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  1. 1. Future of Wireless & Retailing Scott Mullinax IBM Wireless Solutions-Americas [email_address] 918-493-4412
  2. 2. Discussion objective <ul><li>Outline the importance of high value Contextual Experiences and how Wireless Technologies can enable the LAST MILE CONSUMER EXPERIENCE. </li></ul><ul><li>Define the Wireless technologies that are the vehicle to move from Mass Merchandising to Individual Consumer Experiences. </li></ul>
  3. 3. Agenda <ul><li>Wireless Market Trends </li></ul><ul><li>New Market & Consumer Dynamics </li></ul><ul><li>Make a difference in the Store Experience </li></ul><ul><li>Technology the tool of Empowerment </li></ul><ul><li>Roadmap to Success </li></ul>
  4. 4. Wireless Market Trends
  5. 5. By 2004,130 million customers will be generating almost 14 billion transactions, yielding $200 billion in revenue, over 75% of which will come from Western Europe and the United States Source: Strategy Analytics, 2000
  6. 6. In the U.S. the number of net-enabled phone owners will also represent about 50% of the population by 2004 Subscribers (millions) Source: Forrester, 2000, 1999
  7. 7. We are poised on the verge of a Wireless e-business explosion… every second of every day a new mobile internet user is born… mobile internet access will surpass PC internet access in 2002 Source:Research, Reuters, EE Times, Ericsson, 2000
  8. 8. Agenda- continued <ul><li>Wireless Market Trends </li></ul><ul><li>New Market & Consumer Dynamics </li></ul><ul><li>Make a difference in the Store Experience </li></ul><ul><li>Technology the tool of Empowerment </li></ul><ul><li>Roadmap to Success </li></ul>
  9. 9. Current Industry Dynamics <ul><li>There is a tremendous growth of perimeter businesses in retailing because of changing lifestyle attitudes - quick, easy - “I am willing to pay for convenience” </li></ul><ul><li>Reduction in capital asset and labor resource spending is mandated by the boardroom </li></ul><ul><li>Point of sale has to be scan-capable and able to keep track of more complicated promotions and offers </li></ul><ul><li>In-store and channel transactions have to be instantaneous and responsive to the customer’s identity </li></ul><ul><li>Merchandising must be specific to smaller segments of the population, while being able to attract larger segments successfully </li></ul><ul><li>Product allocation, assortment, pricing, and promotion must be dead-on in where, when, and how it is placed in front of the customer. Every time! </li></ul>
  10. 10. Changing Market Dynamics <ul><li>Growing concentration of leading brands and power retailers </li></ul><ul><li>Bankruptcies and liquidations closing down the non-competitive </li></ul><ul><li>Experimentation with complementary business partnerships </li></ul><ul><li>Identification of new points of access for consumers, including pervasive and mobile technologies </li></ul><ul><li>An increasing need to respond to consumer shifts including demographic lifestyle, and buying pattern trends </li></ul>
  11. 11. The Changing Consumer <ul><li>More knowledgeable about comparable product costs and price. </li></ul><ul><li>More changeable in retail and brand preferences, showing little loyalty. </li></ul><ul><li>Self-sufficient, yet demanding more information </li></ul><ul><li>Hold high expectations of service </li></ul><ul><li>Expecting personalization </li></ul><ul><li>Driven by three new currencies: time, value, and information. </li></ul>
  12. 12. New Market Trends <ul><li>Consolidation in the marketplace continues to change the landscape of retail/wholesale, manufacturing and service provider sectors </li></ul><ul><li>Industries are positioning by creating global alliances (Vertically Integrating) </li></ul><ul><li>It is becoming increasingly important for companies to manage their capital efficiently as well as controlling their processes </li></ul><ul><li>Consumer Retention is becoming more important due to increasing competition </li></ul><ul><li>Customized, flexible products will be the future and are expected at the Point of Sale </li></ul><ul><li>NEED TO MANAGE THE FIRST THOUGHT IN THE LAST MILE WITH WIRELESS TECHNOLOGY! </li></ul>
  13. 13. Retailing 2001+ is about the End Customer <ul><li>The key to multi-channel integration is the ability to utilize the information collected from all consumer touch points and make the information actionable throughout the value chain. </li></ul><ul><li>New measurements need to be in place to measure performance. Multi-channel retailers must now measure the variables that affect satisfaction in a specific channel while establishing uniform standards across all channels. Regardless of the sales channel they are using, customers must feel like royalty. </li></ul>
  14. 14. Agenda- continued <ul><li>Wireless Market Trends </li></ul><ul><li>New Market & Consumer Dynamics </li></ul><ul><li>Make a difference in the Store Experience </li></ul><ul><li>Technology the tool of Empowerment </li></ul><ul><li>Roadmap to Success </li></ul>
  15. 15. Positive Contextual Experiences equal Consumer Loyalty Contextual experiences (conditions) directly impact a customer’s perception of vendor value. Value experiences include and transcend monetary value and product-based experiences . Laying the foundations for the store of the future is the key to enabling technologies that will support the total customer experience of feeling understood, connected, and delighted.
  16. 16. Making a Difference in Retailing from the Back-End Systems through to the Consumer - the Components of Experience alternative POS cash alternatives self-serve individualized flow-through management eCRM SCM attentive environment TACTICAL the way you sell STRATEGIC the way customers experience your business OPERATIONAL the way you manage your store retailer
  17. 17. Changing the Retailing Environment How will success be measured? How will the customer experience the benefits of the new vision? How will the value of new technology be realized and amortized across a centralized business model through local channels of customer experience? What are the core values to the business driving forward? What is the end vision to support the near term initiatives? BUSINESS VISION SUCCESS TECHNOLOGY retailer
  18. 18.
  19. 19. The Way You Manage Your Store Experience-Now very important (hidden) Store managers can receive remote real-time product movement updates throughout the day. POS data can be remotely retrieved and can be analyzed immediately to allow for replenishment / replacement where appropriate in order to immediate customer demand. Back-Office (hidden) Lost sales can be reduced as customers no longer face long POS queues, minimizing customer abandonment. Responsive environments effect efficient store / queue management. Sales Floor Mass retailing is founded on the premises of speed, ease of use, and convenience. Managing the experience means excelling at being a convenience provider.
  20. 20. Tickles and Whispers in Mass Retailing drives a valued experience <ul><li>(hidden) </li></ul><ul><li>Responsive environments notify resources how best to manage them </li></ul><ul><li>alert me to open up another cash register line because of long queues </li></ul><ul><li>tell me to adjust the temperature </li></ul>Tickle Technology <ul><li>(hidden) </li></ul><ul><li>A more efficient labor force is better educated, more assisted in real time, and suffers from last turnover </li></ul><ul><li>remind me about cross-sells and up-sells </li></ul><ul><li>remind me about this customer’s preferences </li></ul><ul><li>help me to be more knowledgeable in front of my customer </li></ul><ul><li>help me to be more knowledgeable in front of my employees </li></ul>Whisper Technology Technology becomes ubiquitous as we progress from fingertip, to voice, to bio-metric, to human-centric experiences that are human aware and dialogic, natural, and easy.
  21. 21. Moving from Mass Service to Individualized Experiences <ul><li>(hidden) </li></ul><ul><li>The responsive environment responds to such conditions as: </li></ul><ul><ul><ul><li>who are the people in a given space? </li></ul></ul></ul><ul><ul><ul><li>where are they (geographic and proximal)? </li></ul></ul></ul><ul><ul><ul><li>what are they doing? </li></ul></ul></ul><ul><li>The enabled environment delivers on the promise of mass retailing based on individuals within a space </li></ul>Responsive Environment (hidden) Consumers have more choice than ever and so mass retailers need to grab and retain relationships by extending their value, presence, and opportunity. By using aggregates of Wireless technology to create dynamic individualized experience retailers can lead the market and capture the attention of their customers. “Customer Retention” Individualized Service Mass retailers can now use wireless technologies to get beyond the “last mile” and become the “first thought”.
  22. 22. Metrics of Success Metric Operational Efficiency <ul><li>Reduce operating assets </li></ul><ul><li>Reduce turnover </li></ul><ul><li>Reduce working staff </li></ul><ul><li>Reduce cost of quality </li></ul>Improve Existing Customer Revenue <ul><li>Increase customer retention </li></ul><ul><li>Improve market share </li></ul><ul><li>Up-sell/cross-sell </li></ul>New Revenue Streams <ul><li>New products / services in same business </li></ul><ul><li>New products / services in new business </li></ul>Catalyst/Result <ul><li>More skilled employees </li></ul><ul><li>More efficient and contextual or “in the moment” training </li></ul><ul><li>Require less resources to support the same production and client base </li></ul><ul><li>Improve customer satisfaction </li></ul><ul><li>Provide competitive services </li></ul><ul><li>Increase brand strength </li></ul><ul><li>Increase revenues from intellectual capital </li></ul><ul><li>New service pricing </li></ul>Example Strategy <ul><li>Remote monitoring of employee performance </li></ul><ul><li>Remote store monitoring </li></ul><ul><li>Dynamic environmental awareness </li></ul><ul><li>Ubiquitous employee training / support systems </li></ul><ul><li>Add wireless channel for ease / efficiency uses </li></ul><ul><li>Integrate with online offering </li></ul><ul><li>Offer unique / personalized services </li></ul><ul><li>Charge for automated service </li></ul><ul><li>Use connectivity of product to drive traffic to service offering “portals” </li></ul>
  23. 23. Agenda- continued <ul><li>Wireless Market Trends </li></ul><ul><li>New Market & Consumer Dynamics </li></ul><ul><li>Make a Difference in the Store Experience </li></ul><ul><li>Technology the tool of Empowerment </li></ul><ul><li>Roadmap to Success </li></ul>
  24. 24. The Topography of Opportunity Store-Box Parking Lot BackRoom FrontRoom POS Aisle Aisle Aisle Aisle <ul><li>Inventory Management </li></ul><ul><li>RFID </li></ul><ul><li>Mobile Field Service Agent </li></ul><ul><li>Mobile Sales Agent </li></ul><ul><li>Barcode Tracking </li></ul><ul><li>Unattended Sales </li></ul><ul><li>Remote Shopping </li></ul><ul><li>Replenishment List </li></ul><ul><li>Customer Self-Serve </li></ul><ul><li>eCash Payment Options </li></ul><ul><li>Smart Gold Crown Card </li></ul><ul><li>Assisted Sales </li></ul><ul><li>Wireless POS </li></ul><ul><li>Individualized Retailing </li></ul><ul><li>Remote Access to POS </li></ul>WLAN <ul><li>Aware Environment </li></ul><ul><li>Tickle Environment Support </li></ul><ul><li>Intelligent Environment </li></ul><ul><li>eShelf Labels </li></ul><ul><li>Cartless Shopping </li></ul><ul><li>Smart SKU’s </li></ul><ul><li>Self-Serve Sales </li></ul><ul><li>Intelligent Kiosks / Vending </li></ul><ul><li>Multi-Channel </li></ul><ul><li>New Vends </li></ul><ul><li>Extended Business Opportunities </li></ul><ul><li>Face to Face Sales </li></ul><ul><li>Whisper Sales Support </li></ul><ul><li>Mobile POS </li></ul><ul><li>Customer Awareness </li></ul><ul><li>Remote Store Management </li></ul><ul><li>Interactive Sales </li></ul><ul><li>Virtual Activity Centers </li></ul><ul><li>Media Download Centers </li></ul>ePOS eBillBoard
  25. 25. Multi-Channel Retailing Cellular
  26. 26. Store Management <ul><li>The store will be the place where several emerging technologies will be used: </li></ul><ul><ul><li>Cellular </li></ul></ul><ul><ul><li>802.11b </li></ul></ul><ul><ul><li>Bluetooth </li></ul></ul><ul><ul><li>RFID </li></ul></ul><ul><ul><li>Smart Card </li></ul></ul><ul><ul><li>Kiosk/Vending </li></ul></ul><ul><li>The in-store experience will combine customer satisfiers such as line busting and location based services and enhanced shopping with cross/up sales potential. </li></ul>
  27. 27. <ul><li>802.11b is a high speed, reliable solution for in-store wireless solutions </li></ul><ul><li>Bluetooth is the 10 meter RF solution intended for device to device interaction </li></ul><ul><li>Cellular voice networks will incorporate data services at higher transfer rates using GPRS </li></ul><ul><li>Existing data services only networks will be used for devices like Palm VII and RIM </li></ul>Infrastructure for Enablement - Wireless
  28. 28. Infrastructure for Enablement - RFID <ul><li>RFID cost will drop to an acceptable price point when multiple uses are incorporated: </li></ul><ul><ul><li>Distribution </li></ul></ul><ul><ul><li>Inventory management </li></ul></ul><ul><ul><li>Point of Sale </li></ul></ul><ul><ul><li>Smart Home applications </li></ul></ul><ul><li>An example of cost justification is the use of RFID for baggage handling at San Francisco Airport </li></ul><ul><li>The ultimate goal of RFID is reliability over life of item and pervasive penetration of scanners that take advantage of ID. For example, RFID embedded in my shirt so that if I drop it into washer at home or take it to laundry, it will be handled correctly . </li></ul>
  29. 29. Reasons to use WLANs <ul><li>To extend a wired LAN Network Mobility </li></ul><ul><li>To network difficult-to-wire locations </li></ul><ul><ul><li>Network Flexibility </li></ul></ul><ul><li>To extend a ready-to-use LAN across locations </li></ul><ul><ul><li>LAN-in-a-box </li></ul></ul><ul><li>To provide LAN access to mobile users </li></ul><ul><li>To better understand and know your customers </li></ul><ul><li>To provide location based services…”Where I am” </li></ul><ul><ul><li>Product Location = Where do I go… </li></ul></ul>Enterprises have many different reasons for implementing Wireless LAN solutions -- but network flexibility and mobility are the most common.
  30. 30. Redefining the Internet - Redefining Lifestyles with Cash Alternatives McDonald’s restaurants will test FAST LANE transponder technology in the some of their restaurant drive-thrus. &quot;Transponders will allow our customers to pay for their favorite McDonald’s food – like the Big Mac and our French fries – without leaving their car or using cash,&quot; said Lambrechts. &quot;We expect this new technology will add to the fun and excitement of McDonald’s by improving the speed and efficiency in our drive-thru service for on-the-go New England travelers.&quot; Many People consider a smart card to be a PC in the pocket. A smart card is a credit card style card that has an embedded memory chip that stores data and applications relative to the user - that can be coupled with an identification feature, such as: PIN, biometrics, or other types of security checks. Smart cards are portable, secure, interoperable, and convenient. The iButton is ideal for any application where information needs to travel with a person or object. iButton can grant access to a building, a piece of equipment, can be used to store cash for small transactions, such as transit systems, parking lots, and vending machines. VALID FROM VALID FROM GOOD THRU GOOD THRU 01/2000 01/2000 01/2003 01/2003 John J. Doe John J. Doe 4321 076543 78999 4321 076543 78999
  31. 31. IBM Wireless Offerings for Retail (hidden) Digital Display Boards Dynamic Environments <ul><li>(hidden) </li></ul><ul><li>Intelligent Vending </li></ul><ul><ul><li>ecash enabled POS </li></ul></ul><ul><ul><li>self-serve POS </li></ul></ul><ul><li>eCash Transactions </li></ul><ul><ul><li>integrated POS </li></ul></ul><ul><li>Customer Self-CheckOut Solutions </li></ul><ul><ul><li>PSI check-out solutions </li></ul></ul><ul><ul><li>integrated intelligent kiosk solutions </li></ul></ul><ul><li>Cart-less Shopping: </li></ul><ul><ul><li>consumer barcode devices, </li></ul></ul><ul><ul><li>mobile kiosks </li></ul></ul>Unattended Retailing (hidden) Environment Tickles Employee Whispers Responsive Environments <ul><li>(hidden) </li></ul><ul><li>Site Survey / WLAN / WWAN </li></ul><ul><li>Individualized Retailing </li></ul><ul><ul><li>profiling database </li></ul></ul><ul><ul><li>smart card loyalty programs </li></ul></ul><ul><li>RFID Supply Management </li></ul><ul><li>RFID SKU Management </li></ul><ul><ul><li>in supply </li></ul></ul><ul><ul><li>on the selling floor </li></ul></ul><ul><ul><li>in the dressing room </li></ul></ul><ul><ul><li>at the POS </li></ul></ul><ul><li>Remote Management - mobile MOD </li></ul>Efficient Retailing
  32. 32. Agenda- continued <ul><li>Wireless Market Trends </li></ul><ul><li>New Market & Consumer Dynamics </li></ul><ul><li>Make a difference in the Store Experience </li></ul><ul><li>Technology the tool of Empowerment </li></ul><ul><li>Roadmap to Success </li></ul>
  33. 33. IBM Engagement Focus <ul><li>Our objective is to optimize the value of networked and responsive end-user interactivity via the value proposition of the business objective. </li></ul><ul><li>The strategic consulting engagement focuses on business models, initiative identification and user value proposition bound to the overall business objective. </li></ul>
  34. 34. Statement of the Methodology <ul><li>Our approach is a systematic method for analyzing and delivering mBusiness strategic solutions based on core business objectives. </li></ul><ul><li>We are confident that our methodology, people and tools can provide the client with a value-add solution designed to meet their long-term and short-term business objectives. </li></ul>