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[21 comments]

BrainTrust Query: What Are the Top Three Digital Must-Do's?

August 12, 2013

Through a special arrangement, what follows is an excerpt of an article from WayfinD, a quarterly e-magazine filled with insights, trends and predictions from the retail and foodservice experts at WD Partners.

WD Partners asked more than 2,300 shoppers nationwide which of 14 trendy technologies they were aware of and found appealing. They made their favorites very clear.

We think this research will help retailers overcome a significant hurdle: how to sort out the possibilities for engaging consumers across in-store, online, and mobile options and get the most bang for their technology buck. Stores can't do it all, so here are three digital priorities that will help get a retailer where their customers want them to be:

Buy Online, Pick Up In Store (BOPIS): Consumers in our survey gave BOPIS the highest ranking — an astonishing 86 percent said it's appealing. And 52 percent of them have used this option, when available. That made it the second most used technology of the 14 we studied.

Convenience is the key benefit. The Home Depot is one retailer that does it well. It tells shoppers clearly where to pick up items in the store, it puts that location at the front of the store, and it makes that pick-up location distinct from other types of service with its own line, eliminating annoying delays and streamlining delivery of the product to the shopper.

Endless Aisle: Endless aisle gives shoppers access to your entire inventory, wherever it's located. In most retail operations, there is often 10 times more product available online than is available in any one store.

For the retailer, it's about that conversion metric — a way to still capture the sale for a product that may have sold out in your location. It also ranked third most appealing in our survey. For shoppers, it's about having the most complete access to inventory across the entire brand — and buying what they want, when they want it.

Associate Empowerment: Our survey found that 70 percent of customers want staff empowered with electronic devices to assist them with fundamental questions. What's the price? Where can I find X? This product isn't on the shelf, what are my options?

Take the shoe section in a department store. In the past, customers waited and waited as an associate disappeared to some remote room behind a curtain to find (or not find) shoes. Today, in stores like Macy's, associates carrying handheld devices can check for available shoe sizes, plus style and color, right next to the customer in a fraction of past wait times. Staff with powerful technology at their fingertips can engage customers in ways that often translate to sales. It's a powerful shift that speaks to the needs of your customers.

FINANCIALS:     [NYSE:HD] [ ]

Discussion Questions:

Which of the three digital technologies mentioned in the article do you think will provide the most ROI? Are there other emerging digital technologies you think you should also gain funding?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Which of the three digital technologies mentioned in the article do you think will provide the most near-term ROI?

Comments:

I am partial to BOPIS. It leverages the best of web shopping, reinforces the essential aspect of physical stores that can't be replaced virtually, and encourages retailers to "get it"...that to the consumer it is one brand, whether it is the brick or click version of the store.

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Joel Rubinson, President, Rubinson Partners, Inc.

Buy Online, Pick-up In Store is likely to have the best results for retailers that pull it off well. The Home Depot description is one example of doing it properly and taking it seriously. When online shoppers understand that there's more than lip service to BOPIS and they want the best of both online and physical retailing, they will utilize it in greater numbers. And doing so will drive additional impulse shopping or forgotten items.

Dovetailing BOPIS with properly managed/balanced location based advertising/messaging can be a real boost to ROI. For example: a consumer purchases a leaf blower online, arrives at the store to pick it up and gets a reminder/offer about leaf bags or extension cords, etc.

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Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

Empowering sales associates will yields the best ROI. It saves time for consumers and make the retailer more efficient.

Another technology to be considered is a location app that tells consumers where items they are interested in are located in each store. This technology is still in development, but when it is launched, will greatly assist the consumer shopping experience.

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Max Goldberg, President, Max Goldberg & Associates

These are all good ideas, especially BOPIS, and so I agree with Joel and Ken. Plus, that actually gets people into the store for yet another sales possibility.

I do question the use of the phrase "Associate Empowerment" as the heading for the idea of employees having a device containing inventory info. That is not "empowerment," that's simply having a utility that can be very helpful. Empowerment is an associate being able to say, "Yes, I can give you 15% off because of the scuff mark on that shoe."

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Ian Percy, President, The Ian Percy Corporation

Endless aisle is a huge opportunity. Offering a consumer your entire assortment is important. Especially in a category like shoes, for example. A physical store can't possibly carry every size and flavor of shoe. That said, they can provide the most popular in store and then provide a way in store to see the rest of the inventory, then have it shipped to their house or BOPIS.

I was consulting with a retail shoe store the end of last year and endless aisle was first on my list of recommendations. Number two was empowering the associate.

Retailers should take this list seriously and see if one or all three make sense for their business.

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John Boccuzzi, Jr., Managing Partner, Boccuzzi, LLC

I agree with the three digital technologies mentioned, and would venture to say that they all yield ROI in different ways. By allowing people to shop the way they want—buy online pick up in store—you're catching guests that don't like shipping fees or like the convenience of online, but want their products in-hand sooner. You're also creating another retail opportunity having customers in the store and able to buy more product. Obviously with endless aisle you have more products to chose from and therefore, more to sell. Finally, by empowering employees, stores not only help current sales, but keeps customers returning for great customer service.

According to Mashable.com, the top digital technologies companies are investing in are online customer service, free shipping, online purchase/in-store return, PayPal checkout, email marketing, shopping personalization, product customization, demonstration videos, e-gift cards, and social media including Facebook, YouTube, Pinterest, and Instagram.

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Zel Bianco, President, founder and CEO, Interactive Edge

All three have the potential for great return. But I am going to place my bet on empowered associates. Two reasons:

1. It makes store employees more efficient, which means greater sales and greater return on labor cost.
2. If you do this, you will automatically create an endless aisle.

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Mel Kleiman, President, Humetrics

The combination of endless aisle and Buy Online Pick Up in Store should be a priority for retailers as it provides extremely valuable customer service while at the same time offering an attractive ROI. Companies like Lowe's, Home Depot, Graingers, Walmart, JCPenney and Kohl's have tremendous access to an enormous pool of suppliers. Leveraging those relationships and knitting the inventory, supply chain, marketing content and e-commerce into a seamless ecosystem is what the digitally empowered shopper expects.

There are many words thrown around to define this; omnichannel and cross-channel come to mind. The simple truth is that this should just be shopping as defined by today's empowered shopper where she simple expects this transparency and service.

The sooner brands and retailers learn to be digital, the more successful they'll become. Brands need to become digital publishers. Too many 'digital' initiatives are siloed and function independently. The brands need to corral all of their internal departments AND all of their affiliated external agencies and mandate that everyone must comply to a brand road map. As the old adage goes, if you're not part of the solution, you're part of the problem.

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Adrian Weidmann, Principal, StoreStream Metrics, LLC

This comment will be parenthetical, but there are plenty of companies that can't do any of these three right now. Retailers that haven't adapted to customers' reliance on electronic devices face a huge uphill battle to remain relevant to them. One sure result of digital commerce will be a reduction in the number of stores, and many retailers are in a race to survive.

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Cathy Hotka, Principal, Cathy Hotka & Associates

BOPIS = Shopper convenience so that's an easy one to vote for. As for making sales associates more knowledgeable by supporting them with tools and applications, I would guess that will work for a small number of retailers. But in reality, how many retailers have enough on the floor staff to actually be working with customers, vs the reality of a self serve shopping environment?

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Peter J. Charness, SVP America, Global CMO, TXT Group

All are good desires, but the one that points to the future is the endless aisle. For the customer, it opens variety, access and increases the element of satisfaction considerably. For the company, anything that makes inventory management more efficient has tremendous positive effects on the bottom line. Essentially, the retailer generates more revenue with less inventory.

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Gene Detroyer, Professor, Independent

Associate Empowerment is the true differentiator here.

The customer is able to access product information (perhaps limited) online, at home or on-the-go via mobile device. It's not uncommon for a customer to show up at a store and possess more data than the sales associate. In most cases, the poor employee on the floor has access to POS and in-store inventory at the counter.

Let's empower the associates. Let's turn them into selling experts. Let's help them sell, not only what's on the floor, but what's available across the company, for items that are available right now and items available for pre-order.

To achieve this end, mobile applications are required to help the employee determine ATP inventory, access product information, and perform like product searches based on attribute (style/color/size, etc.). A little bit of customer info (preferences, purchase history, etc.) peppered into the mix would be helpful as well.

Joanna Beerman, Marketing Communications, Manthan Systems

This is a great top 3. We've found that a strong endless aisle strategy requires associate empowerment to succeed. Putting the tech in employees hands is an important component, but so is training them to deliver on the changes in the customer service approach and aligning their incentives to assure that they are willing to help the customer place the order in the channel of his or her choosing.

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Martin Mehalchin, Partner, Lenati, LLC

This discussion has attempted to separate into components a bricks and mortar market plan that can bring stores away from the deadly effects of ecommerce-only sales companies. It is a good part of the plan to create reports that measure the growth and profit of these aspects of the plan, but in order to stem the tide of e-commerce growth and remove the erosion of market share loses, the plan must be complete and sustained. The removal and or segmentation of this plan will cause direct investment dollar loses which are the most damaging in a receding economy like we are in with today's retail business.

Successful retailers will commit to an Information Technology e-commerce plan that is singular in scope and designed to allow the development of these three components to launch as they are ready for the customer. This will allow for return on investment at the earliest opportunity and assist in the development of new and relevant business reports. The time to get started is now.

'gjarnoldjr'

The potential for endless aisle is significant. The ROI of capturing more e-commerce sales from in-store shoppers can be impactful, but there are challenges in execution that have made these efforts seem nascent and ripe for improvements.

Technology and store associates are key pieces to the puzzle in gaining more benefit from endless aisle efforts. It needs to be fast and painless to the customer. Many times the conversion opportunity is lost because the shopper may be notified or informed of the wider selection available online, but the decision to explore is put off until later. The sale isn't being closed in the store.

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Matt Schmitt, President, Chief Strategy & Innovation Officer, Reflect

All of these capabilities are great to build the business. Along the lines of the endless aisle is augmented reality. We are seeing CPG brands from major companies drive real brand value with this. "Blippar" is one app.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Call me old fashion, but I like the concept of the employee being empowered and equipped to take care of the customer. When that customer walks into the store, you don't want deliver a great customer service experience. The employees must be nice, helpful, knowledgeable, empowered and equipped with any technology that will allow them and the business to compete against brick and mortar and online competition.

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

Given research about the failures of retail in this country, associate empowerment must go at the top of the list. Customer experience is at close to an all-time low currently, with consumers frustrated on a daily basis with unmotivated staff who cannot solve their problems. Thus simple trips take hours and consumers often come home empty handed.

Who can blame consumers for switching to online?

But technology will not empower employees—values do. Retailers must invest in their employees and permit them to extend themselves to satisfy consumer need without fear or retribution. Only then will associates want to go the extra mile that technology will permit.

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Mark Price, Managing Partner, M Squared Group, Inc.

The ROI gained from each of these technologies will be dependent on how well the retailer implements/uses the technology and what industry they're in. Certain product categories will benefit more from buy online pickup in store, and others will benefit more from the other two.

In terms of other digital technologies, I think the reverse of BOPIS is also convenient for certain product categories. For instance, if you're looking for a pair of shoes and they don't have your size in the colour you'd like, but you have tried on the right size in a different colour, it is great to be able to order and pay for the shoes in store and have the right size/colour combo delivered to your home free of charge a couple of days later.

Furthermore, as we progress into an increasingly omnichannel world, having omnichannel loyalty programs that provide users with integrated capabilities such as online customer accounts and mobile loyalty apps will help increase brand loyalty.

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Alexander Rink, CEO, 360pi

ROI, of course, is a function of return vs investment. Charting these three with return on one axis and investment on the other might look something like this:

BOPIS: Moderate Return, High Investment
Endless Aisle: Low Return, Low Investment
Associate Empowerment: High Return, High Investment

Why?

BOPIS requires the real time integration of store inventory with the ecommerce site, as well as a logistics set up which makes store fulfillment economically viable. There are infrastructure, technology, and process elements to be integrated. The benefits have been shown via case study to improve online conversion and increase AOV (both initial and subsequent with pick up at the store). But not exponentially.

Endless aisle seems the easiest to do, as it requires simply adding to the assortment, often a relatively low-effort activity. However, that's only the tip of the iceberg. Once added, a mechanism has to exist to provide quick, efficient and intuitive access to the expanded assortment. Faceted navigation and site search are not small efforts in both the technology implementation arena and the tactical set up and tuning. Without those, the addition of endless aisle options becomes an exercise in fruitless effort.

Empowering associates is a fantastic thought, but evidently extremely hard to do. Advances in mobile technology and the penetration of iPad apps are making the prospect less imposing. Still...store expenses are hard to control, and the facts are that most retailers do not have a model which allows for significant skills and experience across most customer touch points on the retail floor. High turnover increases overall training costs, and sustained implementation of customer service support is extremely hard to do. Moreover, while enormously compelling in concept, the hard benefits are not well documented.

Don Delzell, Managing Director, Retail Advantage

This discussion has focused on the right solution for large footprint, multi-unit retail chains. What is best digital technology for smaller, local retailers with fewer doors and smaller budgets?

Endless aisles is the hands' down winner. It takes zero investment other than an online store accessible from mobile devices. Shoppers seeking out of stock items, greater selection, or home delivery can be pointed to the online store by Associates or signage.

BOPIS? That requires both in-store inventory systems and integration into e-commerce.

Empowered associates? Local stores solve that problem by knowing their customers and being natural part of their communities.

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Dan Frechtling, Vice President, Global Product Management, hibu, PLC

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