Is There an Intelligent Store in Your Future?

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Is There an Intelligent Store in Your Future?

By Steven Skinner and Sindhuja Sampath Kumar - 05/10/2011
Mobility, social media and online are no longer nice-to-haves in consumer-facing industries. Retailers are investing heavily in these technologies to bring the “wow” factor to the shopping experience and create the “Intelligent Store” of the future. Nowhere is this more true than in apparel retailing, which has been at the forefront of adopting technologies that enhance customer service and the shopping experience.
 
The Intelligent Store integrates multiple interaction channels and touchpoints with shoppers – mobile, social media, on-line and in-store environments. For apparel retailers, this has many implications. For example, although your online business may allow you to price some products lower online than in your store, research indicates shoppers increasingly expect synchronized pricing. Or they may expect to buy online (based on social media input), and pick up at the store – with a return to store (or different store) option.
 
The store is at the cusp of the multichannel shopping experience. This is where shoppers expect to have the best of both worlds – connected and physical. The Intelligent Store can best influence shopper’s impulse buys or “considered” purchases. Failure to do so consigns retailers to compete against Amazon and other online retailers in the future – a battle retailers may likely lose.
 
How can retailers enrich the in-store shopper experience using consumer technology that is increasingly ubiquitous? How can the physical store complement the online experience? And how do retailers prioritize where to invest?
 
To answer these questions, Cognizant recently surveyed 2,243 shoppers across multiple age groups and incomes on their shopping experiences and expectations. Here are a few strategies based on what we learned:
 
Take your store to the shopper. Create a “boundaryless” shopping experience. Connect with your customers everywhere – at home, on the road or in your physical store. Kill the check-out line – have your store associates walk the aisles and do mobile check-out for shoppers. Guide shoppers in the browsing process, and give them store layout maps and information on shelf assortments via their mobile phones. Bring the “Information Desk” to the shopper – enable them to click a button on their smartphones to have a store associate walk up and respond to their queries. Deliver a great shopping experience in the palms of their hands, wherever they are, and they will keep coming back to your store.

Scale up the retail store IT architecture for today’s mobile shopper. The shoppers in the example above would need the retailer’s IT systems to support these mobile technologies. Cloud-based architectures should be leveraged to push services to shoppers’ smartphones. Because smartphones are portable, personal and connected, they should be leveraged to deliver a highly personalized, enriched shopping experience. Retailers should in time integrate mobile payment options, automated coupon redemption, location-based alerts and offers and other new services. Take advantage of the camera on these devices. A host of barcode scanning or image-capture based applications can be delivered to the shopper in the store.

Make POS the Point of Service. The Point-of-Sale (POS) is currently the most important and often the only place for face-to-face interaction with the shopper. Use it for more than just billing and payment. Above all, don’t make it a source of shopper dissatisfaction! Our research indicates that inattentive cashiers are the biggest source of irritation at check-out counters, followed by manual coupon redemption, long lines and slow check-out.

Move toward mobile POS devices and reclaim valuable store space to offer more merchandise. Get your employees out from behind the POS and into the aisles to interact with customers. This will improve the shopper experience, increase sales per square foot, and lower POS capital expenditures. Apple has done this in all its stores and Old Navy has successfully piloted the same initiative with great results.
 
This is also a great opportunity to attack the second highest turn-off in the check-out process – manual coupon redemption. Automate the process to apply coupons and rebates from different manufacturers automatically at check-out rather than have shoppers mail in the coupons after purchasing the products.
 
Gear up for handling distributed orders. Shoppers expect a variety of purchase and delivery options across channels. Our research shows that the ability to buy online and pick up at the store, with the option of returning it to the same or different store, is highest on shoppers’ wish list. Shoppers also want tobuy in-store and have it delivered at home at no charge, or buy in one store and pick up later at another store. For this, retailers need to have their stores “see” each other’s inventory as well as the inventory in the distribution centers.

A single view of orders across channels and inventory across the network, and an intelligent sourcing system, will enable flexibility in order fulfillment. If there is stock of a product anywhere in your network, you should be able to use it to serve your customer. For instance, if Store A does not have a product, it can offer to ship it to the consumer’s home at no charge or ask if the shopper would like to pick it up at Store B nearby. “Out-of-stock” need never be a reason to turn a shopper away, at a store or online.
 
Make the “selling experience” fun. Don’t lock up your employees behind static check-out counters. The same social media and smartphones that your associates use at home to connect with friends and make purchases can also be used to enrich their work experience. Stale POS technology is a leading source of store associate attrition. Eliminate fixed POS devices and provide your store associates with mobile devices to provide product and sales information to shoppers and enable dynamic check-outs. This will keep associates engaged while enhancing productivity.
 
Make a start
Apparel retailers can leverage new possibilities to make stores ready for the future of shopping. Identifying the right partners can help you get started on your journey of creating an Intelligent Store. It also requires a cross-functional commitment from at least the CIO, CFO, SVP of store operations, and SVP of e-commerce. Moving toward an Intelligent Store will help meet the expectations of empowered consumers. Getting there is no longer optional.
 
Steven Skinner is vice president, Retail Practice, Cognizant Business Consulting, and Sindhuja Sampath Kumar is manager, Retail Practice, Cognizant Business Consulting.