PUTTING MOBILE TO WORK IN RETAIL
PUTTING MOBILE TO WORK IN RETAIL
A BEST PRACTICES WHITE PAPER Retailers today are embarking on one of the most profound retail transformations to take place since the introduction of online shopping. It’s a radical rethinking of retail that is taking shape across the industry. In this white paper, VeriFone will explore what retail brands from all over the world have learned from deploying mobile in-store. Discover the common pitfalls, best deployment methods, littleknown tips and the top take-away items to make any mobile deployment strategy a success.
CONTENT Executive Summary
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Operations
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Employee Associate Training
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Customer Education and Feedback
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Conclusion
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EXECUTIVE SUMMARY With the move to leverage mobility in-store, retailers are embarking on perhaps what is the most profound technology transformation since the introduction of online shopping. It’s a radical rethinking of retail taking shape across the industry, though the motivations driving this revolution are unique to each business. Some retailers are looking to boost sales while others want to cut costs, improve productivity or streamline operations. Some imagine a next generation, high-touch shopping experience that wins over satisfied customers while others simply want to differentiate themselves from the competition. As consumers become savvier shoppers with fingertip access to product information at all times via smart devices, retailers are realizing that they can leverage those same devices to appeal to consumer needs and reshape the entire retail experience.
2013 Boston Retail Partners POS Benchmarking Study 12 percent of retailers had implemented mPOS. 44 percent planned to implement mPOS in 2 years.
The mobility movement is making its way across the industry. In a 2013 RIS News Store systems study, retailers said “mobile for associates” was their top store priority (61 percent of respondents), ahead of “mobile for consumers” (58 percent). Approximately one third of retailers planned on adding tablets and non-ruggedized handhelds in the next 12 months, according to the same study. A 2013 Boston Retail Partners POS Benchmarking study found that 12 percent of retailers had implemented mobile POS and 44 percent planned to do so in less than two years.
Retailers are discovering that implementing mobility is more than just arming employees with a smartphone or tablet device. Embracing mobility can mean a wide variety of things, including inventory management, e-commerce integration, endless aisle, assisted selling and loyalty customer relationship management to name a few. Mobile can also be utilized for in-store communication, scheduling and other workforce management tasks. It’s certainly not a one-size-fits-all strategy. Different retailers are exploring the best use cases for their business. The more aggressive early technology adopters are trying out a mix of mobile solutions, to determine the right mix of tools and applications to suit their particular needs. As the migration to mobile becomes a stampede, many retailers are focusing on the technology angle, picking the right systems and devices, connecting their infrastructure and improving their Wi-Fi networks. While these components are all essential to getting off the ground, deployments struggle less with the Putting Mobile to Work in Retail
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PUTTING MOBILE TO WORK IN RETAIL
hardware and more with operations and training. Retailers are realizing that success often hinges on the softer, human side of a mobile deployment. It’s the trickier questions of how to implement mobile in a live environment and getting associates fully engaged with the new tools that will ultimately determine the level of ROI to be realized. It also comes down to educating customers and setting new expectations for how they proceed with their in-store shopping behavior. Simply adding smart devices to a retail environment is not enough. Retailers need to re-imagine the entire shopping experience, from the way the store is laid out, to the way their staff interacts with customers. Mobile creates new opportunities to achieve existing store goals while engaging consumers and personalizing interactions in a way that simply isn’t achievable in many current-shopping environments. With intelligent consumer devices at their disposal, associates are able to elevate each encounter, tailoring their service to the needs and buying habits of each individual customer. These mobile devices do more than create more knowledgeable employees; they make entire stores more intelligent by introducing realtime analytics to real world operations. With more robust and timely data flowing in from the sales floor, stores are able to become more agile, allowing them to remain competitive and responsive to consumer demands. This white paper will examine some of the common pitfalls and challenges retailers face in deploying mobile, with a focus on the operations and training side of the equation. It will demonstrate how retailers can prepare themselves to effectively leverage mobile devices on the sales floor to achieve maximum results to their bottom line. It will also uncover hidden “ah-ha” moments that lead to a better use of mobility. For the study, we interviewed half a dozen retailers who have deployed mobile for a variety of needs, from mobile POS and inventory look up to price checking, e-commerce integration and clienteling. We have also conducted more than a dozen informal surveys with additional retailers to paint a full picture on what mobile practices work practically and effectively in-store.
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OPERATIONS Rethink retail from the floor up: Introducing mobility means there’s an opportunity to re-imagine the traditional way of doing retail. If a retailer has Most retailers in a significant number of sales people with mobile POS devices, they can the US have 25 reduce the number of cash wraps in use or move them to the periphery of percent of their the sales floor. An Accenture study found that most retailers in the US floor space have 25 percent of their floor space dedicated to fixed POS systems. That dedicated to fixed reduces the amount of merchandise that could be displayed and therefore, POS systems. reduces sales per square foot. One big department store that VeriFone spoke to was able to reduce the number of cash wraps as well as the number of fixed POS stations, to create additional room for displays and customer interactions. Retailers will likely still need at least one cash wrap for consumers who migrate to a fixed location out of habit. In some cases, a fixed POS may also be necessary for more complicated transactions, obtaining personal information from users, or just folding clothes. With mobile POS in use, stores should look at how they can optimize their space. If the stores don’t reconfigure their floor plans, there is also a risk that many customers won’t change their behavior. Bag it, wrap it, tag it: For mobile POS to work, associates need to be free to roam the floor and engage with customers on a personal level while completing transactions on the spot. Experienced retailers are employing small mobile stations that are stocked with bags, wrapping paper, security tag removers and wireless receipt printers. That allows employees to move freely about the store floor. “The vision was that associates would check people out on the floor. What we didn’t give thought to early on was: Where is the wrapping paper? Where are the bags? They found that they still had to go to the back office or fixed POS stations to get bags and wrapping paper. Even if you’re mobile, you still have to go back for a bag,” expressed one mid-tier luxury clothing retailer. Consider new staffing options: Using mobile for inventory look up also opens up the opportunity for new positions such as a runner, who can bring out products from the back room. The use of a runner allows for sales people to remain with customers to prevent abandonment and to complete the sale. “Customers like the fact that it’s not a mysterious shoe associate leaving to go to the back room and then not coming back. It’s more instantaneous feedback,” said one department store. As more sales close with an emailed receipt or mobile self-checkout in the future, retailers should be thinking about positioning staff at the entrance to confirm purchases and deter theft. In bigger stores, Putting Mobile to Work in Retail
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retailers might consider employing an “interceptor” to help manage questions from new customers and let them know about the mobile tools in use. “Quite honestly I think Apple got it right with an interceptor to queue up people and then have an associate show up. Right now, associates don’t have control over how much work they can accept. Currently when a crowd comes at them, they have no place to hide,” the department store said.
One retailer equips their stores with 1.5 to 2 devices per mobile employee.
Mobile device care and feeding: Some retailers are already losing their mobile devices to both shoppers and employees. Managers need to come up with a secure way of checking-out and checking-in devices. Some larger retailers devote a person and a dedicated room to this job though in most cases, it will be up to the manager to do this.
Retailers need to have a plan in place for not only keeping the devices powered often, but also secure during charging. Most devices will not last more than four hours on the floor before they need to be recharged. Retailers should also consider how many devices they need and keep in mind that some devices will be unavailable while charging. One retailer equips their stores with 1.5 to 2 devices per mobile employee on the floor to ensure devices are always available and charged. Dealing with software updates: One of the larger challenges expressed by retailers that are working with a consumer-based platform like iOS for their mobile needs, is managing operating system updates. Some retailers struggle when their devices automatically update to the latest operating system when their software is designed to work with one platform. To combat this, careful consideration needs to be given as to what type of mobile deployment is adopted by the retailer. Some retailers we spoke to discovered that while it may be more cost-effective at first to build their own mobile application or to go with a smaller software company that readily churns out the application needed today, the long-term costs become much higher. Some retailers found that when they deployed mobile, the application they adopted could only run on one platform, which significantly hindered its use and adoptability, causing even higher costs to update existing backend systems. Retailers need to carefully consider the type of application they install to ensure that it’s scalable to meet their businesses’ growing needs, yet functional enough to leverage the current investment already made. That also means deploying an application that will work on multiple platforms. Retailers need to know what types of questions to ask and consider software updates needed down the line with their mobile deployment provider. Deploying a mobile device management solution does not necessarily address this problem, so IT departments need to work closely with software vendors to ensure that regular updates do not disrupt daily operational needs. Putting Mobile to Work in Retail
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EMPLOYEE (ASSOCIATE) TRAINING It’s not so much about learning how to use a new device, which most retailers said was relatively easy to master. It’s about learning how to sell differently, engaging with customers in a new way and ultimately being a helpful resource for customers. This is especially important when dealing with smartphone-wielding consumers who come armed with a lot of information and can easily price compare and check deals at competing stores. Associates need to be able to consistently provide instant benefits to shoppers, giving them some of the tools they might enjoy online but with a human touch. That can mean looking up inventory while staying with the customer or picking them out of line to shorten wait times. Going mobile also allows associates to extend interactions and potentially upsell a customer on additional products. Successful use of mobile requires more hands-on teaching from experienced trainers, who can lead associates through new use cases. Training next generation sales consultants: Deploying mobile requires employees to step up in many new ways and become more than just a sales person. In a mobile environment, associates become more like sales consultants, building relationships with consumers and walking them through the entire sales process. Associates need to be trained on how to create more engaging, personal interactions with customers and they need to become more knowledgeable about products. To do this, companies need to create new training programs with best practices that become a key part of the implementation plan for mobile deployment. In an interview with KWI CEO Sam Kliger, the importance of associate training based on retail best practices is highlighted. He comments, “even though virtually everyone has a mobile device and knows how to use it on a personal level, they still need to be trained on how to use the device properly for customer engagement. To be successful, retailers need the combination of a solutions provider that truly understands retail and best practices, and align that with proper store associate training. Having associates that can use mobility to engage with customers is really what creates a successful project.” Engage instead of interrupt: Equipping associates with mobile devices should allow them to be unshackled from traditional cash wraps. However, associates need to be taught how to initiate contact and interact with customers successfully in a mobile environment. Some associates can get too pushy when roaming the floor in search of customers. Others get engrossed in the mobile device and forget to maintain a connection with their customer. Still others push for the sale without trying to solve a consumer’s problem, or give up on interactions too quickly. Employees need to learn how to read the customer to figure out how much interaction is required and desired by each individual. This requires a level of judgment and social skills that may or may not always be taught. Sometimes retailers just have to hire the right personalities for the job. Putting Mobile to Work in Retail
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New rules of engagement: If interactions are extended well beyond the cash wrap and transactions can be completed anywhere in the store, associates need to be equipped with new rules for engaging consumers. Retailers need to think about setting limits on how many items a mobile associate can ring up and what kind of tender they will accept. “We had mobile POS for targeting people in line, but one associate, she didn’t know what to do when someone rushed her with 20 items. She didn’t know how to push them away. It was a disaster,” one women’s fashion retailer said. Managers need to provide guidance for instances when multiple customers approach an associate. One retailer found employees retreating more often to the safety of the cash wrap because they didn’t know how to handle the rush of customers.
“You don’t have that physical space barrier and people address it differently.. they may form a circle around an associate on the floor.”
“The key thing that needs to be addressed when mobility comes into an environment is human-tohuman interaction. You don’t have that physical space barrier and people address it differently,” said the department store. Associates, “were used to having people artificially line up behind the wrap stand. Now, they may form a circle around an associate on the floor. That changes the interaction.” When dealing with more complicated transactions or problems with their mobile devices, employees need to know how to pass customers off efficiently to a fixed POS station. They also have to know how to adapt their work based on how many customers are in the store. When the guidelines are unclear, employees can get confused or overwhelmed, making them less enthusiastic about employing mobile solutions. Get employees to buy in, persevere: Employees have limited patience for new tools. If the rules are not well defined or the solutions fail on a regular basis, many associates will be tempted to return to their old work patterns and discard their new equipment. Some retailers have reported initial employee enthusiasm and positive results early on, but the impact of mobile wanes over time as associates fall back to more familiar or comfortable work patterns. For instance, one clothing retailer who provided tablets for ecommerce sales and lookbooks saw an initial increase in online transactions evaporate after employees went back to their old way of ordering products from other nearby stores. Another retailer who struggled with an especially slow mPOS system reported that some employees cited the tools as one of their reasons for leaving. Each system will take some time to get underway and associates need to be encouraged to stick with it. Otherwise, the investment in mobile tools will not be realized. Putting Mobile to Work in Retail
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“The stores were trying to use it but they would panic when they didn’t know how to use it, so they went back to the normal POS,” the women’s fashion retailer said. To help get employees to buy into the system, some retailers found it beneficial to show employees how the use of mobility could help make their lives easier. For example, some high-end retailers called attention to how the mobile tools could help associates earn more commission on their sales, or save them time completing mundane inventory tasks. Determine the priorities for your employees and speak to that need. More importantly, continually seek their feedback. Ask them questions, incorporate their responses and help them to develop solutions that will work on the ground floor. There’s no substitute for honest, continuous communication. Help wanted - mobile sales associates: Most retailers don’t see a need to remake their staffing policy immediately after the introduction of mobile solutions. However, with the increased rollout of mobile tools, companies should look for employees who embrace technology and are prepared to be more engaging with customers. There will still be a need at times for some retail associates to receive customers at a cash wrap, but mobile retail requires employees who can initiate interactions more frequently, be more personable with customers and can get the most of out of their mobile tools. Retailers may need to think about cultivating a new class of workers who are more socially skilled and deserve better pay and career guidance in exchange for their ability to operate successfully in the new mobile environment.
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CUSTOMER EDUCATION AND FEEDBACK Let the customer know: One of the biggest problems retailers face is how to educate shoppers on the existence of mobile options. In stores where not every employee is equipped with a mobile device, retailers should consider distinctive clothing, aprons or badges to identify workers who are equipped with mobile devices. Stores should also consider banners or signs alerting customers to the presence of mobile-equipped associates and what can and cannot be handled by these workers. Even in stores where every associate is outfitted with mobile devices, retailers should consider additional messaging to help consumers understand what’s available and how mobile associates can help them. Consumers who visit multiple outlets of the same store can also be unsure about what to expect if associates aren’t consistent in their use of mobile tools or the tools are not available in different locations. So it’s vital for retailers to remain consistent in their use of mobility to remain credible and make it easy for their customers to know what to expect.
Incorporating mobility in-store is more than just adding a smart device. It’s about changing the customer experience.
The importance of marketing: Many retailers that we spoke to neglected to call out their mobile deployment as a unique feature and benefit to their store. Some assumed that customers would ‘figure it out’ regardless or that it wasn’t vital to call attention to the deployment outside of the store. Do not underestimate the power of marketing. Incorporating mobility in-store is more than just adding a smart device, it’s about changing the customer experience to build the brand image and increase loyalty. If retailers don’t call attention as to why shopping in their store is different, consumers will go to competitors that will. Perception is reality. Ensure that consumers have the right impression of the retail environment they can expect with mobility. Utilizing mobile can be a radical reinvention of the retail environment and companies need to retrain employees and customers on what to expect. When mobile tools become more widely available, retailers should consider how to broadly promote the use of mobile solutions as an added benefit in-store. Gauge public interest: Not only should retailers be polling their own workers for feedback and best practices, but they should also be actively soliciting feedback from shoppers. They should be observing how customers react in a mobile-equipped store. Every retailer and customer base is different. Stores should be deploying tools that resonate with their customers and answer their specific needs. Retailers might also look at net promoter scores to get a soft measure of ROI. Putting Mobile to Work in Retail
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CONCLUSION At first glance, deploying mobile retail solutions in-store may sound like a lot of work. Yet many of the same retailers that wrestled with initial rollouts say they are surprised at how well associates receive new mobile tools compared to older dedicated mobile devices. There are also benefits in learning early how to use mobile in-store. While initial deployments might highlight challenges, they also lead to better outcomes as organizations become savvier about what works and what doesn’t in the real-world application. Ultimately, deploying mobile solutions is not about chasing a trend or keeping up with consumers; it’s about changing the customer experience and improving the bottom line. Mobile devices, with their versatility and portability, offer retailers a real opportunity to achieve their goals and maximize the potential of each store. If retailers can get a handle on how to best deploy mobile in-store, especially managing the human element, they will not only start to drive more revenue and cut costs, they’ll also be able to create better, more personal interactions with consumers. By leveraging mobile solutions and software, retailers can hammer home the benefits of visiting a physical store by accentuating personal interactions. Retailers can also deliver an experience that taps the power of online showrooming by leveraging a mobile device’s ability to connect consumers to information, ideas and products in a new and exciting way, wherever the customer is 24/7. That, in turn, may result in higher conversions, bigger purchases and increased loyalty as consumers enjoy more personable and intelligent buying encounters with associates.
Putting Mobile to Work in Retail
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