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The Perspective |
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Monday, 30 November 2009
As the days of 2009 dwindle, I find myself crisscrossing the country, talking to retailers of every stripe. These conversations have revealed a few consistent themes, which are likely to drive customer-facing retail technologies in the coming year.
To my relief and that of probably everyone in the industry, there’s a sense the economy is coming back. Earlier this month I was at the Kioskcom Self Service Expo in New York, and I would describe the mood as "unexpected optimism." Retailers and technology buyers of all sorts were on the floor in surprising numbers with specific projects they needed to execute. One exhibitor even exclaimed, "We’re on the way up!" while making a swooping airplane motion towards the sky. Now that’s what I call a return to confidence. It is a safe bet that retailers who have been waiting on the sidelines will resume investments in their store experiences in the coming year.
The dominant theme I have heard from retailers is the need to inspire shoppers. Retailers are seeking technologies that do for any product category what mannequins do for apparel—show the customer how to bring many items together into a compelling, personalized solution. An expectant mother furnishing a baby’s room, a couple designing a home theatre, a parent building a fish tank for their child—shoppers need to be inspired and guided to a final solution. Retailers understand that addressing a consumer’s end goal is the key to driving more sales, yet doing this with human interactions is expensive. So, I expect to see increasingly sophisticated shopper assistance tools emerge from the simple product selectors of today. Retailers are keenly focused on the problem, and a few are ready to test solutions.
Closely related to inspiration is the idea of cross-selling. Retailers are interested in technology that helps them add items to a shopper’s basket by reaching across the store to cross-sell many product categories. I get the sense from retailers that this is an area in need of improvement. Customer-facing technologies that draw upon in-store and online inventories to automatically suggest the best complementary goods will likely be tested in the coming year.
Another recurring theme is a desire to provide quality customer service where today’s economics simply do not allow it. Many complex products do not sell in enough volume or at high enough prices to justify having human experts in the store. Several retailers see technology as the way forward. Expert systems can give customers the additional product education they need to make an informed choice, while sparing the cost of additional store labor. Expect to see customer-facing technologies deployed most commonly around these so-called "marginal" product categories.
Finally, with recessionary pressures on staffing levels, retailers want to make the most out of their store staff through sales process automation. They want humans doing what humans do best—guiding customers through complex, personalized, real-world product problems and decisions. For the 80 percent of any selling process that is the same for every customer, retailers are looking for technological solutions that do this work, letting store associates handle more customers in a given period of time. In a sense, self-checkout was only the beginning. The phrase I have heard is "moving customers from questions to the counter" as quickly as possible. I personally view this as challenging to execute in practice and anticipate some failed trials, given the need for seamless integration between store personnel and in-store technology. However, the first retailer to do it will reap significant rewards and set the stage for the future of retail.
The year ahead is shaping up to be an exciting one for in-store technologies. Recession-induced paralysis seems to be over and retailers seem to have a clear view of how they want to move forward. If they succeed in deploying the right solutions, it will be a winning year for everyone—shoppers, retailers, and even technology suppliers.
Monday, 10 August 2009
This is not what you nor your customers want to see.
 This was taken at a Cincinnati Kroger's grocery location yesterday as my wife and I shopped for our once a month groceries. The deli ordering kiosk which normally sits just inside of the entry to the main store, was sitting by the shopping carts corral with this ugly but obvious sign. When your customers become so familiar with and used to the self-service kiosks you implement in your store, it can be a real disappointment to them when it's unavailable. And while no kiosk can have 100 percent uptime, you should at least move the kiosk out of their view when it is unavailable.
Now, truth be told, I think this was temporarily set aside while they were remodeling the space it normally sits in. New floors, new drywall, new counter tops, etc. so they had good reason to have this kiosk out of commission, and there was a second kiosk closer to the deli. But I believe they could have put this near a power outlet and dropped a temporary Ethernet to it for connectivity. But maybe this is too much of an over simplification of what it would take (I don't know their setup and networking). This would keep the customers happy, and the deli running efficiently... all of the reasons you deployed to begin with.
On a similar note, we just installed new kiosks for Kroger in a new store that hasn't opened yet in Norwood, Cincinnati. These kiosks are for a completely different purpose in the Personal Finance section of the store. We worked with their vendor who creates a lot of their retail displays and store fixtures. They were to provide an "enclosure" around our IBM AnyPlace kiosk computer.
But as of the time we brought the kiosks, connected and installed, they had not delivered the enclosures. As a matter of fact, the client had not even seen them yet. So this should be an interesting integration. We believe that we should have been engaged for the entire kiosk enclosure, software and hardware, and let that partner focus on what they do best. You know it's bad when the client contacts us to provide a turntable type solution to this yet unseen enclosure. Shouldn't that partner have provided that? Ah well, we will go above and beyond to ensure that this deployment goes well.
In the past we have also integrated kiosks into other grocery retailers for loyalty card systems. The kiosks are highly used and loved by the customers as a means to redeem their points and update their account information. In our initial deployment we had a problem with one of the printers not printing correctly and I was needed onsite to help troubleshoot (hardware firmware needed updating). Trust me, when you take one of the two kiosks offline even for a few minutes, the customers are not happy. They had to walk to the other entrance to use that kiosk instead, but they felt inconvenienced. And they were, but the point is that customers love self service. And when they become familiar and accustomed to using it, you need to ensure it is there for them. Don't disappoint your customers and don't take the easy way out. Keep that kiosk online!
Update: Weeks later my wife and I returned to do our weekly shopping (yes, we are trying to eat at home more often) and found to my delight that the staff had taken off the hand written note and put the kiosk back online! They had even improved the signage and branding on and around the kiosk. Nice job! The original location of the kiosk has been replaced with an in store clinic which may be a new trend in additional services being provided by grocers to enable customers to perform many tasks with one visit, ensuring customer loyalty and foot traffic. This explains why the kiosk was in transition and temporarily offline. My preference would be to not have any kiosk, than the one with the "out of order" note taped to it. Consumers need to know that systems are always working to build trust.
Monday, 19 November 2007
It’s a familiar scene in many houses on the fourth Thursday in November: Relatives young and old chat together, cousins and siblings play football in the back yard, and the introverts watch old Westerns in the basement. In the kitchen, an assortment of gourmet gurus peel aluminum foil off the Thanksgiving dishes they’ve prepared.
But how does an inexperienced cook even begin to contribute to the family feast?
One place to start is the grocery. Recipe and shopping kiosks come to the aid of those in dire need of culinary support. During the month leading up to Thanksgiving, some self-service devices provide recipes and shopping lists of ingredients for such culinary emergencies.
 ShoptoCook, a provider of turnkey meal content kiosks, places a seasonal button on its kiosks, which are deployed in more than 200 grocery and retail stores. Leading up to Thanksgiving, the recipes there provide dozens of basic recipes for turkey, stuffing, vegetables and deserts. Advanced dishes, not for first-timers, also are available.
“It’s during that whole holiday season that people need help with what to cook,” said John Picard, chief operating officer of ShoptoCook Inc. “Many are interested in trying something new.”
In fact, Picard said, many experienced cooks want to impress and entertain their guests with new recipes. ShoptoCook’s kiosk provides an assortment of new deserts and side dishes that were not an option the year before.
And when the feast is finished, the kiosk even has ideas for the leftovers.
“The seasonal buttons are very popular,” Picard said. “It is a key part of what we offer.”
Giant Food Stores, a deployer of several self-service solutions, offers its own Shopping Solutions and Recipe Solutions kiosks. The search capability lets eager hosts search for innovative Thanksgiving recipes. Its kiosks include recipes for roast turkey with corn bread stuffing, pumpkin pie, cranberry relish, roasted zucchini and yam casserole. Many of the recipes also come with preparation and nutrition information.
For those looking to interject some healthy alternatives into their Thanksgiving feast for friends and family with special dietary requirements, Portland, Ore.-based Healthnotes Inc.’s “Fresh Ideas” kiosks offer tips and recipes on fresh foods and health-related products. The Healthnotes kiosks include content on fresh foods, organics, diets, supplements and medications, as well as science-based product recommendations for managing health conditions, and even wines.
Connoisseurs who are especially serious about what they toast their turkey with can find kiosks that exclusively offer beverage assistance. According to a June Newsweek story, roughly half a dozen companies are testing and marketing interactive touchscreen wine kiosks for placement in grocery and liquor stores, as well as in wine shops. The kiosks allow shoppers to search for wines by name, grape, region, price or menu compatibility.
No matter what your experience level in the kitchen, self-service tools can help bring together a fine dining experience.
Monday, 05 November 2007
Information collected at the cash register is a rich pool of data that can help retailers ratchet up the effectiveness of their digital signage networks.
The concept is simple: Take the millions of lines of time-stamped playlist data from the signage network, place them alongside the millions of lines of time-stamped sales data from the POS, and compare. Look for patterns that reveal which bits of content are having an impact on sales.
"As soon as the tools for analyzing POS data against campaign schedules and specific content become standardized and easy to use, this metric will beat any other ROI measurements in retail digital signage," said Nurlan Urazbaev, director of marketing for BroadSign International.
The challenges
While the data is on the network, waiting to be mined, most retailers are not using it. Bill Gerba, president of WireSpring Technologies, said about one-third to one-half of retailers with digital-signage networks are doing meaningful analysis of their playlist/POS correlation. The number is considerably higher for retailers that include self-service and kiosks in the mix, "probably because the kiosks are driving some kind of transaction that’s of a high value to them, and they want to know how to convert it better," he said.
Pure digital signage may not be transactional in nature, but its output data still can be analyzed and solid information can be extrapolated. What happened to sales of a specific brand of cookies when its ads were run — and what happened at the same time to the generics? Which spots provided the largest surges in sales of advertised products, and how did time-of-day have an impact? All of these can be tangibly measured when playlist data is taken out of its silo and placed alongside the real-world store data.
"Integrating digital signage systems to in-store systems is vital to the success of the concept," said Dick Trask, director of public relations for Scala. "Digital signage needs to become an integral part of the in-store marketing strategy and not a lone wolf vying for recognition."
Two major challenges exist for retailers: IT capabilities and the flexibility to react to what is learned.
In large corporations, IT bandwidth is less of a problem, since there usually are programmers in-house already familiar with the POS system and the way it stores data. For instance, Trask said the U.K. grocery chain Tesco built its own middleware between its POS and digital signage systems. Smaller retailers may have a tougher time creating this bridge.
Understanding the broad view of which types of content are having the biggest impact on sales can be a major asset for the creative team — and can provide solid data to executives on the value of the signage network.
A third-party solution
For companies unable or unwilling to build their own POS/digital signage analysis tools, there is at least one turnkey third-party solution. Helmed by former executives from Microsoft, MSN and Amazon, DS-IQ’s analytics engine correlates digital signage and POS data, outputting it to a set of custom dashboards on the Web.
"While a campaign is still in-flight, you can get detailed feedback on precisely what is working and what’s not, while there’s still time to make a positive difference," said June Eva Peoples, vice president of business development for DS-IQ.
One possible downside, Gerba said, is that retailers can be reluctant to open their POS data to outside entities.
Peoples would not reveal pricing for the DS-IQ service, but said it "more than pays for itself by optimizing category sales lift."
Monday, 09 July 2007
The writer is president of Summit Research Associates Inc.
The kiosk industry is booming, especially in the retail sector. When digital photography kiosks are included in the count of retail kiosks, fully 50 percent of all kiosks fall into this category.
The key to successful kiosk deployments is location, location, location. A successful placement relies on a true understanding of shopper habits. Often deployers feel that they have placed a kiosk in the best possible location but discover that usage is far lower than expected. To get some idea why this happens, we will take a look at one of the fast-growing venues for kiosks, supermarkets.
Research was conducted at grocery stores in the western United States by the University of Pennsylvania’s Wharton School of Business. They concentrated on how shoppers navigate stores with their carts. Their findings should be considered when planning future kiosk deployments in these types of venues.
Shoppers do not weave up and down each aisle as previously thought. They zigzag to specific aisles sometimes avoiding whole areas of a store. For kiosk deployments, end caps have proven to be some of the best locations. More people see products displayed at each end of an aisle than anywhere else in a store.
Shoppers spend less time in the aisles than assumed; instead they stick to the perimeter of the store, using it as the main road with quick side trips to the aisles they need. As a result, products displayed at the ends of the aisles near the perimeter are vital for luring the shoppers in.
They also zip in and out of the aisles. Once they enter an aisle, shoppers rarely make it to the other end. As a result, products located in the center of an aisle are frequently ignored.
A good example validating this recommendation was found at Home Depot in a pilot project they conducted at 15 stores along the East Coast. The kiosk was not only placed in the middle of a long aisle, but it was located in a niche — set in from the aisle by three or four feet so that it was not visible from either end. People could not find the kiosk. And, even worse, there was no signage on the aisle to draw the shoppers’ attention to it.
Just like U.S. drivers, shoppers like to enter a store on the right or turn right as soon as they enter the store. Then shoppers prefer to shop in a counterclockwise direction. A key finding was that shoppers who enter on the left spend less time and money shopping.
The highly successful Giant Super Food Store kiosks, especially the flagship concept store in Camp Hill, Pa., is an excellent example of a project that has followed this advice. The more-than 91,000-square-foot store has 25 kiosks, all situated around the periphery. Customer usage and the number of transactions continues to grow each month.
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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