A recent survey by Retail Systems Alert Group (RSAG) found that retailers overwhelmingly believe in-store technologies are instrumental in improving customer satisfaction rates. But issues around costs, reliability and value are slowing down investments in these technologies.
According to the survey of 65 retailers, sponsored by Microsoft, 90 percent of "retail winners" (those with outperforming comps) believe the primary opportunity to improve customer satisfaction was empowering employees through technology. The second greatest opportunity (picked by 85 percent of the winners) is enabling customers to take care of themselves in the store with self-service technologies.
These in-store technologies even trumped the classic formula for retail success, "Bring the right product to the right location at the right time, for a reasonable price" - rated at 80 percent.
"In the minds of these retail winners, product mix and personalized attention from employees is still important, but they believe primary opportunities lie in using technology to facilitate the in-store shopping experience," wrote Paula Rosenblum, RSAG's VP of research and content development, in the report entitled: Technology-enabled Customer Centricity in the Store Benchmark Report.
However, while the survey found retailers moving toward adding "technology-enabled touchpoints" to stores, cost, complexity and overstated value often inhibits adoption. Among the biggest barriers to in-store investments, according to the survey, were the durability and costs of the technology, the need to simplify technologies due to high employee turnover, and difficulties quantifying ROI.
"Retailers are torn," said Ms. Rosenblum. "They know and have identified clear opportunities associated with bringing technology into the store, but the enemy is within. They fear these investments even as they know they need them."
Typically, in-store systems projects are planned and budgeted each year but drop to the bottom of priority lists and get moved to the following year. Or projects get to the pilot program only to languish in pilot mode for years.
"If one asks the retailer or selected vendor(s) if the project met required hurdles, the answer is 'yes'...but still the roll-out is deferred, delayed or otherwise ignored,' said Ms. Rosenblum.
RSAG believes reducing costs and distractions will help move in-store projects forward. Of the survey respondents, 73 percent said merchandising vendor funding for in-store projects would provide "some value" or was "very valuable" in jumpstarting in-store projects. More than 70 percent agreed end-to-end managed services - from rollout, through hardware, network and software maintenance - would be helpful in achieving implementation. Asking technology vendors to provide success stories and references also rated above 70 percent. In a surprise, ranked on the comparatively low-end of responses were pilot projects (60 percent) and internal project champions (57 percent).
Said Ms. Rosenblum, "RSAG believes retailers have understood that champions may fail, and pilots may languish, but practical solutions that eliminate both cost and distraction are more likely to succeed."
Discussion Questions: What do you think stands out in RSAG's findings regarding the adoption of in-store technologies? What do you think it will take to jumpstart the pace of investment in in-store technologies?