A UBM tech BLUePRINt 2013

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A Blueprint for the Digitally Connected Store

Incorporating Analytic Functionality in Digital Signs for Competitive Advantage

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A Blueprint for the Digitally Connected StoreIncorporating Analytic Functionality in Digital Signs for Competitive Advantage

Around the world, retail consumers are now using billions of devices – including smartphones, tablets and PCs – to connect with each other, to research products and compare prices, and to check inventory online and in-store before making their purchases. Harnessing the data that comes from intelligent systems – machines that communicate with one another both directly and via the cloud – can deliver enormous benefits to retailers looking to increase sales and improve customer experience and engagement.

Retailers understand the value of using data for competitive advantage, and they recognize the need to connect with their existing and prospective digitally empowered customers. According to The State of Retail Marketing, a report based on results of an exclusive UBM Tech survey, 76 percent of retailers have indicated that they currently engage their customers online, 71 percent said they use email to engage customers, and 42 percent reach out to engage their customers via mobile device. However, only half actively use the in-store channel to engage customers.

Retailers might want to re-think their brick-and-mortar strategy since consumers now typically use multiple channels in their average shopping experience.

“The traditional buying process isn’t changing, but the way that consumers shop is. Customers today will access multiple retail and communication channels to execute a purchase leading to the requirement that all channels work seamlessly to support the brand,” says Steven Keith Platt, director of The Platt Retail Institute, in a blog, Omnichannel Shopping is Changing Retail. “Retailers that fail to adopt multichannel marketing strategies risk losing their customer relationships. This risk, of course, creates some outstanding opportunities for forward-thinking retailers and their advisors.”

In Take a Tour of a Digitally Connected Store, retai lers learned how leveraging technologies – like the smartphone and digital signage – could lead to new sales, marketing and operational benefits. This “blueprint” will take retailers one step further and help them create a modern technology foundation that can enable their organizations to gain a competitive edge by better engaging the growing number of digitally-empowered customers.

A Strong FoundationIt has become imperative for retailers to have an overall framework for integrating, managing, and securing the entire environment. In the same way that a builder must lay proper footing before constructing a skyscraper, today’s retailers cannot expect to build their businesses without a solid technological foundation. To succeed, retailers need underlying technologies that support the seamless collection and flow of information across their entire sales and marketing environments and supply chains.

Reta i lers need a common, sca lab le framework that ensures processing performance, connectivity, security, and easy manageability. The underlying infrastructure must be scalable and capable of accommodating specialized retail applications and processes like inventory management, as well as handling an increasing number of digital devices. The framework must be capable of protecting personal information while enabling retailers to easily and centrally manage their entire infrastructure. And finally, the framework must also enable data sharing between devices and the cloud to unlock latent data and allow retailers to process the data to deliver actionable information and insight.

Says Deloitte in an article, OmniChannel Retailing: If You Build It, They Will Shop, CIOs will find it nearly impossible to build effective omni-channel support without first creating the technical infrastructure required to offer customers the services they want: “the ability to review product information and compare prices, learn about and take advantage of promotions and purchase products. To deliver these basic omni-channel services, retailers must design and implement a technical framework that is modular, flexible, and scalable,” says Deloitte.

A UBM TECH BLUEPRINT | The Digitally Connected Store

Business Intelligence and Big Data AnalyticsThe wealth of structured and unstructured data flowing into retail organizations is tremendous – and growing. And while managing such voluminous data can be a challenge, it also affords retailers an unprecedented opportunity to use data for competitive advantage.

The key to capturing the power of big data is analytics. For many years now, online retailers have used analytics to send shoppers personalized offers based on analysis of their shopping history and preferences, and they can see how customers are receiving their marketing messages based on dwell time, click-throughs, and resulting purchases. Today, retailers can use digital technology in their brick-and-mortar locations, enabling them to approach shoppers with tailored offers based on customer insights derived through analytics.

Where online retailers need to simply analyze customer navigation patterns and purchase frequency to determine buying preferences and message effectiveness, brick-and-mortar retailers need a way to first collect data on customers in their stores, quickly process the information they collect, and then offer an appropriate marketing message based on likely customer preferences. This process requires sophisticated and tightly integrated customer-facing and back-end technology.

Customer-Facing TechnologiesThe average customer is looking for a digital experience across all touch points – and certainly in physical store locations. According to Pew Internet & American Life Project research, 87 percent of American adults now have a cell phone, and nearly half of American adults (45 percent) have a smartphone. More than two-thirds (68 percent) of smartphone owners use a social networking site, and nearly a quarter (24 percent) get coupons on deals to use at local businesses. The study also noted that during the 2012 holiday shopping season, 27 percent of adult cell phone owners used their phones to look up the price of a product online while they were in a store to see if they could get a better price elsewhere.

A UBM TECH BLUEPRINT | The Digitally Connected Store

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Intel Intelligent Systems Framework,

a set of interoperable solutions

designed to facilitate connecting,

managing and securing devices in

a manner that’s both consistent and

scalable. The Intel Intelligent Systems

Framework is an ecosystem of baseline-

validated components from Intel. The

framework addresses connectivity,

manageability, and security, as well as

software and domain expertise from

McAfee and Wind River.

Intel Audience Impression Metrics

(AIM) Suite enables retailers and

brand to understand how shoppers

respond to visual messaging and how

they move through retail environments.

Using sensors and highly sophisticated

computer algorithms, AIM Suite

accurately counts the potential and

actual audiences for visual messages

and merchandising and provides real-

time and aggregated reporting.

Intel® Distribution for Apache

Hadoop Software, the leading

b ig data sof tware f ramework

for distributed applications. The

Intel distribution is the first to

support the Advanced Encryption

Standard (AES) instruct ions in

Intel’s Xeon processor platform,

which will enable organizations

to securely analyze their data sets

without compromising performance.

A UBM TECH BLUEPRINT | The Digitally Connected Store

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Customers are increasingly looking to technology to enhance their in-store shopping experience, to keep them informed of special offers and product specifications while in the store, to ensure that they will get a competitive price for the item they want, and even to let them know if the product they’re looking for is in stock. Retailers that aren’t able to provide this information in a digital format will risk disappointing customers and losing out on sales.

Digital Signs, Displays, KiosksA growing number of retailers are using digital signs, digital displays, and interactive kiosks to deliver high-impact messaging, provide product information and specifications, and offer shoppers targeted products. While the digital displays in stores are certainly eye-catching, it’s the data-gathering and analytics power behind these smart devices, generating and analyzing data in real time, that can boost customer experience, customer engagement, and sales.

Digital signs, digital shelf micro-displays, and digital kiosks use an integral sensor to gather anonymous customer data. This information can be collected and analyzed by Intel’s Anonymous Viewer Analytics (AVA) software that captures anonymous audience impression data like total number of viewers, dwell time, age bracket, and gender. The technology’s business intelligence tools can detect messaging impact by measuring the number of people looking at each screen, the viewing duration, and time-of-day to determine the success of marketing messages. And finally, the technology can coordinate with back-end systems to generate appropriate messaging to each individual viewing a screen.

Point of SaleUsing intelligent computing technology at the point of sale (POS) can streamline the transaction process, benefitting both customers and retailers. Whether at an interactive and self-service kiosk or a smart point-of-sale terminal, efficient POS systems provide a convenient yet secure transaction experience for customers while improving business efficiency for retail organizations.

Modern POS/transaction systems should incorporate built- in security, integrated graphics, remote management, and scalable performance. The payoff is happier customers who can minimize their checkout time while paying safely and securely.

Back End TechnologiesOf course, as impressive as customer-facing technologies can be, in order to work, they must be tightly woven into the retailer’s back end. Back-end systems include systems for loyalty management programs that credit customers for purchases, and inventory management systems that allow both retail employees and customers to see if an item is in stock at a specific store location and enable retailers to alter pricing on the fly, according to shifts in demand.

Inventory Management The problem of inventory distortion – inventory that doesn’t match consumer buying patterns – costs retailers billions of dollars annually. Modern technology can help retailers better manage their inventory, cutting inventory distortion losses and improving the customer experience by giving shoppers a means to check store stock on desired items and minimizing disappointment from out-of-stock products.

Innovative technologies that enable customers to access product and inventory information through interactive technology – from tablets on kiosks to large, life-size displays on the sales floor – can vastly improve the customer’s experience while enabling retailers to improve inventory management. While the displays are what catch the customer’s eye, it’s the integration with dynamic back-end systems that provides value to customers and generates sales.

Brand OptimizationDigital technology presents new ways for retailers to increase brand awareness. Retailers can leverage an array of available technology-based solutions designed to help inform their messaging and optimize their brand. Some solutions to meet brand optimization challenges are outlined in Retail Remedies: A Solution Guide to Optimizing Your Brand.

Retailers that fail to adopt

multichannel marketing strategies risk

losing their customer relationships.

ABoUT INTEL® :

Digital signage, informational kiosks, and an in-store network can help inform shoppers while increasing brand awareness. Retail solutions to increase brand optimization typically involve capturing and analyzing data to ensure that retailers are successfully engaging with customers and garnering shopper loyalty. As in inventory management, having the right back-end systems is essential to brand optimization success. To effectively manage inventory and optimize their brands, retailers must leverage the right combination of technology that will enable them to do more than just display general messages and present static product details. Digital displays are run by media players based on powerful processors, and connected through the store’s network to the retailer’s inventory management and content management system. The hardware platform must provide for high-resolution,

graphics-intensive signage applications, and the software must integrate with the retailer’s existing Web content resources.

ApplicationsRetail organizations can leverage smartphone popularity by finding ways to reward customers who carry them in brick-and-mortar locations. Combining a social media component with a kiosk gives customers an incentive to purchase a product at the retail store. The store display can reinforce brand messages and retail promotions. Social media tools like text messages and short URLs coupled with incentives such as loyalty points, discount coupons, and prize drawings encourage customers to use their smartphones in the store.

Retailers can also reach out to customers and deliver targeted messages by deploying an intelligent mobile advertising solution that integrates mobile and Web data, social media, data mining, couponing, and digital signage. Consumers get information tailored to their personal preferences and buying habits, and retailers build traffic to their physical stores and Web sites. Customers must opt into a service offered by a retailer and download an app to their mobile device, which mines information like GPS coordinates, call logs, and browser history. The mined information is then generalized and sent to the solution’s mobile data server in the cloud, keeping all information secure.

© 2013 UBM LLC. All rights reserved.

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A UBM TECH BLUEPRINT | The Digitally Connected Store

Intel (NASDAQ: INTC) is a world leader in computing innovation. The company designs and builds

the essential technologies that serve as the foundation for the world’s computing devices. Additional

information about Intel is available at www.intel.com/pressroom and blogs.intel.com.