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RSR the 2012 Retail Store in Transition Wp

RSR the 2012 Retail Store in Transition Wp

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Published by: Capital Computer Group, LLC on Oct 29, 2012
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12/16/2013

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The 2012 Retail Store: In Transition
2012 Benchmark Report 
 Paula Rosenblum and Steve Rowen, Managing PartnersMay 2012
 
 ii
Executive Summary
Even as retailers struggle to improve the in-store customer experience and combat the phenomenonknown as “showrooming”, it has also become apparent that the land-based channel isn’t going awayany time soon. Until computing can offer the tactile and immediate satisfaction of a store visit, amajority of consumers will continue to consummate their purchases there. And until some retailercracks the code on grocery home delivery, supermarkets will remain consistent destinations. In anycase,
customers need stores 
as part of their path to purchase.This leaves us with a fundamental question: How can technology, which has been a mixed blessingfor land-based retailers, support the next generation of retail stores? Retailers have been prettyconsistent in RSR’s annual store technology benchmark surveys: in-store technologies are critical tomaintaining and improving the customer experience by putting actionable information into the handsof managers, educating and empowering employees, and controlling costs. This year, however,we’ve seen some dramatic differences in the point of view of sales over-achievers (who RSR call“Retail Winners”) and their underperforming counterparts (who we call “Laggards”). Overall, RetailWinners are far more interested in improving their in-store workforce than laggards, who look to in-store technologies to help them gain new customers, but seem challenged to understand exactly
how 
 that will occur.
Business Challenges
Retail Winners have a very different perception of the business challenges they face than laggards.They are most often concerned about their keeping their own houses in order: improving storeexecution and employee productivity. Laggards are much more fixated on the competition. They areoverwhelmingly troubled over consumer price sensitivity, since they have a hard time finding otherways to differentiate from their competitors. Lack of technology investments in the store, particularlyin a modern POS system, also hamstrings Laggards far more than their retail peers.
Opportunities
When describing RSR’s “BOOT” methodology, we always talk about “Opportunities” as the way anenterprise can turn lemons into lemonade. So it’s logical that Retail Winners who are mostconcerned about consistency and execution, would look at ways to improve that consistency andexecution as their greatest opportunities. And it is so. Retail Winners overwhelmingly cite educatingand empowering employees using technology as a top-three opportunity, along with improvingcustomer service by making corporate inventory visible (and saleable) to all stores. Laggards knowthey want to make the in-store experience more convenient, but haven’t quite settled on ways to doso beyond finding more interesting products to sell.
Organizational Inhibitors
In RSR’s view, the lack of a wireless infrastructure on the selling floor in more than half ourrespondents’ stores is the single biggest inhibitor to improving the in-store experience. However, theability to take data gathered from stores in near real-time and turn it into actionable information isanother significant liability for laggards. And because the store is no longer an island, the tangle ofback office technologies has become the top self-identified internal inhibitor to moving forward withnew capabilities. There’s general agreement among respondents that pilot programs and smallerprojects with quicker ROI are good ways to get moving. There is also general agreement thatretailers don’t have a lot of choice – the customer is demanding a better experience.
 
 iii
Technology Enablers
Depending on current performance levels, retailers have different views of the potential fortechnologies to deliver value to the store. Laggards still focus on self-service touch points, whilewinners are moving on: they look to technologies like cross-channel inventory and customersynchronization, and better employee scheduling tools to support customer-centricity. While currenttechnologies in use are staples like in-store rewards and coupons, the future seems bright fortechnologies that deliver information to store and customer-owned devices, and of course, morecross-channel synchronization.
BOOTstrap Recommendations
First and foremost, it’s important to recognize the activities stores perform as a new node in the retailsupply chain. Stores really should be compensated for filling orders placed through other channels.Why else would they do it quickly and efficiently? Self-service options are useful, but must be only apart of a total plan that includes educated and empowered employees and managers on the sellingfloor or doing prioritized scheduled tasks that create a better customer experience. A modern POS iscritical for the 21
st
century store, as is a wireless infrastructure on the selling floor – most especiallyfor managers and employees, but ideally for customers as well. Customers will be more likely tocheck with their friends on the “look” of an item than they will to price check with other locations.

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