Retailers remain laser-focused on improving the customer experience in every part of the store. They are improving the checkout experience, hiring more store associates and empowering managers with mobile tools. The recently released RSR store study confirms this and other trends, such as: • 52% of retailers see high value in modern POS hardware and software • 55% see high value in employee selling tools on the sales floor • 43% see high value in personal scanners and self-service sales During this webinar, Paula Rosenblum from RSR will share these and other findings from the store study and discuss how retailers can respond in order to achieve better in-store results. Part two of the presentation will feature a deep dive into how the checkout experience affects overall store performance, honing in on all aspects of checkout, including POS, self-checkout, the queue process, impulse buying, couponing and tendering. Each aspect of the checkout experience contributes to a successful sale. If any part of the checkout experience is negative, 50% or more shoppers may opt to shop online instead.

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SPEAKER
SPEAKER
Paula Rosenblum Julie Huffman
Managing Partner Senior Human Factors
Retail Systems Research Engineer
NCR
Debbie Hauss
MODERATOR
Editor-in-Chief
Retail TouchPoints

6. The 21st Century Store: The
Search for Relevance
A REVIEW OF REPORT FINDINGS
PAULA ROSENBLUM, MANAGING PARTNER
RETAIL SYSTEMS RESEARCH, LLC.
JUNE 2011

7. Agenda
• Report Overview & Methodology
• Business Challenges
• Opportunities
• Organizational Inhibitors
• Technology Enablers
• BOOTstrap Recommendations
• What it Means for Retailers
7

8. Report Overview &
Methodology
8

9. First: Who/what is RSR?
A group of retail industry veterans providing:
Insight into business and technology challenges facing the extended retail
industry
Thought leadership and advice on navigating these challenges for specific
companies and the industry at large
Nikki Baird Paula Rosenblum Brian Kilcourse Steve Rowen
Our research products include technology adoption benchmark reports,
custom research, and comparative personal benchmarks.

10. Our BOOT Methodology
Business Organizational
Opportunities
Challenges Inhibitors
Technology
Enablers
Retail Winners: Year-over-year comparable store
sales outperform inflation.
They sell more “stuff” but! they also think and
act differently than their competitors.
10

11. Top Line Findings
• The Store has to evolve – we have no choice
• Customers demand a more relevant / differentiated experience
• What is relevance?
• Don’t try to sell me what you want to sell, offer me what I want to buy,
and make it personal
• Retailers, especially Winners understand the importance of a more
convenient in-store experience
• What is convenience?
• Educated employees
• Cross-channel consistency
• “Shoppable” layout
• Rapid check-out
• Technology and training to drive productivity all required to facilitate
the necessary change
11

12. Better-Educated Employees a Must
The Post-
Top Three (3) Uses of In-store Technologies Walmart
World
2011 2010
69%
Maintain and/or improve the customer experience
67%
51%
Make our employees “smarter” and better informed
35%
39%
Increase revenue while holding down operational costs
57%
32%
Put actionable information into the hands of managers
36%
Help the company win new customers and retain current 29%
customers 37%
Create competitive advantage and new sources of revenue 26%
generation 30%
26%
React quickly to changes in the business environment
22%
Help us keep up with the competition (avoid competitive 20%
disadvantage) 11%
Source: RSR Research, June 2011
12

13. A Stabilizing Payroll to Sales Ratio
How Have Payroll to Sales Ratios Changed?
2009 2010 2011
51%
40%
38%
36%
33%
30%
25% 24% 25%
Increased Remained the same Decreased
Source: RSR Research, June 2011
13

14. Technology the Key to Education
How long has your company been actively involved in adding
technology-enabled touch-points for employees in your
stores?
2011 2010
70%
Longer than 1 year
49%
8%
Less than 1 year
18%
3%
Budgeted project
8%
14%
Project planned, not yet budgeted
8%
5%
No plans
11%
Source: RSR Research, June 2011
14

15. Getting the Store Manager Back
on the Selling Floor
How long have you been actively involved in adding Mobile technology-enabled
touchpoints for Store Managers within your store?
2011 2010 2009
25%
Longer than 1 year 14%
12%
28%
Less than 1 year 23%
22%
3%
Budgeted project 9%
7%
22%
Project planned, not yet budgeted 14%
15%
22%
No plans 32%
36%
Source: RSR Research, June 2011
15

16. Business Challenges
RETAILERS UNDERSTAND WHAT’S IN
FRONT OF THEM
16

17. Observations
• Improving customer service while holding the line on costs
remains a top concern, but has been joined by pressures
to improve integration across channels and combatting
price transparency
• The uncertain economy remains a persistent challenge –
particularly to laggards
• Retail Winners retain the “luxury” of focusing on a better
customer experience
• Economy taking a toll on under-performers
17

18. Price Transparency and Integration
2010 was “the Year of Price Transparency”
Top Three (3) Business Challenges Faced in Stores
2011 2010
Need to improve customer service while holding the 43%
line on payroll costs 49%
Need for more consistent store execution 37%
45%
Uncertain economic conditions 37%
37%
Consumers know competitor prices for the same 31%
products 16%
Price is re-emerging as an important customer 26%
concern 27%
Customer dissatisfaction caused by lack of integration 20%
between the store and other selling channels 7%
Need to reduce shrink 19%
12%
Store managers lack information they need on the 19%
selling floor – too much time spent in the back room 22%
Source: RSR Research, June 2011
18

19. As Always, Winners More Focused
Business Challenges Vary Significantly by Performance
Retail Winners Average Performers Laggards
50%
Need to improve customer service while holding the
44%
line on payroll costs
25%
27%
Uncertain economic conditions 38%
Unrelenting
58% pressure
Source: RSR Research, June 2011
19

20. Opportunities
NO SHORTAGE OF WAYS TO IMPROVE
20

21. Observations
• Retailers continue to see opportunity in making in-store
experience more convenient
• A growing sense that making employees better informed and
more productive will help generate sense of convenience, as will
reducing out-of-stocks by providing stores with the ability to
locate and ship merchandise from other parts of the company
• Retailers’ have got religion around mobile interactions with
consumers
• 87% of respondents now see value in the smart phone driving
traffic TO the store vs. 65% last year
• 67% now see value of using the customer’s smart phone WITHIN
the store, vs. only 52% last year
21

22. Productivity and Technology Hold
Retailers’ Interest
Opportunities with "A lot of Value" in Improving the In-store
Experience
2011 2010
Focus on a more convenient customer experience 68%
73%
Find ways to make our employees more productive 58%
50%
More personalized attention from our employees 57%
58%
Educate and empower our in-store employees using 56%
technology 49%
Provide ability to locate and sell merchandise from 54%
anywhere in the company 42%
Improve performance reporting to store management 29%
39%
Provide more specific/localized direction to store 28%
managers 38%
Source: RSR Research, June 2011
22

23. Mobile Engagement: Profound
Uptick
Smartphones' Value in Driving Traffic TO the
Store
Lot of Value Some Value No Value
2011 31% 56% 13%
2010 20% 45% 35%
23
Source: RSR Research, June 2011

24. Organizational Inhibitors
FINDING THE MONEY, GETTING
SPONSORSHIP FROM THE TOP
24

25. Observations
• Persistent economic uncertainty deterring investment
• Overall capital requirements continue to plague retailers
• Trumps ROI as an issue
• Positive sign: Retailers recognize there is no way back to simpler
times
• Evidence overwhelming, change must be driven from the top
• Managed services gaining traction as an alternative
• Absence of wireless infrastructure serious impediment to forward
progress with a wireless consumer
25

26. Less Budget, but Better Projects
Persistent Economic Uncertainty Taking its Toll
Top Three (3) Organizational Inhibitors
2011 2010
Overall Capital Requirements – we never even get to 61%
the subject of ROI 40%
54%
Hard to quantify technology return on investment
66%
The existing technology/infrastructure is preventing us 49%
from moving forward with new solutions 50%
We generally don’t want to be an early adopter of new 39%
technologies 43%
The TCO of in-store technologies makes it hard to 32%
justify many of the newer technologies 28%
Management believes stores should be able to just 22%
“do what we tell them” 12%
We are trying to simplify our in-store technology, not 15% Positive Sign
make it more complex 32%
Source: RSR Research, June 2011
26

27. Senior Management Driving Change
How important are each of the following to help your
company overcome the inhibitors you selected above?
Very Important Somewhat Important Not Important
Senior management championing the project 70% 30% 0%
Pilot programs in specific stores or regions 58% 35% 8%
The customer is demanding it – we have no choice 45% 39% 16%
Asking vendors to provide success stories and references 34% 39% 26%
Merchandising vendor funding for in-store projects 34% 50% 16%
Gain sharing programs with vendors 32% 45% 24%
Start with smaller projects, buying basic system functions, and 30% 57% 14%
Managed services for software 18% 58% 24%
Managed services for roll-out and/or maintenance 16% 45% 39%
Managed services for home office / store network 16% 43% 41%
Managed services for hardware 11% 65% 24%
Operating leases 3% 50% 47%
Source: RSR Research, June 2011
27

28. Mobile Opportunities Cannot Be
Realized without a Mobile
Infrastructure
Which of the following statements best describes the
technology your company uses to support wireless
networking in the store?
2011 2010
Wireless available only for receiving and other 30%
inventory control related tasks 25%
30%
No wireless network available in store
38%
Wireless available throughout the store for 27%
performance management, POS and product related
tasks 30%
12%
Wireless available for customers
8%
Source: RSR Research, June 2011
28
Along with the obvious, this constrains placement of new devices

29. Technology Enablers
SIGNIFICANT SHIFTS IN TECHNOLOGIES
HOLDING RETAILERS’ INTEREST, BUT POS
STILL BREAD AND BUTTER
29

30. Observations
• Perceived value of in-store technologies shifts significantly in the
past year
• “Bread and butter” applications like modern POS hardware and
software, and in-store rewards and coupons important
• New trends have emerged
• Now see a lot of potential value in cross-channel initiatives that
support the store, and in delivering information to both company-
and customer-owned phones and PDAs
• Retail Winners most apt to embrace value of newer technologies
• RSR troubled by lack of meaningful Key Performance Indicators
(KPIs) used to track value received from in-store technology
investments. Better metrics needed.
30

31. Massive Shifts in Perception
2010: The Year of Multi-channel and Mobility
Potentially Very Valuable Technologies to Support Opportunities
2011 2010
Cross-channel customer and inventory synchronization 70%
through real time updates 50%
Deliver information to customer-owned cell phones and 62%
PDA’s 30%
Deliver information to store-owned cell phones and PDA’s 57%
21%
Employee selling tools on the sales floor 55%
43%
Modern POS Hardware and Software 52%
52%
Personal scanners, self-service scales, product 43%
information kiosks, employee product information training 25%
In-store rewards and/or coupons 43%
42%
Distributed Order Management (buy in one store, fulfill in 43%
another) 26%
KPI’s and alerts to store managers on mobile devices 38%
25%
Source: RSR Research, June 2011
31

32. Actual Value is ‘Bread and Butter’
Actual Value Achieved from Technologies
A lot of Value Somewhat Valuable Little to No Value
Modern POS Hardware and Software 30% 48% 22%
In-store rewards and/or coupons 28% 48% 25%
Cross-channel customer and inventory
32% 40% 28%
synchronization through real time updates
Employee selling tools on the sales floor 13% 59% 28% Growth
in value
Distributed Order Management (buy in one store,
35% 30% 35%
fulfill in another)
Software that schedules the right mix of labor for
22% 38% 40%
employees
Deliver information to customer-owned cell phones,
18% 41% 41%
tablets and PDA’s
Source: RSR Research, June 2011
32

33. Modern POS the Linchpin
Status of In-store Technologies and Future Plans
Installed Budgeted/Planned No Plans
Modern POS Hardware and Software 60% 31% 9%
Software that schedules the right mix of labor to complete all
53% 33% 15%
activities and tasks
Employee selling tools on the sales floor 50% 36% 15%
In-store rewards and/or coupons 54% 28% 17%
Customer facing self-service touch points in the store 52% 30% 18%
Deliver information to customer-owned cell phones and PDA’s 34% 45% 20%
Distributed Order Management (buy in one store, fulfill in another) 44% 32% 24%
Cross-channel customer and inventory synchronization through
41% 36% 24%
real time updates
Personal scanners, self-service scales, product information kiosks,
38% 39% 24%
etc.
Software to assign actions in response to underperforming KPIs 33% 36% 30%
Deliver information to store-owned cell phones and PDA’s 38% 29% 32%
KPI’s and alerts to store managers on mobile devices 27% 36% 36%
Dual displays at POS 39% 21% 41%
Self-check-out 30% 18% 52%
Source: RSR Research, June 2011
33

34. BOOTstrap
Recommendations
FUNDAMENTALS REDEFINED
34

35. What Does it Mean for Retailers?
• Redefine / differentiate the In-Store experience
• Use Location-based social network promotions to drive
differentiation
• Look at physical design of check-out area to maximize
value of modern POS
• Make a wireless decision now
• Don’t make promises your Employees can’t keep
• Ensure store blends with other channels
35

36. Thank You!
Paula Rosenblum
prosenblum@rsrresearch.com
305-757-1357
www.rsrresearch.com to download
this and other reports
36

37. Julie Huffman
Senior Human Factors Engineer
NCR Customer Experience Consulting
Upgrade Your Customer Experience by Fine Tuning Your Checkout

38. NCR Global Customer Experience Consulting
Usability and Baseline Transaction
Design Operations
Integrating People,
Process and
Technology
To Improve
Performance
and Service
Enhancing Consumer
Self-Service Experience Capacity
Optimization and Analysis
Blueprint
Technology
Optimization
NCR Confidential 38

39. Agenda
Leverage Time in Queue
Coupons / Promotions
Tender Processes
NCR Confidential 39

40. Leverage Time in Queue
Benefits
• Increased basket size / revenue
• Improve product awareness
• Educate and engage your customer
Requirements for success
• Proper design/integration of checkstand & surround
• Optimal mix and placement of impulse merchandise
NCR Confidential 40

41. Time in Queue Case Study
Customer Behavior Did Not Touch/ Touch/
Look
While in Queue: Notice Replace Purchase
Legacy Checkstand Design
Store A 89.0% 6.0% 4.0% 1.0%
Store B 83.0% 12.0% 2.0% 3.0%
New Checkstand Design and Impulse Layout
Store A 47.7% 29.8% 14.4% 8.0%
Store B 60.1% 17.5% 13.9% 8.5%
Store C 55.8% 28.0% 7.0% 9.2%
Newest Checkstand Design and Impulse Layout
Store A 47.3% 25.2% 13.0% 14.5%
NCR Confidential 41

42. Time in Queue Lessons Learned
Integrated impulse merchandise racks
• 10–15% customers make an unplanned purchase
Customer behavior
• Go directly to point of sale
• Look at one impulse display
• Scan the middle to upper shelving
Customer interaction
• Impulse display parallel to queue
• Cooler integrated with impulse display and queue
• End-cap impulse display
NCR Confidential 42

43. Merchandising Display Lessons Learned
Within the front end/queue
• Be consistent across lanes
• Select items based on sales and margin
• Strategic items in the mid to upper shelves
End cap
• Vary item selection to display greater variety
• Offer small, low cost general merchandise
• Gift cards
Counter
• Avoid excessive clutter
• Designate an impulse display area
• Differentiate the color of the counter
• Utilize a tiered display
NCR Confidential 43

44. Time in Queue Digital Signage
Goal is to engage customer in store
• At point of transit
• At point of wait
• At point of sale
Considerations
• Right message at right time
• Dwell time
• Placement
NCR Confidential 44

45. Coupons and Promotions
Benefits of effective coupon and promotion processing
• Enhance customer service and satisfaction
• Improve associate productivity
• Reduce shrink
Requirements for success
• Application and process design
• Associate training
NCR Confidential 45

46. Why are Coupons and Promotions important?
In a recent survey, participants were asked how likely they
would be to use coupons during a recession. The following
responded as much more likely or somewhat more likely.
• Age:
• 71% ages 18-34
• 68% ages 35-54
• 63% among those 55 years and above
• Geographic Location:
• 70% of Midwesterners
• 69% of Westerners
• 64% of Northeasterners
• 62% of Southerners
• Income:
• 68% of those earning less than $50,000 a year
• 67% for those earning more than $50,000
Information and Communication (ICOM) Survey of 1,529 US consumers
NCR Confidential 46

47. Coupons Case Studies
Specialty Specialty Specialty Mass
Retail Segment: Grocery
store #1 store #2 store #3 Merchandiser *
Scanning coupon
1.9 - 2.2 2.7 N/A 3.0 4.5
(in seconds)
Keying in coupon
6.2 - 7.4 17.3 11.6 12.9 16.1 - 26.3
(in seconds)
Manual override 4% 1.30% N/A 6.50% 24%
* Self Serv Check Out; all others were assisted checkout
NCR Confidential 47

48. Coupons Lessons Learned
Avoid coupon key entries
Avoid search for item price
Establish guidelines and
empower associates
NCR Confidential 48

49. Promotions Case Study – Specialty Store
Database issue
• Manual price override
• 2.1% of transactions, averaging 7.3 seconds
Application and data base issue
• Manual price override and authorization code
• 1.3% of transactions, averaging 10.1 seconds
The key is that these issues:
…add time to the transaction
…require associate training and intervention
…jeopardize customer service
NCR Confidential 49

50. Promotions Lessons Learned
Ensure that database is up to date
Ensure all items that are part of a promotion,
sale or clearance…
• Are processed correctly via the point-of-sale terminal
Ensure all discounts are automatically calculated
NCR Confidential 50

51. Tender Processes
Benefits of effective tender processing
• Enhance customer service and satisfaction
• Reduce overall transaction time
• Reduce paper waste
Requirements for success
• Integrated application and process design
• Associate training
NCR Confidential 51

52. Tender Case Studies and Lessons Learned
Cash Tender
• Dynamic Tendering
• CaseStudy: application and process
enhancement, 0.5-2.5 seconds savings
Credit Tender
• Eliminate signature for transaction amount
less than $25.00
• CaseStudy: application & process enhancement,
8-10 seconds savings
• Customer activity: Eliminate need to
verify amount
• CaseStudy: application and process
enhancement, 2 seconds savings
NCR Confidential 52

53. Tender Case Studies and Lessons Learned
Credit and Debit Tender
• Utilize signature capture & pin pad for customer to process tender
• Swipe card & respond to prompts (i.e. enter pin number or sign for credit)
• Case Study: technology & app. enhancement; 13- 20 seconds savings
• Enable swipe card during item entry and pre authorization
• Case study: application enhancement, 2 second savings
• Default the type of card & amount once customer swipes their card
• Case study: application enhancement, 1.5-2.1 second savings
• Ensure time to authorize is less than 5 seconds
Debit Tender
• Enable consumer to enter amount of cash back and verify total
• Case study: application enhancement, 3-4 seconds improvement
NCR Confidential 53

54. Tender New Customer Service Enhancement
Two sided thermal printing
• Less roll changes during peak periods
• Green initiative - use up to 45% less
receipt paper
• Print custom color messages, promotions
and/or coupons
Email receipt option
• Leverage loyalty program to enable
customers to establish preference for
paper or electronic receipt
• Leverage electronic payment to link/ store
email address with customer account
NCR Confidential 54

55. Thank you
Transforming your customer
interactions into amazing experiences
NCR Global
Consulting Services
Engage
Delight
Come partner with us
For more information please contact:
Greg Smith, 678 808-6881
Julie Huffman, 770 623-7396
NCR Confidential 55

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57. IJ8(
FEATURED SPEAKER
SPEAKER
Paula Rosenblum Julie Huffman
Managing Partner Senior Human Factors
Retail Systems Research Engineer
NCR
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