Inside the Store of the Now
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This document discusses the changing retail landscape and the need for physical retailers to adapt to the mobile-first age. It notes that brick-and-mortar retail is under pressure from trends like showrooming and the growth of e-commerce giants like Amazon. However, digital technologies can help physical retailers compete by creating engaging in-store experiences optimized for mobile. The document advocates an approach focused on shopper data and personalization to attract and engage customers throughout their shopping journey.
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Inside the Store of the Now
- 1. Retail’sBIGShow2017|#nrf17 1 Retail’sBIGShow2017|#nrf17 Inside the Store of the Now CHRIS RIEGEL, CEO, Stratacache
- 2. Retail’sBIGShow2017|#nrf17 2 Retail’sBIGShow2017|#nrf17 Inside the Store of the NOW Physical Retail in the Mobile-First Age
- 3. Retail’sBIGShow2017|#nrf17 3 Retail’sBIGShow2017|#nrf17 STRATACACHE ● Leader in digital communication solutions in RETAIL (signage, interactive, mobile) ● over 2.1 million software activations ● in over 300,000 venues globally ● reaching over 500 million consumers every day All names and logos are the property of their respective owners
- 4. Retail’sBIGShow2017|#nrf17 4 Retail’sBIGShow2017|#nrf17 Rapid Growth & Consolidation
- 5. Retail’sBIGShow2017|#nrf17 5 Retail’sBIGShow2017|#nrf17 Our Retail Practice – PRN PRN is a shopper activation agency fully dedicated to brick and mortar retail We design, deploy, and manage digital experiences to serve shoppers, affect behavior, and position retailers and brands for success.
- 8. Retail’sBIGShow2017|#nrf17 8 Retail’sBIGShow2017|#nrf17 The Future is Unpredictable – Humans in 100,000 Years Dr. Alan Kwan Computational Genomics Washington University
- 9. Retail’sBIGShow2017|#nrf17 9 Retail’sBIGShow2017|#nrf17 A ‘Pull’ Universe – with the Consumer at Center HOW IT WAS HOW IT IS
- 10. Retail’sBIGShow2017|#nrf17 10 Retail’sBIGShow2017|#nrf17 Brick and Mortar Retail Business Model is Under Pressure ● Showrooming ● Amazon velocity and E-commerce growth ● Rising costs, particularly labor ● Brick and mortar growth lagging ● Big box stores need reinvention E-commerce accounts for 10% of total US retail sales
- 11. Retail’sBIGShow2017|#nrf17 11 Retail’sBIGShow2017|#nrf17 Sales in 1990 $25.81B $20.26B $3.81B n/a Sales in 2016 $482.13B $109.83B $88.52B Q1-3: $92.24B Q4 estimate: $44.58B Total (with Q4 estimate): $136.82B Brick and Mortar Growth
- 12. Retail’sBIGShow2017|#nrf17 12 Retail’sBIGShow2017|#nrf17 The Amazon Problem – Acceleration, Innovation, and Data All names and logos are the property of their respective owners 50% of all U.S. households will subscribe to Prime by 2020, up from 25% 24% of total U.S. retail sales growth in 2015
- 13. Retail’sBIGShow2017|#nrf17 13 Retail’sBIGShow2017|#nrf17 Shoppers Time is Now Most Valuable Currency All names and logos are the property of their respective owners For 71% of online shoppers, valuing their time is the most important thing a company can do to provide good service. – Forrester Research
- 14. Retail’sBIGShow2017|#nrf17 14 Retail’sBIGShow2017|#nrf17 Amazon Knows – It Needs to be Easy All names and logos are the property of their respective owners Checkout was a 20th century problem. Checking in is the new Checkout.
- 15. Retail’sBIGShow2017|#nrf17 15 Retail’sBIGShow2017|#nrf17 Amazon on a Tear All names and logos are the property of their respective owners
- 16. Retail’sBIGShow2017|#nrf17 16 Retail’sBIGShow2017|#nrf17 Mobile-First Age – Disrupting Physical Retail 200times a day that people pick up their mobile devices 30% of all e-commerce is mobile 3.25average number of hours 16-24 year olds spend on mobile 90%shoppers use mobile in store 300% growth rate of mobile commerce compared to traditional e-commerce
- 17. Retail’sBIGShow2017|#nrf17 17 Retail’sBIGShow2017|#nrf17 Digital-First Retailers Leverage Data & Get Physical All names and logos are the property of their respective owners
- 18. Retail’sBIGShow2017|#nrf17 18 Retail’sBIGShow2017|#nrf17 There’s No Magic Bullet
- 19. Retail’sBIGShow2017|#nrf17 19 Retail’sBIGShow2017|#nrf17 What is the Store of the Future?
- 22. Retail’sBIGShow2017|#nrf17 22 Retail’sBIGShow2017|#nrf17 Chasing an Illusion ● Too much like a museum ● Not enough meaningful data generated ● Doesn’t address strategy of scale ● Creates danger of box checking ● Lacks rigor and discipline associated with meaningful POC initiatives ● The Future is NOW
- 23. Retail’sBIGShow2017|#nrf17 23 Retail’sBIGShow2017|#nrf17 The Future is NOW – The Digital Venue is Here ● We’ve reached a tipping point of scaled deployments ● The technology is stable, cost effective, and highly evolved ● Retail is seeing ROI (and ROO) 2million+ software activations 300k+ venues 500million+ daily consumers
- 24. Retail’sBIGShow2017|#nrf17 24 Retail’sBIGShow2017|#nrf17 Physical Stores – Cost Effective Automation All names and logos are the property of their respective owners.
- 25. Retail’sBIGShow2017|#nrf17 25 Retail’sBIGShow2017|#nrf17 Leveraging Mobile via Apps – Mixed Bag All names and logos are the property of their respective owners 85% of smartphone time spent using apps
- 26. Retail’sBIGShow2017|#nrf17 26 Retail’sBIGShow2017|#nrf17 Reality – Most People Stuck in 5 App Universe All names and logos are the property of their respective owners 84% of that app time is spent using just five non-native apps
- 27. Retail’sBIGShow2017|#nrf17 27 Retail’sBIGShow2017|#nrf17 Avoiding the App Problem Altogether – Chatbots All names and logos are the property of their respective owners
- 28. Retail’sBIGShow2017|#nrf17 28 Retail’sBIGShow2017|#nrf17 AI to Support Personalization All names and logos are the property of their respective owners
- 29. Retail’sBIGShow2017|#nrf17 29 Retail’sBIGShow2017|#nrf17 AI Personalization – True Fit® Genome™ All names and logos are the property of their respective owners
- 30. Retail’sBIGShow2017|#nrf17 30 Retail’sBIGShow2017|#nrf17 Physical Retail’s Response to Mobile First Drive to Retail with Location Driven Content → Micro Moments
- 31. Retail’sBIGShow2017|#nrf17 31 Retail’sBIGShow2017|#nrf17 Drive to Retail by Capitalizing on “Micro Moments” I-Want-to-Know Moments I-Want-to-Go Moments I-Want-to-Do Moments I-Want-to-Buy Moments
- 32. Retail’sBIGShow2017|#nrf17 32 Retail’sBIGShow2017|#nrf17 Physical Retail’s Response to Mobile First Innovate In- Store Digital Experiences → AI, Bots = Personal Assistants Passive & Interactive Experiences
- 33. Retail’sBIGShow2017|#nrf17 33 Retail’sBIGShow2017|#nrf17 Create The Store of the NOW
- 34. Retail’sBIGShow2017|#nrf17 34 Retail’sBIGShow2017|#nrf17 Consumer-centric Methodology – Creating Shopable Moments Goal Attract Engage Differentiate Activate Strategy Emotional & Rational Triggers Personalization Comparison Tools Compelling Rewards
- 35. Retail’sBIGShow2017|#nrf17 35 Retail’sBIGShow2017|#nrf17 STRATACACHE’s Virtual Aisle – Omnichannel Innovation A Variety of Customer Need States and Use Cases 1. Unaware of online-only choices (depth of assortment) 2. Knows more exists online & generally heads to Amazon 3. Intends to buy, needs help choosing/information 4. Didn’t plan on buying, but open to attract messaging
- 36. Retail’sBIGShow2017|#nrf17 36 Retail’sBIGShow2017|#nrf17 STRATACACHE’s Virtual Aisle – Search/Personalization Filters
- 40. Retail’sBIGShow2017|#nrf17 40 Retail’sBIGShow2017|#nrf17 STRATACACHE’s New LIFT Network The LIFT Network is a proven “plus one” upsell platform. Using live transaction data, you can personalize the customer experience, increase sales, and amplify brands at C-Stores nationwide. 42million+ monthly viewers 1.5k+ locations 64million+ monthly impressions 3.5k+ screens
- 41. Retail’sBIGShow2017|#nrf17 41 Retail’sBIGShow2017|#nrf17 Smart Menu Boards Tech Used for Departments
- 42. Retail’sBIGShow2017|#nrf17 42 Retail’sBIGShow2017|#nrf17 Table Stakes – Analytics Optimize the physical space like a website. Customer Facing Portal Trackable Data Swipes, Clicks Offers to Phone Forwards Impressions Demographics Dwell Facial Expression/Sentiment Contact Information Content A/B Testing Carrier Information
- 43. Retail’sBIGShow2017|#nrf17 43 Retail’sBIGShow2017|#nrf17 Table Stakes – Content Management Engine (& Machine Learning) Venue | Channel | Day of Week | Time of Day | Audience | Conditions
- 44. Retail’sBIGShow2017|#nrf17 44 Retail’sBIGShow2017|#nrf17 Table Stakes – State-of-the-Art Hardware All-in-One Tablet ● Forward and Rear Facing Cameras ● PoE (Power over Ethernet) ● 4G Connectivity ● Custom Form Factor ● Rugged, Optimized and Retail Safe OSCTV Large format experiential screens
- 45. Retail’sBIGShow2017|#nrf17 45 Retail’sBIGShow2017|#nrf17 Pragmatism Rules! APPROACH ● End-to-end ● Holistic ● Strategic ● Economies of Scale – Practical FOCUS ● Stakeholders ● Goals & KPIs ● Advanced Flexible Technology ● Experience-centric ● ROI/ROO – Bottom Line
- 46. Retail’sBIGShow2017|#nrf17 46 Retail’sBIGShow2017|#nrf17 What Lies Ahead ● Think Store of the NOW. ● Unite ecommerce and brick and mortar teams. ● Apps can’t do all the heavy lifting. ● Transform mobile trends for in-store experiences– bots, AI, AR, filtering and leverage large inexpensive digital form factors. Make it EASY. ● Low price alone is dead end. Learn from fast-casual service structures vs. fast food approach. ● Experience Architecture is THE Opportunity.
- 47. Retail’sBIGShow2017|#nrf17 47 Retail’sBIGShow2017|#nrf17 The Future is Unpredictable – Humans in 50 Million Years Man After Man: An Anthropology of the Future – Douglas Dixon
Editor's Notes
- Call out the subtitle – So much of what we’re seeing is being driven by the empowerment of mobile first developments. The BIG question is: how do we parse the value of Mobile for PHYSICAL STORES? That’s what we will explore.
- STRATACACHE is a leading provider of software, hardware, and managed services for large scaled digital signage networks. You can see we’ve achieved remarkable scale in deploying digital communication solutions in physical spaces (Smart Menu Boards and McDonalds, Acquisition of Scala). What sets us apart is we’re not simply a tech company.....we offer end-to-end managed services, from network concepition to installation, management, and advanced analytics.
- Talk about the acquisitions, what’s happening in the space, our world conquering - transition to a quick sentence about adding PRN to the company….why....
- Read the mission
- This discussion is as much as anything about how to leverage rapid change. Speaking of change and faces....
- It’s unpredictable. As much as art as a science. Take human evolution….here’s what one scientist says we’re going to look like In 100,000 YEARS: - Click -Maybe Margaret Keane – the artist – was on to something…. So in 100,000 years, we’ll control our features, the human face will be heavily biased to fundamentally appealing features: strong, regal lines, straight noses. And those big eyes. ….Controlling our experience is what the Age of Mobile is all about….
- It’s unpredictable. As much as art as a science. Take human evolution….here’s what one scientist says we’re going to look like In 100,000 YEARS: - Click -Maybe Margaret Keane – the artist – was on to something…. So in 100,000 years, we’ll control our features, the human face will be heavily biased to fundamentally appealing features: strong, regal lines, straight noses. And those big eyes. ….Controlling our experience is what the Age of Mobile is all about….
- When I was a kid, we looked at maps. We saw a big world, and we were small. Today. We’re the center of the world – no need to have a bigger picture.
- And this has been highly disruptive. Depending on the day of the week, and your personal philosophy, you can see the challenges that physical retail is confronting…. And yet, the optimiists like to point out (rightfully in some sense), that brick and mortar isn’t going away. 90% of retail takes place in physical locations....but the trend is all one direction:
- Show 1990 Sales of Walmart – Kroger – Home Depot - Amazon…then same 4 for 2016….help retailers understand that while Amazon is a monster, physical retail has grown in the same period of time and isn’t going away anytime soon
- Ecommerce – more specifically AMAZON So put through the lens of growth, Amazon, by all accounts, is crushing it. Nearly ¼ of ALL retail growth last year was driven by Amazon. And 60% of ecommerce growth was due to Amazon as well. And with Amazon Prime set to double its subscription, and all these “friction free” methods of transaction and delivery seen here like the buttons and the drones, and of couse Amazon has set the bar. Meanwhile brick and mortar growth is essentially flat, between 1-2% (and nearly every big box retailer is shrinking and shutting stores)
- And Amazon Go is setting the bar higher. Riff on Sohosky’s assertion of CONVENIENCE being paramount
- And Amazon Go is setting the bar higher. Riff on Sohosky’s assertion of CONVENIENCE being paramount
- And Amazon Go is setting the bar higher. Riff on Sohosky’s assertion of CONVENIENCE being paramount
- To be captain obvious - we are in a mobile first age, and it’s a major disrupter to physical retail. You can see for yourself: We check our phones over 200 times a day (Forrester) Our kids spend over 3 hours a day on their phones.(Global Web Index Q32015) 90% of shoppers are using phones in store – check reviews, prices, more information And mobile is now over 30% of ecommerce – and growing 3x as fast (300%) as traditional ecommerce….
- And there’s a fascinating trend developing of ecommerce-first stores –beyond Amazon-s stores that start as ecommerce, establish their brand and their audience, and then invest in brick and mortar. And when you talk to these folks, the Birch Boxes and Warby Parkers, they tell you that when they finally DO go brick and mortar, they feel pretty confident about what they are doing They know their customers so well (via digital data & the personalized nature of their sites)….and they have a great sense of why, how, and where to build out their brand and stake their claim in physical retail. And they are ONE TEAM....Ecommerce first. So what’s physical retail to do?
- We probably shouldn’t depend on Magic…
- Or creating a showplace “store of the future” – you know, the store in which all the expensive James Bond tech goes, CMO’s check the box, and nothing is really tested….
- Because all too often – retailers, banks, and others pull together these concept experiences – these 1-offs, that really end as time and money “sinks” They create museum like experiences that generate too little data, don’t test concepts at scale, Lack rigor and discipline and unclear KPI’s We all know that today’s approach is Lean Startup. Radically different approach to product development. Make a MVP that works, fail quickly, scale quickly, and use metrics We’re super pragmatic. We like to make our customers more money. And the fundamental problem with these _ of the future mentality – you know what’s being ignored?
- Because all too often – retailers, banks, and others pull together these concept experiences – these 1-offs, that really end as time and money “sinks” They create museum like experiences that generate too little data, don’t test concepts at scale, Lack rigor and discipline and unclear KPI’s We all know that today’s approach is Lean Startup. Radically different approach to product development. Make a MVP that works, fail quickly, scale quickly, and use metrics We’re super pragmatic. We like to make our customers more money. And the fundamental problem with these _ of the future mentality – you know what’s being ignored?
- The future is already here. Our company alone has deployed intelligent digital solutions to over 230K venues in the US, 30K in Canada And you know why we’ve reached this scale – particularly in incremental risk averse industries like retail, QSR’s and banking? BECAUSE IT WORKS! Both in terms of financial upside as well as the strategic value of these solutions.
- In an effort to reduce labor costs, improve the experience, and make the “bot” experience seamless, some stores are experimenting with full scale robots – digital natives are often more comfortable dealing with digital help… We’ve got Chloe at Best Buy, Pepper at SoftBank, and the OshBot (which is a welcome departure from giving these robots female names (Siri, Cortana, Alexa, Pepper, etc.) Let’s take a look at the OSH Bot…. The execution is VERY rough, and lacks aesthetics, it has a poster on its backside for gosh sakes….but in an era of self driving cars, you know this will only get better.
- Meanwhile, physical retail is attempting to go mobile, via apps and improved mobile web experiences. The app centricity on their part makes sense - today’s consumers are spending over 85 percent of their time on their smartphones using native applications (could call out the recent news of counterfeit retail apps. Was wondering why my Macy’s app wasn’t working right)…..
- The problem is, those five apps will vary from person to person. For some, their top five could include social media or gaming, while others may spend more time in instant messaging. That’s why, getting outside the app ecosystem in mobile is a critical requirement….which leads us to the most important trends in Mobile Retail....and in my opinion, in all retail: ===== Note: By 2016, mobile device users will spend 3 hours 15 minutes per day using apps. Time spent on mobile browser activities will hold steady at 51 minutes this year and next. App Indexing
- Machine Learning/AI Driven bot technology. Here’s an example from a company called Mindmeld. This is the underlying technology that drives Alexa, Cortana, Siri etc. The thinking - since users spend so much time in messaging apps, why not bring all functions right into messaging apps, rather than asking users to pogo-stick from app to app, from site to site? Go where the users already are Some folks call it messaging as an OS Most notable of all is WeChat, an app that’s widely used in China, with 570 million users and over a million businesses represented in the app. You can use WeChat to chat, of course, but you can also order a meal, book a doctor’s appointment, donate to a charity, and more. Not only can you do these things, but they’re everyday events for users of WeChat Facebook is promoting —and allowing these tools to be available to developers, with the idea that people will want to interact with businesses as if they are people, in conversational format Mention Build a Bot event, offered by Decoded…..
- Powering all of this is AI/Machine learning that supports contextual response – it’s guided conversational merchandizing – in this case we’re seeing North Face’s approach, powered by IBM Watson
- True Fit has built a “footwear and apparel's discovery platform. Its Genome™ is mapped from the world's largest collection of attribute-rich fit and style data” It takes data from all the sources you see above, and maps it relationally (semantically). The end result is a sort of Pandora for clothing. If you like those boots, the genome can show you the entire “family,” of relevant offerings. They have a great portfolio of clients – Nordstrom, Macy’s, Jet, Guess, Under Armor, Kate Spade, etc. Now currently the Apparel world in physical retail is running blind– same store comps 15-40% down from last year…..so they should take note of an AI driven tool to improve the shopping experience…. The big question is, how do we apply these mobile –first trends to the physical world of brick and mortar.
- Well first of all, there’s an entire industry developing focused on Location based content… 71% of shoppers use location services to find stores, and 50% of mobile adverising is location based.....but you gotta do that right – On the first point....
- Google has spend a lot of time and energy pouring through data to look for those moment when we are open and receptive to mobile advertising. They call these “micro moments” Retailers today need to understand exactly how they fit into this schema, and capitalize on it. It’s worth reviewing carefully. Just Google the words “Micro Moments…..”
- Secondly, we’ve got to take some of the Automation and Bot technology directly into the stores, and do it in a meaningful way.....
- One doesn’t have to build robots to innovate – replacing paper signs with smart digital and interactive goes a long way In-Aisle: Interactive tablets support product selection in store, Responsive Merchandising: Interactive screens respond to shopper behavior (touching or picking up a product), triggering relevant screen content and mobile activation. Department /Digital “Menu Boards”: Amplifies seasonality, categories, cross-shopping opportunities and new product launches Endcap: Unpacks the features and benefits of a merchandised endcap product, tracks inventory (through shelf-facing cameras), and delivers shopper analytics Checkout: Incents the next trip, promotes front-of-store retailer services, and onramps to broader omnichannel opportunities C-Store Upsell Platform:
- And all of this technology is in service of one thing…those shoppable momements – moments when we can attract, engage, differentiate and activate consumers, leveraging content triggers, personalization, transparent comparisons, and compelling rewards...capaltalizing on in-store micro moments......when consumers go from maybe to yes.... STRATACACHE is bringing that all home in a project we’re doing in collaboration with a very large retailer and a leader in the entertainment space.... And although we’re early into this process, the results are incredibly promising. We’ve deployed a virtual aisle in 15 stores.....
- Some context: This manufacturer has a dedicated omnichannel team and a great relationship with the retailer. They have a huge and somewhat complex line of offerings. Many of which are only found online. They came to us with a desire to help shoppers in-aisle, real time. They embraced the “lean startup” model – test quickly, iterate quickly….don’t get trapped by the “finished product” mentatity: The virtual aisle was created to serve shoppers who: Don’t know about the other offerings, shoppers who might head to Amazon when confronted with this broad assortment Shoppers who intended to buy, but needed help, and shoppers who didn’t plan on buying, but who just wanted to explore Our experience goals: Goal was to build an experience that felt more aligned with an in aisle mindset (not simply porting Dot Com to store) Goal was to use the device as a discovery tool, and once discovery has occurred, then port the consumer to dot com to transact/do further research Goal was to start with a filter-based approach – the approach that we are all drawn to online, and use this to drive immediate engagement
- Attract media plays to call out capabilities. Here’s a case where a static “slide show” can sometimes be better than video – video tends to feel like an ad, a slide show of frames signifies swipe-ability – more critical. Once a user engages, they are met immediately with this page - a page that allows for customized filtering and search. You can see how this works – and what’s compelling about it is that it immediately and real-time personalizes results for the user. Once a user selects the various filters, they see how many products are available that meet their criteria, and which categories of product apply. And if they choose not to select any filters, they are met with the full assortment. So, once they select the green continue button, they are met with a virtual representation of the aisle…. It looks like this:
- It’s completely tactile and scrollable, and features the product laid out in an appealing manner on a virtualized shelf. Once a shopper selects a product, they…..
- As you can see on the left hand side is a link – which takes a shopper directly to the transactional page of the retailers dot com site. And because the employ deep linking, there is also a link that asks a shopper if they want to download the retailer app – so a
- 42 MM+ monthly viewers 64 MM+ monthly impressions 1,500+ locations 3,500+ screens Adult core demo: 55% male/45% female, 71% are 18-49, median age 39 Average income: $72K Visits per week: 61% of adults 18-44 shop at a C-store two or more times per week
- Similar to pinterest Lowes (home improvement) endcap, 3 menu boards “Trending” – 6 images with prices (products sold at Lowes, 3 winter related) “Specials” – 3 images with prices, items in store related to weather (gloves, shovel, sled) “Featured Product” - Storm coming - Snowblower ad
- -And being able to see digital data from a store is really table stakes today: -Robust analytics, captured in real-time…engagement, demographics, -Predictive and proscriptive analytics can be monitored via customized dashboards -We can use real time insights to optimize the physical space (almost like a website -Camera analytics can drill down on dwell and demographics (not currently employed because of retailer policy)
- Having a state of the art content management system is critical as well -One that is context aware, data driven, and rules based, that can optimize media programmatically based on the venue, channel, time of day, day of week, and conditions, and one that can seamlessly transform multi platform data feeds into compelling rich, relevant and engaging in-store media. Another table stake for the store of the now….
- Robust, rugged, retail safe hardware All in one tablets – with all the features you see listed – and large screen experiential solutions – So since these amazing tools exist, what’s taking physical retail so long to respond? So, because I have the stage, which is a tremendous honor, here are the 9 recommendations for physical retail.....
- The benefit of scale – on your behalf. Pragmatism rules….
- Read lists and customize…..and transition to the idea that you never know....
- Thanks