Magazine Article | November 1, 2005

It's (Still) All About The Customer

Source: Innovative Retail Technologies

Store systems initiatives are increasingly centered on learning more about and gaining more from – you guessed it – the customer.

Integrated Solutions For Retailers, November 2005

At this year's Retail Systems show, Wincor Nixdorf unveiled its StoreForward initiative, with support from partner Sun Microsystems. The vendor calls the initiative an integrated, end-to-end solution designed to improve store system performance, drive down operating costs, and turn store systems into performing assets that can improve the bottom line. So, what exactly is it? StoreForward includes POS and interactive software; BEETLE POS hardware, kiosks, and self-checkout systems; ESL (electronic shelf labeling) solutions; Sun server hardware and software; and service and support from Wincor Nixdorf. We asked Wincor Nixdorf's VP of Retail Doug Evans and Sun Microsystems' Retail Industry Marketing Manager Bob Ganley to tell us more.

Wal-Mart's impact on nearly every niche of the retail industry is unprecedented. What specific technologies are helping retailers compete?

Evans: Retailers need technology that enables them to differentiate themselves and create their own niche. Lower prices are not always the trigger for customer loyalty – and that's been proven. In fact, sales for luxury items have seen a large increase in the last couple of years. Using technology in order to produce more revenue – and turning store systems from transactional accounting devices into performing marketing assets – can set a retailer apart and increase sales.

Putting the customer in control is an effective way to increase customer loyalty, whether it's by allowing customers to give real-time feedback, giving them the ability to purchase items that are not usually offered in the store at interactive kiosks, or using a self-service checkout device.

Ganley: It's not only about customer-facing technologies. Retailers need better, faster access to information across their enterprise. For example, when retailers can view data in real time at the store level, they can measure the effectiveness of promotions while they are under way, make adjustments as needed, and see the results of daily specials.

How are disparate, technology-enabled consumer interfaces integrated? How can retailers manage and benefit from the data they produce?

Evans: StoreForward Interactive is a server-based application, which makes it easy for retailers to manage and maintain. These applications are not silos – with a separate application running at the deli, another at the wine section, and yet another for price checks – but rather a single application that is targeted to different products and promotions whenever and wherever the retailer wants to make an impact. Having a uniform look and feel – a consistent customer experience – makes a huge difference when it comes to customer acceptance.

The right technologies – interactive kiosks, for example – can help retailers create an ongoing two-way dialogue with customers, who can share their opinions by responding to simple survey questions or providing open, direct feedback. Savvy retailers can use this information to continually fine-tune their offerings to meet customer needs.

Ganley: Store systems are evolving to be a networked system instead of a collection of loosely coupled yet separate applications. Server-based applications where the customer-facing device has no application logic enforces a consistent customer experience, and this is the key to branding. The StoreForward applications leverage this by using our network infrastructure to provide a single point of control for the projection of a retailer's brand image throughout a store. The benefit comes when a corporate promotion is executed flawlessly across a chain. Technology can help retailers get the most out of their promotional investments. The opportunity exists to further target marketing efforts in the form of personalized messaging that takes into account individual customer profiles. This can't be done without an integrated solution.

We've heard that retailers should differentiate themselves by focusing on the customer experience. How can technology enable this?

Evans: Here's an example: when a shopper enters a grocery store, he or she can swipe a loyalty card at an interactive kiosk and receive personalized, targeted promotions based on buying history. Or they can place their deli order when they enter the store or at home on an Internet PC, then pick it up later. At the same time or even as they check out, they can place an order for an out-of-stock item or third-party products, such as movie tickets or magazine subscriptions. They can use kiosks to locate specific products within the store, too. And self-checkout systems can help busy shoppers get out of the store faster, especially during peak shopping hours, when conventional checkouts often have long lines.

Ganley: Retailers are searching for technologies that will give them a competitive edge and help them differentiate themselves from the megadiscounters. And by embracing thin-client, Java, and Linux technologies, retailers can deliver a truly exceptional, personalized customer experience and actually drive down the cost of store systems while increasing overall performance. The customer wins, and the retailer does, too.

Is creating a unique customer experience really an effective tool in the battle for consumer attention, and how do you measure the success of something like that?

Evans: Absolutely. The customer experience is becoming paramount – few people want to take an average ho-hum cruise, ride an average ho-hum roller coaster, or shop in an undifferentiated store. Technology offers one of the best ways to accomplish this goal, because it connects the chains' marketers and executives directly to the customers far more effectively than the high-turnover-plagued store staff. Technology can increase the shopping basket, and most importantly, it can measure exactly what works and what does not. Technology can empower the employees that might need a little help. Technology has barely scratched the surface of customer empowerment. We have a long way to go.

By offering unique product promotions, generating third-party advertising revenue, gathering valuable customer feedback, and selling products not usually offered in the store, retailers can utilize technology so that it works for them and brings in additional revenue.

Ganley: Perhaps it is best to use a real-world example here. At the end of July we heard from the chief marketing officer of a major retail chain who has a $1 billion marketing budget this year. He had three clear messages to convey. First, branding is the centerpiece of their efforts to grow their business. This is all about targeting profitable customers and getting them into their stores again and again. Second, branding is all about every customer touchpoint. This must be supported by their information technology systems from merchandising to promotions to the POS. Third, they have to measure the impact of everything they do. That is about real-time feedback on what works and what doesn't. So, to put it simply, these days the networked system is the retailer.