The New Frontier for Retail – “Everywhere Commerce”

While digital transformation has affected all aspects of our lives, retail is among the industries that have seen the greatest impact over the years. We read back in the Fall about how online shopping has led to the closure of over 5,000 stores in the US over the last twelve months.

Yet, contrary to the naysayers, I believe that the brick-and-mortar retail store has the potential to survive and thrive. However, business as usual will no longer cut it – retailers must embrace digital transformation in all parts of their business.

Customers want easy

It’s a truism but everything begins and ends with the customer. Today’s connected, tech-savvy consumer expects a highly personalized, seamless experience across every channel.

In fact, BRP’s 2018 Customer Experience/Unified Commerce Survey of top North American retailers predicted that customer experience will overtake price and product as the key brand differentiator by 2020.

However, here’s the crunch – shoppers will turn away quickly if a retailer does not meet expectations. 51 percent say they will stop shopping at a retailer after just a handful of poor in-store shopping experiences[i].

Integrating in-store and online experience

As a result, retailers are looking for ways to build customer relationships and develop loyalty in a way that simply isn’t possible online. One route is to integrate the customers’ in-store experience with their online profile and develop an Intelligent Store that competes with and complements online shopping. The race is on to provide contextualized marketing, personalized care, effective product placement, and improved in-store assistance. The bottom line is that retailers need new insights at the door, through the shelves, and at the counter to get inside the mind of the customer and anticipate their needs.

Customer analytics boosts sales and retention

There are big rewards. According to a McKinsey survey, 50 percent of companies who master the art of customer analytics are likely to have sales significantly above their competitors. Companies championing the use of customer analytics are 6.5 times more likely to retain customers, 7.4 times more likely to outperform their competitors on making sales to existing customers (upsell and cross-sell strategies), and nearly 19 times more likely to achieve above-average profitability[ii].

A silver lining

The additional good news is that despite recent data protection laws, shoppers are willing to share more data than ever before. 64 percent say they are comfortable with retailers saving purchase history and preferences but – and here’s the important caveat – only, if the retailer then offers more personalization[iii]. While 82 percent will research a product online before they visit a store[iv] interestingly, customers who shop using different methods spend more than double compared to those who shop only at brick-and-mortar stores[v].

A strong retail legacy

Of course, delivering a personalized customer experience across all channels requires the right technology and partnerships. Dell Technologies has a strong legacy and track record of delivery, having provided essential infrastructure to some of the world’s largest retailers over the years. According to the National Retail Federation, 88% of US retailers use Dell laptops or desktops, 78% use Dell EMC servers, while 80% of the storage infrastructure in US retailers runs on Dell EMC[vi].

One Home Depot

Home Depot is a great case in point. “For a growing number of customers, has become the front door to our stores,” said Daniel Grider, vice president of technology at The Home Depot. “Creating an interconnected customer experience across our online, in-store and mobile environments is what we call “One Home Depot.” To help us meet the evolving needs of our customers, we rely on innovative technology partners like Dell to help us increase business efficiency, virtualize our infrastructure, and support new workloads as we continue to grow.”

Our retail solutions

Our existing solutions range from Dell thin clients powering POS systems, through Dell EMC Intel-powered servers, storage, and networking, including a strong video surveillance solution. Meanwhile, Pivotal has been transforming how various retailers build and deploy modern software.

On the VMware front, retailers are increasingly using Pulse IoT Center to on-board, manage, monitor, and secure cameras, beacons, and gateways. Project Dimension Infrastructure will also soon provide retailers with the public cloud experience at the Edge, fully installed and managed by VMware.

Engineered foundation for retail store transformation

Where to next? Within the Dell Technologies IoT and Edge Solutions Division, we’re now developing an engineered infrastructure foundation to make it easier for customers to deploy, secure, manage, and scale IoT solutions.

This foundational infrastructure is optimized to work with inputs from both cameras and traditional sensors to cover a full complement of different use cases, when combined with various tools from the overall Dell Technologies portfolio and partner ecosystem.

Simplifying surveillance

What does this mean on the retail shop floor? Together with Intel and our ISV and camera partners, we’ve been helping retailers transition from CCTV to IP based surveillance systems for years. As the first use case built on top of our engineered foundation, we recently launched the Dell Technologies IoT Solution | Surveillance to make it easier to deploy large scale surveillance offerings. We’re currently working on a roadmap of various other sizings for different customer contexts.

Ideas from science fiction becoming a reality

While today’s solution is primarily focused on security and loss prevention, we’re also increasingly offering extensions for computer vision that formally leverage Artificial Intelligence (AI) to improve retailer’s visibility into customers’ behaviors and preferences, with the goal of driving a better overall customer experience.

As Ken Mills, our GM for Video Surveillance says, “Ideas from science fiction are becoming a new reality for both consumers and retailers.” Read more about the work Ken and his team are doing in retail, along with some new solutions we’ve designed in partnership with Intel.

A lack of interoperability

Despite the competitive pressure to deliver value and innovative new service models, a common stumbling block for retailers is confusion about foundational technology choices and a general lack of interoperability and standardization across the retail ecosystem, especially with emerging technologies around sensing and analytics.

This can make it daunting for retailers to know to where to get started or lead them to spend more time on plumbing and integration than on value creation. The bottom line is that the industry would benefit from collaboration on an open framework to enable retailers to focus on innovation instead of reinvention. So, what are we doing in this regard?

Simplified tools for IoT innovation

For starters, we’re investing in tools to make it easier to leverage sensors that enable use cases such as people counting, logistics, inventory and electronic price tags. Additionally, VMware Pulse IoT Center provides retailers with a single point for monitoring and management their IoT infrastructure and is completely agnostic to devices and software used, which is important in terms of providing a consistent management experience across a heterogeneous environment.

The Open Retail Initiative

Within the broader IoT ecosystem, in April 2017, we helped launch the EdgeX Foundry open source project within the Linux Foundation to develop an open framework for interoperability between IoT devices and applications. In addition to our own ongoing inputs, the project has seen a steady increase in the number of supporting organizations and developers contributing across the globe.

Signaling our support of retailers, we’re now delighted to be a founding member of the Open Retail Initiative (ORI), which was announced this week at NRF. Loosely-coupled with an Intel-led Commerce Working Group within the EdgeX Foundry project, the ORI is a coalition of industry participants, who want to create an open, scalable, and flexible ecosystem to accelerate innovation within retail.

Reducing complexity and increasing profitability

The goal of the ORI is to reduce the complexity of capturing data from the physical store environment and streamlining the integration of that data with online and other operational systems data, for example, Point-of-Sale, CRM or ERP. This will enable merchants and retailers to more effectively realize the promises of IoT for improving consumer and employee engagement, on-premise assets, and inventory management.

Move from saving money to making money

I believe that accelerated development and deployment of digital capabilities will translate into a better experience for shoppers and increased profitability for retailers. With Dell Technologies, you can improve decisions throughout the retail value chain as you collect, aggregate, and analyze multi-channel data – improving margins, decreasing costs, enhancing sustainability, and reducing security risks.

Our net goal is to help you excel at not only at “saving money” through general efficiency gains, but also “making money” through everything from measuring customer behavior based on demographics, to driving personalized experiences like real-time recommendations and offers, as well as managing environmental factors such as lighting, temperature and background music.

Join the revolution

Connected customers are driving a revolution in retail. They want to buy anytime, anywhere and will reward retailers who can offer this flexibility. This is your opportunity to raise brand awareness, drive loyalty and value, and increase your profitability. Together, we can make the intelligent store and everywhere commerce a reality.

Come visit us at NRF January 13-15th at VMware Booth – #1057, Level 1, Hall 1B to learn how Dell Technologies can help address your retail needs. Are you interested in joining the Open Retail Initiative? Learn more and join here.

I’d love to hear your comments. Do stay tuned for more exciting news throughout 2019!

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i, iii, iv BRP’s 2018 Customer Experience/Unified Commerce Survey of Top North American retailers

ii McKinsey: Why Customer Analytics Matter

v Deloitte’s The Omnichannel Opportunity Study

vi National Retail Federation, Top 40 Retailers with US Home Location