make purchases. So when you think of smartphones, think mobile. These devices are carried everywhere.

Mobile is everywhere and the ability to bring the internet into the store has forever changed the shopping landscape.  Google has created an entire initiative to help business improve their mobile web sites.  As the look and feel of content on the mobile web improves, usage will only increase.  Retailers are in the infancy of embracing the mobile web and probably won't put major initiatives in place to impact holiday 2011, but it is coming and is going to be coming fast.

Most e-commerce sites today have outfitted themselves with advanced web analytics systems to understand who is using their site, which pages they go to, how much time they spend, etc.  This makes a lot of sense in the online world since there really is no other way to monitor traffic and gain any insight into the customer.  For pure-play internet companies, these analytics are a must have.  However, most multi-channel retailers have also implemented and received the benefits of web analytics.  I am sure the online team raves about the insights they are able to gleam into their customer and how much easier it is to do their job of providing a meaningful online shopping experience.  Don't get me wrong, I do think these analytics are valuable to multi-channel retailers, but its time to start thinking about how to bring these insights into the portion of the business that can provide the most benefit.

As I have posted before, online transactions still only account for about 7% of all transactions.  90%+ of all retail still takes place in the store.  Today store analytics consists of store employees and store management telling merchants what is happening, followed by merchants looking at monthly numbers to see what the effect of certain programs has been.  Stores have always had some form of analytics, but in light of what we can get on the web they now seem inefficient and ineffective.

One of the biggest shopping trends over the last year has been the incorporation of the smart phone and internet into the store environment.  Customers want access to price comparison data, social media, etc. while they are shopping.  Retailers have figured out that this data actually helps increase impulsive buys - having more information at the point of purchase makes the shopper feel better about grabbing something and buying it now versus going home to do research online.  Since shoppers are bringing the internet with them into the store (via their smart phone) why not use analytics to better understand these new patterns?

Web analytics are not enough for the multi-channel retailer of today.  The concepts of being able to identify a unique shopper, understand what they are interested in, see where they go in the store, and know when they want help from a store sales person, those are the new analytics of this retail age.  The smart phone changes everything in retail and it's time for a new regime of analytics to help retailers better service all of their customers.