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January 2, 2015

Bridging the Physical and Digital Worlds

I am a technophile, and I believe sincerely that technology is going to make tomorrow's world better than the one today, just like it made today's world better than yesterday's. The retail shopper will be among those who enjoys increased conveniences and better shopping experiences with the technology trends sweeping the Retail industry today.


One such trend - a vital piece of the Omnichannel puzzle - is interconnecting the physical and digital customer touch-points, thanks to various technologies including geo-fencing, NFC tags, GPS and mobile devices like smartphones. By bridging the physical and digital worlds and allowing them to interact with each other in a seamless manner, the Retailer can improve the customer's shopping and service experience resulting in increased conversions.


Let's take an example from a real life situation. Say I want to buy a smartphone and I research various smartphone brands online, select one and add it to my shopping cart or wish list. The next time I walk into a store, an alert can be made to appear on my smartphone asking if I need assistance buying the smartphone in my abandoned shopping cart or my wish list. The customer experience could then be taken further, by paging a customer service rep to come help me or by allowing me to navigate to the electronics section using my phone. The experience could be completed with price comparisons, a mobile checkout and feedback on the product and experience.


This is just one example and the possibilities are endless - including personalized in-store offers, price and availability alerts, proximity based product information, showrooming and analytics of in-store behavior; not to mention upcoming technologies such as Automated Shopping Trolleys, 3D Printing and Augmented Reality. And while Retailers improve their experience, Shopping Mall operators are also starting to connect shoppers to the digital world, for added conveniences such as automated parking garages and price comparisons.


Shoppers may look forward to an exciting future where their shopping trips resemble a sequence from a science fiction movie. Retailers already have several tools to launch themselves on the way to that future.


To learn more about the various ways for Retailers to bridge the physical and digital worlds, meet our experts at Retail's Big Show. Schedule a meeting now. Visit www.infy.com/NRF15.

Continue reading "Bridging the Physical and Digital Worlds" »

December 16, 2014

2015: THE YEAR OF ONLINE GROCERY? (PART - 2)

With the U.S consumers' wallet share on ONLINE GROCERY growing rapidly, there is a subtle battle brewing between traditional retailers and e-tailers to capture their share of wallet. Given this is an industry typically characterized as highly price sensitive, hyper-competitive with razor thin margins and high purchase frequency - 'How to drive profitable revenues and build a sustainable, scalable (mass-market) online grocery business model?' is a key conundrum faced by U.S grocery retailers today.

Without a doubt, the U.S Online Grocery industry is experiencing a structural shift [see Figure 1] in the way consumers shop for groceries today. Few key trends defining this landscape, worthwhile to note are: price-to-value continues to remain an important driver for consumers who are seamlessly shopping for food and beverage across various store formats (no longer shopping at just one stop shop supermarkets), local and private labels are gaining popularity (better assortment mix), and last-mile delivery continues to be more challenging for retailers with diversifying consumer needs. So, what drives a consumer to shop online?[1] 

 

Grocery Image_3.jpgGrocery Image_4.jpg 

 

 

 


Turns out, Convenience still remains their primary motivation, though not the ONLY reason [see Figure 2] - according to a U.S Grocery Shopper Trends 2012 - Executive Summary published by Food Marketing Institute (FMI). Clearly, some of these reasons are easily replicable by the traditional retailers making it a level playing field for them. So, how can grocery players tap onto this opportunity today and make MONEY at the same time?
 
A Grocer's Perspective
 
De-constructing the P&L of a grocery business model [see Figure 3] shows that the overall economics of this business mainly depends on: the type of fulfillment model used (meaning productivity in number of units picked per hour), basket size, consumer demand, and population density.[2] 
 
Grocery Image_5.jpg
Clearly, a one size fit all approach where-in an e-tailer offering only a home-delivery or a traditional brick and mortar retailer offering only an in-store pick-up might not be viable and profitable. Instead, both e-tailers and traditional brick and mortar retailers, will have to strategically innovate to harness the given market opportunity. Consequently, rather than having a home delivery model across all geographies, brick and mortar retailers can play it by the consumer demand and population density to leverage a combination of fulfillment models e.g. in areas of low density and low consumer demand they can offer variations of click-and-collect models (in store, curbside pickups, delivering to your cars - Volvo seems to be innovating on this front), areas of high density with high consumer demand can leverage dark stores (dedicated warehouses) to offer home deliveries. E-tailers too, can leverage a similar strategy in offering variations of click-and-collect models (car deliveries, specific location pick-up) to drive up their revenues. Having looked at the "last-mile" logistics of the food delivery, now let's look at the consumer side of interactions - how can grocery players engage better with changing consumer needs?
 
A Consumer's Perspective
 
Offering a "differentiated digitally connected seamless" shopping experience today will entail: brick and mortar retailers looking at leveraging location based services to offer a more contextualized, and personalized in-store experience. E-tailers can explore the possibility of offering virtual grocery stores, and contextualized basket building features to match the in-store experiences offered by a brick-and-mortar retailer. In my opinion, some of the key capabilities [see Figure 4] emerging for grocery players today are:
 
Grocery Image_6.jpg

Given the relative economics of grocery business, offering a right combination of click-and-collect and home delivery models that "seamlessly" integrates with a "differentiated digitally connected shopping" experience will be the key to position the grocery retailers for success ahead. Grocery retailers to realize this first will continue to stay relevant to take it all.

As traditional retailers build upon their omni-channel capabilities to be more "online-like" and e-tailers continue to expand their offerings to be more "store-like", it will be interesting to see who wins in this unclaimed territory. Whom do you think will win? 
 

To know more about trends in online grocery and how you can leverage various innovative technologies to provide a seamless and truly engaging customer experience, meet our experts at Retail's Big Show 2015 (Jan 11-13, 2015). Schedule a meeting now. Visit www.infy.com/NRF15



[1] U.S Grocery Shopper Trends 2012 - Executive Summary by FMI: www.icn-net.com/docs/12086_FMIN_Trends2012_v5.pdf

[2] Online grocery winners emerging - A Report by Bank of America Merrill Lynch

April 8, 2014

To Pause (POS) or Not

In a recent study done by University of Arizona and Demandware it was highlighted that Traditional POS systems at Brick and Mortar stores are not able to keep pace with the expectations of digital consumers and the retailer's response in the form of omni-channel strategies.

The reasons are not hard to see; today's POS systems are no better than siloed systems that have stores as boundaries and cannot look outside to support many of the retailer's omni-channel aspirations. Thus the tools and software available as part of traditional POS are falling short of supporting some of the key initiatives like

·        Single view of customer (or the 360o customer view),
·        Cross channel inventory visibility
·        Looking up inventory in nearby stores or
·        Assisted Selling and Product personalization
·        Personalized Offers

Also added to that these traditional POS devices have a cyclical re-haul  which is to happen in the next 2-3 years -perfectly coinciding with the thinking of several CIOs to see if they should replace the Traditional POS systems.

So what are the alternatives that CIOs or Leaders have -

Option1: Extension of current POS to bridge the Gap

One easy way out for retailers is a natural extension of current capabilities and investments to support future needs. Some POS vendors like NCR, Epicor and Oracle already offer capabilities like Assisted Selling, targeted up-sell and cross-sell and mobile POS.

This option is characterized by (View image) leveraging existing investments to a large extent, lower cost, Faster Time to market, Incremental Change management and clearly Short Term Focus.


Option2: Overhaul of the current system in favor of a common customer transaction suite

A compelling alternative would be that of extending the best in class digital commerce architecture to support store operations. This solution will help connect all channels and implement an integrated solution that will provide a common view of customers, products, inventory, price, promotion and order information. This will also help address other in store opportunities like guided selling, and locate nearby store inventory to save the sale.

This approach is generally characterized (View imageby a Flexible Architecture that can scale to support future needs, Significant Initial Investment, a Big Bang Approach to replace existing POS systems, Training and change management initiatives that are needed to support such a big bang and finally has a Long Term Strategic focus.

In the not so distant future we might as well hear from the best in class digital commerce platform vendors like hybris, IBM WCS, ATG and Demandware about the emergence of a new class of enterprise software - we can call it the 'Customer Experience Management Suite' or 'Integrated Customer Transaction Platform' covering all customer touch points (from stores, desktop, mobile, tablet and Call Center) and providing truly seamless experience. 

However replacing the Traditional POS systems cannot happen overnight nor is it feasible. Some of the broad questions below need to be answered before we can arrive at meaningful answers and way forward


  1. Risk perception of Retailers: What if it means putting all the eggs in a single basket for retailers and if they perceive a higher risk in doing that then that's a huge impediment to deal with.
  2.  Complement or Supersede - Given that traditional POS is entrenched and is a proven model, should retailers look to complement investments in Traditional POS with that from the new customer platform?
  3. Applicability for all types of Retail: Will the new POS platform be suited for all types of retail businesses? Definitely the opinion seems to be divided here - will it be more suited for High value transaction businesses compared to high volume transactions
  4. Security Concerns:  The security and PCI Compliance for traditional retail POS further augmented by Video Surveillance puts it ahead of Mobile POS and make the current offering fairly robust with very few incidence of violations. Unless the new platform is able to match up the security aspects of incumbent it is going to be a hard bargain.
  5. Reliability: Given that the new Mobile POS will run on Wireless network, questions around matching the reliability and availability of existing POS system needs to be addressed
  6. Tenders: Again Traditional POS is designed to accept multiple tender types like Cash and card at a bare minimum. Support for multiple types of tenders needs to be built in
  7. Purpose of Use - Self Service or Assisted: How should mobile POS (based on digital commerce architecture) be used in stores?  Should it be left for self-service as standalone kiosk for customers to checkout and complete payment or should it be used by the Store Associate as assisted selling tool? Or should it be a combination thereof?
  8. Business Process Re-Design / Standardization: Right from re-defining the roles of cashiers and store Associates to designing new business process ranging from providing common inventory visibility, uniform chain level pricing, common promotion definition & delivery, Guided selling, Deliver to home and many more - there is a whole lot of Business process and Role alignment that needs to be thought through and designed.
  9. Training needs: Identification of Change management and Training aspects needs to be done upfront. This will help address various aspects like for example, in an assisted selling scenario (using a new mobile POS platform) determine when exactly to approach the customer to assist and close the transaction? Approaching too early might result in wasted opportunity as customer might have other items or approaching too late will mean wasted opportunity. The roles of cashiers needs to be re-evaluated- How to reskill the current army of cashiers and deploy them as trained store associates to help in clientiling or assisted selling
  10. Choice of Technology: Several options exists for retailer that needs a very careful consideration
      1. Platform Options
        • Extension of current Platform with value added use cases
        • Re-haul of existing platform in favor of Table POS
        • Re-haul of existing platform in favor of an integrated Customer transaction platform driven by digital commerce architecture
      2. Other considerations:
        • SAAS vs On-premises
        • Single tier vs n-tier
        • Rich Website like UX vs traditional POS like UX / features
        • Global Platform vs Localization Needs (store specific, Brand specific)
        • Point to point integration vs Open Standards based Integration with ERPs

It is now fairly evident that it needs a long drawn process where the pros and cons need to be weighed in before a final decision. For the near future we can safely assume that new POS (Integrated Customer Transaction Platform) at best might at co-exist with the enhanced versions of Traditional POS and not end up replacing it altogether.

However in the long run once the benefits from the new systems are realized, when the risk-reward equation has been hashed out and after enough pilots validate/fail to validate the hypothesis and long after store associates are adequately trained and when Mobile Payments become main-stream - we can for sure say that the new POS platform (with much lower incremental cost) will have sufficiently replaced the existing ones.

In my view we are 5 years from that point of inflection, but that's good enough a time for the likes of established Traditional POS players like Epicor, Oracle, NCR SAP, Microsoft and Retalix to take rearguard action and have a compelling solution offering to stifle progress of Digital Technologies in their own turf. Whichever way the pendulum swings, it's a very interesting space to observe and act in the next 18-24 months as it is bound to have far reaching impact on the future and landscape of POS technologies and solution offerings.

March 7, 2013

Soak Period for Store rollout - A process that needs to be standardized

Rolling out any patch or software update to a chain of stores is always a challenge.  The complexity lies predominantly on the number of instances where the same software package is running.  While there are standard set of challenges for any software update to a stand-alone system, it has the potential to become catastrophic if they were not done with enough attention to details. This is especially applicable for roll outs involving large number of stores.  Many retailers face this problem regularly.  A package that is approved for release and performs as expected in pilot, simply causes unbelievable trouble when it is rolled out to the entire chain. Operations team is bombarded with a sudden spike in ticket volume. What went wrong?  A thorough testing was done before the release, pilot was carefully monitored - so what was missed?

Continue reading "Soak Period for Store rollout - A process that needs to be standardized" »

September 30, 2012

"Mobile Apps For Faster Shopping Sprees"

 "Google Indoor Maps" has opened a whole new opportunity to retailers whereby they can enable their customers in getting easy and quick access to the products that they're looking for. In brief, "Google Indoor Maps" allows a person walking inside a store to navigate his travel within this indoor location just like what she(/he) would have done while driving a car using a GPS

Integrating these maps with Retailer's own mobile application (app) and tagging a store's aisles by "Product Categories" on these Google Indoor Maps for a large format store, going down to category of products available by Brands may be just the beginning of the thought as to how Retailers allow their patrons to directly reach out for the product that they are looking for rather than wandering through store departments or searching for a store associate which for some shoppers may be time consuming or even frustrating.

One of the best supporting feature on Google floor maps, is the ability to guide the user by individual floor's plans, whereby a large multi-level retail stores can also be covered easily and therefore we feel that some of the immediate exploits can be in the large scale Store or say Super Store

Let us try to understand how one such Retailer app may make the life a Retailer's clientele much simpler and the shopping experience much better. Assume the scenario that our loyal Customer "Louise" is entering such a Large Super Store for her weekly purchases which runs across several departments of the store like fresh produce, dry grocery, apparel, cleaning supplies, bath-ware, electronics, sports goods and the list goes on. Soon after she has parked at the store, Louise logs-in to the Retailer's own native Mobile app on her smart phone. The Retailer's app upon invocation on her smart phone, detects her geographical location and the store that she is visiting today via Location Based Services (LBS) wherein this specific store's latest tagged maps can be pulled and displayed on Louise's phone's screen

To make the whole shopping trip faster, Louise has keyed in the shopping-list beforehand in the app and a route map is prepared for her upon her check-in into the store via this app. This route map is based on the latest movement of shelves/racks in the store.  Such a guided walk cuts down the Louise's walk through the aisles a short, easy and a confortable one

Louise was looking for a shirt for her son, but the size small does not appear on the shelf today... does the store have it? No problem... the check would be a quick one by Louise quickly getting to know this via her mobile app. Moreover, if it is not available in store right now, the app prompts her with an easy and quick site to store order which she can pick up during her trip next week 

Another use for this app+google maps eco-system can be to integrate with the floor maps and publish current vacancies/next available time slots/expected wait times in Large Store's sub stores like ophthalmologist shops, saloons etc.

 

This Large Super Store's sub stores are very frequently publishing a status of a vacant customer spots/seat available or unavailability of the same on the floor map which when viewed by Louise, will give her an idea whether she needs to do the shopping first or go to the sub store for a quick visit to the hair salon

While these are just some of the initial thoughts, when pursued actively this specific technology can be utilized in umpteen ways to boost the store sales and to guarantee customer satisfaction. Overall, sky is the limit when one starts documenting the concept of such a solution/product. Customer purchase/return history and loyalty points can be utilized to highlight offers/deals when customer is approaching a specific aisle or when she has been looking for a specific product for some time

This article has been contributed by Ashutosh Kaushal - Senior Consultant (Sterling Commerce - Infosys Ltd). You can reach Ashutosh at Ashutosh_Kaushal@infosys.com.

 

July 12, 2012

Mantras for creating store Layouts and Displays

Hey Guys..!! It's a weekend ahead..! Planning for some shopping..??

And you might be looking for some good stores with nicest displays, are you?

Have you ever wondered how easy it is for retailers to create a store on your expectations?

Well, let me tell you the very fact about it, there is a hell lot of planning which goes on before giving you something which you find as "SIMPLE".

It's not that easy for retailers to conceptualize their store for maximum footfalls and conversions, rather it's like an iceberg where you hardly see 20% of its size on surface, and 80% still lies below the visibility layer.

Have you ever wondered, what lies in the remaining 80% part that you can't see..??

As far as I can understand it there are various key 'Mantras' that retailers follow to ensure the best store layouts and displays:

1. Human psychographics: human psychographic factors give an important touch to the store because the subconscious mind of the human being many a times plays more important role than the conscious mind. There are certain factors which greatly influence the footfalls and sales of the stores such as: people see at their right hand side first and move toward that most of the times, this factor may be used to boost up the store sales for a particular category and if a right attraction factor is arranged in such a way, it could enhance the overall sales of the store to a greater extent.

2. Category flow: sensible and easily understandable by the customers. Display should tell story about the product usage so it becomes easier for the customers to relate and understand. It should be enabling customers to move throughout the store without him knowing the same.

3.  Adjacency plan: within the category, the products should be kept maintaining a flow of understanding, based on a particular criterion. This makes it easy for the customers to choose products faster without the products being left out of sight.

4. Appropriate use of fixtures and textures with great ergonomic planning is what make the shopping experience even more pleasant.

5. Use of the focal walls: should be given to a product that appeals to the customers the most and is able to make them stay longer in the store.

6. Use of color combinations and proper lighting improves the touch and feel of the store, attracts customers, and meanwhile increase their curiosity about the products. Especially Spotlighting in case of window display has a great significance. Using the concepts from color wheel definitely holds eyes towards the merchandise for longer.

7. Signage: play very important role for enhancing customer understanding in different terms like directions, product usage, promotion and many more.

8. Activation zone: the space where the promotional campaigns actually work. Mostly these are easiest approachable places in the store and receive a lot of customer attention.

9. Neither empty shelves nor the over flooded shelves are going to help; customers don't like both of the situations knowingly or unknowingly.

10.  Washrooms/trial rooms etc. needs to be maintained as per the need of the retail format. And should be clean & clear, appropriately ventilated and separated from the store yet properly accessible.

11.  Hot Spot Planning: Hot spots in a store are the most significant places for promotions as maximum traffic engagement is found at these places, might these be at the entrance, in the center, or on the end caps of the aisles depending upon the area and structure of the store-floor.

12.  Window Displays: The story that's hidden in the windows of the store is something which pulls crowd from the visibility zone and facilitate high footfalls.

13.  The consistency factor: Finally a consistent combination of all the factors in the store is what creates an overall impact.

Have you ever given a thought, how different it is from what you thought earlier..!!

It takes more than a few days, weeks or months to generate this entire plan which helps you buy at the stores. There is probably even more than what I have mentioned above. If you know a few of the other things, please hit the comment button and let everybody else know about it.

April 26, 2011

Self-Check out: Will it be the future of Indian retail stores?

Last weekend on Saturday, my mother asked me to accompany her for the monthly grocery purchase to the closest retail store from our home-'D-Mart'. We went to the store in mid-morning around 11am thinking it would be relatively less crowded. But I guess, everyone's thought process was exactly like us and the retail store was buzzing with people. Yet, due to effective and now well placed self-service practice in organized retail stores in India, we did not take too much time to finish purchasing our grocery (Just 30 mins!!). But then it was the time for the herculean task of standing in serpentine queue of billing. It took us approximately 50-55 minutes to finally reach the counter and pay the bill. Though there were 5 different counters with cashiers working as fast as they could, the waiting time was still very high.

Suddenly my mother asked a very innocuous question- "Why do we need to stand in queue? Why can't we have a system where we can swipe the product as and when we purchase, pay the bill on our own and then go? We are spending (or wasting) more time standing in queue than it took us for purchasing items".

It triggered my thinking. 'Check out' being last point of contact with consumers; convenience and pleasure at this point can surely improve satisfaction of consumers by few folds. How can Indian retail stores leverage this opportunity? How can this convenience be provided?

Self-checking out can be one option. So what is Self-Checkout mechanism? In colloquial term, it can be defined as any machine/scanner/system which will allow consumers to scan products themselves while picking them up from shelves.

Some form of self-checking out mechanism has a presence in western world. However, same cannot be said for India. But yes, with invasion of organized retailing and consumers embracing the usage of technology, there is a need and requirement of provision of a self-operating scanner or a self-checkout machine.

In my opinion; the way advent of ATMs minimized total time spent at a bank, in similar fashion; installation of Self-Checkout system will also minimize time spent at a retail store. This will in turn be a key to improve the consumer service and satisfaction.

However, like any other IT implementation, a self-checkout mechanism will have its own advantages and disadvantages. Let's put it down:

Advantages

·         Reallocation/freeing of store employees. Thus they can focus on other operational aspect of store

·         During hurry or lesser number of items to buy, faster payment and check out for consumer

·         Another School of thought: Self-Check out/Payment may not be as fast, but the active participation of consumer in the scanning process will surely result in time appearing to pass faster. Thus a happy consumer J

·         Form of privacy for some consumers in buying some personal items/products/goods

Disadvantages

·         Inefficiency of consumer to operate the machine

·         If there is no re-allocation of store employees then possibility of loss of labor

·         Security issues with the self-checkout machine

·        Self- checkout not feasible for huge/big items (e.g.: electronic gadgets like TV/Refrigerator)

 

So what do you think? Will 'Self-checking out' be the future of Indian Retail?

Leaping ahead, as the buzz word all around is Mobile, will 'Mobile-check out' or 'M-check' out also be a thing to look forward to in Indian Retail scenario?

Continue reading "Self-Check out: Will it be the future of Indian retail stores?" »

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