nullJanuary 16, 2007
January 16, 2007
By David Barry, News@Cisco
You are standing in the aisle of a major electronics store trying to choose between a plasma or LCD flat-panel TV. They both seem impressive, but you are unsure which would offer greatest clarity in your living room. At Circuit City, soon you may no longer have to make an educated guess.
According to Brian Bradley, Steward of Innovation and Strategy at Circuit City, a major factor that determines the quality of the display--lighting--is difficult to determine from a store aisle. "The type of lighting in a buyer's living room or bedroom, whether bright or dull, direct or ambient, strongly affects the visual resolution on these TVs."
At a few pilot Circuit City stores in Boston and Miami, consumers no longer must try to imagine the impact of lighting--they can see it for themselves. Equipped with hand-held wireless Tablet PCs with 8 ½ x 11-inch screens, store associates help buyers by calling up side-by-side images of plasma and LCD screens. Then, by using a dimming function on the Tablet PC they can demonstrate the impact of lighting changes on both screens.
"We have studied the behaviors of our customers and determined ways to respond to the most common concerns such as 'which TV set is better, or how many megapixels do I need on my camera,'" says Bradley. "We've found that if they can see it on the Tablet PC, they are often convinced and very satisfied."
Enhancing the Customer Experience
For years retailers have focused on using technology to enhance operations--streamlining the supply chain, speeding checkout, limiting stockouts. Now, they are turning to the customer experience to create differentiation.
"The key to unlocking the store of the future is getting into the consumer's head and finding ways to make their lives easier," says Nikki Baird, Principal Analyst at Forrester Research, Inc. "It's not necessarily about helping sales associate locate inventory or avoiding stockouts. It's about saving the consumer time, helping them find the things they need, and helping them do it faster."
Companies that achieve this goal of improving the customer experience are seeing the results in increased sales. Apple Computer has parlayed unique store innovations such as store concierges, "genius bars," and multichannel integration to achieve an impressive $2,661 in sales per square foot of store, according to Apple, Inc.--second only to Tiffany at $3,215, but far ahead of Best Buy at $868 or even Victoria's Secret at $653, according to research by the Cisco Internet Business Solution Group (IBSG).
The Intelligent Fitting Room
In Japan, well-established clothing retailer Mitsukoshi, Ltd is beginning to transform the experience of its customers with the Intelligent Fitting Room using the Cisco Intelligent Retail Network and RFID technology. From within a fitting room customers can rapidly retrieve information on existing stock or call up virtual models to demonstrate accessories.
If a woman is trying on a pair of jeans that is too small, for example, she can wave the garment's price tag near an electronic tag reader and instantly see all available product information on a Cisco IP Phone's LCD panel. Alternate options--size, color, style--are also displayed. By simply choosing her preferred option the system reveals whether the selected style or size is in stock. In the near future, system enhancements will allow customers to actually call up a model to demonstrate the outfit. Customers can also "accessorize" an outfit by having the model try out various shoe styles, earrings or sweaters--right from the fitting room.
Forrester's Baird would also like to see RFID and wireless expanded out to the floor. "You're standing in front of a wall of jeans. Instead of hunting to find your size, you type your size into the nearby kiosk and the shelf lights surrounding your size begin to flash. We're on the cusp of these types of innovations."
Raising the Productivity Benchmark
Often, new deployments may provide both an enhanced customer experience and an operational benefit. With Mitsukoshi's Intelligent Fitting Room, for instance, early trials show that the Intelligent Fitting Room is also reducing wasteful roundtrips of sales associates to stock rooms by 25 percent.
Hannaford Bros. Co, a large grocery chain in the Northeast, based in Scarborough, Maine, recently deployed Cisco Unified Communications in most of its 13 stores. Many IP phones are distributed in each store today and, beyond providing voice service, also run a time clock application. Employees can log in for work from any phone and view hours worked for the day or week, rather than having to walk to the back room. Soon, Cisco will be adding biometrics to the phones so employees only need to press a finger in order to log in. At some point, Hannaford is also considering making biometrics available at registers. This will speed checkout lines, greatly improving the customer's experience by allowing them to check out quickly.
Retailers are also recognizing that, as the number of channels through which buyers shop increases--in-store, kiosks, web, catalogs, TV--enabling cross-channel integration further enhances the customer experience.
A case in point is Circuit City's 24 minute/$24 gift card guarantee. Shoppers that order products online are guaranteed that their purchases will be ready for pickup at the local store within 24 minutes--or they receive a $24 gift card. According to Circuit City's Bradley, the 24/24 campaign will help drive Internet purchasing to more than $1 billion in its fiscal 2007. The company found that more than 50 percent of the Internet purchases were picked up at the store, helped in no small measure by the new campaign.
The use of multichannel integration--especially personal devices such as cell phones or PDAs--is expected to blossom in the coming years. One idea is that a sensor in a store automatically detects when a loyalty customer (who has agreed to the service) enters the store carrying a Bluetooth-enabled cellphone. In response, the system might send a 15% off discount coupon to the phone, or indicate that the latest home audio component he has expressed interest in is now in stock.
A major electronics retailer may use the same technology to sense when a loyal customer has entered the store and direct an audiophile expert (a valuable, costly human resource) to greet the customer. Cisco CEO and chairman John Chambers has also discussed the future of this technology during his address at the 2007 Consumer Electronics Show where, in an onstage demo, a cell phone/PDA doubled as a ticket to a ballgame at the future Cisco Field baseball stadium in California. A demo of digital signage was also presented. Expected to be arrayed at Cisco Field, digital signage is changeable and can sense nearby inputs, such as a customer's cell phone. In one scenario, the ballpark database would know the customer's interest in upgrading seats (perhaps at the 3rd base side) and, as the person passed by the digital signage, a message would pop up alerting the customer and offering them the option to upgrade the seats.
"We are in the age of customer experience," says Mohsen Moazami, Vice President of Retail, Cisco Internet Business Solutions Group, who provides strategic business counsel to Cisco retail customers. "It's about offering the right solutions, in the right way, to the right customers, which builds loyalty and ultimately leads to greater wallet share."
David is a freelance journalist located in Princeton, NJ.