Retail 3.0? Mobile technology is both bane and boon to retailers

Savvy consumers use smartphones and tablets to find the best deals from couches and in the aisle. Retailers are now looking to these same devices to improve the in-store experience.

NEW YORK - Have you ever used your smartphone or mobile device while walking the aisles of a store? Not to take a call or message someone, but to check out whether you could get a better price or deal elsewhere?

This practice, called "showrooming," has some retailers running scared to the point where they have banned customers from wireless access in their stores.

But retail technology advocates believe that the same mobile technologies putting pressure on retail margins could also be instrumental in bringing new value to the brick-and mortar experience.

This philosophy is central to a wave of new products unveiled this week by Motorola Solutions. The new devices, which include a tablet (pictured right), a smartphone with integrated barcode scanner and credit card reader, and something called a "smart badge" have one common purpose: to help retail store associates interact more effectively and personally with customers.

"We are looking to mesh online digital with real world retail," said Jim Welch, senior vice president of sales and field operations of North America, Motorola, speaking at a briefing in Manhattan. "In the future of retail, experience is everything."

Retail 3.0
The idea of forging tighter relationships between store associates and customers really isn't anything new. It harkens back to the early days of local stores, when people were greeted on a first-name basis and credit was extended to repeat, loyal customers.

But shifting dynamics in the retail business model have retailers thinking about how technology can help customers focus less on the transaction and more on the experience.

Almost three-quarters of the 150 retail executives surveyed for the Motorola "Retail Vision Survey" said that creating a more engaging in-store customer experience would be "business critical" in the next five years.

There are a number of factors motivating this mindset. In early June, the Nielsen organization showcased data suggesting that consumers were becoming more fickle with their shopping preferences. While 69 percent of those surveyed by Nielsen indicated that in-store purchases were "most reliable," 68 percent of them said that it was the "easiest" and "most convenient" method of shopping.

Retailers that focus on offering the best omnichannel experience – regardless of whether it takes place in a store or in cyberspace – will fare best during the upcoming transition to Retail 3.0, said Alison Kenney Paul, vice chairman and U.S. Retail & Distribution Leader for consulting firm Deloitte LLP.

"Consumers do not want to feel like they are dealing with two organizations," Paul said.

That will take investment in technologies that enable closer interaction between stores associates and customers, including wireless networks and handheld devices that can help clerks be better brand ambassadors.

For example, the Motorola survey found that while almost 37 percent of retailers have shied away from investing in Wi-Fi networks, that number will shrink to 18 percent by 2017.

Wireless networks could allow retailers to invest in number of emerging retail applications that can make a big store feel small including:

  • Opt-in customer loyalty applications that help clerks know when a specific person has entered the store
  • Analytics systems that help keep tabs on inventory levels, alerting managers when stock needs to be rebalanced
  • Mobile checkout and payment systems that will transform the point of sale experience
  • Product information systems that help customers find out more information about products, escalating those questions to a store associate when appropriate<

The Home Depot has been testing these sorts of applications for the past 18 months, in cooperation with Motorola. It has deployed between 10 and 15 devices in its pilot locations.

These devices, dubbed First Phone internally and based on the Motorola MC75 enterprise digital assistant, are being used to help answer inventory problems and alleviate long checkout lines, said Jennifer Smith, senior director of store options for Home Depot.

The trial has been so successful that the retailer intends to make Motorola's next-generation retail mobile device, called the MC40, widely available across its stores, she said. "We can solve the problem in the aisle," Smith said.

Motorola's Mobile Retail Agenda
The MC40 was one of several devices showcased during demonstrations in New York. It comes with a bright four-inch touch screen, voice and data communications capabilities. It can also be outfitted with optional barcode scanner and credit-card swiper.

Tom Bianculli, senior director of emerging business and chief technology officer for Motorola, said the MC40 series will be available by the end of 2012. In addition, the company is putting the final touches on what it calls a "Smart Badge."

The SB1 (pictured right) is a smaller device with a longer battery life that includes simple messaging and in-store voice communications capabilities. It will be priced at less than $500 and will be meant for simple tasks such as inventory lookups, customer information requests and price checking.

Motorola also sells a tablet device called ET1 for store associates that can be used for tasks that are more visually intensive, such as merchandising.

All of the devices discussed by Motorola this week can run HTML5 applications (chosen so that consumers can also download apps to Android devices and iPhones), and the company has introduced a developer's kit called the RhoMobile Suite to help encourage the creation of secure, enterprise-grade business applications that have easy-to-use interfaces, Bianculli said.

Ensuring that these devices are easy to use will be a big push for Motorola, so that store associates can become even more empowered and knowledgeable than the consumers they are hired to serve.

"We need to make this technology second nature," Bianculli said. "We want to leverage the learning curve that people have already gone through in their personal lives."

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