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Future Stores: Why POS Matters In An Omni-Channel Strategy
Lolita A. Alford | Jan 15, 2014
Title: Editor
Topic category: What's In Store
Fashion Currency
SAP

Have you seen the movie “Minority Report?”

In one scene, Tom Cruise runs through a futuristic shopping mall. He is surrounded by digital screens displaying ads. A discreetly mounted eye scanner automatically identifies him, the ad display greets him personally, and he’s shown customized ads – such as one for a pint of Guinness, and another for a vacation, as he looks like he could use a break. The futuristic Gap store recognizes him right away and asks if he still likes the tank top he bought the last time he was in.

Is this all just a dream of the future? It may well be. However, the technologies that can turn a concept like this into reality are already here.

The importance of a personal touch

It is now entirely feasible to track the route a customer takes in a supermarket via cell phone positioning data, and to send personalized offers to the cell phone according to its location in the store. If, for example, a customer were in the bread aisle, they might receive an automatically generated coupon for a 10 percent discount on the purchase of a jam or jelly.

Despite the technical opportunities, we’re still a few years away from introducing these kinds of future-oriented store concepts across the board. This is somewhat surprising, given that personal offers and customer behavior tracking are a commonplace practice online.

When I log on to a well-designed online store, I get a personal greeting message, personal product recommendations, rich product information, videos, cross-selling offers, delivery times, stock information, a ten-percent coupon for my next order, etc. In short, I’m treated like a king.

In contrast, if I walk into the same retailer’s physical POS the next day, it appears as if no one is interested in me.

I have to find my own way to the jeans I’m looking for and rummage through the racks only to find out that the pair I want are sold out in my size. After spending far too long searching for a sales assistant to ask if the jeans are still available in my size, he disappears to the storeroom for five minutes only to return and fob me off with the news that, “Sorry, we’re all out.”

When I ask if the jeans are still in stock at another branch, the assistant reacts with a shrug of the shoulders and says I could check the store in the city center. If I’m ‘lucky,’ the sales assistant might stuff a coupon for the new swimsuit collection in my hand as I leave the store in a quiet rage. On the way home, I whip out my cell phone and after a few clicks, I’ve ordered the jeans I want from another store.

The difference between the online shopping experience and the reality of the POS is simply staggering. Now more than ever, retailers need to think about how to integrate their physical network of stores with their online environment in order to offer customers a shopping experience at the Point of Sale that is just as rich, engaging, and personalized as the one they can get in the online store. Otherwise, the retailer runs the risk of losing its customers to competitors: Competing offers are always lurking, and they’re usually only a few clicks away due to the widespread popularity of smartphones. Here, the dreaded showrooming phenomenonrears its ugly head.

How commerce systems help optimize the POS

The significance of the POS remains unchanged, even in the age of e-commerce. According to a recent study, 76 percent of purchasing decisions are still made at the POS (2012 Point of Purchase Advertising International’s Shopper Engagement Study). However, today’s customers expect a lot from store employees.

According to a Forrester study, 65 percent of respondents expected sales assistants to be able to provide information on the prices of various products. 55 percent want instant information on in-store stock if a product is not available on the shelf, and 48 percent want to know whether an out-of-stock product is available in a store nearby or online. And finally, at least 37 percent would like additional product information, pictures, and customer reviews on demand (Forrester’s North American Technographics Retail Online Survey, Q2 2012).

These may sound like simple requirements, but this is where traditional POS solutions reach their limits.

Here, too, there already are tools and software solutions that make it possible to introduce a single stock display across all sales channels, integrate product information and stock levels with the online catalog, offer flexible fulfillment options such as ‘Buy Online, Pickup in Store,’ and provide a rich, personalized shopping experience at the POS.

To do all of this, it is necessary to break down the existing data silos and introduce a single, comprehensive product data management system for all sales channels. An additional omni-channel order management solution makes it possible to implement a standardized stock display, which is a prerequisite for any ‘Buy Online, Pickup in Store’ and ‘Buy Online, Return in Store’ options. It is also possible to optimize delivery times and stock levels as stores can directly send products ordered online to customers in the vicinity.

Creating a superior shopping experience

One idea is to use digital screens to display seasonal product videos or short advertising spots, for example, to deliver a superior customer experience. The Burberry flagship store in London is a perfect example of the digitalization of a POS.

What’s more, sales assistants could be equipped with tablets with integrated user interfaces to display rich product information, customer reviews, similar products, and stock levels. Here, too, there already are ready-made software solutions to do just that.

When a customer enters the store, a sales assistant can ask for their name or customer number. When this information is entered via the user interface, the sales assistant can see that the customer has already made online purchases totaling over $200 in the past month. Based on this amount, the sales assistant receives a notification stating that the customer is in line to get a ten percent discount on any purchase made today.

When the customer asks about a red sweater in medium size, the sales assistant can immediately lead them to the right rack in store and provide additional product information (such as washing instructions) and positive customer reviews. The tablet also shows the sales assistant a pair of jeans as a potential cross sell opportunity, which is then passed on to the customer.

When the customer asks for a specific size, the sales assistant sees that the jeans are no longer available at the POS. He opens a product availability list on the tablet and sees that the jeans are still available at a nearby POS. He asks the customer if he should put the jeans on hold or if they would like them delivered from the online warehouse directly to their home.

Note how different this is to the previous scenario. Here, the customer has a superior shopping experience and can leave the store fully satisfied. The POS has to strive to blur the lines between the online and offline experience. Modern customers don’t think in channels. They are only interested in the retailer that can offer the best shopping experience and the best services right then and there.

Retailers need to adjust to current developments, develop an integrated omni-channel strategy and integrate the necessary solutions to interlink sales channels, achieve a uniform brand appearance, and offer customers genuine added value over competitors. More and more, modern stores like this are set to become digital worlds of experience, enriching the brand appearance and offering the best possible personalized customer service through employees networked online.

With concepts like this, a store as shown in Minority Report might become a reality in the not-too-distant future.

SOURCE:
Christian Rohr |Dec 6, 2013
FROM: SAP
Tags: Minority Report, Digitalization, POS
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