We’ll now learn how Deloitte and Hewlett Packard Enterprise (HPE) are helping traditional retailers -- as well as
hospitality organizations and restaurants -- provide a more consistent,
convenient, and contiguous user experience across their businesses.
Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy.
Here to help to define the
new digitally enhanced retail experience are Kalyan Garimella, IoT Manager
at Deloitte Consulting, and Jeff Carlat, Senior Director
of Technology Solutions at HPE. The interview is moderated by Dana Gardner, principal analyst at Interarbor Solutions.
Here are some excerpts:
Gardner: Jeff, what are the top trends now driving the
amazing changes in retail?
 |
| Carlat |
Carlat: First off, I want to clear the air. Retail is not
dead. Everywhere I go I hear that the retailer is dead, no more brick and mortar. It's a
fallacy. There is a retail apocalypse out there, but quite honestly 85 to 90
percent of purchases still go through the brick-and-mortar retailer.
The retail apocalypse does
apply to brick-and-mortar stores that are failing to transform to fully embrace
the digitalization expected by consumers today. We are here to do something
about it.
Gardner: Kalyan, user experiences have always been important.
You can go back to Selfridges
in London more than 100 years ago. People understand the importance of
user experience. What's different now in the digital age?
Garimella: Unfortunately, if you think about it, going back for
the past four decades, retailers have relied on brand names and the strength of
the merchandise to attract more customers. They never really differentiated
themselves from the experiences that they were creating versus what their
competitors were creating.
With the advent of changing
customer demographics -- with Millennials, Gen Ys, Gen Xs coming into the picture
-- retailers now need to produce a more customized shopping experience. They need
to give shoppers a reason to escape their online retail channels, to come to
brick-and-mortar shops and make more purchases there. It’s high time we give
that to them -- and make them come back to the stores.
Gardner: There are still things in the physical world that
need to remain in the physical world, right, Jeff?
Virtual-real hybrid
Carlat: Exactly right! Take me, for example. We recently bought
a new house and I wanted to get a nice La-Z-Boy
chair. I’m the kind of guy who’s not going to just push a button on a computer
or a handheld to buy a new chair. I’m going to want to go sit in it. I want to
know is this right for me, and so I go to a traditional brick-and-mortar outlet.
Yes, I may do my research
[online]. I may actually end up [online] doing my purchase and having it
shipped directly to my home. But while I’m at the store, I want to have an
experience -- an immersive experience -- that's going to help suggest to me, “Oh
what's the perfect side table that should go with that? What’s the complementary
piece of art that actually matches the fabric?”
I want the capability to
know what that chair will look like in my own decor, via virtually imposing
that chair into my environment. That's where the world is going. Those are the
demands of the new retail environment, and they will separate those that
continue to thrive in the retail environment from those that suffer and
decline.
Gardner:
And, of course, the people in that physical environment might actually know
quite a bit about the purchase that you could gain from. They have been doing
this for some time. There is the interaction of a consultancy effect when you
are in a sales environment.
 |
| Garimella |
Garimella: People are always going to be a key asset no matter
where we do it and in whichever industry. If we can complement the existing
user knowledge that exists in the retail stores with the intelligence, or analytics
and data that go along with it -- that's a powerful combo. We want to provide
that.
That's why we are talking
about helping brick and mortars attract more customers -- not just by
increasing the customer experience and optimizing your digital store operations
-- by combining data and insights, and not relying only on opinions.
Gardner: Is that what we mean by cross-channel experiences,
Jeff?
Easy as 1-2-3
Carlat: We, together with Deloitte, are delivering in early
2018 the Connected Consumer for Retail offering. It’s definitely a cross-channel
experience. This takes the cross-channel experience and enhances it for the brick-and-mortar
environment.
The Connected Consumer for Retail offering is based on three core principles. Principle number one is providing
that enhanced customer experience, that immersive experience, which ultimately
increases revenues and basket sizes for retailers.
The
Connected Consumer for Retail offering takes the cross-channel
experience and enhances it for the brick-and-mortar environment.
The second principle is based on optimizing in-store operations. How do you ensure that you have the right amount of stock -- not overstocking and not under-stocking? How do you reduce the amount of a lost inventory? This Connected Consumer offering will help shrink and reduce the cost structures in a brick-and-mortar environment.
And finally, as Kalyan mentioned, the third key principle
is around driving new insights from the in-store analytics. That data and
intelligence is derived from the customers -- coming through video-location analytics
and all kinds of integration into social networks. You can know so much more
about the customer, and then give that customer a personalized experience that
brings them back and increases brand loyalty.
Gardner: I suppose it’s important to connect all of the dots across
an entire shopping ecosystem process – from research to purchase to
installation to service. Is that what we need?
Garimella: Absolutely, and that is what we refer to as an omni-channel experience, or a unified commerce experience. Our customers
these days expect a seamless continuous shopping experience -- be it online or
in a store. If you can create that consistent behavior and shopping experience,
that is a powerful channel to attract even more customers.
There are many retail
concepts very much in demand right now, such as online delivery or pickup at
the store. Or you can order in-store and have delivery to your house. Or you can
order in one store and pick up in other stores, if the inventory is not
currently available in the initial store.
So whatever channel they choose, you can provide value
in each of those steps back to the customer – and in doing so you are
attracting loyalty, you are building the brand. And that is a powerful medium.
Gardner: And the more interactions, the more data, the more
feedback, the more analysis, and the better the experience. It can all tie
together.
Let’s talk about how the
technology accomplishes that. You mentioned a new retail initiative at HPE in partnership
with Deloitte. What are fundamental technology underpinnings that allow this to
happen?
Solid foundations for success
Garimella: The Connected Consumer for Retail begins at the
infrastructure level -- solutions around HPE Aruba, HPE Edgeline Systems portfolio, and other converged infrastructure systems.
For location-based analysis, we are using the wireless LAN from Aruba and their
Meridian App Platform for mobile. From a security layer, we are using Niara and ClearPass,
but we are also working with a set of third-party vendors for radio-frequency identification (RFID) and for video analytics. So it amounts to an ecosystem of
the right partners to solve the right business problem for each of those
retailers.
Gardner: And, of course, it has to be integrated properly,
and that is where Deloitte comes in. How does that come together into an actual
solution?
Carlat: This is the beauty of working with a group like
Deloitte. They bring together the consultative and advisory capabilities, along
with the technical integration needed. Deloitte brings the ability to help the customer
figure out how to get started on this journey.
First off, the methodology helps
a customer think big about what they can do, then helps them actually build a
business plan internally to drive change and get the right business approvals
to start changing. Then they proceed to solution execution that starts small –
and builds a proof of concept.
In as little as eight weeks,
we can deliver the value that can then be extrapolated across all of the retail
sites. That’s what projects the true savings. That is the proper scale: To
think big where you can, then start small, and lastly, scale fast across all of
the sites.
Gardner: Kalyan, any more to offer on the importance of
proper integration at a solutions level?
Garimella: Internet of Things (IoT) is such a complex ecosystem
of technologies that you need subject matter experts from each of the technologies
-- such as RFID, Bluetooth beacons, Wi-Fi, analytics, artificial intelligence (AI), your core enterprise resource planning (ERP) systems, the customer relationship management (CRM) systems, and the list goes on.
That’s where we come in,
with the right people, and with the vast resources that we have. That’s deep
industry expertise. We come and we look at the problems, create the customer
journey for our clients, and then create the right level of systems integration
that can help achieve the business objective.
Gardner:
Let’s look at some examples. What are some of the ways that retailers are doing
things right to improve on that all-important user experience?
Carlat: As a consumer, I know what I like -- and I know what
I do not like. I have seen overly aggressive advertising, pushiness that repels
me as much as waiting in a long line at a retail brick-and-mortar. There needs
to be a correct balance, if you will, of suggestive selling, cross-selling, and
upselling. But you have to have the right learning, the right analytics, to be
right more times than you are wrong. It means providing a value versus becoming
a pest.
This new offering allows
that balance to be made. Other best practices would be providing point
notifications to issue a discount that would get me as a consumer over the buying
hump, to say, “You know, that is a good deal. I cannot pass this up.” Then as a
seller, I can naturally dovetail into increasing the basket size, cross-sell,
and upsell.
Gardner: How can the brick-and-mortar company better extend itself
beyond the threshold of the physical building into the lifestyle, the
experience, and the needs of the consumer?
Customized consumer choices
Garimella: You are talking about bringing the retailer into the
houses of the customers. That is where the successful online retailers have
been. We are working with our brick-and-mortar clients to create similar
experiences.
Some of the options to do
that would be having a digital voice assistant included on your retailer or
shopping app. You could add items to a wish list; you could look up those items
and determine if they are close by and where is the retailer nearest to my
house. Maybe I could go and check those out instead of waiting for a couple of
days for them to be delivered.
We
are talking about bringing the retailer into the houses of the
customers. That is where the successful online retailers have been.
So those are some of the
experiences that we are trying to create -- not just inside the
brick-and-mortar store, but outside as well.
Gardner:
Jeff, tell us a bit more about the Connected Consumer for Retail. Where can we
find out more information?
Carlat: We are rolling out this offering in Q1 2018. It is
being delivered consultatively initially through Deloitte as the lead. We are
happy to come in and do demos, as well as deliver proofs of concept. We are
actually happy to help build a business model and conduct workshops to
understand what is the best path for retailers to begin adopting the on-ramp to
this digital transformation.
The easiest way to get to us
is via our websites at either HPE or at Deloitte. We have business leads in all regions, all parts of
the world.
Gardner: We have talked mostly about brick-and-mortar retailers,
but this applies to hospitality organizations, restaurants, and other consumer services.
How should they too be thinking about the user experience and extending it to a
life cycle and a lifestyle?
From pain to gain
Garimella: Wherever there’s a possibility of converting a pain
point in a customer journey into an engagement point, I think IoT can
definitely help. We are calling this the Connected Consumer for Retail for a
reason. The same concepts and the same technologies that we have developed for
the retail solution can be extended to hospitality, or travel, or food
services, et cetera, et cetera.
For example, based on
location and proximity of a user, you can create -- using the location-based
services – improved experiences that cater to individuals in hospitality and
hotels by giving them the right offers at the right time, thereby increasing
the basket size in their respective industries.
Gardner: It
seems that across these vertical industries we are at the threshold of
something that had never been possible before.
Carlat: This
is the beginning of a new era for retail. What is clear to me is those
retailers that choose to adopt change are going to be the winners -- and more
importantly those that do not choose to change are going to be the losers.
Garimella: I think Jeff hit it right on. Retail is changing and
changing fast, and other industries will follow in the same suit as well. If
you do not put enough emphasis on customer engagement, while also optimizing
your operations, you are at risk.
Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy. Sponsor: Hewlett Packard Enterprise.
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