Why customers are won and lost on the strength of retail networks

Battle of the

bandwidths

Battle of the bandwidths: Why customers are won and lost on the strength of retail networks

The growth of

multi-channel retail may

have created new places

to reach consumers, but

it has made identifying,

attracting, serving

and selling to them via

traditional bricks-and-

mortar harder than ever.

The growth of multi-channel retail

Convenient and often personalised, ecommerce and mobile retail are not

just eroding share of channel from the store; they’re changing shopper

expectations at the shelf edge. Today, the wrong price or a bad experience

can send potential customer online – or to a rival retailer.

Without support from digital technologies throughout the store journey, retailers

cannot integrate online and offl ine retail, and are therefore losing valuable conversion and upselling opportunities. Even those who have technology in place

are letting customers down at crucial moments, because they aren’t investing in

the network underpinning their technology.

In this report, Vodat International will look at where tech-savvy shoppers are

being let down by the current store experience, and create a new roadmap for

engaging bricks-and-mortar customers in an increasingly digitised world.

A world in which customers are won and lost on the strength of retail networks.

3

The impact of the ‘digital high street’

Walk into any store or through any shopping centre and you’ll see

the fundamental impact of technology. Consumers are glued to their

smartphones as they wander the aisles, and practices such as comparing

online prices whilst stood at the shelf edge, or ‘Googling’ discount vouchers

prior to purchase, have become commonplace.

Digital connectivity is now so fundamental to everyday interactions that it has

become a national initiative; in March 2015, the government released Digital

High Street 2020, assessing how the UK must prepare for technology’s increasing

infl uence on retail.

The report made 3 key recommendations:

Raise internet/4G connectivity

standards

While we wholeheartedly support these ambitions, the government has set a fi ve-year time frame for meeting these objectives, and the average High Street still has a

long way to go.

Retailers cannot aff ord to wait for this ‘connectivity for all’ dream to become a reality in the UK. There are a wealth of revenue generating opportunities that can be created

in the store right now, if retail businesses can integrate technology into bricks-and-

mortar experiences.

Let’s explore these opportunities in further detail.

Ensure business

owners have basic digital

skills

Create a digital innovation

hub featuring resources that

companies can utilise

Battle of the bandwidths: Why customers are won and lost on the strength of retail networks

Being mobile-savvy is non-negotiable

The chance to engage with shoppers through their mobile device is now almost

ubiquitous; two-thirds of UK adults now own a smartphone, and last year it

overtook the laptop as internet users’ number one device.

To explore the relationship between mobile and retail in greater depth, Vodat

International commissioned original research among 1,000 UK consumers.

Our insights reveal just how intertwined smartphones have become with bricks-and-

mortar shopping. More than a quarter of consumers use their smartphone during all

store visits, while 60% use it in at least half their shopping trips.

Opportunities for interaction are particularly strong among Millennials; three quarters

of 16-29 year-olds use their mobile device during most or all of their store visits.

However, if retailers don’t actively involve themselves in this mobile journey, there

is potential for digital connectivity to detrimentally impact sales – as we will explain

momentarily.

Where are the opportunities to infl uence mobile users in-store?

Payments

Promotions

Upselling

Price matching

Social media

Product reviews

Loyalty points

Repeat ordering

Click-and-collect

Personalised communications

5

Mobile retail: the push eff ect

Consumers’ widespread use of smartphones may present opportunities

for positive engagement, but, if unmanaged, they can also push potential

customers in diff erent directions.

Our research revealed that two of the most common reasons for referring to a

mobile in store are price comparison related. With more than half of shoppers

checking prices for a better deal online, and a further 35% looking for cheaper prices

at another nearby store, smartphone usage can negatively impact sales conversions.

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Battle of the bandwidths: Why customers are won and lost on the strength of retail networks

Taming the mobile beast

By embracing digital connectivity, retailers can bring an authority to the

online journey that shoppers are experiencing in-store, to neutralise these

detrimental behaviours.

In order to achieve this, retailers need to invest in technology that supports

a positive customer experience, to infl uence sales in a profi table manner. For example, Vodat International discovered that:

58% of consumers would

shop in a store more

often if it off ered free customer WiFi

39% would increase their

store visits if there

were more self-

service checkouts

31% would like

contactless and

mobile payments to

be readily available

23% would increase their

loyalty if there was

a digital information

kiosk in-store

19% would like store

associates to be

equipped with tablet

technology

The store layout can be even further optimised if retailers can map technology

requirements to the needs of their target audience. For instance, our insights show that men are more likely to check prices and look up product information, whereas

women are more concerned with sourcing discount codes and redeeming click-and-

collect purchases.

7

Falling at the fi rst digital hurdle

Some retailers will be reading this report thinking that’s great, I’ve already

invested in some of these store technologies, but the ‘bells and whistles’ being

used to create digital connections in-store are only part of the story.

Ultimately, the customer experience is only as good as the technology itself - the

ease with which it connects, the speed at which it works – and a vast part of this

success is the store network.

Many retailers are falling into the trap of investing in software and hardware to

bridge the online/offl ine divide, but failing to support this new technology with a robust network, capable of managing the increasing number of customer and staff devices logging on.

The strain of more technology being added to the bricks-and-mortar environment

is already beginning to show. Our research has found that slow running networks

are impacting the service shoppers are receiving within the store.

4 in 10 shoppers have been frustrated by slow public WiFi in-store, while a third have experienced issues with slow card machines and self-service checkouts. In

fact, less than a quarter (22% of men and 24%) have not encountered problems

with slow running store technology in the past 12 months.

78% of men

76% of women

have encountered

slow running store

technology in the

past 12 months due

to an overloaded

network

Battle of the bandwidths: Why customers are won and lost on the strength of retail networks

9

The true cost of digital disappointment

Slow running networks don’t just keep customers waiting; they can have a

signifi cant impact on overall satisfaction levels.

95% of the shoppers we surveyed that have experienced network issues were forced

to wait up to 30 minutes for the problem to be resolved, with a third of these waiting

more than 10 minutes.

This not only leaves them in a bad mood following that encounter, it can have a lasting

impact on customer/retailer relationships. 25% of our consumer panel lost loyalty with

that retailer in some way following a network incident.

For many, the impact was immediate: 1 in 5 were put off shopping at that store for some time, or stopped shopping at that particular store, but still visit a diff erent outlet within the same retail chain. Meanwhile, a staunch 5% felt so let down that they

stopped shopping with that retailer altogether.

Even those that persevered put the retailer on ‘last chance’ terms – 3 in 10 of the

shoppers we polled gave the store the benefi t of the doubt, but would stop shopping with that retailer altogether if they experienced slow running technology problems for

a second time.

Two strikes and you’re out

30%

of shoppers will give a

retailer the benefi t of the doubt after experiencing

slow running technology

issues in-store, but won’t

return if it happens a

second time

Battle of the bandwidths: Why customers are won and lost on the strength of retail networks

How to choose a future-proof

network

As our insights show, the cost of a sub-par store network is signifi cant. It can cost on the spot sales and damage valuable long-term relationships – and that’s

not taking into account the secondary impact of shoppers ‘bad mouthing’

retailers to family and friends.

In order to prevent customer disappointment and potential disloyalty, the foundation

of a retailer’s digital strategy in the bricks-and-mortar environment must be a

business strength network.

For many organisations, the most resource-eff ective solution is to partner with a managed data network provider, which can shoulder the responsibility for the

network’s performance without the need to invest in an in-house IT department.

However, it’s important to work with a partner that understands the bespoke needs of

your business, rather than a deploying a ‘one size fi ts all’ approach.

Additionally, proactive network management is a must. This report has underlined

the cost of poor performance, and technical downtime is only going to be more

costly. A leading managed data network provider should be able to identify potential

issues before they escalate, and liaise with technical suppliers to address the problem

without it costing retailers vital trading hours.

11

7 questions all retailers should ask themselves when selecting a network provider

1. Can the solution eff ectively connect all our stores and other sites?

2. Is there suitable bandwidth capacity to

ensure speed and performance?

3. Can the network scale and fl ex as our business estate grows?

4. Are there surveillance tools in place?

5. Does it provide secure connectivity?

6. How resilient is the network and what

failover systems are in place?

7. What level of support is on off er in the event of a technical problem?

If a robust business network is step one when

building digitally-driven customer experiences

in-store, a reliable public WiFi off ering is step two.

The opportunity to impress shoppers with a stable, secure WiFi connection is huge. Vodat International’s research found that three quarters (77%) of smartphone

users will log onto free store WiFi if it is available, with a third (32%) using it every

time they visit that store.

However, the current state of store internet services leaves much to be desired: 3 in

10 shoppers don’t fi nd free WiFi services reliable, while a further 1 in 10 prefer to

use their own 3G or 4G capabilities because they get better performance.

Off ering enterprise-class WiFi opens up new opportunities to interact with, infl uence and capture insight on consumers – provided retailers invest in a solution that’s fi t for purpose.

Security is paramount for customer peace of mind. Retail stores

need to off er either a separate guest WiFi, which can be an expensive option unless it’s an open public WiFi service, or a solution that can separate public and business traffi c.

Bandwidth control is also a key concern. Many retailers still struggle

to get good bandwidth from ADSL connections, and customer

WiFi can take up a lot of this bandwidth, resulting in critical store applications running slowly. A business-class managed solution

enables retailers to restrict the amount of bandwidth customers can

access when demand is high, ensuring essential technology operates

at peak performance, regardless of how busy the store becomes.

One fi nal consideration is access restriction. An enterprise WiFi solution can allow retailers to block users from visiting certain

pages, such as a competitor’s site. Outsourcing WiFi to a third party makes this process easier to set up, and can also shoulder further

legislative burden; organisations off ering customer connectivity must keep a record of the sites they have visited, which can become

onerous on an IT team if managed in-house.

Battle of the bandwidths: Why customers are won and lost on the strength of retail networks

Winning with reliable

customer WiFi

77%

The problem with

going public

Some retailers opt for a public WiFi solution, which can be seen as a cost-

eff ective alternative to separate guest WiFi services. Although this outsources

performance and security responsibilities

to a third party, it means retailers cannot

collect customer data – therefore losing

valuable marketing insights.

13

Battle of the bandwidths: Why customers are won and lost on the strength of retail networks

Adding digital ‘bells and whistles’

With the right network from which to run technology, and a reliable WiFi service

in place for both customers and staff to use, retailers can then begin to investing in the tools for digitally-enhancing the store experience.

The exact shape of this investment will depend on what a retailer’s customer base

wants from their retail experience, as we outlined earlier in this report. But whatever

technology retailers select, having a robust managed network in place will empower

them to add more devices to the store, and for more customers to connect their

smartphones to WiFi services, without compromising performance.

This way, retailers can ensure they are off ering store shoppers a ‘best of both worlds’ experience, connecting online and offl ine retail long before the 2020 deadline of the Digital High Street initiative, and utilising technology to diff erentiate themselves from the competition.

in place for both customers and staff to use, retailers can then begin to investing in place for both customers and staff to use, retailers can then begin to investing

15

Future-proof network support from

Vodat International

As the fastest growing supplier of telecom solutions and private, managed

networks to the UK retail market, Vodat understands that what goes on

behind the scenes is just as important in enhancing satisfaction levels as your

customer-facing interactions.

Managed data network

Tailored to the needs of retailers with complex, multiple site estates, our business

strength private networks are managed directly and securely through intelligent

remote management software.

Our own MPLS core interconnects with major UK carriers, enabling us to select and

deliver broadband connections by the Britain’s major carriers. As we’re not tied to one

Telco, we can mix and match, to bring you the best bandwidth and reliability within

your budget.

Wireless network

Simplistic, high performance WiFi technology, from world-renowned supplier Cisco. Our Meraki wireless network solution builds enterprise systems through the cloud at

much lower costs than over fi rst generation networks. Our solution is ideally designed for the hospitality and leisure industry.

Call us on 0161 406 1820 or visit www.vodat-int.com for a better network solution.

Call us on 0161 406 1820 or visit www.vodat-int.com