The old Chinese proverb still says it best: A man without a smiling face must not open a shop. No matter how the sales environment has changed, the customer is still king. The battleground has merely shifted to finding ways to make him happy using technology.
Today’s customers are getting increasingly connected and tech savvy. A Motorola study showed that around 64 percent of shoppers aged 13 and 34 and 52 percent of shoppers aged 35-49 worldwide use their personal mobile device for shopping related activities.
"We live in a world of exponentials," said Paul Steinberg, Chief Technology Officer, Motorola Solutions, at a recent press briefing at the sidelines of the Motorola Vertical Solutions Marketplace 2013 event in Malaysia. "In 2013, there will be over a billion smart devices and by 2015, there will be over two billion smartphones in use globally. Already today, there are more than seven billion mobile devices in service in the world. There are more phones now than people. So, it is clearly a highly mobile world."
In addition, he said a Cisco Digital Networking survey projects that broadband consumption will increase 13 times in the next four years, from 2013 to 2017. Forty seven percent of that mobile data traffic will come from Asia-Pacific.
What does it mean for retail?
"A lot of shoppers today browse online before they go to the store," said Grace Ho, Head of Solutions Sales at Motorola Solutions, Asia-Pacific. "They also rely on third party validation through reviews published in social networking sites. Customers today have so many alternatives and sometimes they have more information than the sales associates. These are the pain points that we are seeing. Retailers need to innovate."
Retailers are under duress, Steinberg added. They need to connect with customers more closely so that they can personalize and customize the shopping experience.
Co-creating: The outside in approach
At Motorola Solutions, both executives said they "co-create" with their own customers to build applications and solutions specific to verticals such as retail, healthcare or government. This is also called the "outside in approach," taking real-world challenges faced by enterprises to develop products and solutions that can help them meet customer demands.
In retail, Ho said they have to understand customers’ buying behavior, along with their clients, so that even before they walk to the store, a retail establishment is prepared to provide customized or personalized in-store experiences.
"The connected shopper solution really starts with understanding the workflow. In line with the explosion of mobile devices comes a flood of data. How do we use this data and make sense of it. How do we apply intelligence so we can understanding the consumer better?" she explained.
As a retailer, these information are important because the company may be able to preempt or facilitate the buying decision.
"We always start with the customer. We work with the community, university partners, internal incubation to develop solutions or "co-create". The best ideas come from our customers," Steinberg said.
From B2B to B2B2C
In the retail segment today, stores come in many different formats – there are the neighborhood stores, the convenience stores, the department stores, and the hypermarkets. But common among these establishments is the use of communication device for the staff members or the sales associate.
Ho said in Asia-Pacific, enterprises are keen on purchasing mobile devices to arm their workforce because they are seen as productivity tools. And recognizing that they can allow more workers to be flexible, they usually skip the PC and buy mobile devices. They’ve also started allowing workers to bring their own devices to the workplace.
"Traditionally, in Business-to-Business (B2B) enterprises, the use of mobile technology is about arming their own staff with tools that make them more productive and efficient. But as the industry evolves, they are not only looking at these devices now as productivity tools for workers, but also see them as opportunities for engaging or interacting with customers or shoppers," Ho explained.
As today’s consumer usually take their own mobile devices to shopping sprees, the gadgets become part of the journey. The devices that the store associates use for their own communication can actually be extended and used to communicate with customers as well.
"When they (customers) are in a retail premise, we take advantage of the fact that they have a smart device, and we want to be able to be proactively want to detect their presence in the store and preferably know what they want so that we can provide information or even push promotion so they can walk out the store with something and also feel happy about the purchase," Ho explained.
Perpetual inventory
This gives rise to another concept, which Ho calls the "perpetual inventory."
In almost any field today, "on-demand" is the norm. Shoppers, for one, expect that whenever they want something from the store, you have it in stock.
"Why do they expect that? Because they can easily check online. If you don’t have it, they’ll probably go elsewhere. From a retailer’s standpoint it is a lost sale," Ho said.
This is clearly about getting about the supply chain. As a retailer I may traditionally get my products from one supplier, but because the customers are getting smarter, I need to have an omni-channel strategy. I can’t just assume that you would walk into my store to buy products. I know that you will check online and along with prices, I need to be able to provide you with inventory status information. If not, I’ll lose you as a customer," she added.
Clearly, the burden is on retailers to follow their customers and this raises the bar that enterprises must reach to close a sale, to increase sales, or to even to keep selling.
Technology, said Steinberg, should be second nature. "We’d like to say that technology needs to be second nature so they (people using it) don’t have to think about it. The tech does what they need it to do for them."
CEO Talking Shop is the Retail in Asia section devoted to interviews with brand CEOs and retail industry leaders.