Today’s retailer is challenged not only by competition from other stores, but by a growing number of consumers whose preference is to shop online from home or work. Retailers need to lure these consumers back into the store by creating an engaging customer experience that far exceeds the online experience. Solutions such as in-store mobile marketing and digital signage combined with targeted loyalty programs can enhance both acquisition and retention of customers to positively impact in-store purchasing decisions. However, there are many possible pitfalls associated with these solutions.
Store networks have evolved dramatically over the past decade. What was once a simple private network designed to handle credit card transactions and support basic back office applications has transformed into a complex, open network required to support guest Wi-Fi and multi-vendor access, network security services, and distribution of many forms of multimedia content. This expansion in scope has challenged many retailers to redesign their store networks to satisfy new business requirements to increase customer engagement in the store.
By enhancing the consumer’s in-store experience with compelling electronic media and targeted information, retailers can counter the consumer’s perceived need to do more online research and so-called “Showroom Shopping” ― examining products in-store then buying them cheaper online ― and trigger the impulsive buy decision for immediate gratification. To do so, many retailers are opening their private networks to grant consumers the Internet access they have come to expect. Such initiatives require careful consideration because of the potential impact to the retailer’s brand image. A slow Internet connection, which exposes the consumer to inappropriate content or infects their device with a virus, will reflect negatively on the brand. On the other hand, a high-performance, trustworthy connection will advance the consumer’s brand experience.
To achieve the desired experience, retailers not only are augmenting existing private network infrastructures with lower cost broadband alternatives, they also are implementing guest Wi-Fi captive portals, store caching servers and network security solutions to fully support the next wave of in-store, mobile marketing initiatives. Guest Wi-Fi captive portals provide the opportunity to promote the brand and highlight new products with real-time promotions. Furthermore, loyalty programs can target specific consumers or groups based on buying history, with promo ads delivered to their PDAs or laptops to keep bringing them back to the store. Local store caching servers can enable an “instant” multimedia experience if properly designed to account for network bandwidth constraints. Network security services, such as web content filtering and access control, not only protect the retailer from the undesirable legal liabilities associated with exposing customers to inappropriate content, but include solutions that assist retailers in achieving PCI compliance.
A key challenge facing retailers is to create such a compelling in-store experience that a consumer would leave the comforts of online shopping from home or office and want to visit the store. To achieve this goal, many retailers are remodeling their stores with a more “open” and inviting format, and reducing store clutter with digital signage solutions such as the ‘Virtual Shelf,’ ‘Digital Sales Associate’ and other technical strategies.
However, nothing is free: The ability to sell more products with compact, digital solutions comes at a cost. For example, the network impact of a handful of high-definition product promotional videos is comparable in file size to an entire Microsoft Windows service pack release. And retail multimedia content may require updates on a weekly, even daily, basis. When more data is required more frequently it not only impacts access to store systems, but also causes substantial demands on network connectivity to the data center. Even with significant network capacity upgrades, retailers still may need to implement content delivery network (CDN) solutions, which regulate the distribution of multimedia assets to fit within the boundary conditions of the network. In some situations, additional Quality of Service (QoS) policies will be required to insure that high-priority applications — such as credit card transactions — will be successful during high bandwidth, multimedia file transfers.
Digital signage initiatives not only present networking challenges but device management issues as well. For example, a dark screen suggests network errors, reflects poorly on the brand, and detracts from the in-store shopping experience. Screen malfunctions can be caused by a problem in any portion of the digital media system. As such, each element of the system (for example, the digital media player, monitor and video distribution system) must be monitored continuously for health and status. Depending on the number of unique channels of content, digital signage solutions multiply the number of in-store IP devices that require remote management. In addition, digital signage solutions are not created equally; Some favor Simple Network Management Protocol (SNMP) management while others introduce proprietary management platforms, and still others lack in basic remote management tools. Success in a digital signage initiative requires appropriate network planning with the flexibility to support integration into existing device management solutions.
Developing a compelling customer experience that lures consumers from online shopping involves more than the technology itself; retailers must also consider the logistics behind implementation, operations, support and field maintenance. Especially to succeed with a large scale, nationwide deployment, appropriate resources must be allocated and prepared. Where internal expertise is not sufficient, retailers may require third-party resources. Unfortunately, very few providers have core competencies in all the disciplines involved in these types of projects. Given the volatile nature of today’s market, the ideal vendors are those with the operational flexibility and solution resources to adapt to changing market conditions.
Retailers’ urgent need to create compelling in-store customer experiences has transformed store network designs dramatically. Solutions created to increase customer engagement, such as in-store mobile marketing and digital signage, increase the number of devices to be supported, the complexity of the network architecture, and the scope of support boundaries. To ensure success, retailers need a comprehensive understanding of the solution challenges involved in achieving these marketing objectives.
Tim Tang is a director in the vertical market group for Hughes Network Systems, an EchoStar company, where he works with retail customers to develop their “store of the future” initiatives. He can be reached at [email protected].