An17 exhib insight_monday_insidethestoreofthenow

Inside the Store of the Now

Inside the Store of the Now

CHRIS RIEGEL, CEO, Stratacache

Retails BIG Show 2017 | #nrf17

Retails BIG Show 2017 | #nrf17#Inside the Store of the NOWPhysical Retail in the Mobile-First Age


Retails BIG Show 2017 | #nrf17#Call out the subtitle So much of what were seeing is being driven by the empowerment of mobile first developments. The BIG question is: how do we parse the value of Mobile for PHYSICAL STORES? Thats what we will explore.2

STRATACACHELeader in digital communication solutions in RETAIL (signage, interactive, mobile)over 2.1 million software activationsin over 300,000 venues globallyreaching over 500 million consumers every dayAll names and logos are the property of their respective owners


Retails BIG Show 2017 | #nrf17#STRATACACHE is a leading provider of software, hardware, and managed services for large scaled digital signage networks.

You can see weve achieved remarkable scale in deploying digital communication solutions in physical spaces (Smart Menu Boards and McDonalds, Acquisition of Scala).

What sets us apart is were not simply a tech company.....we offer end-to-end managed services, from network concepition to installation, management, and advanced analytics.3

Rapid Growth & Consolidation


Retails BIG Show 2017 | #nrf17#Talk about the acquisitions, whats happening in the space, our world conquering - transition to a quick sentence about adding PRN to the company.why....4

Our Retail Practice PRNPRN is a shopper activation agency fully dedicated to brick and mortar retailWe design, deploy, and manage digital experiences to serve shoppers, affect behavior, and position retailers and brands for success.


Retails BIG Show 2017 | #nrf17#Read the mission 5

The Changing Face of Retail


Retails BIG Show 2017 | #nrf17#This discussion is as much as anything about how to leverage rapid change. Speaking of change and faces....6

Evolution


Retails BIG Show 2017 | #nrf17#Its unpredictable. As much as art as a science. Take human evolution.heres what one scientist says were going to look like In 100,000 YEARS:

- Click -Maybe Margaret Keane the artist was on to something.

So in 100,000 years, well control our features, the human face will be heavily biased to fundamentally appealing features: strong, regal lines, straight noses. And those big eyes.

.Controlling our experience is what the Age of Mobile is all about.7

The Future is Unpredictable Humans in 100,000 Years

Dr. Alan KwanComputational GenomicsWashington University


Retails BIG Show 2017 | #nrf17#Its unpredictable. As much as art as a science. Take human evolution.heres what one scientist says were going to look like In 100,000 YEARS:

- Click -Maybe Margaret Keane the artist was on to something.

So in 100,000 years, well control our features, the human face will be heavily biased to fundamentally appealing features: strong, regal lines, straight noses. And those big eyes.

.Controlling our experience is what the Age of Mobile is all about.8

A Pull Universe with the Consumer at Center

HOW IT WASHOW IT IS


Retails BIG Show 2017 | #nrf17#When I was a kid, we looked at maps. We saw a big world, and we were small. Today. Were the center of the world no need to have a bigger picture.9

Brick and Mortar Retail Business Model is Under Pressure

ShowroomingAmazon velocity and E-commerce growth Rising costs, particularly laborBrick and mortar growth laggingBig box stores need reinvention

E-commerce accounts for 10% of total US retail sales


Retails BIG Show 2017 | #nrf17#And this has been highly disruptive. Depending on the day of the week, and your personal philosophy, you can see the challenges that physical retail is confronting.And yet, the optimiists like to point out (rightfully in some sense), that brick and mortar isnt going away. 90% of retail takes place in physical locations....but the trend is all one direction:10

Sales in 1990$25.81B$20.26B$3.81Bn/aSales in 2016$482.13B$109.83B$88.52BQ1-3: $92.24BQ4 estimate: $44.58BTotal (with Q4 estimate): $136.82B

Brick and Mortar Growth


Retails BIG Show 2017 | #nrf17#Show 1990 Sales of Walmart Kroger Home Depot - Amazonthen same 4 for 2016.help retailers understand that while Amazon is a monster, physical retail has grown in the same period of time and isnt going away anytime soon 11

The Amazon Problem Acceleration, Innovation, and DataAll names and logos are the property of their respective owners

50%of all U.S. households will subscribe to Prime by 2020, up from 25%

24%of total U.S. retail sales growth in 2015


Retails BIG Show 2017 | #nrf17#Ecommerce more specifically AMAZONSo put through the lens of growth, Amazon, by all accounts, is crushing it. Nearly of ALL retail growth last year was driven by Amazon. And 60% of ecommerce growth was due to Amazon as well.And with Amazon Prime set to double its subscription, and all these friction free methods of transaction and delivery seen here like the buttons and the drones, and of couse Amazon has set the bar.

Meanwhile brick and mortar growth is essentially flat, between 1-2% (and nearly every big box retailer is shrinking and shutting stores)12

Shoppers Time is Now Most Valuable CurrencyAll names and logos are the property of their respective owners

For 71% of online shoppers, valuing their time is the most important thing a company can do to provide good service. Forrester Research


Retails BIG Show 2017 | #nrf17#And Amazon Go is setting the bar higher. Riff on Sohoskys assertion of CONVENIENCE being paramount13

Amazon Knows It Needs to be EasyAll names and logos are the property of their respective owners

Checkout was a 20th century problem. Checking in is the new Checkout.



Amazon on a TearAll names and logos are the property of their respective owners



Mobile-First Age Disrupting Physical Retail

200times a day that people pick up their mobile devices

30%of all e-commerce is mobile

3.25average number of hours 16-24 year olds spend on mobile

90%shoppers use mobile in store

300%growth rate of mobile commerce compared to traditional e-commerce


Retails BIG Show 2017 | #nrf17#To be captain obvious - we are in a mobile first age, and its a major disrupter to physical retail.

You can see for yourself:

We check our phones over 200 times a day (Forrester)Our kids spend over 3 hours a day on their phones.(Global Web Index Q32015)90% of shoppers are using phones in store check reviews, prices, more informationAnd mobile is now over 30% of ecommerce and growing 3x as fast (300%) as traditional ecommerce.

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Digital-First Retailers Leverage Data & Get PhysicalAll names and logos are the property of their respective owners


Retails BIG Show 2017 | #nrf17#And theres a fascinating trend developing of ecommerce-first stores beyond Amazon-s stores that start as ecommerce, establish their brand and their audience, and then invest in brick and mortar.

And when you talk to these folks, the Birch Boxes and Warby Parkers, they tell you that when they finally DO go brick and mortar, they feel pretty confident about what they are doing They know their customers so well (via digital data & the personalized nature of their sites).and they have a great sense of why, how, and where to build out their brand and stake their claim in physical retail. And they are ONE TEAM....Ecommerce first.

So whats physical retail to do?17

Theres No Magic Bullet


Retails BIG Show 2017 | #nrf17#We probably shouldnt depend on Magic18

What is the Store of the Future?


Retails BIG Show 2017 | #nrf17#Or creating a showplace store of the future you know, the store in which all the expensive James Bond tech goes, CMOs check the box, and nothing is really tested.19

Times Square


Retails BIG Show 2017 | #nrf17#Because all too often retailers, banks, and others pull together these concept experiences these 1-offs, that really end as time and money sinksThey create museum like experiences that generate too little data, dont test concepts at scale, Lack rigor and discipline and unclear KPIs

We all know that todays approach is Lean Startup. Radically different approach to product development. Make a MVP that works, fail quickly, scale quickly, and use metricsWere super pragmatic. We like to make our customers more money.

And the fundamental problem with these _ of the future mentality you know whats being ignored?20

Main Street


Retails BIG Show 2017 | #nrf17#Because all too often retailers, banks, and others pull together these concept experiences these 1-offs, that really end as time and money sinksThey create museum like experiences that generate too little data, dont test concepts at scale, Lack rigor and discipline and unclear KPIs

We all know that todays approach is Lean Startup. Radically different approach to product development. Make a MVP that works, fail quickly, scale quickly, and use metricsWere super pragmatic. We like to make our customers more money.

And the fundamental problem with these _ of the future mentality you know whats being ignored?21

Chasing an IllusionToo much like a museumNot enough meaningful data generatedDoesnt address strategy of scaleCreates danger of box checkingLacks rigor and discipline associated with meaningful POC initiativesThe Future is NOW


Retails BIG Show 2017 | #nrf17#

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The Future is NOW The Digital Venue is HereWeve reached a tipping point of scaled deploymentsThe technology is stable, cost effective, and highly evolvedRetail is seeing ROI (and ROO)

2million+software activations300k+venues500million+daily consumers


Retails BIG Show 2017 | #nrf17#The future is already here. Our company alone has deployed intelligent digital solutions to over 230K venues in the US, 30K in Canada

And you know why weve reached this scale particularly in incremental risk averse industries like retail, QSRs and banking? BECAUSE IT WORKS! Both in terms of financial upside as well as the strategic value of these solutions.23

Physical Stores Cost Effective AutomationAll names and logos are the property of their respective owners.


Retails BIG Show 2017 | #nrf17#In an effort to reduce labor costs, improve the experience, and make the bot experience seamless, some stores are experimenting with full scale robots digital natives are often more comfortable dealing with digital help

Weve got Chloe at Best Buy, Pepper at SoftBank, and the OshBot (which is a welcome departure from giving these robots female names (Siri, Cortana, Alexa, Pepper, etc.)Lets take a look at the OSH Bot.

The execution is VERY rough, and lacks aesthetics, it has a poster on its backside for gosh sakes.but in an era of self driving cars, you know this will only get better.24

Leveraging Mobile via Apps Mixed BagAll names and logos are the property of their respective owners

85%of smartphone time spent using apps


Retails BIG Show 2017 | #nrf17#Meanwhile, physical retail is attempting to go mobile, via apps and improved mobile web experiences.The app centricity on their part makes sense - todays consumers are spending over 85 percent of their time on their smartphones using native applications

(could call out the recent news of counterfeit retail apps. Was wondering why my Macys app wasnt working right)..25

Reality Most People Stuck in 5 App UniverseAll names and logos are the property of their respective owners

84%of that app time is spent using just five non-native apps


Retails BIG Show 2017 | #nrf17#The problem is, those five apps will vary from person to person. For some, their top five could include social media orgaming, while others may spend more time in instant messaging.

Thats why, getting outside the app ecosystem in mobile is a critical requirement.which leads us to the most important trends in Mobile Retail....and in my opinion, in all retail:

=====Note: By 2016, mobile device users will spend 3 hours 15 minutes per day using apps. Time spent on mobile browser activities will hold steady at 51 minutes this year and next.

App Indexing26

Avoiding the App Problem Altogether ChatbotsAll names and logos are the property of their respective owners


Retails BIG Show 2017 | #nrf17#Machine Learning/AI Driven bot technology. Heres an example from a company called Mindmeld. This is the underlying technology that drives Alexa, Cortana, Siri etc.The thinking - since users spend so much time in messaging apps, why not bring all functions right into messaging apps, rather than asking users to pogo-stick from app to app, from site to site? Go where the users already are Some folks call it messaging as an OSMost notable of all is WeChat, an app thats widely used in China, with 570 million users and over a million businesses represented in the app. You can use WeChat to chat, of course, but you can also order a meal, book a doctors appointment, donate to a charity, and more. Not only can you do these things, but theyre everyday events for users of WeChatFacebook is promoting and allowing these tools to be available to developers, with the idea that people will want to interact with businesses as if they are people, in conversational format

Mention Build a Bot event, offered by Decoded..27

AI to Support PersonalizationAll names and logos are the property of their respective owners


Retails BIG Show 2017 | #nrf17#Powering all of this is AI/Machine learning that supports contextual response its guided conversational merchandizing in this case were seeing North Faces approach, powered by IBM Watson 28

AI Personalization True Fit GenomeAll names and logos are the property of their respective owners


Retails BIG Show 2017 | #nrf17#True Fit has built a footwear and apparel's discovery platform. Its Genome is mapped from the world's largest collection of attribute-rich fit and style data It takes data from all the sources you see above, and maps it relationally (semantically). The end result is a sort of Pandora for clothing. If you like those boots, the genome can show you the entire family, of relevant offerings. They have a great portfolio of clients Nordstrom, Macys, Jet, Guess, Under Armor, Kate Spade, etc.

Now currently the Apparel world in physical retail is running blind same store comps 15-40% down from last year..so they should take note of an AI driven tool to improve the shopping experience.

The big question is, how do we apply these mobile first trends to the physical world of brick and mortar.29

Physical Retails Response to Mobile First

Drive to Retail with Location Driven ContentMicro Moments


Retails BIG Show 2017 | #nrf17#Well first of all, theres an entire industry developing focused on Location based content71% of shoppers use location services to find stores, and 50% of mobile adverising is location based.....but you gotta do that right

On the first point....30

Drive to Retail by Capitalizing on Micro Moments

I-Want-to-Know MomentsI-Want-to-Go MomentsI-Want-to-Do MomentsI-Want-to-Buy Moments


Retails BIG Show 2017 | #nrf17#Google has spend a lot of time and energy pouring through data to look for those moment when we are open and receptive to mobile advertising. They call these micro momentsRetailers today need to understand exactly how they fit into this schema, and capitalize on it.

Its worth reviewing carefully. Just Google the words Micro Moments..31

Physical Retails Response to Mobile First

Innovate In-Store Digital ExperiencesAI, Bots = Personal Assistants Passive & Interactive Experiences


Retails BIG Show 2017 | #nrf17#Secondly, weve got to take some of the Automation and Bot technology directly into the stores, and do it in a meaningful way.....32

Create The Store of the NOW


Retails BIG Show 2017 | #nrf17#One doesnt have to build robots to innovate replacing paper signs with smart digital and interactive goes a long way

In-Aisle: Interactive tablets support product selection in store, Responsive Merchandising: Interactive screens respond to shopper behavior (touching or picking up a product), triggering relevant screen content and mobile activation.Department /Digital Menu Boards: Amplifies seasonality, categories, cross-shopping opportunities and new product launches

Endcap: Unpacks the features and benefits of a merchandised endcap product, tracks inventory (through shelf-facing cameras), and delivers shopper analyticsCheckout: Incents the next trip, promotes front-of-store retailer services, and onramps to broader omnichannel opportunities

C-Store Upsell Platform:33

Consumer-centric Methodology Creating Shopable MomentsGoalAttractEngageDifferentiateActivateStrategyEmotional & Rational TriggersPersonalizationComparison ToolsCompelling Rewards


Retails BIG Show 2017 | #nrf17#And all of this technology is in service of one thingthose shoppable momements moments when we can attract, engage, differentiate and activate consumers, leveraging content triggers, personalization, transparent comparisons, and compelling rewards...capaltalizing on in-store micro moments......when consumers go from maybe to yes....

STRATACACHE is bringing that all home in a project were doing in collaboration with a very large retailer and a leader in the entertainment space....

And although were early into this process, the results are incredibly promising.

Weve deployed a virtual aisle in 15 stores.....34

STRATACACHEs Virtual Aisle Omnichannel InnovationA Variety of Customer Need States and Use CasesUnaware of online-only choices (depth of assortment)Knows more exists online & generally heads to AmazonIntends to buy, needs help choosing/informationDidnt plan on buying, but open to attract messaging


Retails BIG Show 2017 | #nrf17#Some context:This manufacturer has a dedicated omnichannel team and a great relationship with the retailer. They have a huge and somewhat complex line of offerings. Many of which are only found online. They came to us with a desire to help shoppers in-aisle, real time.They embraced the lean startup model test quickly, iterate quickly.dont get trapped by the finished product mentatity:

The virtual aisle was created to serve shoppers who:Dont know about the other offerings, shoppers who might head to Amazon when confronted with this broad assortmentShoppers who intended to buy, but needed help, and shoppers who didnt plan on buying, but who just wanted to explore

Our experience goals:Goal was to build an experience that felt more aligned with an in aisle mindset (not simply porting Dot Com to store)Goal was to use the device as a discovery tool, and once discovery has occurred, then port the consumer to dot com to transact/do further researchGoal was to start with a filter-based approach the approach that we are all drawn to online, and use this to drive immediate engagement35

STRATACACHEs Virtual Aisle Search/Personalization Filters


Retails BIG Show 2017 | #nrf17#Attract media plays to call out capabilities. Heres a case where a static slide show can sometimes be better than video video tends to feel like an ad, a slide show of frames signifies swipe-ability more critical.

Once a user engages, they are met immediately with this page - a page that allows for customized filtering and search. You can see how this works and whats compelling about it is that it immediately and real-time personalizes results for the user.

Once a user selects the various filters, they see how many products are available that meet their criteria, and which categories of product apply. And if they choose not to select any filters, they are met with the full assortment. So, once they select the green continue button, they are met with a virtual representation of the aisle.It looks like this:36

A Tactile Design


Retails BIG Show 2017 | #nrf17#Its completely tactile and scrollable, and features the product laid out in an appealing manner on a virtualized shelf. Once a shopper selects a product, they..37

Transact in Aisle


Retails BIG Show 2017 | #nrf17#

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...or Via Mobile


Retails BIG Show 2017 | #nrf17#As you can see on the left hand side is a link which takes a shopper directly to the transactional page of the retailers dot com site.And because the employ deep linking, there is also a link that asks a shopper if they want to download the retailer app so a 39

STRATACACHEs New LIFT NetworkThe LIFT Network is a proven plus one upsell platform. Using live transaction data, you can personalize the customer experience, increase sales, and amplify brands at C-Stores nationwide.

42million+monthly viewers1.5k+locations64million+monthly impressions3.5k+screens


Retails BIG Show 2017 | #nrf17#42 MM+ monthly viewers64 MM+ monthly impressions1,500+ locations3,500+ screensAdult core demo: 55% male/45% female, 71% are 18-49, median age 39Average income: $72KVisits per week: 61% of adults 18-44 shop at a C-store two or more times per week40

Smart Menu Boards Tech Used for Departments


Retails BIG Show 2017 | #nrf17#Similar to pinterestLowes (home improvement) endcap, 3 menu boardsTrending 6 images with prices (products sold at Lowes, 3 winter related)Specials 3 images with prices, items in store related to weather (gloves, shovel, sled)Featured Product - Storm coming - Snowblower ad41

Table Stakes AnalyticsOptimize the physical space like a website.

Customer Facing Portal

Trackable DataSwipes, ClicksOffers to PhoneForwardsImpressionsDemographicsDwellFacial Expression/SentimentContact Information Content A/B TestingCarrier Information


Retails BIG Show 2017 | #nrf17#-And being able to see digital data from a store is really table stakes today:-Robust analytics, captured in real-timeengagement, demographics, -Predictive and proscriptive analytics can be monitored via customized dashboards-We can use real time insights to optimize the physical space (almost like a website-Camera analytics can drill down on dwell and demographics (not currently employed because of retailer policy)42

Table Stakes Content Management Engine (& Machine Learning)

Venue | Channel | Day of Week | Time of Day | Audience | Conditions


Retails BIG Show 2017 | #nrf17#Having a state of the art content management system is critical as well -One that is context aware, data driven, and rules based, that can optimize media programmatically based on the venue, channel, time of day, day of week, and conditions, and one that can seamlessly transform multi platform data feeds into compelling rich, relevant and engaging in-store media.Another table stake for the store of the now.43

Table Stakes State-of-the-Art Hardware

All-in-One TabletForward and Rear Facing CamerasPoE (Power over Ethernet)4G ConnectivityCustom Form FactorRugged, Optimized and Retail SafeOSCTVLarge format experiential screens


Retails BIG Show 2017 | #nrf17#Robust, rugged, retail safe hardware

All in one tablets with all the features you see listed and large screen experiential solutions

So since these amazing tools exist, whats taking physical retail so long to respond?

So, because I have the stage, which is a tremendous honor, here are the 9 recommendations for physical retail.....44

Pragmatism Rules!APPROACHEnd-to-endHolisticStrategicEconomies of Scale PracticalFOCUSStakeholdersGoals & KPIsAdvanced Flexible TechnologyExperience-centricROI/ROO Bottom Line


Retails BIG Show 2017 | #nrf17#The benefit of scale on your behalf. Pragmatism rules. 45

What Lies AheadThink Store of the NOW.Unite ecommerce and brick and mortar teams.Apps cant do all the heavy lifting.Transform mobile trends for in-store experiences bots, AI, AR, filtering and leverage large inexpensive digital form factors. Make it EASY.Low price alone is dead end. Learn from fast-casual service structures vs. fast food approach.Experience Architecture is THE Opportunity.


Retails BIG Show 2017 | #nrf17#Read lists and customize..and transition to the idea that you never know....46

The Future is Unpredictable Humans in 50 Million Years

Man After Man: An Anthropology of the Future Douglas Dixon


Retails BIG Show 2017 | #nrf17#Thanks47

An17 exhib insight_monday_insidethestoreofthenow

Retail

Transcript of An17 exhib insight_monday_insidethestoreofthenow