Digital now drives in-store traffic; is your network ready?
Guest Blog By Ricardo Belmar
Retailers need to rethink the notion that online shopping steals or cannibalizes their brick-and-mortar sales. While it’s true that in-store visits have dropped thanks largely to digital e-commerce, the value of each in-store visitor has risen tremendously.
According to a recent Deloitte study, digital influences 36 cents of every dollar spent at retail stores. Digital also impacts in-store sales rates; consumers using digital devices in the store convert at a 40% higher rate. Consumers visit less, but are better informed about what they want when entering a store. Each trip is more purposeful and they buy more.
The problem is those conversion rates drop precipitously when the in-store digital experience fails to deliver a positive customer experience. Even a few second delay on an in-store Wi-Fi network can send an otherwise promising customer out the door. Considering that 70% of millennials shop with their mobile device in hand according to a recent report from MSLGROUP and the Hartman Group, retailers cannot afford a poor experience. And with social media, a single bad experience can exponentially influence a retailer’s customer base.
The key to implementing a digitally influenced in-store experience lies in the store network. It’s no longer just a tool for processing store transactions, emails and files; it’s a Customer Engagement Network…the central nervous system of the retail enterprise.
Some retailers also want to create compelling in-store experiences by equipping store associates with tablets and mobile point-of-sale devices. The network therefore impacts the customer’s experience both on their own device and on the associate’s device. All of these factors mean stores must beef up their network capacity, security, and Wi-Fi capabilities if they want digital to drive in-store traffic.
Performance as good as home
The problem is customers expect the same kind of network performance they enjoy at home. Yet when they visit a store, they may suddenly find themselves sharing a 1.5 Mbps connection with dozens, if not hundreds, of other shoppers.
Some retailers are solving the problem by deploying high-speed Internet access with 10+ Mbps, 50+ Mbps, and even 100 Mbps. Stores with tight budgets or limited network options can still offer better performance by leveraging WAN optimization technology to magnify lower speed circuits into suitable high performance connections.
Given the flash crowds which may overwhelm a store at any given time, congested Internet access must be strategically managed. Business-relevant mobile activity (e.g. mobile shopping apps, gift card redemption, product reviews, etc.) must take priority over lower priority activity (e.g. competitor websites, games, movies, etc.). Proper management can help retailers maximize the business value of even limited or congested Internet access.
Security is Job One
Security is as important as high-capacity bandwidth for a good in-store digital experience, especially in these days of increasingly frequent cyber-attacks. Customers won’t shop at stores they don’t trust.
Store networks used to be simple: a private network to support credit card traffic and overnight polling. Today’s in-store networks are more complex. Store-in-Store promotions, for example, require third-party access to semi-secure resources. And in-store Wi-Fi requires open Internet access. The risk is significantly different between unrestricted Wi-Fi where users can “see” each other versus a Wi-Fi network where users are isolated from each other.
With the emerging “Internet-of-Things,” even the merchandise itself requires Internet access. Evaluating a product’s mobile app has become part of the purchasing process. Customers want to quickly download the app, and see if it contributes to a product’s appeal. Retailers do not want an unacceptably slow download from a congested store network to interfere with the purchase process.
There are also legal and social concerns. To satisfy stringent PCI compliance requirements, all of this activity must be fully isolated from each other. When it comes to network security, the strength and scope of the solution must exceed the severity of the threat.
Robust Wi-Fi is Key
Retailers need a flexible and robust Wi-Fi infrastructure that can deliver great performance with no dropped connections or dead zones and can easily adapt to rapidly evolving market requirements. This requires more than a simple wireless connection between a smart phone/tablet and a wireless access point (AP).
The ideal model for in-store WiFi starts with a high-performance guest and associate experience, which often includes streaming multi-media content to the user’s device. Content must appear quickly on-screen. These devices all compete for the same network capacity. A robust solution must provide proper access management to ensure a great experience for both user groups.
Peak store traffic will likely create periods of severe network congestion. For the retailer, all customer Wi-Fi traffic does not represent an equivalent business opportunity. For example, a customer “showrooming” for a lower price should always take a back seat to a customer trying to buy a product not available in-store from the retailer’s online site.
The online and offline retail experiences are merging and digital offers retailers a strategic opportunity to not only drive in-store sales, but to differentiate their customers’ experiences and gain a competitive edge. The bottom line is that there is no offline! Digital experiences are critical to in-store shopping and to ensure success retailers need a powerful network with cost-effective, optimized bandwidth, comprehensive security, and capable Wi-Fi solutions flexible enough to adapt to rapidly evolving market requirements.
Ricardo Belmar is Director of Solutions & Product Marketing for Hughes Network Systems