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Retailers Need to Get Connected for Revenue

Guest Blog by Jon Stine

It’s no secret that shoppers increasingly prefer the experience provided by e-commerce retailers. Brick and mortar brands have long excused that preference with references to lower prices and at-home convenience – but the truth of the matter is that best of the e-commerce brands win with data.

Take Amazon, for example. Consider their best-in-class customer experience, complete with personalized recommendations, suggestions of “go-withs” and accessories, ideas from others, and shipping addresses on file.

All working together to positively influence shopper decisions, to create bigger baskets and an emphatic “yes.”   And all created through data acquisition, analysis, and action.

In today’s internet-of-everything world, it’s not just online retailers who can create new value from the realm of data. Brick and mortar retailers can take a page from their playbook and leverage the people, processes and things that increasingly connected to the Internet to better predict when and where consumers will want to buy, and ultimately capture more revenues.

For that last few years, Cisco has been watching the impact of the Internet transform the retail industry. Our research started with the observation that retailers just aren’t taking advantage of data already available. Here is how retailers can better connect and capture the data available to them to increase profits this holiday season and beyond:

1. Connect and Build Customer Trust: When customers freely share data with trusted brands, (via social media, mobile [location-aware] or at the website), retailers have the opportunity to upsell and match offers online and in the physical store – leading to greater revenue.

Example: Amazon shoppers don’t mind the retailer knowing where they live, their browsing history and what their favorite brands are because in exchange for this information, Amazon gives them personalized recommendations tailored directly to their needs.

2. Maximize Your Manpower Through Connectivity: Employees can access and share best practices, operational alerts and develop smart training and development tools from their mobile device, while giving managers new insights into efficient ways to allocate sales personnel to drive profits. In addition, employees can provide real-time feedback on product and promotion performance – leading to improved advertising, marketing and additional revenue.

Example: Imagine if your top sales person could be in all your locations everyday, providing expert advice to shoppers and suggesting additional items to go with their purchases. A workforce connected video collaboration can do just that. And by recording top performers, other employees can watch and learn how to do a successful upsell from anywhere, at anytime.

3. Drive Higher Levels of Stock Availability: In-stock performance is one of the four most critical indicators to overall store performance. With automated intelligent stock management and shelf sensing, stores can keep track of merchandise, order stock when inventory falls below a certain level and service customers – all without employee intervention.

Example: Numerous apparel retailers are now rolling out item-level RFID on their private label assortments. Numerous studies have documented the value of that investment in reducing stock-outs in basics, and lifting turn and revenues. Such an investment also pays dividends in omni-channel management, as it allows retailers to create an “endless aisle” of linked and available inventory.

4. Tap Into Dark Assess In-Store: By connecting dark assets like video surveillance cameras, social media, customer’s Wi-Fi signals to online analytics, retailers can predict new trends and empower employees to respond to drive profitability.

Example: A leading retailer is using sensors in the parking lot to help employees anticipate store traffic, and more efficiently staff checkout lanes.

5. Make Your Supply Chain Transparent: Retailers need to have full visibility across the supply chain process by connecting every component. This includes tracking materials from the source, to the factory, to the delivery truck and ultimately to the store or warehouse. In this model, retailers can anticipate exceptions to business rules and respond before anyone else.

Example: If a retailer has complete visibility in to the supply chain, they will know exactly when a shipment falls behind, and why. They don’t need to wait for a shipment to be late to know there is a problem. This allows them to reallocate inventories and promotional schedules as necessary.

These tips are just the beginning. There are countless ways to take advantage of the data available to your organization. Data comes from everywhere and there are trends starting right in front of you, all you need to do is be on the look out to realize the potential revenue they can provide.

Jon Stine is director, retail industry for Cisco Consulting Services

Reinvigorating Retail Loyalty Engagement through Partner Programs

Guest Blog by Rob MacLean

Just because something is good doesn’t mean it can’t be better.

According to COLLOQUY’s 2013 Loyalty Census, retail loyalty program membership has enjoyed some of the fastest growth compared to other industries. Department stores saw their loyalty program membership surge 70% in the last two years while drug store loyalty grew 45%. Overall, retail loyalty program membership has grown 24% since 2010 and 116% since 2006.

But with engagement levels down 4.3% as a loyalty program average, membership growth is only part of the whole loyalty and customer story.

Today’s retail loyalty programs (despite high membership) struggle with three main challenges:

#1.  Rewards fragmentation: the types of rewards offered to customers in different retail loyalty programs are inconsistent. Such inconsistency undermines consumers’ rewards expectations across the entire retail space. Financial institutions and airlines, by contrast, have designed loyalty program constructs where the rules and rewards between programs are similar.

#2.  Lack of merchant-operated scalability: many merchant-operated programs are too small to become retail profit drivers. Instead they become cost centers, forcing many loyalty programs to shut down before they hit their engagement stride.

#3. Drowning in the data deluge: competition among retailers combined with changes in consumer behaviors has left many businesses scrambling to find new ways to capture customer behavioral insights. And in the rush to acquire this data, retailers have failed to align business goals with the data they need to maximize customer engagement. As a result, many loyalty programs lack focus and, once again, don’t offer customers what they want.

Hubbub Over Loyalty Hubs

Considering how interrelated the above challenges are, solving them requires an overarching and integrated approach. Rather than building individualized small-scale loyalty schemes, coalition loyalty programs that bring together multiple retail loyalty programs in one location make the most sense. Either that, or retailers must do additional homework to discover which third party program providers are offering their competitors amazing loyalty rewards and collecting data that will help tailor future rewards to specific demographics.

In other words, there’s no reason to re-invent the wheel. If successful rewards programs are already engaging customers, why risk further fragmentation?

But after a coalition program or loyalty hub has brought customer reward schemes together, what then? How does brand’s loyalty strategy evolve? Loyalty marketplaces must be more than grand assemblies. They must allow customers to track, trade, exchange and redeem their points/miles (depending on the specific loyalty currency) in a seamless and intuitive manner. Making these transactions easy to perform and execute is the key difference between coalition programs and true marketplaces that continue to be developed.

The latter drives engagement to new heights as consumers are incentivized to perform more loyalty transactions, improving the quality of the reward while reducing redemption time. High activity levels also help merchants discover new customers and the shared customer data between members benefits all parties.

Mobile Wallets and Loyalty – A Partnership with Potential

Of course, a discussion of loyalty marketplaces isn’t complete without addressing mobile wallets and its customer engagement potential. Despite sluggish adoption, this environment will prove the perfect incubators of such digital transactions. With smartphone shipments now outpacing feature phones, (225 million smartphones were shipped in the US second quarter of 2013) it’s clear consumers crave these devices’ functionality and ability to augment in-store and off-site shopping experiences.

Convergence, a marketing term favorite, isn’t a buzz word after all. Uniting great loyalty programs with easy-to-use virtual currencies all within a single smartphone is nothing short of revolutionary. The union of loyalty programs and virtual currency might be the perfect marriage of convenience and the ultimate loyalty strategy.

Even if mobile wallet adoption has yet to hit critical mass and Point of Sale technology uniformity is far from achieved, smart retailers will be the ones envisioning a future where the phrase “paper or plastic” sounds entirely antiquated.

High loyalty program membership is great. But legions of disengaged members are like dead weight on a loyalty program’s enduring success. Joining a coalition loyalty program isn’t cost-free, or without integration challenges. But there’s no doubt that’s where the future of retail loyalty engagement lies.

So consider this article a conversation starter about what’s needed to reinvigorate retail loyalty programs and the steps needed to transform an already good retail loyalty program into one of the best.

Rob MacLean is CEO, Points

Tips to Ensure Your Brand Promotion Weathers the Season

Guest Blog by Jodi Sawyer

In planning your seasonal promotional campaigns, you, as a brand owner, are well aware that creative and implementation planning must begin well before the actual ‘holiday season’ arrives. Your successful Yuletide promotion was probably on your drawing board well before the beginning of July. However, have you considered how environmental conditions may impact the life of the promotional graphic? For example:  Installation temperature, location of the graphics (indoors or outdoors), the end-use application surface (windows, walls, floors, carpets, shelves, counter-tops), and the challenges that the graphic materials will need to endure. By considering these factors, your graphics will stay eye-catching and vibrant through the duration of your campaign.

By collaborating with your print-service provider and media-provider in the initial planning and design phases of your seasonal campaign, it will help ensure that you can handle any application challenges such as proper installation temperatures, heat and humidity variations, local sign ordinances and others.  By incorporating installation specifications during the planning stages, your promotional campaign will shine wintertime, summertime – anytime.

Here are five tips to ensure your brand promotion weathers the season:

  • Take into account the environment. For outdoor advertising and promotions, consider the various climates where your promotion will be implemented and know what environmental conditions your campaign will have to stand up against. This can be extreme heat in the summer or freezing temperatures in the winter. The promotional materials need to withstand certain conditions–which may span all four seasons–or may vary across regions.
  • UV exposure – know where the graphics will be placed, the expected life of the graphic, ink color and saturation – all of these factors can impact the material performance.
  • Removability.  Consider that promotions will likely be changed in a few months’ time. While you want to select the film and adhesive solutions that will last, you also need to consider the removal process. Leverage removable adhesive products that are easily removed without leaving adhesive residue behind. Surfaces vary, so the selection of adhesive is crucial to a graphic application’s success.  For example: A low-tack removable adhesive is ideal for interior wall borders and small- to medium-format decals. It offers initial repositionability and clean removability for a period of six months or less.
  • Consider the space and surface. Think about how you can visually transform an entire store aisle, taking the shopper-engagement experience to a new level. Consider using thin-gauge, full-coverage floor graphic films (clear, white opaque, silver and brushed silver underlaminates). In addition to branding elements, these films can use printed textures to create environmental effects, like grass, wood, rocks and water.
  • Durability.  Consider whether there will be heavy foot traffic in a busy retail area. A durable overlaminate for carpet graphics can resist heel punctures, reduce lifting and deliver improved printing clarity compared to the thinner-gauged overlaminates.

With these tips in mind, brands can be sure to help make their products stand out against the competition whatever challenges the seasons may bring.

Jodi Sawyer is a Market Development Specialist with FLEXcon

How Data-Driven Technologies can Help Brick and Mortar Retailers Step Up their Holiday Game

Guest Blog By Steve Jeffery

Santa gets letters. E-commerce purveyors get clickstream data. What do brick-and mortar retailers want for the holidays? In-store customer behavior intelligence. In store tracking is a hot item this season because understanding behavior in brick and mortar environments will help retailers level the playing field with ecommerce. If last year’s trends are any indication, online channels will continue to compete fiercely for consumer dollars during the holiday shopping rush. With an array of options just a mouse click or screen tap away, it’s more important than ever for brick and mortar retailers to close the deal when customers are in the store—they simply can’t afford to drop the ball when it comes to merchandise in stock, service, selection or price. Here’s how technologies for capturing and analyzing in store behavior data can empower brick and mortar retailers to bring their “A” game this holiday season:

  1. Staff strategically. The span of time between Thanksgiving and Christmas includes many of the busiest brick and mortar shopping days of the year, including the Big Daddy of them all: Black Friday. Making the most of these high value retail opportunities requires consistent service and product on the shelves. Especially when demand is fluctuating, good service depends on real-time adjustments in staffing. Periods of understaffing can mean missed sales: shoppers who want help finding a size or are interested in asking a few questions about a product may simply leave when a salesperson is unavailable or lines are too long. Overstaffing is problematic too, as it wastes money on headcount that is not needed. This is why continuously tracking store traffic and measuring wait times are critical. Historical traffic data is important to planning schedules, but real-time tracking allows staff to be deployed precisely when and where they are needed, consistently matching service levels with demand. Technologies designed to capture and analyze this vital data can help retailers more effectively manage their workforce and deploy staff strategically, so that service levels stay strong even on the highest volume shopping days, and without incurring unnecessary labor costs.
  2. Keep lines moving. Customers hate to wait, especially during the busy holiday season when nerves are frayed and people are rushing around trying to get all their “to dos” done. In addition to traffic metrics, capturing accurate data about individual wait times and customer actions while in line can help stores better manage queues and keep shoppers from getting annoyed, or worse yet, dumping their items and leaving when they think the wait will be too long. Real-time queue data, combined with traffic metrics, can be used to predict wait times so in store staff can be deployed to speed check outs when needed. Estimated wait times can even be communicated directly to customers, who are less likely to get frustrated when they know what to expect.
  3. Identify trouble spots… and recognize success. Retailers can also use traffic data to calculate sales conversions. Analyzed in conjunction with Point-of-Sale (POS) data, people counts help retailers determine the total percentage of store visitors that ended up making a purchase during specific times throughout the day. This is a very important metric, as it provides much more accurate insight into store performance than sales data alone. It’s valuable to understand both how many people came into the store and how many of those people purchased. For example, POS data may show lower than expected sales for a store on Black Friday, but when compared with the traffic figures, a very high conversion percentage is revealed. This means that store staff are doing an excellent job converting shoppers that do come in, and suggests instead that marketing needs to drive more foot traffic to the location. Without the traffic data, a retailer may incorrectly think that store’s service is to blame.
  4. Optimize marketing, pricing, display and service strategies. Brick-and-mortar stores offer the benefit of immediate access to products that online retailers can’t match. Showrooming —the practice by which shoppers look at products in a store and then price shop for a better deal online—were blamed for hurting sales last year but, this year, more and more retailers are embracing showrooming and offering free WiFi in the store. The WiFi allows the retailer to push a special offer to the customer in the store and counter the online price advantage. Price isn’t, of course, always the main factor.  The guy on his way to a party cares more about having the hostess gift in his hand than whether he saved a few dollars. He can even have it beautifully wrapped and ready to go in a matter of a few minutes (so much nicer than those generic colored boxes!) Another shopper may be prompted to buy by a particularly engaging product display or demonstration. Capturing behavior data about how shoppers use and move through the store, what displays they stop at and what items the touch and try can offer a wealth of insight that can be filtered back into more effective marketing, pricing, display and service strategies.

Understanding what makes brick and mortal holiday shoppers inclined to spend demands continuous, real-time analysis of their behavior—analysis that’s just as sophisticated as what’s currently done online. Retailers that take advantage of “behavior intelligence” technologies available for capturing and analyzing this insight will be better prepared to shine this holiday season.

Steve Jeffery is CEO of Brickstream