1.RetailWeek TECHNOLOGY September 2012 Online engagement why digital content is king Self-service checkouts harness their full potential Blue-sky thinking the cloud service space race The companies shaping the future of in-store mobile payments In association with Smart money

2. www.boxtechnologies.com T: +44 (0)1844 264000 E: sales@boxtechnologies.com W: www.boxtechnologies.com : @boxtechnologies www.boxtechnologies.com Delivering the Customer Interface Through Technology From concept to deployment and beyond... Box Technologies has a solution Services The Concept Store of the Future Self Service and Kiosk Interactive Digital Signage 3. retail-week.com | September 2012 | RWT 3 Challenges for IT IT bosses in retail are used to working in a state of ux, and the technology landscape continues to throw up challenges to keep them busy. Mobile payments, for instance, have been on the horizon for years, but that hasnt made rolling out a mobile payment service any easier. The market is busy and sometimes confusing choosing which service to invest in is difcult. We look at whos doing what in the market, the main players and what motivates them to seek a slice of the mobile payments pie on page 4. As mobile continues its fast pace of development, so does cloud technology. It has made two of the worlds biggest retailers Amazon and Apple bona de technology suppliers to consumers and in Amazons case, to other retailers. On page 21 we discuss why winning the cloud battle is so important and who might triumph. The development of the multichannel environment is driving many of the changes affecting retail, including the focus on in-store technology. Cross-channel retailing is changing the role of stores, as bricks-and-mortar retailers use IT to help them face the threat of pure-play etailers. From kiosks to Wi-Fi, on page 9 we look at how stores can be equipped with an arsenal of technology to encourage shoppers to buy there and then, instead of later on their computers or via their mobile phones from Amazon and its ilk. On page 17, meanwhile, we discuss the development of self-service tills. Are they doing what they were designed to do? Do customers love or hate them, and are they t for purpose? The challenges dont stop at in-store technology either.Competition online is just as tough, andretailersmustworkhardtostandout.Goodqualitydigitalcontentisacrucialpartof doing this from conversion of sales to customer engagement its a core part of trading online.On page6welookintohowtodoit.Encompassingeverythingfromexcellentimagerytovideosand the facilitation of online discussion, the IT department is now involved in areas that ve years ago would have been hard to predict.We ask who does digital content best,and why it matters. Rebecca Thomson, Supplement Editor Contents 4 Money on the move Who are the main players in the developing mobile payments market? 6 Online content Digital content is now at the core of campaigns to engage customers 9 Multichannel moves How bricks-and-mortar retailers are using technology to keep customers 13 Ordered approach The innovations transforming the stock management process 17 Till trouble Self-service suits retailers but customers remain divided 21 Skys the limit Rivals battle to be the biggest provider of cloud-based services Supplement Editor Rebecca Thomson Production Editor Abigail OSullivan Supplements and Special Projects Production Editor Tracey Gardner Design Jon Hart Contributors Claire Burke, Liz Morrell, Kevin Pruitt, Jessica Twentyman Advertising Manager Paul Stewart Account Manager Sarah Killey (020 7728 3561) Group Commercial Director Mandy Cluskey Managing Director, Retail Tracey Davies Retail Week All material is strictly copyright and all rights were reserved. Reproduction in whole or in part without the written permission of Retail Week is strictly forbidden. The greatest care has been taken to ensure the accuracy of information in this magazine at the time of going to press, but we accept no responsibility for omissions or errors. The views expressed in the magazine are not necessarily those of Retail Week. Retail Week Technology is printed by Headley Brothers Ltd. Ashford, Kent RetailWeek TECHNOLOGY Box Technologies, with its consultative approach to business challenges, offers the most all-encompassing, multichannel retailing solutions implementing cutting-edge systems in both off-the-shelf and completely bespoke forms. Whatever the challenge, we have a solution. The advent of cloud computing and its ubiquitous nature has gifted organisations with a solution that boosts efciency while reducing the margin of human error. Though considered excusable, human error is damaging to the image of any organisa- tion. Box Technologies is uniquely placed to implement such solutions due to its strong partnerships with industry leaders. Consider customers who wish to order their meal in a restaurant. Often, given the time elapsed between the waiter taking the order and processing it at a static order point, errors can occur, extending an already time-consuming process. Cloud printing solutions reduce this signicantly. Epson PoS printers TM-T88V-i and TM-T70-i utilise the EPoS-Print solution, which enables direct printing from web applications without the need to change printer settings, install drivers or even the use of a PC. This means staff can print receipts directly from the point of sale, ensuring a more efcient and, more importantly, accurate process. Box Technologies solution delivers an enhanced customer experience while potentially increasing footfall. What more could you ask for? Russell Willcox, Chairman, Box Technologies In association with A word from our sponsor 4. 4 RWT | September 2012 | retail-week.com T he mobile payments market is our- ishing it seems barely a week goes by without another new company entering the fray. But it makes for a confusing time for retailers. A proliferation of services means it can be difcult to know what to invest in and which company does what. So who are the main players, what do they offer and what do retailers need to know? Although in-store mobile payment is still in its early days, retailers are interested done right, it can improve the customer experi- ence by speeding up payment and cutting queues, and businesses from Marks & Spencer to Waitrose are trying it. But the number of mobile payment solutions can seem bewil- dering, especially as not all of them are expected to reach critical mass. Sandy Shen, research director for consumer services at analyst rm Gartner, says payment mechanisms can be divided into two camps those using near-eld communications (NFC), which is often referred to as contactless payments, and those that use mobile applica- tions, such as PayPal. She says: We dont expect NFC payments to hit the mainstream market until 2016. The market adoption has been slower than expected, there have been some technical issues. The delay is partly due to the initial investment costs NFC requires smartphones to have an NFC chip and merchants to have contactless readers. David Hodgkinson, KPMGs customer and channel management practice, says apps are much cheaper: Cloud- based branded apps can be a lot less expensive because they are not hardware based. E-wallet options So what are the main options? In September 2011, Google Wallet was launched in the US. It is one of several e-wallets, including Visas V.Me and the O2 Wallet. An e-wallet is a payment method that can be used by any device connected to the internet, including smartphones. Google Wallet stores a custom- ers credit and debit cards, and users tap their phone on an NFC terminal at checkout and chose which card to pay with. The app will allow Google to obtain infor- mation on sales trans- actions, although some retailers will no doubt be reticent to share informa- tion with the search giant. If retailers allow their loyalty cards to be stored in the app, Google will also have infor- mation about a customers spending habits. David Oliver, partner at PwC Consulting, says: For Google, its all about data. Theyre an advertising business. The piece of data they dont have is how we spend our money in stores. This gives them access to that data. He says the most impor- tant consideration for retailers is who might gain access to their informa- Tapping into mobile walletsThe mobile payments market is still developing, but its already crowded and can be confusing. Claire Burke asks who are the main players and whats in it for them? tion. They need to ask whos going to have access to that data and for what purposes? and in what form is my data available to other retailers? he says. Under the Google Offers programme, retailers are expected to pay Google for sending targeted offers and advertisements to individuals, based on their spending patterns. The company, therefore, controls the offers the customer receives. Hodgkinson says: They dont charge on top of the interchange fee. They make money by selling services around the transactions the consumer is making. Retailers are paying to have offers put in front of the consumer via mobile devices. Physical stores PayPal, meanwhile, launched its rst major UK retail roll-out this year when Aurora Fashions decided to start using its services. The PayPal in-store app provides the customer with a unique barcode and transaction number, which the shop cashier scans to take payment from the customers PayPal account. Oliver says: For PayPal, very much an online-only business, its an opportunity to get into the physical store world for the rst time. Being a payment services company, it makes In association with 5. retail-week.com | September 2012 | RWT 5 send payments and it enables a user to send money abroad. Hodgkinson explains that it is intended to rival services such as those provided by Western Union. He adds: Its a clever strategy because international payments is a big market. The bank does not charge for the service and those who are not customers with Barclays can still register to use it. The catch is the amount of data customers need to supply. You need to hand over a lot of information, which lets them build a marketing prole for potential new customers, Hodgkinson says. Mobile phone operators also have something to gain from being involved in the mobile payment market. They are seeing it as an incremental revenue stream, says Oliver at PWC Consulting. Wallet platform O2 launched O2 Wallet in April, which works by allowing customers to preload money onto their accounts and use their phone to pay. The company is also involved in a joint venture known as Project Oscar, with Vodafone and Everything Everywhere, which owns T-Mobile and Orange. The venture will see the operators forming a company to create a mobile wallet platform. Another option for retailers is to create their own branded app. Starbucks mobile payment app has proved successful. It works by allowing customers to load money onto a prepaid account and, when they want to pay in store, they press a button on the app which shows a QR code that is scanned. Hodgkinson says it has been a success. It works really well in terms of payment. Its been very successful for Starbucks. The company processed 26 million mobile payments in 2011. It also means Starbucks can keep control of customer relationship management and doesnt have to pay someone else to put promotions in front of customers. Its a confusing business, and the mobile payments market will keep developing in the coming months retailers who are interested will need to keep an eye on its evolution. money on the payment by charging merchants an interchange fee. But Hodgkinson warns that its fairly pricey: PayPal will come under pressure because they are expensive. However, Shen points out that a key advan- tage is it is already a popular and widely known brand. She says: PayPal has a big user base to tap into. In the US in March, a PayPal in-store payment system was rolled out across nearly 2,000 Home Depot stores. Customers can use a PayPal account by typing their mobile phone number and a PayPal account pin on an in-store terminal. The retailer did not need to install new software, instead upgrading point- of-sale equipment. There is another option for large retailers, adds Shen. They can have their own branded app, and customers can pay using PayPal. She says McDonalds in France is rolling this out. Visa and Mastercard Visa and MasterCard are also keen to play a leading part in mobile payments services and are obviously keen not to lose their role as a primary handler of payments. Oliver says they are trying to protect their market share.If you take the established bank and credit cards operators its partly protec- tive, he says. Shen says Visa and Mastercard which has expanded mobile payment service PayPass into a larger platform called PayPass Wallet Services are trying to seize every opportunity. Customers might soon use smartphones to pay where they would have previously used cash, and Visa wants to increase the number of small transactions it deals with. Shen says: For Visa, its about capturing some of the cash transactions market because its an additional business opportunity. Visas V.Me digital wallet will launch in the UK on a trial basis in October 2012 with a wider roll-out expected next year. It will not include point-of-sale contactless payments at launch, but ultimately will. Jon White, head of marketing for mobile strategic alliances at Visa Europe, says: In the next 10 years, we can expect to see the creation of entirely new shopping experiences, where stores on both the high street and internet become seamlessly integrated and made accessible through the mobile device in the shoppers pocket. Barclays Pingit adopts a slightly different approach. The app allows people to link their bank account to their mobile number to In association with Large retailers can have their own branded app, and customers can pay using PayPal Sandy Shen, Gartner 6. 6 RWT | September 2012 | retail-week.com Content is king Retailers are battling to stand out from the crowd and keep customers interested, and digital content is an effective tool. Jessica Twentyman asks how retailers can become digital publishing experts, and discusses the best way to produce content online Online content should spark emotion in a customer and spur them to action Chris Gorell Barnes, Adjust Your Set W hen Liz Earle Beauty Company, a British brand owned by Avon, launched a new make-up line to complement its existing range of skincare products in May, it already had the ideal platform for showcasing the products, advising customers on how to use them and encour- aging them to buy: Liz Earle TV. Launched seven months earlier, the online channel offers video content that includes company and product news, expert beauty tips and how-to demon- strations of products but more importantly, it featuresclick to buy functionality, which means that customers can quickly add any item they see in the videos to their basket. And they can do that whether theyre watching them on the Liz Earle website, on its Facebook page which has 42,670 likes, or on YouTube. Liz Earle TV affords us a huge opportunity to engage with our customers in a new and unique way, highlighting our company philos- ophy and history, plus the quick and easy-to- use nature of our products, said Liz Earles global brand director Hannah Webley-Smith at the channels launch in October last year. The credit for creating the video content and integrating it with Liz Earles ecommerce systems goes to Adjust Your Set, a London- based multichannel video agency that also works for Marks & Spencer, Debenhams and Thomas Pink. If content is king, then context is queen, says Chris Gorell Barnes, chief executive of AdjustYour Set.Online content,he says,should be designed and delivered in a way that sparks emotion in a customer but, more importantly, spurs them to action preferably to make a purchase. A customers click on a piece of content, if its compelling enough and gives the right informa- tion about a product to make it appeal to the customer, should trigger a second click, a buy click, he says. Video content, when used effectively, increases customer dwell time on a site, ups conversion rates and repeat business and can dramatically boost a retailers search rankings, according to Gorell Barnes. Asos was an early adopter its catwalk fashion videos helped to increase conversion and made it stand out from other online players. The service remains one of Asos most successful innovations because it allows shoppers to see how the clothes move on models as they walk. Those are all appealing prospects for retailers especially the promise of higher conversion rates. Its a goal that has already been achieved by foot-wear retailer Dune, which began piloting product videos on selected lines in May 2011. It decided to roll out videos of its entire range later that year after seeing a signicant impact on conversion rates. Dune uses Adobes hosted digital asset management platform Scene7 to manage videos for its commerce site. It can also deliver product views and zooms, colour swatches and click-through promotional banners and is used by retailers including Boots, Shop Direct, Harrods and Debenhams. All these elements are vital to create a compelling user experience, says Jamie Brighton, EMEA product marketing manager at Adobe. Digital content for retailers is all about bridging the gap for customers between their ofine and online shopping experiences, he says. Shoppers like to get a really good look at the product that theyre thinking of buying, he says and, if they cant see it properly, they wont buy. Retail brands need to remember that because, historically, this gap in experi- ence getting a good, hard look at a product is one of the main areas where online retail has struggled to match the in-store experience. World play But in an increasingly social and connected world, compelling digital content isnt just a matter of what product features a retailer chooses to show customers. What others say about them matters too. These others might be well-known fashion Asos was an early adopter of putting video content on its retail website Dune experienced a signicant impact on conversion rates when it introduced videos In association with ALAMY 7. retail-week.com | September 2012 | RWT 7 journalists, for example. In the US, department store group Nordstrom struck a partnership with mens magazine GQ in May 2011 in which products from the pages of the magazine were sold in a dedicated shop at norstrommen.com, which directs shoppers to the Nordstrom mens ecommerce site. Closer to home, clothing retailer Boden partnered with Grazia magazine on its autumn 2012 collection. In both Bodens print catalogue and online site, Grazia fashion editors now pick out the items they like the most from that collection. Such alliances bring fresh content to a transaction between shopper and retailer. More important still is what customers say about a product. According to research conducted by market analyst Forrester Research, on behalf of digital commerce specialists Bazaarvoice and RichRelevance, todays online shoppers are looking for three kinds of content when deciding to buy: product details, certainly, but also peer reviews and personalised recommendations. According to the research, in which more than 500 UK-based online customers were surveyed, 86% rely on product ratings and reviews by other customers before making an online purchase. Personalised product recommendations are also widely used for purchases 93% of UK shoppers surveyed said that they had seen recommendations on retailers sites and 42% said they had made a purchase based on personalised product recommendations. User-generated content (UGC) in the form of customer reviews is an increasingly common type of digital content on UK online retail sites. Argos, Boots and Cath Kidston, for instance, all use Bazaarvoices hosted platform integrated with their ecommerce sites for handling this kind of content. The online review sites of Boden, Superdry and Millets, meanwhile, are powered by Shopzilla. Spread the message The content retailers create themselves should be distributed to as wide an audience as possible. This can be posted on a retailers Facebook page, on YouTube and linked to on Twitter, as is the case at Liz Earle. Electricals retailers Currys and PC World regularly tweet links to promotions and discount codes on their website from its Twitter account @curryspcworlduk. This drives trafc to content that might not otherwise be seen by potential customers. Retailers should also target key inuencers, particularly bloggers, says Trisha Brandon, head of content at digital marketing agency iCrossing, where she works with retailers John Lewis, TK Maxx, Lands End and Lipsy.There needs to be a mix when it comes to how you distribute your best content,she says. Retailers need to engage inuencers by creating exclu- sive content for them or giving them hooks around which they can create their own content a video clip of a fashion shoot, an interview with a hot designer or simply previ- ously unseen product photography. Brandon says: Providing these inuencers are given something of value, its a win-win situation for both sides. By forging connec- tions and sharing content with them, stories are told about a brand in fresh ways. This approach is used by iCrossing for retailers including John Lewis. The agency shares exclusive video content with bloggers, such as Kristin Knox at theclotheswhisperer.co.uk, who attend the annual Vogue Fashion Night Out event in September in London. But the rst place to start is still with the companys own product pages, according to a recent report by Lauren Freedman of US-based ecommerce consulting rm E-tailing Group. Creative how-to guides, video, alternative views and interactive tools all support a more sophisti- cated, content-rich experience, she says. The companys survey of 147 online merchants found that 87% plan to invest more in category content over the course of 2012. Its an investment worth making, Freedman says. The result will be more compel- ling and memorable brand experiences for customers, which more retailers will need to provide as online and multichannel sales grow. As customers become more astute and demanding, and the retail landscape gets more competitive, good quality digital content will become crucial to stand out from the crowd. There needs to be a mix when it comes to how you distribute your best content Trisha Brandon, iCrossing 93% of UK shoppers surveyed said that they had seen recommendations on retailers sites and 42% said they had made a purchase based on personalised product recommendations. User-generated content (UGC) in the form of customer reviews is an increasingly are given something of value, its a win-win situation for both sides. By forging connec- tions and sharing content Lewis. The agency shares exclusive video content with bloggers, such as Kristin Knox at theclotheswhisperer.co.uk, who attend the annual Vogue Fashion Night Out event in September in London. But the rst place to start is CLICK TO BUY and 42% said they had made a purchase based User-generated content (UGC) in the form of customer reviews is an increasingly bloggers, such as Kristin Knox In association with 8. ANTs wireless solutions can combine a surprising array of functionality. For instance, internal and external voice calls, lone worker alarms, messaging and automated process notifications can be integrated and managed in one solution. And now the latest i62 IP handset delivers a new reliable, cost-effective answer by enabling staff to communicate over a WiFi network. This solution can be particularly suitable for organisations that require a new WiFi network or have one in place already. For more information on how we can help synchronise your staff, please go to www.anttele.com/coordination or telephone 01494 833100. Better staff synchronisation can improve customer service Call 01494 833123. Visit www.anttele.com/synchronise Avaya Partner in Customer Excellence ANT Telecommunications Limited, Swift House, Peregrine Business Park, Bucks HP13 7DL Telephone: 01494 833100. Fax: 01494 833101. Email: info@anttele.com www.anttele.com 9. retail-week.com | September 2012 | RWT 9 A new phrase has emerged in retail over the last year or so showrooming, which involves customers using physical stores to check out a product but buying elsewhere, either online or with their mobile phone, because its cheaper or more convenient. Its proving an increasing headache for retailers as they fight to win sales and one that technology itself is enabling as in-store Wi-Fi is rolled out. But this is not a new phenomenon.A Dixons advertising campaign in 2009 encouraged shoppers to try out products at John Lewis but to buy online at Dixons, and there has long been rivalry between channels. However, Chris Donnelly, global industry managing director for retail at Accenture, says the growth of mobile commerce over the last two years has made showrooming easier for consumers and a critical issue for retailers. Showrooming is most popular among consumers purchasing big-ticket items and branded goods, where a like-for-like price comparison is possible, he says. The problem also causes tensions between retailers own stores and internet businesses. Embracing change James Spalding, managing director of e-commerce provider e2x, which works with B&Q, says retailers have been trying to find a solution. Some have tried selling products exclusively in-store, but this is a lazy idea that is more likely to lead to resentment by customers and goes completely against the multichannel approach they should be adopting, he says. Siobhn Ghin, associate partner at consul- tancy Kurt Salmon, says a recent Kurt Salmon and Prosper Corporation survey of 8,000 consumers revealed that 70% of consumers aged 25 to 54 with smartphones use them to Stores go multichannel Bricks-and-mortar retailers are installing a raft of online technologies to showcase their complete ranges and prevent consumers buying elsewhere after testing products in-store. Liz Morrell finds out more the right information in their hands to engage the customer, he says. Shopper engagement Rolling out in-store Wi-Fi is important, not only for customers but for store staff, who need access to information. Lee Gill, senior vice-president of retail strategy at supply chain software specialist JDA, says retailers need to fully engage with the shopper. That will only be achieved by empowering the sales associate by giving them access to real-time information possibly through a tablet device, he says. Fashion retailer Reiss is 90% through the roll out of iPads in its stores, with 57 now live in the UK, supported by a Wi-Fi network from Vodat International. Like fashion giant Aurora, which has led the way in using in-store tablets, it allows customers to view its full collection and order products not available in store. Additionally, using Wi-Fi in store means the store can easily claim the sale as its own. Reiss business systems manager Alex Dixon says the project has exceeded expectations driving an uplift in sales that is likely to deliver a return on investment in less than three months. Retailers can dramatically increase sales by telling shoppers the item is in stock and available to take away Phillip Adcock, Shopping Behaviour Xplained comparison shop, up from 62% a year ago. She says: Nordstrom, the US department store, was surprised that many younger customers were using its app while shopping in-store instead of approaching salespeople. Rather than fighting this,Nordstrom added Wi-Fi to its stores and is testing recharging stations and providing clusters of iPads for shopper use. Phillip Adcock, founder of research agency Shopping Behaviour Xplained, says retailers need to understand how the shopper thinks to realise that with the right retail proposition the store can still win the sale. The human brain always disproportionately favours immediate gain over deferred loss. So retailers can dramatically increase sales by telling shoppers the item is in stock and available to take away now, he says. BT Expedite chief executive Josh Pert agrees. He says retailers will still have the upper hand if price comparison is driving showrooming. You have the opportunity to get to the customer first, present them with better infor- mation and fulfil the product on the spot. This is a very powerful advantage if you can respond quickly, making sure your staff have More consumers are making purchases via their smartphone In association with 10. 10 RWT | September 2012 | retail-week.com We have seen this as an absolute must to bridge the gap between channels. There should be no boundaries for our customers when they come into one of our stores, he says. But as well as opening up the product range, such initiatives allow retailers to access customer history and product informa- tion that allows them to provide a person- alised shopping experience more likely to result in a sale. For retailers to profit in this showrooming environment, its more impor- tant than ever for stores to create a personal- ised experience for their customers, according to Craig Sears-Black, managing director of Manhattan Associates. Single customer view A single view of each customer also enables retailers to target shoppers with offers that persuade them to buy while in store,says Cindy Etsell, head of retail at SAS UK and Ireland. Understanding who your customers are, what they buy and how, their age, gender and other key demographics is crucial and can give retailers a clear strategy on how to deal with challenges such as showrooming, she says. However, Gill says sales staff should have freedom to bargain too. The associate should iPads at Reiss The roll out at Reiss was designed to enable customers to connect to the retailers website in store, enabling them to see Reiss full collection of products, and allowing the store to order stock not held in the shop. Staff also have access to Reiss retail intranet Clothes Live allowing them to access planners and check availability. Stores only have one iPad per site but Reiss business systems manager Alex Dixon says the retailer is considering introducing further devices and is looking at their use in changing rooms. The changing rooms would be one area we might look at, so customers trying items on can see what other items are available to complete the look. Future plans include allowing customers onto our Wi-Fi network in a controlled manner and potentially streaming videos via the iPads, he says. be prepared to negotiate on price, having access to real-time compara- tive price informa- tion and business rules that define the amount of discount that can be offered, based on the custom- ers value to the retailer, he says. This will encourage customers to buy rather than just try. Maplin Electronics agreed a roll out of in-store Wi-Fi earlier this year with The Cloud. The deal will allow it to promote a range of tailored products and promotions via a branded Wi-Fi landing page, personalised according to shoppers browsing histories, as well as allow customers to read product reviews or discuss purchases on social media. Retailers including John Lewis are also using kiosks and in-store technology to help staff sell. Tailored communications Ian Smith,senior consultant with Kurt Salmon, says retailers should encourage customers to challenge prices and should more accurately track customers too. Asking for login details when the Wi-Fi is used will enable the retailer to track subsequent purchasing and browsing data. If they do not buy anything, retailers can then contact them with tailored marketing communications based on their previous online or in-store history, he adds. Wi-Fi basedpresence zonetechnologies can also help persuade shoppers to buy in store. They identify a shoppers presence in the shop, according to James Lovell, a European smarter commerce solutions consultant for IBM. Coupled with location-based services linked with smartphone devices, they give retailers the ability to identify customers individually as soon as they enter the store and then serve targeted marketing communications messages via their phone or on digital displays in-store, he says. Pert at BT Expedite says continuing improvements in location-based services allow incentives to be delivered to the customer while shopping, meaning a retailers message can be presented to them before theyve even started comparing prices online. But while technology can help, many experts believe that the best approach to combating showrooming is a simpler one that requires retailers go back to the basics of customer service. Retailers need to make sure their employees are trained as sales people, not just clerks, says Sears-Black. As with many problems in the present retail environment, the solution needs to be multi- pronged and retailers need to be creative. But with the right approach, even difficult multichannel problems can be solved. n Retailers have the ability to identify customers as soon as they enter the store and then serve targeted marketing communications messages via their phone James Lovell, IBM John Lewis is among a number of retailers to have installed online tools in its stores In association with 11. 1.106OSRAMAG,CMKMKAB,81536Munich,Germany Dont make any compromises when it comes to your shop illumination. Go for our best choice: OSRAM POWERBALL HCI Plus. Especially when it comes to long lifetime and energy efciency, you can expect top performance. Furthermore, you will get that extra colour effect, and across the entire colour spectrum to boot simply brilliant. Find out more: www.osram.com/hciplus New: the premium solution for your shop illumination with extra efciency. Makes fashionable colours shine even more: OSRAM POWERBALL HCI Plus. www.osram.com/hciplus 12. With best-in-class network, hosting and contact centre services, Cable&Wireless Worldwide delivers end-to-end solutions that boost profitability across multi-channel retailing. Our RETAIL 20|20 programme drives out costs, increases supply chain efficiencies and enhances customer experiences to build loyalty, advocacy and sales. Embedding rapid-response agility across every aspect of retail, we equip you with services designed to build business growth in todays uncertain and evolving landscape. Going for growth? Going for growth: www.cw.com/retail Driving growth in the new consumer-led world 13. retail-week.com | September 2012 | RWT 13 F rom demand analytics to mobile shopping, technology is constantly changing. Innovations in technology are allowing retailers to make the shopping experi- ence faster, more convenient and more interac- tive. So whos leading the way in retail? From fashion to food, retailers are nding interesting ways of using technology to enhance their offer and, despite the current economic climate, investment in new IT is continuing. Technology hasnt always been a strategic priority but, as these retailers show, its becoming a worthwhile way to stand out from the crowd. Aurora Fashions Andy Tudor is head of IT for Aurora Client Services. He works for technology supplier Retail Assist, which has been supporting Aurora Fashions owner of brands including Warehouse, Oasis and Coast and Karen Millen in introducing innovations in technology for the last 18 months. Among them is Anywhere Everywhere, a new approach to stock management and order fullment. The process starts when a customer A high-tech step forward An innovative reserve and collect scheme and integrated online shopping solutions are two uses of IT that are enabling retail brands to stand out in the marketplace. Claire Burke discovers whats new You dont need to hold as much overall in the business when you can ship it directly from the store. The cost of holding stock is reduced Andy Tudor, Aurora Client Services places an order on the website. The order is sent into the management system, which then sources the product from the distribution centre in the rst instance. But if its not there, the order management system will source the product from a retail outlet instead. Aurora was among the rst to introduce the system. It was up and running in October last year, after the software had been tested and installed. Tudor says: We were certainly rst in the fashion world and I know that other retailers are developing that capability. Its all about not disappointing customers. Theinitiativemeans thatcustomersreceive products sooner, and stores can avoid marking down items in the store when they are still in demand online. Tudor adds: Its also about inventory holding. You dont need to hold as much overall in the business when you can ship it directly from the store. The cost of holding stock is reduced. Currys and PC World Technology is also improving the order process at electricals retailer Currys and PC World. Brian Hume, managing director of retail consultancy Martec International, singled out the retailers Reserve and Collect service as an example of clever use of IT in retail. It starts working once a customer has ordered an item on the Currys and PC World websites. They are then given the option of choosing a store to collect the item from. Burberrys fashion show featured real models and holograms In association with ALAMY 14. 14 RWT | September 2012 | retail-week.com An email will conrm the order this usually takes ve to 15 minutes and they can pick up the product just an hour later. Hume says: The people at the front of the pack are going to do same-day click-and- collect. With Currys you can go an hour later to your store and pick it up, even if its out of stock in stores. Everyone doing online retail will have to go that way. To offer such a quick service, retailers need the technology to know what is in store at that very moment. Hume explains: You need to know what stock is in store now. Every time they sell an item in store they have to update the database in real time. He says that, when an item is sold, the infor- mation will be sent to the stores headquarters immediately. Within 20 minutes, I guess, the database is up to date. Three or four years from now you wont be able to be competitive unless youre doing that. There are only a small number of retailers doing this now but it will become obligatory in the not too distant future. Burberry Martin Gill, principal analyst for ecommerce and channel strategy at Forrester Research, highlighted Burberry as leading the way in its in- store digital experience. He says: Burberry is one which stands out. Its probably the brand with the most advanced embedded digital strategy. Where they are pushing boundaries now is the in-store digital experi- ence, the theatrical retail experience. Burberrys fashion show in Beijing last year, for instance, featured both real models and holograms. It was a blended digital and physical catwalk show, it looked amazing. They streamed it live to a number of agship stores around the world, says Gill. Customers in Burberry stores were given iPads to watch the show and if they saw something they wanted, could order a product using the devices. This meant they were ordering garments before the lines were nalised. Gill says that Burberry achieved this by integrating the manufacturing and ecommerce systems Their processes are slick enough, enabled by technology. They can understand projected volumes and build stock, he says. Debenhams Innovations in technology are allowing retailers to improve integration across their channels. Gill praises Deben- hams for the way it has integrated its iPhone app shopping basket with its ecommerce operation. He says: They are one of the few brands to do this. Technically its complicated. You can go to a store, use your app to scan products, look at the price then drop it into your iPhone shopping cart. The customer might decide not to buy the item there and then. But, if they later go onto the stores website the item will come up, giving the customer another opportunity to buy it. Asos Asos also has good integration of platforms. Gill says: They integrate content, communi- ties and ecommerce. Asos produces videos and season style guides, and its not just standalone content. There are always links that take you back to the ecommerce site. They know the more you interact with a brand the better. Everything from the fashion etailers Pinterest page to its print magazine can link customers back to product pages, driving trafc volumes. There are so many areas to get right in retail technology it can seem a daunting task to know what to do rst. But retailers are still getting it right, even in times of rapid change. Asos integrates communities and ecommerce Tescos virtual success Tesco is among the retailers leading the way in technology. In August, it unveiled one of the UKs rst interactive virtual grocery store in Gatwick Airports North Terminal. It aims to help passengers avoid the inconvenience of coming home from holiday to an empty fridge. The store uses interactive digital displays, allowing passengers to browse, as they would in a physical store, and take advantage of the convenience of an online grocery shop and home delivery. Shoppers can view a range of products by scrolling through moving screens on large virtual fridges. By scanning the barcodes with their smartphones they can add chosen products to their online baskets, book a home delivery slot and pay. Their shopping will then be delivered when they return from holiday. Last year Tesco launched a virtual store in South Korea and it was able to use that experience when it came to opening its virtual store at Gatwick. Tesco said the technological challenges it faced included the quality of the 3G signal, deciding whether it would need to use Wi-Fi, getting the specication of the barcodes just right to ensure customers would be able to scan them easily, ensuring staff understood the whole grocery operation from start to nish, and, in terms of the website, planning the customer journey to ensure it was a logical one. The people at the front of the pack are going to do same-day click-and-collect. All online retailers will go that way Brian Hume, Martec International Martin Gill, principal analyst for ecommerce and channel strategy at Forrester Research, highlighted Burberry as leading the way in its in- store digital experience. He says: Burberry is one which stands out. Its probably the brand with the most advanced embedded digital strategy. Where they are pushing boundaries now is the in-store digital experi- ence, the theatrical retail Burberrys fashion show in Beijing last year, for instance, featured both real models and holograms. It was a blended digital and physical catwalk show, it looked amazing. They streamed it live to a number of agship stores around the world, says Gill. slick enough, enabled by technology. They can understand projected volumes and build stock, he says. Debenhams Innovations in technology are allowing retailers to improve integration across their channels. Gill praises Deben- hams for the way it has integrated its iPhone app shopping basket with its ecommerce operation. He says: They are one of the few brands to do this. Technically its complicated. You can go to a store, use your app to scan products, look at the price then drop it into your iPhone shopping cart. Debenhams is using technology to ring the changes In association with 15. www.quantumretail.com *Proud sponsors of the Retail Week Technology Summit 2012. Providing retailers with the latest technology solutions and strategies to compete in todays complex retail environment. Solving Todays Complex Retail Problems Quantum Retail oers the most innovative inventory management and merchandising optimisation solution for maximising a retailers prot and service levels. We help retailers become more ecient at eliminating excess inventory, markdowns and waste whilst supporting expansion and multichannel growth. 16. Congratulations to all the nominees at the Oracle Retail Week Awards. Youre the ones writing the next chapter in this ever-more complex and fast-paced industry. What we used to call multi-channel is now just a given. Today, its about coordinating those channels to create a truly seamless in-store and on-line customer experience. At ReThink, this reflects our approach to recruitment and resourcing. Our dedicated Retail Sector team has an in-depth knowledge of everything from retail systems to e- and m-commerce, and from operational development to supply chain and logistics. Together weve earned an enviable reputation for our quality approach to the market. And for the fresh ideas we bring to every recruitment challenge. To get the full story and discover what we can do for you, call our Retail Director, Iain Blair on 0117 317 8888 or visit www.rethink-recruitment.com retold Retail Youre the ones writing the next chapter in this ever-more complex and fast-paced industry. What we used to call multi-channel is now just a given. Today, its about coordinating those channels to create a truly seamless in-store and on-line customer experience. At ReThink, this reflects our approach to recruitment and resourcing. Our dedicated Retail Sector team has an in-depth knowledge of everything from retail systems to e- and m-commerce, and from operational development to supply chain and logistics. Together weve earned an enviable reputation for our quality approach to the market. And for the fresh ideas we bring to every recruitment challenge. Whether youre a client looking for talent or you are the talent looking for your next role, to get the full story and discover what we can do for you, call our Retail Director, Iain Blair on 0117 317 8888 or visit www.rethink-recruitment.com 17. retail-week.com | September 2012 | RWT 17 S elf-service checkouts are one of the more divisive in-store technologies of the past couple of decades. Introduced in the late 1990s, theyre loved by retailers for their efficiency but disliked by some customers for their glitches, and a love-hate relationship has ensued. The benefits are obvious. The tills can speed up transaction times and free staff to serve customers on the shopfloor, while taking up less space than a manned till. But bugbears remain, particularly when staff intervention is required, and Ikea is just one retailer to have experienced problems. This summer the Is self-service fit for purpose? Self-service tills are now common, but is the technology doing what its supposed to do? Liz Morrell finds out Current technology relies on products being bagged one at a time, resulting in the infamous unexpected item in the bagging area message Sandra Samulski, Kurt Salmon Swedish furniture giant revealed that it was removing self-checkouts in the US because the systems, which were more secure than UK versions, required too much staff oversight. Love-hate relationship Tim Ogle, European chief executive of customer intelligence company Market Force, says that the flaws in the system can actually extend waiting times. There are some technology tweaks that still need to be addressed, he says. Market Force recently surveyed 5,000 shoppers on the use of self-service checkouts which showed that more than half (57%) liked them because they speed up the payment process and 64% said retailers should invest in more this year. But it also showed how frustrating the experience can be. Almost half (44%) said they didnt use self- service checkouts because they preferred to interact with staff, while 22% said they didnt like the amount of time it took to get authorisa- tion for age-restricted products. A 2011 white paper, The Impact of Self- service on the Customer Experience, from the Henley Centre for Customer Manage- ment found that customer experiences of self-service technology can be poor. In many cases, self-service applications are damaging rather than enhancing the consumers overall service experience, it said. But despite the problems, the market is growing. Strategic research and consulting firm Retail Banking Research says that in 2011 shipments of self-checkout terminals rose to 26,700, a number that is set to more than double by 2017 to 60,000. Helen McInnes, retail trend watcher at technology provider NCR, says the market has developed quickly in the UK. She says: In larger supermarkets between 20% and 70% of lanes are self-service. They handle between 35% and 70% of transactions and are now Studies show a near 50:50 split among customers for and against self-checkout In association with 18. 18 RWT | September 2012 | retail-week.com used by 40 million customers every week in the UK. A Sainsburys spokeswoman says the use of self-service checkouts is about giving the customer choice, rather than replacing staffed tills. She maintains: There is a trend for customers to shop more often for smaller amounts in order to waste less, so the greater choice and checkout numbers that self- checkout has given us makes for a better shopping experience. But the experience can still be improved,says Sandra Samulski, retail consultant at consul- tancy Kurt Salmon. Current technology relies on products being scanned and bagged one at a time,resulting in the infamousunexpected item in bagging areamessage when a customer tries to scan and bag more than one item, she says. Accuracy of the scales also causes customer frustration especially when they fail to register a bagged product. Sainsburys admits this can be a problem. Some of the common problems arrive from the weighing scale that interacts with the point of sale system, and the bagging alert when customers own shopping bags are too heavy when first put on to the checkout, says the retailers spokeswoman. Sainsburys points out that colleagues are available to help if customers are having problems but Samulski says the systems still need to improve. Scale readings need to become quicker and more accurate, and retailers have been fine tuning the scale settings to ensure light items such as greetings cards are registered by the machine, she says. But thats not all. Samulski says that on-screen user interfaces could be improved to reduce confusion. Shoppers are frequently left puzzled when they are required to know the exact name of the bakery good or produce item they are buying to be able to find it in the menu, says Samulski. Security issues Another motivation for ironing out glitches is theft. A survey of nearly 5,000 shoppers by watchmywallet.co.uk found that nearly a third (30%) had stolen goods from supermarkets while using self-service checkouts. The check- outs are calibrated to detect when unpaid items are put into the bagging area, but staff often simply override the checkout to keep queues moving. Keeping tabs on customers in store might help prevent theft becoming more of a problem. This could be done by asking a customer to identify themselves, either by swiping a loyalty card at the till, using a log in, or by installing sensors to detect consumers mobile phones when they enter the store as long as shoppers have given their consent for this to happen. Theft is less likely to occur if shoppers know the retailer is aware of their presence. Tony Harrington, assistant director of the Henley Centre, says login information or mobile phones could be used to keep a handle on what customers buy. That means that the brand can establish a customers identity and monitor a range of information about the user as they move throughout the store, he notes. Although it may seem contradictory, self- service checkouts actually require a higher level of overall customer service than ever if retailers are to keep customers happy. McInnes at NCR says that the self-checkout area needs plenty of staff monitoring the tills, adding: The self-checkouts increase the density of the number of payment points in-store, but active service delivery is still important. Sainsburys says that it has concentrated on addressing this. We have heavily invested in colleague training to ensure that we can give great service as well as coaching customers to use the checkouts, says the spokeswoman. Grocers were among the first to embrace self-checkout, but it has proven popular throughout the industry. General merchandise stores including retailers from Homebase to WHSmith and Boots have introduced it. WHSmith unveiled the roll out of self-service checkouts from supplier NCR earlier this year, using BT Expedite point-of-sale software, and the technology has since been introduced in a number of large high street and airport stores. The retailer says customer feedback has been positive, with queuing times reduced and no detrimental impact to overall customer service. Increasing customer choice Boots introduced self-service tills in June 2007 and now has them in 100 stores. A spokes- person says that the aim is to increase choice for customers, adding: Customer care is always our first priority and by having self-service machines as an option for our customers, our aim is to increase the number of places they can pay at rather than decrease the number of colleagues we have on hand to offer advice. And as consumers become more tech-savvy, they expect more choice. Chris Gates, director of retail at Hitachi Consulting UK, says: With the rise of consumers that have grown up with an inherent understanding of technology,there is certainly a need for in-store technologies. The technology is likely to get more user- friendly and IT providers insist that it is improving. Ed Brindley, director of marketing and business development at Wincor Nixdorf, says that second generation self-checkouts are less likely to malfunction. He points out that some are also equipped with a cash hopper, allowing customers to put both coins and notes into the machine without needing to flatten and feed notes. There may be niggles, but self-service machines enable retailers to cut queues and release staff to work elsewhere, plus customers are fans when they work correctly. It is likely that theyre here to stay. n Nearly a third of shoppers (30%) have stolen goods from supermarkets while using self-service checkouts Survey by watchmywallet.co.uk Grocers pioneered self-service checkouts In association with 19. If so, you are not alone. Informaticas Master Data Management (MDM) solution delivers a single, authoritative, and trustworthy view of your critical data assets. Learn why hundreds of retail companies and other organisations rely on Informatica MDM to: Deliver new products to market faster Streamline operations to reduce costs Demonstrate compliance with standards and regulations Find demos, videos, and whitepapers at www.informatica.com/uk 2012 Informatica Corporation. All rights reserved Are you struggling to get a complete and accurate view of your data so that it works for the business? 20. retail-week.com | September 2012 | RWT 21 A pple and Amazon: they are two of the worlds biggest retailers, yet they are now competing in another race entirely. Alongside Google, they are battling to become the worlds largest provider of cloud- based services. In terms of financial clout, it doesnt appear an evenly pitched battle. In its most recent full financial year (to 30 September, 2011), Apple posted net income of $25.9bn (16bn), on revenues of $633.4bn (389.9bn). By contrast, in Amazons most recent financial year (to 31 December 2011) it post a comparatively paltry net income of $631m (388.5m), on revenues of $48.1bn (29.6bn). At the time of writing, the market capitalisations of the two compa- nies stood at $633.4bn (389.9bn) for Apple and $110.3bn (679m) for Amazon. But this is not a fight that will be won on financials alone and Amazons track record Reach for the cloudsApple and Amazon might be retail giants, but they didnt get where they are by being one-trick ponies. Jessica Twentyman charts their battle to lead in the race to provide cloud-based services Amazon revealed last month that for every 100 printed books sold on its UK site, 114 ebooks are purchased. Pay-as-you-go server capacity Above all, Amazon is already an established cloud services pioneer. Launched in 2006, Amazon Web Services is a collection of services that together provide companies of all sizes with a computing platform in the cloud that can be increased or decreased in size, according to a companys needs. This collection has grown quickly over the past six years, beyond the core Elastic Compute Cloud (EC2) service, which offers server capacity on a pay-as- you-go basis, to include storage capacity and content delivery networks. Its not possible to pinpoint exactly how much revenueAmazonWeb Services takes each quarter. The company reports revenues Though much smaller than Apple, Amazon is making incursions into its air space Customers tell us that they want access to all of their music, wherever they are, and on all the devices they use Steve Boom, Amazon of innovation is undeniable. It runs the largest ecommerce site in the world, enjoying a comfortable lead over any other rival. Its ereader, Kindle, is the most popular device of its kind in the world and the retailer sells more ebooks than any other company, despite the best efforts of other booksellers and publishing houses to enter the market. In association with 21. 22 RWT | September 2012 | retail-week.com in three categories media, electronics and general merchandise, and other. It is in this third category, other, where Amazon Web Services revenues are reported, along with what is calls miscellaneous marketing and promotional activities, our co-branded credit card agreements and other seller sites. Still, revenues in this category came to more than $1bn (615m) in the first half of 2012, prompting speculation among financial analysts that, even if Amazon Web Services accounts for just 75% of that other category, it could easily be a $1.5bn (923m) a year business by the end of 2012. Earlier this year, analysts at investment bank Morgan Stanley estimated $1.19bn (733m) in revenue in 2011. Amazon on the warpath Either way, its safe to assume that Amazon is already a billion-dollar cloud business. And the companys latest move in cloud services is a clear challenge to Apple. This summer, Amazon made a number of Amazons B2B services One area in which Amazon stands out in the battle for provision of cloud services is to other retailers. Carlos Conde, solutions architect at Amazon Web Services, says: Customers in the retail sector are using us for everything from back-office functions to marketing, and from one-off projects to running their entire ecommerce platforms in [our] cloud. To a large extent, retailers are drawn to Amazon Web Services by the prospect of being able to scale their cloud-based computing environ- ment up and down according to changes in sales volumes and customer demand, says Conde. This saves them the trouble and expense of having to buy in-house systems to cope with peak periods. Having extra computing capacity for a short period is also good for marketing campaigns. In 2010, for example, Sainsburys commissioned London-based digital marketing agency Dare to run its Feed your family for 50 campaign. By moving this campaign on to Amazons scalable technology, Dare didnt have to invest up-front technology resources and could focus all its efforts on creative execution, says Conde. Some retailers are running their entire business on Amazon Web Services, Conde says. He observes: Retailers are good at serving their customers, but arent necessarily very good at operating and managing large-scale, resilient and highly-available IT infrastructures. But not every retailer wants to farm out ecommerce to Amazon, and some have issues with sharing so much transactional data with another retailer which competes in almost every sector. Marks & Spencer and Mothercare, for instance, have in the past few years both decided to come off Amazons web platform and develop the necessary expertise in-house. a n n o u n ce m e n t s regardingitsyear-old Cloud Player digital music service, a would-be rival to Apples iTunes. First, in mid-June, there was the unveiling of a free Cloud Player app for Apple iPhone and iPod Touch, so that users can stream or download music stored in their Amazon cloud account to their Apple devices. Customers are granted five gigabytes of storage on Cloud Player for free. Those who need more must upgrade to a paid option, which starts at $20 for 20GB, but music purchased from Amazon doesnt count towards a users storage quota. Previously, Cloud Player was only avail- able for Android devices. Customers tell us that they want access to all of their music, wherever they are, and on all the devices they use, said Steve Boom, vice-president of digital music at Amazon, at the time of the launch. By bringing Cloud Player to iPhone and iPod Touch, we now have the most widely compat- ible cloud playback solution available, giving our customers the ability to buy once and enjoy music anywhere. Just six weeks laterAmazon struck again; this time it announcedscan and matchtechnology for Cloud Player, which clearly will go head-to- head with Apples iTunes Match service. What this means is that when a customer signs up for Cloud Player, Amazon will scan the song libraries sitting on their computers in Windows Media Player, for instance, or on iTunes. Where it finds matches a song on the users computer that is already avail- able among the 20 million songs in the Cloud Player library they will be instantly made available to that user in Cloud Player, without them having to upload the song. That includes those songs previously ripped from CDs, or purchased from iTunes. Such blatant attacks represent a clear challenge to Apples iCloud, launched in October 2011, which incorporates an iTunes in the cloud service, as well as cloud services for storing documents, photographs, contacts and calendars. The idea behind iCloud is that a user with multiple devices an iPhone, an iPad and a desktop Mac or PC can rely on all their personal content being synchronised in the cloud and pushed out consistently to their different devices. That means that a user might open up thebrowserontheiriPhoneandseeadocument they were reading on their iPad earlier that day and email it to a colleague, whose contact details will be instantly available from that iPhone or any other of the users devices. In terms of consumer service, Amazons Cloud Player and Cloud Drive have a head start over Apple iCloud of just a few months. Meanwhile, a host of other providers are targeting consumers: they include other digital music services, from Spotify to We7, purchased by Tesco in June 2012, and other cloud- based storage services, such as Google Drive, Microsoft SkyDrive and Dropbox. It is shaping up to be a battle too close to call. n Retailers are good at serving their customers but arent necessarily very good at operating and managing large-scale IT infrastructures Carlos Conde, Amazon Web Services In association with ALAMY 22. 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ACHIEVINGACHIEVING MULTICHANNELMULTICHANNEL EXCELLENCEEXCELLENCE 30-31 October 201230-31 October 2012 | Etc Venues, St Pauls, London| Etc Venues, St Pauls, London Ways to book: Tel: 0207 728 5897 Email: retailconferences@EMAP.com www.retailecommercesummit.com Programme highlights you cannot afford to miss: 1 Knocking your customers socks off: Surpassing customers expectations to increase loyalty and spend 2 Multichannel, cross-channel, omni-channel: Converging the space between ofine and online 3 How will ecommerce change the future of retail? 4 Ecommerce in the Boardroom: Streamlining your digital offering for multichannel and moving from bricks to clicks 5 Protable overseas expansion: Successfully leveraging your business internationally Visitthe w ebsite to see w ho else w illbe attending Gain a fresh perspective from the following experts: Allison Wightman Head of eBusiness Ishan Patel Group Omni-Channel Director Robin Phillips Ecommerce Director Chris Webster Director EU Border Trade Laura Wade-Gery Executive Director Multi- Channel E-Commerce Simon Forster Director Richard Pennycook CFO Steve Mills Head of Ecommerce Andy McWilliams Multichannel Consultant Rob Feldmann CEO Gracia Amico Head of Ecommerce Jon Rudoe Director of Online Exhibitors: Sponsors: Associate Sponsors: