Get ready for the connected customer
Why digital devices may soon be vital to your business
Updated: October 7, 2005
It's no secret that today's consumer has embraced technology-driven convenience. Instead of shying away from retail technology, consumers are avidly using Web sites for comparison-shopping, banking, and online bill-paying. They’re using more than just Web sites, too—technologies such as SpeedPay on toll roads, car rental check-in, and airline ticket kiosks are all becoming the norm for consumers.
To stay on top of the market, retailers must adopt innovative solutions that make shopping easier. It won’t be long before devices such as SmartPhones and Pocket PCs with barcode-scanning and wireless Internet access will also be the norm for consumers. David Gruehn, Retail and Hospitality industry manager at Microsoft, agrees: "Consumers are very quickly beginning to embrace a wide variety of digital devices and will be using those in a variety of ways, by themselves, to enhance their shopping experience. Retailers can either let consumers use these devices on their own and disregard this trend, or they can take advantage of it and try to create a more intimate consumer experience by leveraging these devices."
The connected customer: A look ahead
As consumers continue to embrace technology, it is likely that they will become more reliant on digital devices for everyday tasks. Retailers who offer services that take advantage of these devices will stand to gain the competitive edge. "We've seen these trends before," says Gruehn. "One retailer offers a technology-enhanced option that becomes so popular with consumers that it becomes a prerequisite for doing business." With barcode-scanning at check-out, drive-through pharmacies, and pay-at-the-pump gas stations now being standard retail features, stores that failed to implement these solutions have fallen out of consumer favor. Retailers need to carefully watch technology trends to avoid losing their credibility with consumers.
So, what technology trends should retailers consider? Here’s a glimpse at a possible future for retail technology.
Smartphones. Cellular phones with added memory and functionality are gaining ground as powerful tools for running applications and accessing the Internet. Retailers should consider a future where nearly all consumers have smartphones with them while they shop.
Barcode-scanning. In the near future, consumers will have access to smartphones with barcode-scanning capabilities. They can build shopping lists before going out by scanning product barcodes in their homes.
In-store wireless shopping assistants. As a consumer enters a store with a shopping list on their wireless digital device, retailers could provide an in-store wireless network that greets the consumer. Consumers could "opt-in" for additional shopping features provided by the retailer, such as a store map with the location of each item on the consumer’s shopping list, special promotional deals based on the consumer’s spending habits, product reviews from other consumers, and radio frequency identification (RFID)-enabled shopping carts with running cost totals.
Smart retailers are taking steps now to prepare for this future. "A big benefit to retailers is that they don't have to buy these devices—the consumers are already going to own them," says Gruehn. "Retailers just need to be prepared to integrate with them by providing the infrastructure. But many retailers already have the infrastructure in place as part of any number of other systems, so why not take advantage of the existing infrastructure to create added customer intimacy?"
Realistic solutions on the Microsoft platform
Retailers can begin to take steps toward building an infrastructure for connected consumers by embracing open source standards, such as XML and Web services, in stores and enterprise environments. Not only will digital devices likely use these standards as consumer technology advances, but these standards also enable retailers to reduce current environment maintenance costs and create system agility. Using XML and Web services for current retail system functionality can free up information technology (IT) resources to focus on more productive tasks.
The Microsoft platform fully supports these open source standards, enabling partners to provide retailers with innovative shopping solutions. Microsoft partner Experticity offers Nextprise, a solution built on the Microsoft platform that enables retailers to provide their customers with live, on-screen product information and face-to-face assistance at all times. Retailers can maintain centralized support staff, using Nextprise to load-balance incoming customer service requests and provide real-time video conferencing with consumers.
Another Microsoft partner, Radiant Systems, has developed their Self-Service Kiosks solution on the Microsoft platform. Their solution enables retailers to provide their customers with self-service capabilities, similar to self-check-out lanes, in other areas of the store, such as grocery store deli counters and gas station islands. Retailers see immediate return on investment (ROI) with higher revenue, better customer service, increased efficiency, and improved bottom-line performance.
These solutions make sense for retailers to implement now as foundational components for future consumer technologies. "Right now, many of the retail solutions offered by Microsoft partners are available on kiosks," says Gruehn, "but I think eventually these solutions will make it down to handheld digital devices. Consumers will be able to chat with the pharmacy through their cell phones in a video format to find out if their prescriptions are ready while they’re shopping in the meat department."
"Retailers can’t predict what consumer devices will become mainstream or how they will be used," says Gruehn, "but they can take steps to prepare for the future by implementing solutions that make sense."
