Catch ’Em and Keep ’Em: Revitalizing the Store in a Cross-Channel World. Based on original research conducted by Cisco IBSG in the U.S. and U.K., cross-channel shopping demands a new approach to win customers and capture wallet. More info: http://www.cisco.com/web/about/ac79/retailcpg/nrf-2012.html

1. Catch ’Em and Keep ’Em
Revitalizing the Store in a Cross-Channel World
Cisco Internet Business Solutions Group (IBSG)
Lisa Fretwell, Jon Stine, Jeff Loucks, James Macaulay, and Michael Adams
January 2012
http://www.cisco.com/web/about/ac79/retailcpg/nrf-2012.html
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 1

2. What We Think
1 Is Happening

3. Today’s Technology-Shaped Shoppers
Are Driving Four New Trends
Internet shoppers
seek best deals
 45% of shoppers seeking
more deals
It’s now a cross- Retail real estate
channel world in decline
 More than 30% of  2010: U.S. sales up
U.S. shoppers touch 3.5%; store traffic
more than one down 0.5%
channel before
making a purchase
Midmarket retailers
struggling
 Upper / lower ends of
market thriving
Sources: Google and Ipsos OTX, 2011; Pew Research, 2010; IDC, 2011; Forrester Research, 2011;
TheWall Street Journal, 2011; Google, 2011; Cisco IBSG, 2011
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4. Hypothesis 1: Effective, Engaging
Experiences Revitalize the Store
Emotion Triggers
Buying
 Emotions drive  Help shoppers make
buying decisions decisions (don’t
 Prime the pleasure overwhelm them)
centers  Provide information to
 Spark emotions and reassure shoppers
people will buy…but not
necessarily what you
showed them
+ they’re making the right
decision
 Make it easy to pay
=
 Images and pictures (buy without thinking)
create an emotional  Create the thrill now
response to drive buying
 Encourage buying things
that make a societal
difference Emotions don’t
compare prices
Source: Cisco IBSG, 2011
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5. Hypothesis 2:
Four Buying Triggers Drive Purchases
High
1. Inspire
Treat, pleasure, personal, feeling good
Feel part of something, trend-creating,
coveted, celebrity “Oh, I like that.”
2. Discover
Have a need…find an answer Retail
Create my recipe margins /
Orchestrate choices to meet needs shopping
“That’s how I could do it.”
complexity
3. Best Deal
Too good to miss, great value
Price, offers, rewards, scarcity
“I would be crazy not to buy it.”
4. Find
Information, price, product
Right item, right place, right price
Available
“Found it. That was easy.” Low
Sources: Cisco IBSG, 2011; “How We Decide,” Jonah Lehrer, McGraw Hill, 2010
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6. Hypothesis 3: Mashops Keep Customers
Inside Brand During Shopping Journey
Today’s Mashops Catch ’Em and… …Keep ’Em
Channels
Search
Online
Store
Mobile Win eyeballs /
foot traffic
Maintain margins
Social
Grow basket size
Increase
Shopping Journey conversion rates
Source: Cisco IBSG, 2011
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7. Hypothesis 4: There’s a Recipe for
Buying-Trigger Mashop Concepts
Outcome: Create
Step 1: Develop and Design Step 2: Apply triggers to sell
Content Right screen type
more
+
Right location /
Customer position
Design Experience +
Right time
Concept
+
Clear usage
information
+
Encouragement
Social to use
Development Path
Source: Cisco IBSG, 2011
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8. Key Findings from
2 Cisco IBSG
Primary Research

9. Finding 1: Online Sources Trump “Real
People” for Making Buying Decisions
What are the three most important sources of information
you use to help make buying decisions?
80%
Friends and family
70% 68%
60%
60% Customer reviews on
52% retailer sites
50%
41% Online professional
40% reviews
36%
29% Manufacturer site info
30% 27%
24%
21%
20% In-store employees
13%
11% 9%
10%
Social networks
0%
2010 2011
Source: Cisco IBSG, 2011
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10. Finding 2: Digital Content / Experiences
Influence All Four Buying Triggers
Buying Triggers Top Digital Content Used
 Online retailer recs. 44% 24%
 Online buying guides 24% 37%
1 Inspire  Online solution guides 22% 32%
 Online videos 28% 22%
 Online retailer recs. 49% 25%
 Online buying guides 30% 36%
2 Discover
 Online solution guides 27% 32%
 Online videos 30% 23%
 Retailer websites 63% 20%
 Price-comparison sites 28% 34%
3 Best Deal  Coupon sites 23% 29%
 Social networks 27% 18%
 Retailer websites 65% 19%
4 Find  Social networks 32% 15%
 Mobile apps 20% 21%
Source: Cisco IBSG, 2011 (U.S. data) Do it now Interested
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11. Finding 3: In-Store Digital Content Is
Important Influencer of What People Buy
Percentage of respondents who currently  Growing interest in rich / visual
use or are interested in using to shop content in the store to make
60% buying decisions
 Mobile increasingly vital for
50% online searchin stores
40%
 49% of shoppers already use or
31% are interested in connecting to
27%
30% 20% Wi-Fi outside home
27%
 1 in 2 shoppers now use /
26%
20% want to use in-store
kiosksthat unite web info, self-
10% 20% 21% 20% service, access to greater range
15%
9% of items
0%
 Over40% of shoppers say video
Kiosk in Digital Video Mobile in Tablet PC walls / digital screens could
store screens in walls in store in store change what they buy
store store
 Tablet interest rising fast:
Do it now Interested 35% use / want to use in stores
Source: Cisco IBSG, 2011
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12. Finding 4: Kiosk and Mobile Play Key
Roles in Capturing Store Traffic / Sales
Search Buy Do It Now / Interested Key Insights
Online research / in-store purchases still most
PC Store 57% 17% popular for cross-channel shopping
Shoppers using stores as showrooms for online
Store Online 38% 19% purchases, further pressuring margins
Kiosk Store Opportunity to keep shoppers in brand using in-store
24% 29%
kiosks that enable immediate sales…
Immediate in-store sale
Kiosk Store …and allow customers to pick up items in the store
19% 27% at a later date
Later in-store pickup
Kiosk Store Strong willingness to interact / transact via self-
15% 28% service kiosks in the store
Delivery to location of choice
Use of mobile as a search device gaining
Mobile Store 24% 21% momentum…
Mobile PC 26% 18% …but there is cross-channel even within online
Source: Cisco IBSG, 2011 Do it now Interested
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13. Key Concept Test
3 Findings

14. Five Concepts Tested
1 2 3 4 5
Immersive Product Shelf help Personal Shopper
experiences viewer mobile favorites
shopper
Ability to visualize Large, interactive Ability to see Personalized Screen shows
yourself wearing screen provides product info, offers, based on products rated by
clothes and product videos, comparison transaction history popularity, votes,
accessories info, views, directi s at with retailer and “likes”
virtually ons, and reviews shelf edge;
option to
speak with
virtual expert
Source: Cisco IBSG, 2011
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15. Immersive Shopping:
All Women / Gen Y Men Want To Use
Immersive Shopping Top findings by age / gender
 Most popular concept among all groups
 High interest from women of all ages; Gen Y and
Silvers most interested
 Women most interested in clothes, room
design, and makeup
By standing in front of a large, full-  Gen X and Y want to see what others bought
length screen, shoppers select and when shopping for similar items
“wear” items virtually. They also view
items in a room setting, such as
furniture, lighting, and blinds.
Features shoppers like best Shoppers say it’s best for
 “Try on” items (46%) Electronics / Home- Health /
Grocery Apparel
 Coordinate items such as Appliances wares Beauty
furniture, clothes, and accessories
(44%)
 View / buy products available (29%)
and not available (19%) in store
Source: Cisco IBSG, 2011 Broad interest Niche interest Low interest
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16. Product Viewer:
Women, Young Men Like “The View”
Product Viewer Top findings by age / gender
 Most-interested groups: Gen X and Gen Y
men, and women of all ages
 Social network integration: Sharing “likes” and
recommendations popular with Gen X and Y
 Older shoppers, especially women, want
directions to products in store
Shoppers use a large, high-definition
display to look for specific products or
just browse. Shows “go withs,”
ratings, “likes,” and location.
Shoppers say it’s best for
Features shoppers like best
Electronics / Home- Health /
 Compare product / price (45%) Grocery Apparel
Appliances wares Beauty
 Detailed product specs (32%)
 “Like” product on screen (29%) Gen Y
 Directions to products in store (27%) women
Source: Cisco IBSG, 2011 Broad interest Niche interest Low interest
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17. Shelf Help:
Appeal Across Generations, Genders
Shelf Help Top findings by age / gender
 Most consistent appeal across segments
 Video experts “important” or “very important”
part of value for 36% of shoppers (spread
evenly across segments)
 Most want to interact using touch screen at
Shoppers receive expert advice shelf, especially older shoppers
through self-service guided selling or  Ability to interact with social network unpopular
via video chat with a remote expert.
Can be delivered through interactive
screens at shelf, employee tablet, or
shopper’s smartphone.
Shoppers say it’s best for
Features shoppers like best
Electronics / Home- Health /
 Compare product / price (43%) Grocery Apparel
Appliances wares Beauty
 Price at competing retailers (40%)
 Detailed product specs (31%) Gen Y men; Gen X and
 Guide for selecting best product (30%) Silvers Y women
Source: Cisco IBSG, 2011 Broad interest Niche interest Low interest
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18. Personal Mobile Shopper:
Smartphones Spur Gen Y Excitement
Personal Mobile Shopper Top findings by age / gender
 Biggest hit with Gen Y women; Gen Y men not
far behind
 40% of Gen Y would be more interested if
tailored offers based on social media activity
 44% of Gen Y would be more interested if
solution automatically recognized them from
Facebook account information
Shoppers greeted on mobile device as  37% of shoppers want to use mobile to tell
they enter the store and get personalized retailers they’re ready to make major
offers based on past transactions and
purchase, receive offers
“likes” on retailer’s Facebook page.
Shoppers say it’s best for
Features shoppers like best
Electronics / Home- Health /
 Compare product / price (49%) Grocery Apparel
Appliances wares Beauty
 Ability to opt in / out (40%)
 “Push” offers for big purchases (37%) Gen Y, Gen
 Directions to products in store (36%) X women
Source: Cisco IBSG, 2011 Broad interest Niche interest Low interest
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19. Shopper Favorites:
Older Shoppers Love Info, Updates
Shopper Favorites Top findings by age / gender
 Gen Y, Boomer / Silver women most interested
 Older shoppers want directions to products in
store and ability to scan barcodes on screen for
more information
 Social network integration (sharing “likes” and
recommendations) popular with Gen X / Gen Y
Shoppers view new products, top sellers,
and most “liked” on large, constantly
updated, high-definition display.
Shoppers can vote via screen or mobile.
Shoppers say it’s best for
Features shoppers like best
Electronics / Home- Health /
 Up-to-minute special offers (44%) Grocery Apparel
Appliances wares Beauty
 What’s new in store (43%)
 Limited-time specials (41%) Gen Y
 Directions to products in store (32%) women
Source: Cisco IBSG, 2011 Broad interest Niche interest Low interest
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20. 4 Achieving the Potential

21. To Embark on This Journey,
Here’s What To Do
1. Analyze 2. Build 3. Implement
Customer desires Design your concepts Set up in store
 Determine cross-channel  Agree on design  Complete rapid review
behavior today / future principles over 6-week period
 Create endpoint  Apply recipe to your  Consider traffic / noise
experience concepts  Prepare to make
 Determine target buying-  Design simple / easy continuous improvements
trigger mix with respect customer flows  Support concepts with
to brand  Remember bold / simple shopper encouragement
Shopping journey are best, beware of Operationalize
 Map core cross-channel beauty vs. usability  Create overall framework
journeys around brand  Create an enticing of repeatable concepts
promise physical design  Develop, apply, and
 Incorporate sales flows  Build prototypes create business and
technology architectures
 Determine key digital  Complete rapid / iterative
consumer testing for 2-3  Measure and learn
concepts and framework
 Review / discuss with cycles of 2 weeks each
target customers
Source: Cisco IBSG, 2011
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22. Example: Map Concepts onto the
Shopping Journey / Create a Framework
Catch ’Em and Keep ’Em Shopping Journey
Aware Research / Decide Transact Service/Support
Large screen /
video wall inspirer
Integrate with
Digital screen guider / existing in-store /
visualizer
online influencers
At-fixture guided
selling screen
Kiosk: extended range /
guided selling
Hologram /
projections Staff tablet / smartphone / mobile POS
Video / web advice in store / at home
Shopper mobile
Facebookspecial-interest page / Twitter
Digital space / special-interest website
Source: Cisco IBSG, 2011
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23. Start with Customers, then Operationalize
with Business / Technology Enablers
Business Enablers Start Here Technology Enablers
Knowledge / content mgmt. Content mgmt. / delivery
 Governance / security  Customer needs / system
 Roles / responsibilities / rights behaviors  Central / framework mgmt.
 Content creation / quality  Concept recipe  Bandwidth capacity /
 Mashop experiences optimization
Operational procedures
 Security / audit
 Associate roles / responsibilities
Store architecture
 Labor / expertise optimization
 CPU optimization
 Evaluation / metrics
 Bandwidth capacity / latency
 Compensation
 App delivery
Channel management
 Thin-store opportunities
 Data integration
Data integration
 Cross-channel inventory
fulfillment  Single data view
 Revenue recognition  Flexible fulfillment
 Compensation  Actionable exception mgmt.
 Big-data analysis
Source: Cisco IBSG, 2011
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24. Taking Next Steps:
What Type of Retailer Will You Be?
Retail isn’t broken
— stores are.
A store must be much
more than a place to
acquire merchandise . . .
Leader? . . . it has to help people
enrich their lives.
Fast Follower?
Laggard? Ron Johnson
CEO
JCPenney
Sources: Cisco IBSG, 2011; Harvard Business Review, December 2011
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25. http://www.cisco.com/web/about/ac79/retailcpg/nrf-2012.html