Point of View Paper

What’s stopping you?Overcoming the barriers to implementing In-Store Mobile

Point of View Paper | What’s stopping you?

Table of contents

3 Introduction: the new retail reality

3 The 7 most common barriers to adopting In-Store Mobile technology

4 HowshouldwestarttouseIn-StoreMobile?Definingtheusecase

4 How will it change the way we work? Assessing the cultural impact

5 How will it work with our existing systems? Getting the infrastructure right

6 Does In-Store Mobile increase risk? Allaying security concerns

6 Can we serve our customers better with In-Store Mobile? Impacting sales and the Customer Experience

7 Isn’t it better to wait and see? Seizing the competitive advantage

7 Will the business buy in? Selling the solution internally

8 Executive summary

Point of View Paper | What’s stopping you?

Introduction: the new retail realityFor most retailers, recent years have seen a focus on online and social channels. But despite the unprecedented speed and nature of the changes the retail sector has seen, the fundamentals of shopping remain the same and the physical store continues to be a key arena for sales.

The “new consumer” – mobile, empowered, with insight and information at his or her fingertips–expectsamoreengagedandpersonalisedexperience,reflectingthenewdigital,mobile reality in which we live, work and shop. For today’s consumers, the path to purchase is enhanced by the physical store rather than limited to it.

Consumers are invariably coming in to store with smartphones and mobile devices that represent a consumer-grade level of technology which is superior to legacy in-store POS applications in providing insight and understanding (around products, pricing, and availability). The challenge is for mobile technology to provide the personalised, information-rich experience that consumers desire in the store - bridging the gap between the store experience and the personalised, content-rich experience they get online.

Overall, the case for In-Store Mobile technology has become inarguably compelling. And yet many retailers still resist taking the plunge, for reasons that range from deciding precisely how to use it, to perceived complexity of implementation, security, and staff reactions.

The question is: what’s really stopping you?

HPandMicrosoftareleadingtheefforttodefinewhat,inreal-world,practicaltermsiskeeping retailers from moving forward. This paper highlights what HP research suggests are the seven most frequently asked questions – the common “blockers” in the eyes of retailers –aroundimplementingIn-StoreMobileanditoffersguidanceonhowtoaddressthem.Theresearch was conducted across the US and Europe and focused on retailer and shopper perceptions around the use of technology in retail.

The 7 most common barriers to adopting In-Store Mobile technology• Howshouldwestarttouseit?–Definingtheusecase

• How will it change the way we work? – Assessing the cultural impact

• How will it work with our existing systems? – Getting the infrastructure right

• Does In-Store Mobile increase risk? – Allaying security concerns

• How can we serve our customers better? – Impacting sales and the Customer Experience

• Isn’t it better to wait and see? – Seizing the competitive advantage

• Will the business buy in? – Selling the solution internally

Point of View Paper | What’s stopping you?

How should we start to use In-Store Mobile?Defining the use caseOne of the most commonly encountered barriers among retailers is assessing how great an impact the adoption of in-store technology can have on their business and across their customer base. A well-defined use case ensures that In-Store Mobile will serve a retailer’s goalseffectivelyandisimplementedinpursuanceofaclearlydefinedbusinesspurpose,operational goals and process improvements. It should also explore the value that can be added from the customer perspective.

Use cases aren’t “one size fits all” – they are broad and various and depend on considerations like the store format, brand promise and customer base – but some common use case examples include:

• Checking stock: if used for checking stock availability and reducing inventory stock-outs then systems have to be put in place that integrate inventory and enable the sharing of the updated information.

• Assisted selling: ifusedforhelpingstoreassociatesexplainproductfeaturesandbenefitsthentheaccessibleinformationhastobedesignedforintuitiveusebystaffandclarityofdisplay to customers.

• Queue busting: in supermarkets handheld scanning devices are being used to drive queue-busting and improve the customer experience.

• Manager’s dashboard: giving managers real-time visibility into their data and greater insight around performance indicators.

To date, the most successful In-Store Mobile rollouts are the ones that have the functionality andprocesseswelldefinedbeforedevelopment:isolatingthemobiledeviceandplatformtoperformspecifictasksreliably,ratherthanawiderangeoftaskssub-optimally.Additionalfunctionality can come onstream soon after the initial technology has proven its value and there has been clear evidence that it can achieve the goals it was designed to achieve.

How will it change the way we work?Assessing the cultural impactThe cultural perspective gives many retailers pause for thought. Retailers are sometimes worriedthatthe‘intrusion’oftechnologyintothestorewillchangeitscharacter,orthatstaffmight fear the new skills they have to acquire. In today’s hyper-connected world mobility is second nature.Moststorestaffarealreadyavidusersofmobiledevices.Asmuchasmobility can add excitement and enrich experiences for shoppers, it does the same for store staff.Italsoaddsmorequalitycustomerinteractionandautonomytotheirroles.Manyretailerswiselyseektoincludestaffasfaraspossibleininitialdecisionsarounddevices,which helps aid adoption and satisfaction.

Training is of paramount importance in ensuring that store associates understand “the big picture” around what a mobility rollout is trying to achieve. An important consideration at the training stage is to sow the seeds for peer recommendation and adoption by involving employees in the training of other employees. This approach not only serves to demystify the technology and allay any fears that might exist but also creates a forum where discussion and discovery assumes greater relevance, and information seems more accessible–socialinteractionbeingaveryeffectiveeducationcatalyst.

Training in other areas can also be enhanced and made more productive through mobile devices. At non-peak times, for example, store associates can use their tablets to view productdemonstrationvideoswithouthavingtoleavetheshopfloor.Notimeislostindedicated training sessions, and costs are reduced since associates remain ‘fully functional’ ready to interact with the next customer who comes along.

The introduction of devices will entail change and the insertion of new processes into the working day – for example as well as learning how to use the devices to conclude transactionsstaffneedtoconsiderhowtheystore,secureandchargetheunits.Ontopofthis are practical considerations around how the newly introduced physical mobility changes commonin-storeactions–retailersneedtothinkabouthowtheirstaffnowtakecash,getreceipts, de-activate security tags, remove hangers and bag merchandise.

Use cases aren’t “one size fits all” – they are broad and various and depend on considerations like the store format, brand promise and customer base

Point of View Paper | What’s stopping you?

How will it work with our existing systems?Getting the infrastructure rightFundamentally,wirelessdevicesontheshopfloorandbackoffice–fromtabletstosmartphones to handheld barcode scanners – can only work well if a store has the communicationsinfrastructurethatcandeliversignalstothem:awirelessLAN(localareanetwork).Settingoneupisoftenperceivedasproblematic–toomucheffort,costand risk. Retailers fear chaos through the store as devices fail and frustration builds. This is not, however, the pioneering era of wireless technology. It has matured. A robust wireless infrastructure is at the very heart of driving an empowered workforce, and retail environments without such capabilities will soon be the exception rather than the norm.

The days of wireless drop out and “notspots” in-store (through variations in signal relay) are a thing of the past in developed markets. Today, a seamless and continuous experience is delivered through multiple access points which are strategically positioned according to store shape, size, and potential obstacles to reception. Seamless now means seamless – technologically and experientially.

Some environments have greater practical challenges than others – DIY centres have a verylargefloorspacetocoverwhichincludesbothinteriorandexteriorareas.Retailareaswithin hospitals may need to ensure that their signal does not go beyond very tight spatial boundariestoavoidriskofconflictwithhospitalequipment.Nothingisinsurmountable:forward-thinking retailers have found solutions that have been put in place easily, to move away from the counter to their customers – mobile solutions that bring incremental revenues because they stimulate greater customer interaction.

Another consideration around wireless infrastructures is that as part of making omnichannel a reality for customers, stores have a duty to provide customer Wi-Fi. The argument here is that this is the only way to guarantee that the customer who (for example) has started their transaction at home on their own mobile device will be able to continue and complete it (if desired) in-store.

Point of View Paper | What’s stopping you?

Does In-Store Mobile increase risk?Allaying security concernsSecurityisjustifiablyamajorconcernforretailers,andforallthosewitharesponsibilityforfinancial,workforceorcustomerdata.Thisisn’toverkill–goodretailconsultantswillactivelyencourageretailerstoenvisagesecurity‘doomsdayscenarios’preciselyinordertodefinehow they can be prevented.

Manyindustry-gradedevicesarenowavailablewhichhavebeendesignedwithsecurityfirstandforemost.Concernsoverspecificallywirelesssecuritybreachesisaddressedbywirelessnetworks using the same level of data encryption that is used for wired retail solutions. Retailers are happy to take responsibility for their own data but can sometimes be over-sensitive when it comes to customers’ data. The act of capturing personal data via a mobile deviceonthestorefloor-concludingasaleforhomedelivery,forexample,orsigningacustomer up to an online account - is seen as risking exposure of the data.

The surest way of dealing with the threat of data breach or theft is to ensure that malicious partiescannotaccessit.InawirelessLANinfrastructureenvironmentnodataneedresideon the physical device. All data, whether at rest or in transit, can be encrypted and tokenized so that it has no exploitable or even comprehensible value to outsiders. The data captured when customers sign up in store to receive newsletters or take part in loyalty schemes can be safely housed in the cloud rather than kept in store or on the mobile devices.

With regards to the possible theft of physical devices, it is possible for these to be docked and locked when not in use – they don’t need to be exposed to potential harm. Devices can alsobe‘geo-fenced’tomakethemcapableofonlyworkingwithinthestore’sdefinedarea,whetherLANorGPSdefined.Ifthedevicesmoveoraretakenbeyondthegeofence,theycanbe tracked, wiped, and locked remotely.

Can we serve our customers better with In-Store Mobile?Impacting sales and the Customer ExperienceFew would deny that mobility and other associated in-store technologies are driving processautomationandmoreeffectiveintegrationbetweenshopfloorandbackofficeaswell as store and supply chain. Mobility is less the subject under discussion than customer satisfaction and competitive advantage. Customers have always expected to be treated as if their unique needs and desires count. In-Store Mobile is enabling retailers to better meetconsumer’sexpectations.Mobiletechnologyallowsthemtobemoreagile,offersconvenience to the consumers. It empowers the associate so they can better assist customers with product information, pricing and availability.

In-Store Mobile changes little if technology initiatives are perceived simply as a way of the storereducingitscosts(removingcheck-outstaff,forexample).Benefitstocustomershaveto be obvious. This is where mobile touchscreen technology comes into its own – proving value as an enabler not just for the business but also for the customer experience. Enabling a customertoplaceanorderforanoutofstockitemdirectlyfromthesalesfloorwithamobileenabledassociate-whoisalsoabletousethedevicetoupselloroffercomplementaryproducts-putstheenergyandthefeelingofdiscoveryandexcitementontotheshopfloor.

Customersareloyaltotheretailbrandsthatofferthemthechoice,convenienceandconsistentservicethattheywant.Theylikechattingwithstorestaffwhocananswerquestions immediately with the help of a mobile device. When they don’t get the level of service they have come to expect in the retail world they simply shop somewhere else. When they do get it they are more likely to buy and more likely to remain loyal.

Point of View Paper | What’s stopping you?

Isn’t it better to wait and see?Seizing the competitive advantageRetailers who adopt an approach of waiting to see how it all turns out – how the technology develops, how the prices come down, how others handle it – will lose time and lose the initiative. That could add up to losing customers and market share. In-Store Mobile, and the many associated technologies that support and extend what it can do, is at the disruptive stage. As with all technologies it will continue to evolve with an extremely wide range of entry points for mobility solutions.

Most importantly it should be viewed that there are easier ways into In-Store Mobile than full-on, risk-intensive adoption. Test now and test often with frequent checkpoints to monitor implementation success would be the best strategy. Test now would be the most importantstrategicpriorityinordertoexploitthelatestandmosteffectivetechnologies.There’s nothing to stop retailers meeting customers on their own terms while demonstrating relevance, understanding, and forward thinking.

When retailers take too long to identify their goals and evaluate the technology they want to use to achieve them, the technology they have under consideration could well be nearing the end of its life and the process would have to recommence. It’s far more realistic and pragmatic to accelerate the decision making process and simply get going, even if only in a test exercise. Individual store pilots or regional tests can reveal teething problems that can be addressed for fuller rollout.

Will the business buy in?Selling the solution internallyAs much as a retailer will encounter traditionalist consumers whose reluctance and trepidation needs to be addressed in any plans to move forward – change is rarely easy – such emotions can also be found in the C-suite. Gaining buy-in at a senior level is critical. Champions of in-store solutions should set out to win hearts and minds and not just signatures on the expenditure request. Any risk-averse organisation will want to make sure that the solutions being explored can drive a reasonable ROI, cut operating costs, drive more sales, will deliver a competitive edge, and will not alienate the customer base.

HPunderstandsthatretailersneedthemostefficienttechnologyandprocessessotheycan:

• Anticipate and react to customer demands with an agile environment

• Drivecostcontainmentandoperationalefficiencies

• Harness information to respond quickly to customer trends

• Createadifferentiatedcustomerexperience

Ourconsultancyservicescanhelpdefinethescopeofproposedin-storesolutions,buildtheessential business plan, and identify appropriate ROI metrics and how to measure them.

This is an HP Indigo digital print.

© Copyright 2015 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

Point of View Paper | What’s stopping you?

Executive summaryIn-Store Mobile: taking the plungeHP’s ‘check-list’ aims to help to get you where you need to be in the competitive world of retail faster, connect with your customers easier, and grow your business smarter.

• In-Store Mobile use case: In-Store Mobile is not a gimmick, it’s a transformation. When specificusecasesareidentifiedmobiletechnologycanbedeployedwithimmediatevalue.

• Storeculture:In-StoreMobileisnotanalienintrusionforstaff,mostofwhomareavidmobile users in their personal lives. Mobility enriches experiences for associates adding more quality customer interaction and autonomy to their roles. Training is important to ensure that store associates understand what a mobility rollout is trying to achieve.

• Infrastructure: In-Store Mobile is not in beta stage, it has matured. The same localised network arrangements that enable Wi-Fi will support In-Store Mobile devices. You might already be halfway there.

• Security:In-StoreMobileisnothighrisk.Neithercorporatenorcustomerdataisanymoreatriskthanwired/fixedpositioncounterparts.Thestringentsafeguardsagainstdatabreach in ‘wired’ tech now apply to wireless.

• Customerandstaffexperience:it’saboutenablingassociatestoprovidebetter,deeper,meaningful, enjoyable, faster customer service and more rewarding shopping visits.

• Timing: mobile technology is not a trend. It’s the new retail reality. Connected consumers wanttheworldandtheywantitnow.Startdelivering,orslipofftheirradars.

• Internal alignment: selling the solution internally means identifying and clearly communicatingthemanyexpectedbenefits.

While some retailers are embracing mobile technology as both a pragmatic solution to improving store operations and a long term driver of competitive advantage by creating more personalised shopping experiences, others are still waiting. They believe the next iteration of technology will bring more capabilities. There’s a potentially high opportunity cost implication to such an approach. There is no time like the present.

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