Two strikes and you’re out

The store no longer operates in isolation. Walk down any aisle and you’re likely to see shoppers browsing their smartphone to check they’re getting the best deal, receiving consultative selling from a sales associate with a tablet computer, or paying for goods independently through a self-service checkout. But how efficiently do these technologies work in the bricks-and-mortar environment – and what’s the cost of a poor digital experience to retail stores?

Vodat recently commissioned research among 1,000 consumers for our latest report, Battle of the Bandwidths: Why customers are won and lost on the strength of retail networks, which reveals that many shoppers are feeling let down by the quality of digital services they receive. We found that more than a three quarters of consumers (78% of men and 76% of women) have encountered problems with slow running store technology in the past 12 months.

But even more alarming for retailers is the knock on impact on customer loyalty. Our research shows that while 30% of shoppers will give a brand the benefit of the doubt after experiencing slow running technology issues in-store, they won’t return if it happens a second time.
So how can retailers create a digital-ready store? Their number one priority should be to invest in a network that is business strength. Many organisations are falling into the trap of investing in software and hardware to bridge the online/offline divide, but failing to support this new technology with a robust network, capable of managing the increasing number of customer and staff devices logging on.

Our research has found that slow running networks are impacting the service shoppers are receiving within the store. Nearly all (95%) of the shoppers we surveyed have experienced network issues that forced them to wait up to 30 minutes for the problem to be resolved.

The strain of more technology being added to the bricks-and-mortar environment is already beginning to show. It is not only a matter of providing enough bandwidth capacity to ensure speed and performance; networks must be able to effectively connect all stores and other sites.

It’s clear that technical problems can dramatically affect consumer experiences. But for many organisations their biggest worry is that they don’t have adequately specialised staff to problem solve, either at a network level, or in-store. They know they need to invest in a resilient network and ensure failover systems are in place, but they want a solution that is crisis ready.

Alongside providing training to empower their staff with all the information they need, retail businesses should consider investing in managed data networks to address this problem. It is important to consider what level of support is on offer in the event of a technical problem.  By using a third party provider, retailers can tap in to their telecommunications experience and technological insight, rather than needing experts in-house. This provides access to support to resolve issues quickly and efficiently, as and when it is needed.

As retailers start experimenting with connectivity, both behind the scenes and to power customer engagement, it is vital they invest in solutions that are future-proof. Taking into account bandwidth capacity and management services will help create a network which is able to scale and flex as businesses and estates grow.

To find out more download our report Battle of the Bandwidths: why customers are won and lost on the strength of retail networks

How can retailers make in-store a more flexible shopping environment?

For every positive story in the retail press at the moment, there seems to be a contrasting tale of lesser fortunes. For example, Ocado has announced a first-quarter jump in sales, with average orders increasing nearly 17%, and weekly orders passing a quarter of a million for the first time. Compare this to the wider grocery industry, where profits are falling and sales are stalling, and it’s clear that more needs to be done to keep customers satisfied.  It’s not a just supermarket thing either; only last week, John Lewis revealed a near 10% fall in pre-tax profit.

What makes John Lewis unlike some of the other retail brands to have suffered a dip in sales is that they simultaneously announced a plan to drive recovery. The department store chain is moving their services to 7-day delivery, driven by the “need to reflect how and when our customers are shopping with us” in the words of Managing Director, Andy Street, as “customers increasingly want flexible shopping and delivery times”.

The fact that John Lewis wants flexible shopping as well as delivery is important. The recent success of Ocado would indicate that fulfilment is high up the priority list for consumers, but convenience and seamlessness rank highly also. PWC’s Total Retail Global Report 2016 shows 55% of UK consumers cite convenience as their main attraction to online shopping, compared to just 37% being motivated by price.

Bearing this in mind, retailers need to focus on making the store more flexible and agile, in line with shopper priorities. Click-and-collect has been the first hugely successful cross over service in this area; 60% of consumer report they have used it, and a huge 98% recognise the concept. This illustrates that, despite drops in foot traffic, shopping in-store is still an important channel for most consumers.

So how can retailers create a store environment that not only attracts shoppers, but also meets their expectations and encourages them to spend? PWC asked a sample group of online shoppers how retailers could enhance their physical stores, and better alignment of in-store and online services ranked highly. With this in mind, we would recommend retailers focus on enhancing three core aspects of their bricks-and-mortar business:

  1. Increase communication between staff, and locations, to streamline the customers experience

Poor in-store communication has long been a problem for some retailers, but improving it needs to be a priority. We know that a third of consumers have abandoned a shopping trip because they couldn’t get the information they needed prior to purchase, while 4 in 10 have left a store and sought the item elsewhere. The industry needs to understand that consumers place value on the ability to check online stock quickly (32%) and sales associates with a deep knowledge of the product range (40%).

Alongside providing training to empower their staff with all the information they need, retailers should consider investing in managed data networks to address this problem. Giving sales associates connected devices can improve their access to knowledge about the customer, as well as giving instant access to stock information, store transfers, and transactional capabilities, but these will only run efficiently with a robust supporting network

  1. Improve systems to reduce waiting times

Shoppers, rightly, demand the speediest checkout experience (35%) possible, and retailers know queuing times can have a negative effect on sales. Yet many are working with overloaded systems, which can affect not only payments, customer queries, and processing orders, but also core tasks including inventory. This has huge potential impacts on customer loyalty, with a third (32%) of consumers not returning to stores with slow service, and 1 in 5 being put off buying from that brand over any channel.

In response, retailers should review their systems and consider updating them, or even just increasing bandwidth, to avoid technical downtime.

  1. Invest in the customer across all channels, to deliver a joined up experience

PWC’s report clearly demonstrates that technology is as important in-store as online. A fifth of customers are interested in store WiFi (22%) and most use their mobile phone as an important research tool when wandering the aisles. Alongside this, many shoppers would like to receive mobile promotions in-store, be able to access loyalty programs, and make mobile payments.

With 3 in 10 believing the quickest way to answer queries is to look up the question on their own mobile device, retailers can better facilitate consumer needs by ensuring there is a fast, secure WiFi offering in place, and also providing independent technology experiences such as in-store tablet information points.

To find out more download our report More than words – Why retailers and customers are becoming disconnected by the store network – and how to fix it

The secret to successful store expansion

Online retail is no stranger to positive headlines. In fact, it sometimes seems that all we hear about in the industry is the strength of ecommerce.

And it’s these types of stories that have put stores in the spotlight for the wrong reasons. Although 90% of all sales still happen in physical shops, there seems to be far more of a focus on the aspects of bricks-and-mortar that aren’t doing quite so well. For example, in the last few weeks alone, BHS, Greggs and Dixons Carphone have been making headlines regarding store closures.

One of the key reasons that stores close is because they don’t resonate with shoppers; in the interactive, instant world of digital commerce, store layouts and processes can appear outdated. However, this is something that can be amended – and there’s a huge appetite amongst retailers for getting the store right and growing its presence. New research by CBRE has revealed that retail estate expansion still remains high on the agenda, with 83% of retailers adamant that store growth will not be influenced by the rise of ecommerce this year. After all, there is no online substitute for seeing, touching and trying items before purchase.

The benefits of bricks-and-mortar haven’t gone unnoticed by e-tailers. Already this year, we’ve seen their eyes move towards the high streets, with the likes of Missguided announcing its first offline stores. Yes, the business is doing very well trading as it is, but if they want to grow even further, it makes sense to offer a physical experience as an alternative too.

So how can retailers optimise their stores for profit growth – and potential expansion if they get their formula right? For starters, today’s connected consumer is all about convenience and, as we well know, that doesn’t necessarily mean choosing between online or offline retail. Instead, shoppers want to switch between the two at different stages of their journey, and they need to know that retailers will allow them to be flexible in this respect.

Achieving this level of agility means incorporating some of the elements that shoppers love about digital platforms into the store experience. Some retailers are already way ahead of the game, launching concepts that aim to convey the ‘store of the future.’

House of Fraser, for example, recently experimented with shoppable windows, whilst Tommy Hilfiger has brought the runway to the store using virtual reality headsets. These are pretty ambitious of course; the store must focus on perfecting the basics before taking this kind of leap. Investing in more mainstream technology such as mobile POS is one good example of connecting the bricks-and-mortar experience through online functionality.

Another key consideration is the interaction between ecommerce and store activity through click-and-collect. Even though many retailers already offer the service, there are still elements of the process that frustrate customers. Perfecting the ‘collect’ part should now be a major focus for stores, making it a pleasant experience for those finalising their purchase. Enabling speedy payments technology, such as contactless, will be handy here, as well as ensuring the right amount of staff are there to keep the queues running smoothly. Streamlining the click-and-collect element will increase the opportunity to encourage further impulse purchases.

Of course, not all online browsing will take place at home. In an era of smartphone addicts, it’s now habit for consumers to rely on their devices whilst in a store too. Vodat International recently commissioned some research that revealed 54% of shoppers use their smartphones to compare prices in the aisles, 46% look up product information and 44% for personal reasons, such as checking social media. The bottom line is that consumers expect to be able to connect to the web whenever suits them – and that includes within the bricks-and-mortar shopping journey.

It may seem obvious, but there are still retailers that do not invest properly in strong WiFi to encourage this behaviour in controlled circumstances. In fact, 3 in 10 shoppers don’t find the current standard of WiFi unreliable. Retailers with sub-par WiFi are not only at risk of frustrating their customers, they are also losing a valuable opportunity to understand (and react to) their behaviour patterns. Provided they select the right provider, retailers will be able to interact with, influence and capture insight on consumers when they log on to the network.

It’s great to hear that retailers are feeling optimistic about the potential of stores, especially at a time when ecommerce is threatening share of sales channel. Gone is the time where stores and online were two separate things; the future of the store is very much intertwined with digital interaction. If they go about it in the right way, retailers can now harness the power of ecommerce in the physical environment, and use it to boost profitability.

Stay tuned for our new report – Battle of the bandwidths: why customers are won and lost on the strength of retail networks – which will provide even more insights into the connected consumer.

Are fashion e-tailer’s attempts to venture offline Missguided?

It’s a great time for online retail. Hailed as the most convenient means of shopping, ecommerce is in the midst of one of its most successful seasons yet – December alone saw a sales increase by 15.1% compared to the previous year.

However, it seems that this level of success isn’t quite enough for some retailers; in a bid to grow even further, they’re looking offline too. Fashion e-tailer Missguided recently announced plans to open its first store in the UK, and it’s not the only one – the likes of Boohoo and Fabletics have also taken their first steps into bricks-and-mortar.

And who can blame them? News headlines about the death of the high street are fast becoming replaced with success stories. Services such as click-and-collect are providing stores with a new lease of life, with John Lewis being the latest retailer to praise the shopping method’s contribution to its strong festive trading figures. Meanwhile, some are even calling out for store opening hours to be extended, with 64% of retail workers in London supporting longer trading on Sundays.

So yes, heading to the High Street offers great potential for an online retailer. But there some things to factor in if they wish to replicate the great customer experience they create on the web.

Unlike ecommerce, the store has a helping hand in converting sales: staff. Personal service is something that gives bricks-and-mortar an edge over online shopping, so it’s essential that retailers make the most of this opportunity.

Offering great bricks-and-mortar customer service relies on the retailer’s ability to give consumers the same informative experience as their digital platforms provide. Yet, we recently found that 43% of shoppers voiced frustrations with inconsistent answers from staff. In order to address these communication challenges in-store, some leading retailers are equipping staff with tablets. This way they’ll have access to product information and stock availability at the swipe of a finger, making it far more likely that they can address customer queries.

This is especially important at a time when most shoppers enter the store with some level of product knowledge. Recent research from omnichannel retail specialist iVend Retail revealed that 68% of European consumers will research online before visiting a store – and clued up customers expect far more from retailers. These shoppers have already done their research, and just want to touch or try the item before committing to a purchase. In this case, staff members are far more likely to be faced with technical queries regarding the item, rather than general product information. In this case, a tablet device will prove even more valuable to your staff – they can’t be expected to understand the ins and outs of every store product on their own after all.

And not all shoppers restrict their online research to the comfort of their own homes. Instead, many are relying on their mobile devices to have a quick browse in-store, either for more product knowledge or to compare it with those available from other retailers. During the festive period alone, 41% of shoppers ‘showroomed’ when buying gifts in-store.

This shopper desire to use mobile in-store, combined with staff usage of tablets, means more devices devices than ever are connecting to store networks. Retailers that have not invested well enough in their network may be faced with a whole host of issues; slow running technology, intermittent connections and, in the worst case, complete connectivity blackouts. Not only will this be extremely frustrating to those working at the business, but most importantly, customers will be left disappointed too. Then, all the good work that retailers have done to blend their store and online experiences will be completely undone.

The battle for consistency between online and bricks-and-mortar shopping has been raging for years, and retailers like Missguided must tread carefully to ensure their in-person experience lives up to the digital hype. Much attention will have been paid to the marketing, store layout and such like, but it’s the network underpinning their store that will define their ability to deliver what customers want.

 

 

 

Business travellers are getting younger – and demanding more from their hotel experience

When it comes to work travel in 2015, the image of an older man in a suit, placing his briefcase on the counter as he holds out his paper details at the check-in desk couldn’t be further from the truth.

The growth of virtual offices and cloud-based systems has liberated the UK’s workforce from their desks and created a new generation of travelling professionals.

Millennials (those aged 18-34) are now twice as likely to travel for business purposes than those aged over 35 years, according to new research by The Service Apartments Company, which in turn is changing perceptions of hotel standards.

51% of younger business travellers want high-speed WiFi during their stay – with 6 in 10 valuing it higher than good quality food.

Millennials are also more likely to embrace cutting-edge developments, with 46% excited about bring your own device (BYOD) concepts. Some hospitality vendors are already experimenting with such technologies; Starwood Hotels and Resorts in the USA, for instance, allows visitors to bypass check-in and access their room via a smartphone virtual key.

However, examples like Starwood are few and far between, as many hotels are not adapting to new behaviour patterns at the pace of customers demand.

The rise in younger professionals using hospitality services has raised the bar on technology-led experiences. Business Class WiFi should now be offered to visitors as standard in hotels, in all locations.

On the contrary, there is still great variation in the service today’s hotel visitors receive. Patchy internet signal is still a major frustration among Millennials, caused by vendors’ networks not being optimised to provide coverage across the venue. In addition, some hotels struggle to cope with the increasing number of devices connecting to public networks, leading to slow loading times irritating patrons.

Until hotels create a reliable and secure wireless network, it will be impossible for management to contemplate the implementation of next generation BYOD facilities such as mobile check-in. Wowing visitors with bells and whistles is all well and good, but without the right network support backing them up, these systems could easily fall down.

The key for hospitality companies is to get the basics right, give visitors the connectivity they crave, before experimenting with further services. A strong wireless network foundation is essential for customer experience innovation.

Are networks about to become retailers’ next big battleground?

Retailers are always looking for the ‘next big thing’ to help them march ahead of their competition. Companies have gone (and are still going) head to head on many emerging trends in recent years – omnichannel, mobile commerce, in-store technology, to name a few – and it seems networks could be the next competitive battleground.

This insight comes from IDC senior research analyst Miya Knights, who spoke about the Internet of Things (IoT) at this month’s Retail Business Technology Expo (RBTE).

For those of you not familiar with the Internet of Things, it’s defined as ‘a proposed development of the Internet in which everyday objects have network connectivity, allowing them to send and receive data’.

Already we’re seeing retailers experimenting with IoT capabilities. Electronics firm Darty is installing technical help buttons into customers’ homes; John Lewis crowned geo-location technology start-up Localz the inaugural winner of its JLAB scheme; Zara and American Apparel are successfully using Radio Frequency Identification (RFID) in their respective supply chains.

Over the next two years, more and more retailers will start experimenting with connectivity, both behind the scenes and to power customer engagement. IDC predicts the retail industry will invest over $500 million in the Internet of Things by 2017, and it’s important that this investment is not purely on front end technology.

It seems obvious, but a connected device is only as secure and effective as the network it runs on. The more devices are connected, the greater strain this puts on a network. Therefore retailers must invest in the robustness of their data network for an IoT strategy to stand any chance of success.

Not only that, but business networks must be capable of adapting to multi-stage IoT implementations. In her RBTE speech, Miya pointed out that the Internet of Things can feel vague in concept at the moment, because we don’t know exactly how it will evolve, and therefore networks need the flexibility to adapt to these developments as they unfold.

This is an exciting time for retail technology, but it’s important that forward-thinking organisations get the basics right before exploring cutting-edge solutions. Data networks will be the foundation on which outstanding IoT experiences can be built.

What’s in store for stores in 2015? 3 retail game changers

Retail never stays still – if anything, it’s moving faster than ever. This year alone, we’ve seen growing adoption of click and collect and contactless payments, to name two examples. But what will be the major influences changing retailer/consumer relationships in 2015?

In our final blog of 2014, we’re looking towards the year ahead – and predicting what’s in store for retail stores next year. Here are our top 3 most influential trends:

  1. There will be more devices in the store

From mPOS tablets being operated by sales associates, to mobiles being utilised by consumers to showroom, digital touch points will become an even greater part of the store experience. This will place additional strain on retailers’ data networks.

Those who triumph will offer reliable connections for staff and robust complimentary WiFi connections for the customer.

  1. Technology will personalise store shopping

We touched on the store becoming a theatre of dreams in a blog post earlier this year, and this trend will most certainly continue into 2015.

Technology such as near field communication (NFC) and Bluetooth beacons, are already being piloted by major retailers like John Lewis and House of Fraser; this points towards in-store interactivity dominating next year’s marketing and customer service agenda.

  1. Reputations will thrive or dive on payment security

With more consumers than ever using credit and debit cards to pay for goods, data breaches could prove devastating to retailers’ reputations. From June 30th 2015, businesses accepting card payments will need to meet PCI DSS v3 standards.

As a result, the race will be on to upgrade current payment solutions and reduce scope for PCI compliance before legislation comes into force.

For further information about payments security in 2015, visit the Payments Network, our online community for retailers and hospitality vendors.

Are current networks up to managing the customer journey in store?

News that Boots is to give customers personalised offers through its new app, in conjunction with its Advantage Card, shows that retailers are upping the ante on loyalty. But the reasons seem to be more to do with gaining greater insight into customer shopping habits than just winning more business.

Retailers have for a while been struggling to solve the problem of being able to identify customers in store in the same way as they can on line; most consumers remain invisible to retailers in store until they come to actually buy something, before which they may have left the store for all sorts of unrecorded reasons.

No wonder Boots has made this latest move and why most retailers are either implementing WiFi or plan to; the theory goes, if I can give customers a reason or inventive to identify themselves in store, then I can meet their needs much more personally and fix any problems as they arise.

Ruth Spencer, director of loyalty and multichannel at Boots UK, said: “We know that our customers love to receive personalised offers on the products they use the most and 87% of our customers use the coupons they receive in their quarterly mailings.”

The next challenge in store will be to join the dots – link people counting, WiFi, geo-location, the point of sale and kiosks together in order to track the customer journey in store.

The technology that drives this network will have to be robust, always-on and responsive to traffic flows. Many current network architectures, hardware and telecoms are simply not up to the task. Worse, many retailers tack on new network technology as they go, so not only is the network not inter-connected, it may be costing far more than it need to because of multiple suppliers and service agreements.

Retailers need a network fit for a multichannel environment

The in-store network is fast becoming the life line for retailers that need to reach their customers through multiple channels and devices. There has never been a better time for the store to rediscover its strengths as the flagship for the retail brand as, regardless of which channel a consumer decides to shop via, the store remains a key destination at any stage in the shopping journey.

In particular, the millennial generation (generation Z) take a different approach to shopping, one that centres round the store. Before making a purchase it has become common practise for this group of consumers to visit the store for the purpose of browsing, taking pictures of products to send to friends, log onto the Internet through tablets and kiosks and update their Facebook pages with latest locations – all before deciding what, when and which channel to make a purchase.

While eCommerce provides convenience, consumers actually gain more enjoyment from the physical shopping environment. However, at present it lacks lustre in comparison to product availability and the capability to evaluate prices online. To counteract customer disappointment, new technologies have recently been deployed to bridge this gap and entice tech-savvy consumers back in-store.

The emergence of these new interactive technologies are also delivering value added services within the store environment. These include payments on the spot, scanning of product tags using a mobile for detailed information and connection to the online channel.

However, it’s a double edge sword as generation Z have high expectations once in store. Some retailers have worked hard over many years to satisfy these demands, but  the bar has risen: retailers need, if they can, to identify every customer as they arrive and provide each of them with a personal experience, regardless of the reason behind their visit.

This is where the store network comes into play. Retailers cannot forget the technology behind the scenes that enables all this functionality – the retail network. It is the crux of in-store operations and will continue to be so, as the in-store environment evolves into an interactive hub, where consumers can look, touch, feel, test products and engage with sales staff armed with devices delivering in-depth knowledge far beyond the capabilities of a lone sales assistant.

Is sunny weather generating a bright shopping forecast?

The UK skies have been filled with a strange, yellow globe during the past fortnight – after months of rain, the sun is finally shining! With temperatures increasing and the official start of British Summer Time bringing lighter evenings, lifted spirits are having a positive impact on High Street traffic.

Latest figures from retail intelligence company Springboard revealed that during the week ending March 16th 2014, UK High Street traffic increased by 8.2% on the same period the previous year, with retail parks enjoying a 3.3% increase as well.

So why does the sunshine cause a spike in sales? Firstly, consumers are much more likely to go out and about if the weather is pleasant. Secondly, and perhaps more importantly, the change in season marks a shift in buying patterns. Instead of stocking up on woolly hats and hot water bottles, spring’s arrival prompts people to invest in new outfits, garden furniture and barbeque equipment in anticipation of the summer heat.

Many retailers are already seeing a surge in certain product sales due to changing conditions; Karen Millen noted strong dress sales for the week ending 16th March, for example. The hospitality industry has also seen a welcome boost from impromptu trips for coffee, drinks and dinner in the sunshine.

Even if consumers aren’t setting out to buy anything in particular, some retailers believe that weather-induced happiness prompts impulse purchases. This can often be the case if the first weekend of the month, after most people have been paid, coincides with a sunny spell.

With temperatures and sunshine levels set to increase over the coming weeks, there is a huge opportunity for retailers to capitalise on the latest wave of consumer enthusiasm. Their secret to success will be marketing the right products and creating a seamless customer experience in-store, maximising sales by ensuring product availability and a joined-up service.