Getting my vote as best speaker of the first full day at the CIO Retail Summit was Steven Skinner, vice-president, business consulting, retail, consumer goods and hospitality practice leader at Atlanta-based Cognizant, who gave detailed results on the recently-released 2nd annual Cognizant Shopper Experience Study.
With so much of this CIO Retail Summit focused on retail, we were interested to hear the answers on such topics as to whether mobile commerce was really important and what roles play out in the buying process for different age groups.
There are a number of surprises in the study, especially in the area of mobile commerce, which is not yet ready for prime time in the minds of most shoppers while simultaneously being one of the fastest growing opportunities in retailing. It takes a careful approach to reconcile these opposing forces
“The shopping experience is becoming disaggregated, leaving the retailer in the lurch,” Skinner said. “Four drivers are reshaping business today: Globalization; Virtualization (of organizations, people, processes, technology); Millennials; and Leveraging technology.”
The study showed that social media is not the dominant driver of decision makers yet. Packaging is still the number one driver. In fact, social media lagged in all study segments.
And mobile payments are not yet a priority in the U.S., although are huge in Europe and Asia- Pacific. The only group really asking for it is Generation Y (18-33). Skinner said that retailers can learn from the others “because it’s coming.”
Integrated channels (in store, online, etc.) are now expected by shoppers. And when shopping, while older customers will take it up with store management if they aren’t satisfied, Gen Y consumers are more likely to post of a bad experience.
Cognizant noted 10 megatrends emerging from the study. They are:
- Taking the Store to the Shopper Retailers will bring all of the capabilities of their enterprises to the shopper, regardless of their location, whether the shopper is in the store, in the home or walking in the park.
- Shopper Demand for Consistent Cross-Channel Experiences Drives Retailer Organizational Integration. To create the seamless shopping experience, customer service, merchandising, pricing, inventory and supply chain business processes will be integrated within the organization.
- Distributed Order Management Integrates the Retailer. All enterprises will integrate distributed order management, providing one view of customer orders regardless of channel.
“These first three MegaTrends reinforce giving shoppers the freedom to shop and receive goods in the way that they want to be served,” said Skinner. “The research indicates shoppers expect these capabilities.”
- Social Media and Product Development Collide
The product lifecycle management process will be integrated with social media feedback to improve product relevance, increase speed to market and reduce cost associated with products that don’t resonate with target customer segments. Social media, while still in its infancy, will continue to help retailers maintain a two-way conversation with their customers and help guide actions.
- The Death of the Task Worker In order to deal with the dramatic increase in shopper product knowledge, retailers will transform their workforces to a knowledge-based workforce, dramatically increasing customer facing labor hours and automating back-office tasks in order to keep labor costs at current levels.
- Generation Y Changes the Behaviors of All Other Generations The massive and fast adoption of shopper-friendly technologies forces retailers and other generations to adapt to Generation Y shopping styles. Generation Y’s impact requires special discussion. The widespread adoption of the Millennial Mindset has become a fundamental driver of change in the marketplace across all generations, income levels and geographies.
- Sales and Product Information via Mobile Phone Shoppers will opt into networks that send them content-rich messages about product information, prices, promotions and special services.
- Mobile Shopping (Finally) Comes of Age
Talked about since the turn of the century, shopper acceptance, necessary technologies (like Near Field Communications), increased network bandwidth and decreased retailer reluctance will fuel this trend and make retail operations virtual. While mobile phone payment is not a reality yet, solutions are quickly entering the marketplace that will help drive adoption.
- Death of the POS Becomes a Possibility
Retailers can potentially eliminate the tyranny of future POS investments as they come to terms with the availability of additional options for checkout, increasing customer acceptance of out-of-queue checkout and the cost-benefit of mobile checkout versus static POS solutions.
- Real SKU Rationalization Takes Hold
Cross-channel order management will enable retailers to rationalize SKU (Stock Keeping Unit) location — sending slow-moving product into the warehouse or back to suppliers, and increasing inventory for key items. This can lead to dramatic reductions in suppliers and SKU counts. Regarding SKU rationalization, there have been some well publicized reversals on this, but we believe the economics will push slower-moving SKUs out of stores and make them available via home or store delivery.