Network infrastructure: The key to retail modernization
Ron Kjelden and Jessica Mok
To paraphrase Mark Twain, the death of traditional retail has been greatly exaggerated.
A majority of goods transacted in the U.S. in 2018 were sold in brick-and-mortar stores, according to all available analysis. But, of course, traditional retailers cannot ignore the constant disruption occurring in their industry. Digital’s share of retail has nearly tripled in a decade.
Retailers of all stripes need to strategize and invest in digital to keep pace and continue to meet consumers’ ever-increasing expectations for personalization and convenience. The good news: traditional brick-and-mortar retailers can leverage the same network technology used by e-commerce leaders to improve the consumer experience.
Starting with the right mindset
The best advice for progressive retailers to follow is: think like a tech company but don’t act like one. Successful retailers have demonstrated over the course of many decades they are good at providing a wide choice of innovative products and services to consumers, which should continue to be a strength.
Adding tech company thinking enables fresh perspectives, but retailers that try to build their own digital solutions can run into trouble. Instead, it may be smarter to work with experienced vendors that can provide a holistic network infrastructure to solve multiple challenges with multiple solutions.
Approaching today’s challenges holistically requires a digital network that can help a retailer break down silos. It is important to realize “retail” is not just a transaction that takes place at a brick-and-mortar store or a purchase that takes place online. Consumers do not shop in one particular way, so having brick-and-mortar and digital siloed does not work anymore. Retailers have to meet the demands of consumers in a frictionless way, and they have to be ready as demands and expectations continue to evolve.
Network infrastructure is the lynchpin to modernizing the retail environment. Planning for the next three to five years, retailers can take advantage of a digital network running in the cloud to scale effectively, adding technology as needed.
Adopting digital solutions to connect with shoppers
For retailers looking to upgrade their digital offerings to align with today’s consumer journeys, they can look to innovations surging quickly into brick-and-mortar. Mobile is clearly a key cog in this new ecosystem.
For example, beacons give retailers the ability to interact with shoppers via their mobile devices in a personalized, localized experience and collect consumer data that retailers can use to make the shopping experience frictionless. Wireless access points can provide location data on how shoppers move around a store, allowing retailers to see when and where shoppers are – and are not – interacting with the retail environment.
Video will become increasingly important in the brick-and-mortar setting. Most consumers already are digitally immersed every day. The way many people interact with the world is through a screen, with graphics and video. With a robust network infrastructure to support them, retailers can stream video on interactive digital signage to engage shoppers and even enable them to order products and services on the fly.
Video cameras will also become more ubiquitous as consumers become more comfortable with being “known” by retailers. Networked cameras enable facial recognition solutions that streamline the shopping experience.
Consumers who are recognized by the network and who have opted-in for additional services can be served up personalized shopping experiences on their mobile devices. They can even shop with their faces, checking out using facial recognition software that connects to their credit card or bank account – but only if the consumer chooses this option.
The Internet of Things (IoT) is connecting merchandise, stores, warehouses, shoppers and associates in new ways via the digital network. With pervasive connected sensors transmitting data in real-time, grocers can be confident they are maintaining refrigerated foods at the proper temperatures for the right amount of time – without using extra store resources.
Leveraging smart shelf solutions, retailers can ensure stores are stocked efficiently and consumers are happier. Hyperlocation technology can access a shopper’s list on his or her mobile device to trigger an electronic shelf tag to change color when the shopper approaches to identify the items.
These smart shelf tags will combine with historical data to create an immersive experience for the customer. If someone has a 15-item list and eight of those are things he/she buys every time, the store will have those eight waiting at the front, so the shopper just needs to pick out the other seven.
Solving for connectivity and scalability
State-of-the-art network infrastructure can enable the robust connectivity that retailers need to utilize these types of solutions and more. Just as the leading e-commerce sites must be accessible and secure 24/7/365, a retailer’s in-store network can be equally reliable using today’s technology.
Similarly, using a multi-cloud approach to networking, retailers can scale these solutions across locations – without investing months to accomplish it. Just like an e-commerce leader, a brick-and-mortar retailer can take full advantage of a digital network infrastructure to roll out innovative technology in physical locations to surprise and delight customers.
Ron Kjelden is global director of financial services and retail at Cisco, and Jessica Mok is global retail marketing manager at Cisco.