Think small to win big: Broadband, wireless connections improve POS benefits
This article was originally published in Retailspeak Magazine
It's a problem all major retailers face: how to answer a customer's question without disappearing into the ether for ten minutes, only to find the customer has gone elsewhere upon their return. Ideally, all shop floor staff would have an exhaustive knowledge of every product on the shelves, but we don't live in an ideal world. Or, at least, we didn't.
Thanks to the explosion in broadband availability and wireless connectivity, retailers are now enjoying unprecedented access to technology that is revolutionizing their point-of-sale (POS) options and adding a personal touch to the shopping experience.
Philippe Leclercq, store solutions director, VcsTimeless, says, "Low-price broadband technology has definitely played a key role in the increased adoption of wireless technology in retail stores. However, other factors include increased security in broadband technology and the availability of software solutions on handheld devices such as PDAs [personal digital assistants], which now offer the same functionality as fixed POS software solutions."
Retailers have long-realized the value that customer intimacy can bring to their operations but have struggled to actually achieve a strong and lasting bond with their customers. This is especially the case with larger companies whose outlets have grown to hundreds if not thousands.
By employing inexpensive wireless technologies and broadband availability, they can establish improved lines of communication between their various departments; at once improving managerial efficiency and stock availability.
Neil Ashworth, retail industry observer, explains: "There is a general rule of thumb that says approximately eight percent of merchandise believed to be in store is not on sale at any one point in time. To U.K. retailers, that is worth in excess of half a billion pounds sterling a year. So having improved connectivity between different departments and channels is critical in this sense."
However, the ubiquity of POS solutions has also facilitated the adoption of value-added, customer satisfaction tools.
Says Ashworth, "Customer service is always considered a good thing, but it can be difficult to justify expenditure in this area when the benefits aren't tangible."
Jeff Erwin, president and chief executive officer (CEO) of Experticity, shares this belief: "The retailer knows and acknowledges that customer experience is the highest priority, but, behind closed doors, they admit that cost is the primary driver. If a new technology doesn't have a very clear return on investment (ROI), the retailer will delay adoption of that technology until they are forced to by the market. Self-checkout is a good example of this. Once a few retailers adopted the technology, it became an expectation with their customers and had to be adopted by other retailers that wish to remain competitive."
However, POS systems reward the retailer on both fronts—they are able to better manage all aspects of their organization while simultaneously improving customer service.
Winning over the customer
The power of value-added POS tools to improve customer service is only now being realized. The ability to unite multiple outlets, integrate communication channels, and provide real-time connectivity to shop floor employees is transforming the relationship between customer and retailer. Such product intimacy would have been previously unimaginable in a large supermarket, where staff couldn't possibly be expected to know the finer details of every product on display. However, using wireless devices connected to a central database, they are able to instantly access detailed information concerning everything from the connectivity ports on a DVD player to the calorie count of a birthday cake.
Traditionally, this information, if held at all, would have been buried deep within back-office legacy systems, inaccessible to all but the most tenacious of senior management. But thanks to the growth of real-time accessibility, any authorized employee can gain access to this data, ensuring that virtually every customer query can be answered on the spot.
Erwin comments: "Today's retail customer is much more knowledgeable than in the past regarding their intended purchase, so the questions they have can easily exceed the capability of the floor sales person. Having access to deeper data can help solve this."
And this knowledge could make all the difference as traditional distinctions between large high-street retailers gradually disappear. "In today's retail environment, all the retailer has is customer experience to differentiate itself from the competition," warns Erwin.
Store floor managers
But the benefits of the integrated environment don't end with simply providing greater product information. The whole notion of customer intimacy demands the store and its staff are able to relate personally to each and every customer.
Wireless connectivity allows store managers to spend more time on the shop floor, talking with customers rather than toiling over spreadsheets behind the scenes. Says Ashworth, "Ideally, the store manager should be on the shop floor, interacting with customers to build relationships and improve retention. Yet traditionally, this is the kind of customer relationship a big retailer can only dream of. This kind of connected architecture releases managers from the back office and allows them to conduct their daily tasks among their customers."
In-store communication
In many ways, this represents a return to the customer intimacy of old, when a store owner knew his or her customers by name and could actively inform them of new products that might suit them. While this may seem impossible in a busy supermarket, for example, the concept is being revived with the help of radio frequency identification (RFID) devices.
By detecting customer-specific information on, for example, a loyalty card, any relevant promotions and special offers can be flagged to the customer, perhaps on a display on their shopping cart.
Leclercq says, "I personally think the revolution will come from the combined use of RFID and wireless technology in store. Using RFID loyalty cards, retailers start to know how to identify a customer. However, such practices are still considered to be intrusive today. Some countries, such as France, have strict legislation to protect customers from such practices."
But while legislation may be hindering the take-up of such technologies in certain regions, the relentless march of progress is likely to diminish such concerns over time.
"RFID built into a customer loyalty card will allow a retailer to identify key customers just as the casinos do today," says Erwin. "The customer can then be provided whatever special treatment they have coming."
As to the concern that RFID may be considered intrusive, Erwin points out, "Everything seems intrusive at first; whether it remains intrusive depends on the value the customer gets from the technology."
The concept of integrated store systems and personnel, connected through wireless technology across multiple outlets, is no longer retail science fiction. RFID chips are a clear example of how retailers can interlink their employees with a back-office infrastructure that has traditionally hindered, rather than facilitated, customer satisfaction. In this environment, not only does the customer receive a service above and beyond anything they have previously experienced, but the retailer gains from improved supply chain management, greater managerial efficiency, and superior customer retention.
But as with all new technologies, there is always a risk that things might not go according to plan. As a final word, Leclercq notes, "The most important thing is how we communicate, when we communicate, and what we communicate. This depends on our understanding of the client. Retailers must ensure that what they do is meaningful. You must adapt your communication to your strategy and determine if you want to talk to your entire customer base or to specific customers. Quite often, it is the stores who know the most about their customers that understand them the least."
