Building the Intelligent Store
Contributed by Steven Skinner, Deepthi Timmasarthy
The networked “intelligent store” is about to boost the value of bricks–and–mortar shopping. By leveraging customers' mobile devices, retailers can now integrate online and mobile channels with in-store shopping. The obvious advantage is that the merchandise they want can be taken home immediately.
For retailers, the intelligent store lowers costs through process streamlining, less reliance on fixed POS and the reduction of coupon handling fees. At the same time, it makes the deployment of sales personnel more efficient and improves their interaction with customers while increasing the effectiveness of in–store promotions. The obvious potential: increased basket size, greater customer loyalty and higher profits.
Emulating the Online Experience In–store
The best retail websites offer customer recognition, customer appreciation and customer responsiveness. The intelligent store brings that same level of service and technology to physical stores. It offers retailers the opportunity to reinvent the physical shopping experience so it flexes responsively depending on how consumers choose to interact with it.
The intelligent store will come to shoppers with services and add-ons that consumers are waiting for, including:
- Mobile support: The intelligent store supports mobile applications such as couponing to serve customers who are increasingly comfortable with sophisticated smartphones. In fact, it is now possible to capture and automate coupon redemption so customers don't have to personally manage their paper coupons.
- Loyalty data: Smartphones (and in–store touch screens) will link to loyalty data and provide personalized communications.
- Social networking: Through social networking, customers will build community, get feedback and share information right in the store.
- Real–time targeted information: Product information will be available digitally through signs or shoppers' handheld devices.
- Dynamic checkout: Payment will be made almost anywhere in the store, so no more long checkout lines and far more sales associates working the floor.
High Integration, High Touch
The intelligent store takes multi–channel integration to the next level. An in–store shopper might run a price–comparison application while tapping into one or more social networks for opinions. GPS–enabled geo–location services can draw consumers to in–store promotions at nearby locations.
The intelligent store also makes smarter use of staff, currently a major push by traditional retailers, which need to hire, train and schedule more efficiently and to personalize in–store service, like online retailers do. Staff can spend more time with and impart more helpful information to shoppers, increasing satisfaction and basket size. Mobile device links or self–service kiosks ease store navigation, promote the in–store “endless aisle” concept and bring Web delivery alternatives to in–store shoppers.
Building the Intelligent Store
Seven fundamental prerequisites make a store “intelligent ”:
- Take the store to the customer. Stores need to be everywhere that shoppers are – offline, online and on the road. Retailers need to leverage the latest technologies to provide shoppers with product information, details on promotions, checkout opportunities, delivery alternatives and other services, regardless of location.
- Integrate stores with other supply chain elements. Agile supply chains include stores. By integrating with merchandising, sourcing, logistics, order management and order fulfillment, the intelligent store enables flexible demand response no matter where customers are.
- Support social networking. Intelligent stores are an extension of customers' social networks. Smart retailers tap social media to engage their customers.
- Be customer-centric. Intelligent stores track and expand upon customer trends and relationships. Retailers grow their customer base through targeted promotions, personalized messages and in–store loyalty management programs.
- Empower store managers. Intelligent stores should be outcome–oriented. They provide store managers with the data needed to react to exceptions in store, generating alerts (when a shelf is out of stock, for example) and decisions (assigning the re–stock task to a store associate). This empowers store managers to be more effective by being on the floor, helping customers and driving revenue.
- Manage the store efficiently. More effective use of employees is another major benefit. With dynamic checkout, reliance on POS is reduced, freeing personnel to work the sales floor. The intelligent store also provides associates real-time access to enterprise data and helps to plan work schedules to improve customer service. Analyzing key trends such as shrink patterns enables store managers to target their activities and drive bottom-line productivity.
- Shift from point–of–sale to point–of–service. Point–of–sale is the most important and often the only point of customer interaction. Strategies that reduce POS dependence and create differentiated at–shelf, mobile “point– of–service,” or customer handheld “applet” solutions let shoppers execute checkout services from anywhere within or outside of the store.
The Intelligent Store Has Arrived
Until recently, shopping online and in–store have been completely different experiences, often to the frustration of customers. Retailers are leveraging leading–edge technologies to bridge the gap between the online and physical store experience, making customers happier and retailers more profitable.
The intelligent store is the future of physical retailing. The technology exists today. It's up to retailers to begin innovating so they can develop their own strong platform ahead of the competition.
For more information, please read the complete white paper Building the Intelligent Store (PDF) or learn more about Cognizant's Retail practice.
About the Authors:
Steven Skinner is a Vice President with Cognizant Business Consulting and leads the Retail, Consumer Goods and Hospitality Practice. He has over 21 years experience in professional services and retail, with expertise in the areas of strategic planning, innovation, retail operations and multi-channel strategy. Steven’s work experience includes leadership positions at Home Depot, Microsoft and Accenture. He is a graduate of the U.S. Naval Academy reaching the rank of Commander, U.S. Navy. Steven received his MBA from the University of Chicago.
Deepthi Timmasarthy is a Consultant with Cognizant Business Consulting and is a core team member of the Retail Store Operations line of business consulting for Cognizant. She has over six years of experience and varied experience leading consulting engagements, requirements gathering, vendor evaluation and functional projects — apart from niche assignments in Point-of-Sale (POS). Deepthi has an MBA from Indian Institute of Management Bangalore, India and a BTech from the Indian Institute of Technology Madras.