By Jon Stine
Director, Internet Business Solutions Group
Retail-Consumer Products
Cisco Systems

Trust. It’s a powerful human emotion that often drives our behavior. The level of trust, or lack thereof, between a retailer and its customers can literally make or break the business. Given the importance of trust, many retailers are asking: How much do customers trust retailers? What are the benefits of increasing trust? How do retailers gather the information needed to provide the  personalized experiences many customers want, while maintaining and even building trusted relationships?

These questions are especially important given the critical juncture at which we find ourselves—the convergence of people, process, data, and things called the Internet of Everything (IoE).

To help retailers build customer trust in an increasingly digitally connected world, Cisco Consulting Services surveyed 1,174 consumers in its fourth annual Digital Shopping Behavior survey.* From a behavior perspective, shoppers are becoming more digital. In fact, eighty percent of respondents are what we call Digital Mass shoppers—people who research, browse, and purchase digitally. Within this group, Über Digitals, who almost always use a smartphone to shop, increased from 11 percent last year to 18 percent this year. Clearly, your customers are digital.

Before we discuss “how,” it is important to understand “why.” Our research showed $100 billion of IoE value was available for retailers in the United States to capture in 2013 by offering more personalized shopping experiences. If you missed your share, don’t worry. This number is expected to increase slightly in 2014. Realizing this value, however, isn’t easy.

When it comes to trust, retailers are starting from a low base. When asked, “How much would you trust these companies/institutions to protect your personal data and use it to provide something you value?” respondents ranked retailers second to last, at 31 percent—behind government agencies (37 percent), and ahead of Internet companies (18 percent).

Even so, shoppers want personalized experiences. When asked, “Which personalized experiences do you prefer?” respondents ranked promotions via touch-screen or smartphone first (Digital Mass: 46 percent; Über Digitals: 53 percent). This was followed by personalized products, personalized shopping lists, and personalized service.

So, how do we solve this dilemma between a lack of trust and the desire for personalized shopping experiences, which require the collection of personal information? For answers, let’s look at a few of the research findings.

•     Shoppers want personalized offers that are easy to use – Most people want to receive personalized offers via email at home. This suggests that shoppers — even Über Digitals — start the shopping process while they are in their home environment. The vision of in-store offers may simply not be in sync with the reality of shopper decision making and in-store behavior.
•     Shoppers are willing to share information – Both Digital Mass and Über Digital shoppers are willing to share past purchase history and basic personal information (name, age, etc.) with retailers to receive a more personalized shopping experience. Topping the list of acceptable information for retailers to use are time spent in the store, location in the store, and products you try but don’t buy.
•     Shoppers want something in return – To give personal information, however, shoppers must get something in return. By far, the top two factors that would lead shoppers to share more personal information are guaranteed percentage savings on their next purchase and specific dollar savings on their next purchase. Interestingly, a world-class privacy policy ranked third, 21 percent below the second choice for the Digital Mass, and 14 percent below the second response for Über Digitals.

Based on our experience working with many of the world’s leading retailers, there are three key takeaways and actions when it comes to building trust:

•     Shopper trust must be earned. Retailers can do this by delivering a clear data policy and making the benefits of providing personal information transparent and easy to understand.
•     IoE is already here. To capture your share of the $100 billion value at stake, develop a strategic plan that takes into account the information above.
•     Über Digitals are too important to ignore. Selling to these shoppers requires an architecture and infrastructure that can support their increasing expectations for connected, digital shopping experiences.

To gain even more insights into developing trust in an IoE world, take a look at:

    http://www.cisco.com/web/about/ac79/docs/IoE/IoE-Retail-Key-Findings.pdf
    http://www.cisco.com/web/about/ac79/docs/IoE/Digital-Shopping-Behavior.pdf
    http://www.cisco.com/web/about/ac79/docs/IoE/Digital-Customer-Infographic.jpg

*  This year’s Cisco Consulting Digital Shopping Behavior survey includes responses from 1,174 consumers who are representative of the United States broadband population by age, income, and region. It is the fourth in a series of popular “Catch ‘Em and Keep ‘Em” studies by Cisco Consulting Services.

Provided by Frank Mayer & Associates, Inc.

Retailers are both optimistic and realistic about challenges heading into 2014. Either way, they should be intent on making each touch point with the customer as meaningful as possible. Here are some of the ways our thought leaders see this imperative playing out in stores.

What role does in-store merchandising play in positioning retailers for a new and challenging year ahead?

Mike Mayer, President: Our success and that of our clients going forward will come from helping marketers face a changed environment, changing consumer and rapidly evolving technology. The biggest challenge we can help our clients meet is keeping the in-store experience vibrant and relevant in the midst of upheaval.

We create solutions that keep shoppers coming into stores, help them make sense of categories, and keep them engaging with products so that in the end they appreciate the advantages of the in-store experience and are enabled to shop the way they want to.  Sometimes it isn’t the newest, shiniest technology, and sometimes it is. Fitting the right technology to the environment and the consumer leads to the best outcome.

Are there new tools that will be put to use in the realm of interactive retailing?

Ron Bowers, Senior Vice President Business Development: I’m watching to see if 2014 will usher in a new wave of in-store communication with shoppers. Proximity marketing enabled by beacon technology gives retailers a new tool to interact with connected consumers at precise locations in stores. People in retail, entertainment, transportation and other industries are paying attention to news about Apple’s iBeacon.

I’m rooting for this technology to work because from an in-store merchandising perspective, iBeacon has the potential to increase ROI and make even non-interactive displays “smarter.” A beacon could send a prompt to engage, a purchase incentive, or information.  This solution helps address the “if you build it, will they come” question that often arises when ambitious interactive merchandising solutions are used, and it could enable something as simple as knowing when and where a display gets put up.

Retailers are the real harbingers with beacon technology. If several retailers have successful tests and roll beacons out to their stores in 2014, it will add an exciting new layer of relevance to in-store communication.

This development begs the question: Have we finally reached the point of cultivating true one-to-one relationships with important customers that Peppers and Rogers espoused in their book One to One Future a decade and a half ago?

What will 2014 bring from a display design perspective?

Ryan Lepianka, Creative Director: As online shopping options become more enticing due to cost savings and ever faster shipping, brick and mortar retailers must differentiate themselves evermore from their virtual counterparts.  One aspect that really sets physical retail apart is the presence of well-crafted, hands-on experiences. A live demo allows potential purchasers to gain a tactile knowledge of products that is impossible to attain from a jpeg and a few questionable product reviews.

Heavily branded custom demo stations – for electronics and gadgetry for example – give premium products the pop they need to stand out in a crowded retail environment. They help consumers answer questions like: Does this product have the quality build I’m looking for?  Do I trust this product?

The quality of the demo station itself helps to reinforce a premium message.  These types of displays have elevated in quality of construction and features of late, and I see a continuation of this trend. More enticing lighting, less visible fasteners and more premium-looking materials are defining the preferred brands at retail today.

What worked well at retail in 2013 that we are likely to see more of in 2014?

Joe Holley, Vice President New Business Development–Displays/Merchandisers: The “less is more” trend from retailers this past year will carry into 2014.  A growing number of retailers are focusing their efforts on a detailed consumer profile for a category and only offering products – including top sellers – that fit that profile.  Omitting some SKU’s in the lineup creates opportunities to develop point of purchase displays on a higher level.

Displays and merchandisers have more real estate available to communicate to the consumer and can present a category with more style and simplicity. The “less is more” trend also opens the door for innovative ways to showcase the product as well as provide guidance to the consumer to shop the display/merchandiser with ease at the point of sale.