Technology in the “New Normal” Landscape

“The industry has evolved into a ‘new normal,’ and it’s having an impact on brand equity, IT spending priorities, new business models and overall competition,” according to David Gruehn, U.S. retail industry solutions director for Microsoft Corp, Redmond, Wash. Chain Store Age Web editor/associate editor Samantha Murphy spoke to Gruehn about the “new normal” and what to expect in 2010. 

What key technology trends have emerged in the “new normal” retail landscape? 

The cross-channel customer reigns as retailers strive to meet their growing expectations for a seamless shopping and buying experience. We saw a tremendous spike from Black Friday through Cyber Monday with consumers using their mobile devices along with the Web to find the absolute best deals both in-store and online. Retailers are also connecting with consumers via in-store kiosks, at the point of sale with special promotions and on social networking sites.

Merchants are also providing store associates with mobile technology and other tools to deliver a great experience to their customers. Since the vast majority of retailers rely heavily on the millennial work force to staff their stores, retailers are recognizing the need to provide their workers with the same easy-to-use innovations that they enjoy using off the clock.

And finally, with pressures to contain costs and protect profit margins, retailers are making a concerted effort to embrace efficiency in all aspects of their operations. This means investing in a low-cost, agile platform that positions them to take advantage of opportunities and rapid business changes.

What challenges do retailers face? 

The biggest challenge is the dynamic nature of consumer behavior, which leaves retailers struggling to forecast demand and then execute at the market level across all of their channels. Consumers have become more cost-conscious and less brand-focused than they have been historically. Add to that the pressures retailers are feeling from new competitors encroaching into their top categories, such as purely digital merchants and even online auctions and overstock sites.

Also, consumers feel more empowered than ever with seemingly ubiquitous availability of product comparisons, customer reviews, pricing aggregators and loyalty offers, so much so that the traditional brand equity that insulated retailers from their competitors now feels much less secure.

How are retailers overcoming these roadblocks? 

Retailers are seeking ways to build a digital bond to encourage loyalty with their top customers, while building bridges to new customer bases. They are doing this through social networking sites and microblogs, new applications on mobile devices and loyalty programs armed with richer consumer insight.

Retailers are also demanding more from their data and business intelligence investment than delivering reports and basic analysis. Since retailers collect a lot of data about customer-buying behavior and preferences, they can use this information to better target and enhance a customer’s buying experience to help create better value and influence loyalty.

What other areas should retailers focus on in 2010? 

Consumer mobility is the next frontier in the customer experience as consumer demand to instantly track, find, know and connect with their mobile devices grows stronger every day. This will be a way to more intimately connect with customers on their own devices in the store and at home, while at the same time providing retailers with valuable information that can improve key revenue-driving processes such as promotions, assortments and space management.

Employee productivity and empowerment should also be a focus in the new year, as retailers will look to provide more robust collaboration platforms to their employees.

Microsoft has a strong Twitter presence. How is the company using it to reach the industry? 

Our retail industry team uses a Twitter account (@ MSRETAIL) to keep our customers and partners up to date with relevant information. It also helps us respond to customer and partner queries, monitor industry trends and news (by following industry influencers), and crowd source opinions and trend information using surveys via Twitter. We also Twitter to share and monitor information in real time at industry events and trade shows. We’ve had great success with it so far and have plans to keep going.