A S U P P L E M E N T T O R I S N E W S

Innovation is a must-have when whirlwinds reign that can either recreate business or wipe them out

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The Innovation Dilemma

therefore ignored the upstart MP3.Sony owned one of the largest

music organizations on the planet but never leveraged it into something like iTunes. Sony owned a major Hol-lywood studio and didn’t shift into streaming video to become Hulu or Netflix. And, finally, Sony was the premier electronics manufacturer in the world but never made a meaning-ful move into mobile phones.

Instead of focusing on innovation, Yahoo and Sony chose to become high-ly efficient companies because that’s where the money was. But making money is a great and wonderful thing until the day it stops and your finely tuned machine hurtles over the cliff.

“The era of true retail innovation has arrived,” says Jeff Roster, research vice president for Gartner, in the 2013 RIS/Gartner Retail Technology Study. Roster adds that the forces of innova-tion are producing “a whirlwind that will either recreate businesses or level them.”

Retailers with effective and efficient systems in place are like sports cars with finely tuned engines. They are fast but they are not guaranteed a checkered flag at the end of the race. In fact, retailers with smoothly humming engines can run their or-ganizations right off a cliff in trans-formational times like these when innovation becomes the necessary ingredient for success.

Think of Yahoo and Sony, two great companies that changed the world. Yahoo was the first and fastest sports car on the information superhighway back in the day. It owned the Internet desktop, but just when profits started to roll in Yahoo became conservative and opted to preserve corporate val-ue. As Yahoo was idling along at the head of the pack it ignored opportuni-ties that were seized by such upstarts as Amazon, eBay and Google.

However, Sony’s example makes Yahoo pale in comparison. Sony owned the Walkman market and

CLOUD-BASED FLExIBILItyFortunately for retailers, there is an innovative technology that provides a pathway around the whirlwind. The cloud delivery model has emerged as a unique method for retailers to leap-frog their current limitations and end up with a 21st century solution set. It lets retailers quickly add advanced e-commerce and omnichannel capabili-ties without incurring heavy upfront costs. In addition, it is ideally suited to support rapid expansion into global markets.

Cloud technology is the founda-tional model upon which Demand-ware has been built and it takes the concept a step further by not only de-livering an e-commerce solution but by tightly coupling a related solution set together to create a robust om-nichannel platform.

A good partnership with a cloud-based vendor helps retailers stay ahead of the curve by adding a power-ful member to the innovation team. “Last year Demandware had six ma-jor releases with 44 revenue-driving features introduced into our plat-form,” says Rob Garf, vice president of product and solutions marketing for Demandware. “Our community is constantly innovating and pouring enhancements into the platform. Our clients take advantage of them with-out the disruptive nature of a tradi-

Investing in efficiency is not enough when whirlwinds blow that will either create new businesses or destroy old ones

By JOE SKORUPA

The era of true retail innovation has arrived and it is producing “a whirlwind that will either recreate businesses or level them.”

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To get to a level of granularity, sensing devices are placed through-out the store and set up for specific configurations based on the retailer’s goals. For example, some retailers want to see how shoppers move from department to department. Others want to learn how customers experi-ence signage and end-cap displays.

Like the data collected by online retailers, in-store tracking data has major implications for store opera-

tions and merchandising. In addi-tion, by tracking shoppers who spend time in a particular department and then comparing conversion numbers through POS transactions, it is able to settle questions about showroom-ing once and for all.

MAnAgIng WEB COMPLExItyThe proliferation of digital devices and connectivity methods is forcing e-commerce retailers to rethink their performance infrastructure to bet-ter manage the full range of digital experiences. Retailers can no longer assume the vast majority of shoppers interacting with their digital site will be doing so by using a mouse or key-

tional software upgrade.”Reducing upfront infrastructure

expenses is a critical element for today’s global expansion plans and cloud technology offers retailers a unique opportunity for achieving suc-cess while lowering risks. A great deal of the process can be streamlined by opening up an online channel and using the cloud to establish a local brand experience with targeted prod-uct assortments while using a single instance of all applications.

POWER OF tRAFFIC AnALySISThe use of cookies, website heat maps and other tracking methods in the digital realm offers retailers an unprecedented ability to understand the behavioral patterns of online cus-tomers. As analysis of this data began to produce measurable results for on-line retailers it became apparent to brick-and-mortar retailers that they needed the same ability to aggregate and analyze shopper behavioral pat-terns while they were moving inside the store.

In the age of ubiquitous mobile devices this concept has now become a reality. One vendor that offers such a shopper tracking and analytics so-lution is iInside, which uses mobile location services to passively detect consumer mobile devices within a store and analyze the in-store path to purchase.

“We anonymize the signals and create a unique identifier for each one,” says Jim Riesenbach, CEO of iInside. “The data is then aggregated so that we can follow shoppers’ pat-terns.”

board. Nor can they assume shoppers are connecting through fixed net-works.

“Retailers can no longer think of their website as one indivisible thing that’s the same for all users,” says Mike Afergan, senior vice president and general manager of Web experi-ence at Akamai Technologies. “They need to think about all the different situations that their Web experience will be consumed in.”

Due to the explosion of mobile devices and wireless access points a new level of complexity is forcing e-commerce retailers to look for ways to manage situational (device and connectivity) awareness. Akamai has taken an innovative approach to this problem by developing an intelligent platform called Aqua Ion that deter-mines what technologies to apply to each shopper’s digital device and con-nection method.

According to Afergan, the platform is being constantly updated and in-novations added, which is critical in an age when whirlwinds and cliffs threaten even the most finely tuned sports cars. RIS

tech innovators 2013

Retailers with smoothly humming engines can run their organizations right off a cliff in transformational times when innovation becomes the necessary ingredient for success.

The rise of omnichannel retailing has awakened a hunger for insights among brick-and-mortar retailers. They envy digital commerce’s ability to track ev-ery Web click and mobile finger-swipe that precisely maps the shopper’s path to purchase.

The ubiquity of consumers’ mobile devices, however, is bringing online-style capabilities into the retail store,

with customer tracking and traffic ana-lytics tools from companies including iInside. Their mobile location service solution can passively detect consum-ers’ mobile devices within a store envi-ronment from the signals they send out.

“We anonymize the signals and cre-ate a unique identifier for each one; there’s no personally identifiable infor-mation about the device’s owner or even the phone. Nothing can be extrapolated back to the individual customer,” ex-plains Jim Riesenbach, CEO of iInside, a WirelessWERX company. “The data is aggregated so that we can follow shop-pers’ patterns.”

DIFFEREnt RAngES, DIFFEREnt gOALSThe iInside solution uses a number of inexpensive sensing devices placed

throughout the store, with the specific configuration based on the retailer’s goals and the insights they are seek-ing. “Each one can be set to a level to see as granular a range as one meter, or as broadly as 50 meters,” explains Riesenbach. “If we’re working with a retailer that wants to understand how customers are moving from department to department, and what their path is

through the store, our solution can be set up with a relatively small number of devices.”

In contrast, in a grocery store where the retailer would want to learn about how customers are experiencing sig-nage and end-cap displays, the impact of specific merchandise selections or the average queue times at checkout, more devices with smaller ranges would be needed.

VARIEty OF InSIghtS“We can see the consumers that go in, and where their first intent is in the store – the first department they visit and the dwell time there and throughout the store,” says Riesenbach. “There are both operational and merchandising compo-nents to the data we can provide.”

For example, iInside is working with

a major consumer electronics chain to “test different store formats, layouts and consumer experiences,” notes Ri-esenbach. “Other clients rely on our analytics to optimize merchandising and marketing spend, and to staff more efficiently and improve operations. The ability to measure in-store traffic helps our clients determine the conversion or sales effectiveness of a single depart-ment across every store in their chain. As a result, they’re able to isolate valu-able performance data that could never otherwise be available, and make the necessary adjustments to improve prof-itability.

“We provide the most reliable, gran-ular view of what’s happening inside the store, down to the one-meter zone,” Riesenbach adds. “With this view, we can provide insights, capabilities and actionable results for the retailer.” •

In-store mobile location tracking provides a new level of granular detail and strategic insight

Adding Mobile to in-store tracking

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tech innovators 2013: iinside

hEADqUARtERSYorba Linda, Ca

WEBSItEwww.iinside.Com

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I N N O V A T I O N Q U O T I E N T

With its ability to analyze shopper movement within the store, iInside provides intelligence, capabilities and actionable insight for retailers.