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The Perspective |
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Wednesday, 06 May 2009
 Last month, I was invited to visit the Microsoft Retail Experience Center near the company's headquarters in Redmond, Wash. We've talked about the REC before, as well as shared with you a video walkthrough, but I didn't want to miss the opportunity to see it first-hand.
It's a truly remarkable retail test lab, one that could easily be mistaken for a real electronics superstore, but you'd never know it if you drove by: The 20,000-square-foot facility is tucked away inside an unmarked building with no Microsoft signage anywhere to be seen. It's an invitation-only affair, a place where the company can bring retailers, partners and focus groups to test-run merchandising strategies and in-store technologies.
Stephen Sparrow, Microsoft's senior industry marketing manager for U.S. retail, is the driving force behind the center. He said his emphasis is on making the retail experience more connected, a word he uses a lot. It's at the core of his philosophy of what retail must become in order to thrive ? connecting stores with one another, with their employees, and with their customers.
"Disney used to say, when you're on a Disney cruise line, we'd better be able to recognize you as someone who just dropped four grand on a cruise," he said. "(We want to) create a world where you have more transparency, where you can deliver the right information and business insights to the right person, in an actionable way, when they need it and where they need it."
SLIDESHOW: Take a look inside the Microsoft Retail Experience Center
The store itself is a faux electronics store, replete with big-screen TVs, laptops, Xbox games and boxed software. But beneath the surface, the emphasis on connectedness bubbles up in some unique and new ways.
Take the shopping cart, with integrated touchscreen. Anyone who has attended a retail trade show in recent years has seen any number of such smart carts, but here it is integrated with the store's loyalty program to connect store database with shopper from the moment the shopping experience begins. An interactive store map, with turn-by-turn directions, not only delivers the shopper to the right place but builds an ever-growing pool of behavioral data.
Most of the products the shopper passes by in the store bear a Microsoft Tag, a technology that Sparrow calls "leveraged capital" ? a unique example of an in-store technology that the customer paid for himself, the cell phone. Giving a shopper a handheld scanner is one thing, but utilizing a device that is already in his pocket is quite another.
Giant touchscreens dot the walls, allowing customers to browse never-ending catalogs in a very intuitive fashion. Similarly hands-on experiences are served up by a Surface tabletop computer. In each instance, the devices in the store are pulling from the same central database, which not only insures a consistent experience, it saves the retailer time and money ? a screenshot or a product photo or a box cover need only be scanned once, and can then be automatically resized and repurposed for whatever touchpoint needs it.
Making the supply chain fully visible from source to shelf requires tagging, and in a perfect world, retailers will have RFID tags applied by the manufacturer. But for smaller retailers or those with a manageable assortment of products (or perhaps assortments from a large number of sources), the answer lies at the back of the REC. A desk bears a computer station with an RFID printer; as products come in the back door, a staffer prints a tag for each one and applies it to the box. Boxes are walked through a pair of reader gates, and from that moment on, the store is aware of each and every product for sale in the house.
In the back office, the database is mined through a data-rich but easy-to-understand management dashboard. From a single location, a manager can see any idiosyncrasy at the device level, and can make smart scheduling decisions. Color-coded feeds give real-time sales data, out-of-stock alerts, camera arrays, and even comparison charts detailing other stores in the network.
Sparrow pointed out that it's not just customers that benefit from the connected experience ? it empowers store managers to do their job better.
"You look at store managers ? retailers typically take their best sales rep and make him the manager and put him behind a desk with a Monday morning report," he said. "We say, give him that report mobile. And do it quickly, so he can get back on the sales floor, helping customers."
Sparrow said the REC is a "living, breathing facility," one that is evolving over time. In recent weeks, his team has begun experimenting with interactive storefront windows and new merchandising strategies.
"We understand that it's all about the customer? how do you help them find what they need," he said. "And how do you help the employee help that customer."
Tuesday, 10 March 2009
In the past, I've ranted about kiosks that are not working. Sometimes that is due to hardware failures, and sometimes those failures are not the fault of the hardware provider. Any time you have electronics plugged into A/C outlets there is a risk of lightening strikes, power surges, brown outs, and more commonly: dirty power. All of these electrical issues can cause hardware to fail, or act abnormally, or even cause the operating system or software to have "issues."
Now a customer who has deployed these kiosks in their retail store, or office building, etc., has probably contracted with a software developer and a separate hardware provider. They may have even used another company for networking, installation or Internet access. So there are a lot of people to point fingers at when things go wrong. Sometimes it is better to use a total kiosk integrator (see my company as an example) who can provide software, hardware and installation so that the customer only has one butt to kick when things go awry. And that integrator will often know what element is causing the problem, and just fix it rather than start the finger pointing game. But a situation like "dirty power" or "line noise" can be hard to troubleshoot, and can make things happen that are unexplainable without a lot of investigation.
This is why it is often a prudent investment to use an A/C line conditioner to prevent this right up front, no matter if you are the integrator or the customer that is buying the kiosk. A small investment (around $150-$175 per unit for a good one) will keep your kiosk from having downtime, possibly losing data or at least losing opportunities when a customer is ready to interact. That could be hundreds or thousands of dollars lost and your reputation tarnished. The small investment makes your total cost of ownership (TOC) lower because, over the life of your kiosk deployment, you will make fewer service calls out in the field, have fewer wasted hours trying to troubleshoot, and fewer wasted hours shooting emails back and forth trying to determine what went wrong. That's hard to see up front when you are planning and budgeting for a deployment, but I hope you will think of this now and save yourself, your partners and your customers a lot of grief.
We are, after all, talking about computer hardware / software in an public space, often un-manned or un-managed. There are enough ways for it to fail like vandalism or sabatoge, that you have a hard time fighting. Why leave open a unprotected A/C line (which you can defend) and have that be the cause of failure? Also, if you are using a cabled ethernet connection, this is another source of danger, as sometimes the surges come across the network or phone lines and not the A/C lines. Protect those points of entry too. I'm not talking about a simple power surge protector here, I'm talking about a quality line conditioner which will prevent line noise or dirty electricity. And they will often have a surge protector built in as well.
As an example, our firm has a client who uses kiosks in a mobile marketing campaign for many large brands. They have non-IT savy staff members traveling all over north America setting up for consumer-facing events. One day a field team called and said that the kiosk had failed. Three quarters of the screen was black, and the software could be seen only on one quadrant. Well, there were lots of ideas as to why this would happen, such as high heat since it was outdoors in a parking lot under a tent. But the temperatures were well within tested temperatures and should not have caused it to fail.
We had our onsite warranty team go and replace the unit.
When the unit was tested later, it worked just fine, even outside in the sun. We later found that they were running the power to the computer kiosk from a generator. Generators are great mobile power sources, but often produce dirty electric sinewaves. A line conditioner was the fix.
There are many available from companies such as tripp lite, APC, ESP and many more. We like the guys at ESP whose product is being integrated more and more in the kiosk industry, often as an option by hardware fabricators. Their products are inside of many large NCR ATM machines, behind a lot of large corporate copiers and expensive electronics. This stuff works great. We even use it to protect our phone system. Our company sells these as an option for new kiosks and can provide them with leased or rented kiosks too. It just makes sense. Now they can be a bit big, so hiding them will take a few more inches than a surge protector, but its worth the protection and the uptime you will not ever think about.
Peace of mind? Or prudent planning? As long as you protect your investment and your reputation, I think you're one smart kiosk integrator!
Tim Burke is the owner of Electronic Art. This column originally appeared here.
Tuesday, 02 January 2007
The rise of online shopping to the mainstream puts pressure on retailers to master multichannel retailing. Supporting consumer interactions across channels like catalog, call center, Web and bricks-and-mortar may seem like a no-brainer at this point, but not all firms have responded well to this challenge.
Although Forrester has been writing about multichannel retailing for the past five years, we continue to receive many of the same questions from e-commerce executives, VPs and chief marketing officers: What are other retailers doing, and how are they doing it? To answer these questions we spoke with retailers that have taken multichannel strides over the past few years and to North American consumers to discover the state of multichannel retailing.
We found that consumers increasingly shop across channels. Using the Internet in the purchase process is no longer just for the technologically elite — in fact, 88 percent of all online consumers use the Internet to research products. Researching online and buying offline, however, is a more complex activity, but such cross-channel shopping rapidly is becoming a typical behavior. More than half of online consumers engage in it.
While there were some improvements in 2006 by leading retailers, firms continue to play catch-up to consumer demands, implementing one-off features like buy online/pickup in-store without the foundation of a holistic multichannel strategy. But we’ve gotten to the point where multichannel retailing cannot be ignored. For the past few years, retailers have had the luxury of choosing how multichannel they want to be, but they’re about to lose this privilege. While multichannel consistency and service have been nice-to-have capabilities, consumer adoption of technology — specifically the Internet — will turn this into a requirement over the next two years.
Of all the multichannel retailing competencies, retailers have made the most progress in supporting the multichannel buying process — helping consumers find products. This has been an easy place for retailers to start since it is the most visible area and it provides the most tangible benefits. But lost opportunities continue. Almost half of cross-channel consumers buy from a different retailer than the one they researched. These defections represent a significant opportunity for retailers to retain customers as they cross channels.
Retailers have begun to tackle this problem by building self-service Web applications that bridge the channels. To help prevent consumers from switching retailers as they switch channels, Circuit City, Lowe’s and IKEA have deployed configuration applications that let consumers do the research at home, but then access their work in-store via kiosks.
This approach allows consumers to research at their own pace, have easy access to their work once in the store, and get help from a sales associate to confirm and augment their selections. Circuit City offers a home theater configurator, and both Lowe’s and IKEA offer kitchen configurators. IKEA allows consumers to download the application and design their kitchen offline and then upload it back to the IKEA servers when they are ready to come into the store.
This control over the purchase process is something that the Internet has taught consumers, and as cross-channel shopping approaches mainstream, retailers should look to kiosks and self-service applications to bridge the channel gap and help meet consumer demands.
Tamara Mendelsohn is an analyst on Forrester’s Consumer Markets team. For more information please contact cxp@forrester.com.
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