Global Retail Executive Council

A few weeks ago, I explained some ways in which the iPad could be used to revolutionize the retail industry, specifically in the way it can be used to boost sales associates' knowledge and overall usefulness. However, as we've seen in recent weeks with the iPhone 4, Apple is not infallible, and its products do contain their faults, which could prevent it from becoming a player in the retail business space. So this post will be somewhere between a reality check for Apple fanboys (yes, we know a few work in retail) and the right side of a SWOT chart.

First of all, a major problem is simply a security matter: Having a $700 piece of technology laying around your store with access to much of your business intelligence isn't a very safe system. After all, it's much easier to slip an iPad in your shirt than trying to, for example, fit a kiosk in your purse. Plus, as a hot consumer device (with waitlists to even get one), they're more likely to walk out the door than, say, an IBM 4690 would be.

But beyond the logistics of keeping track of loose iPads, the devices still have many problems that brings their usefulness in retail into question. A major barrier is Apple's app store, which doesn't allow third-party applications. Retailers could "jailbreak" the device (or some less criminally named process since it's now an "enterprise activity") to allow them to deploy in-house developed "apps," but this would likely void the warranty and render the device bricked with the slightest code errors.

There are also a slew of hardware problems that make the iPad hard to use.

• reports of WiFi connectivity issues
• no multitasking, which means 100% application integration on the back end 
• no camera, which means it can't be used to scan barcodes (unless you want to buy an external camera or barcode scanner, which pretty much defeats the purpose of such a sleek and sexy device). This is a huge disadvantage for the iPad, since many customers will be walking into stores with barcode-scanning abilities in their own pockets via smartphone.

Similarly, the iPad very publicly and explicitly does not support Flash. Many retailers such as Nike, Converse, Arctic Cat, and IKEA use Flash elements on their websites, which would make accessing those sites impossible via the iPad. The iPad also doesn't support GPS, and with geolocation becoming a hot new thing in retail, not having GPS ability will greatly impair the iPad's retail impact. For example, it makes it much harder for the sales associate to help a customer find a nearby location where they can find the item they're looking for if the store they're currently in doesn't have it in stock.

Another problem with the iPad is that you need adaptors like CRAZY to hook anything up to the tablet. You even need an adaptor for a USB plug! This would make it very inconvenient to attach the iPad to any of your in-store devices. One last problem is simply a matter of typing ability: The touch-screen keyboard makes it rather inconvenient to type with one hand while holding the iPad with your other hand, which would be the typical position sales associates would be in when using the tablet to help customers.

With all these downfalls, it seems unlikely that the iPad will catch on as a major tool for retailers to employ. Like so many "next great things" at the consumer level, the enterprise implications are just a little too challenging to make adoption easy.

However, this isn't to suggest that tablets aren't useful in retail; in fact, their potential is enormous. Cisco's recently released Cius tablet is specifically aimed at businesses, and it explicitly fixes many of the aforementioned problems with the iPad: It is compatible with a company's current Cisco business applications, it has a camera and can be integrated with existing Cisco telephone and conferencing products, it offers both USB and bluetooth connectivity, and it even will support 4G. Plus, to Steve Job's chagrin, it runs on the Android platform which offers far greater adaptability and configuration options.

It remains to be seen who what tablet maker will come out on top in the retail space, but with Cisco specifically targeting businesses rather than consumers, the battle has already begun.

Since the launch of the iPad by Apple, the tech industry has become even more tablet-crazed than usual, and by the end of the year we should expect to see a whole variety of tablet computers flying off the shelves during the Christmas season. But besides (hopefully) propping up holiday sales numbers, what can these thin, ultra-portable computers do for the retail industry?

A lot of attention has been focused on the utility of the iPad for point-of-sale systems. Although no retailer has yet completed a chain-wide iPad-to-POS system integration, retailers and restaurants have begun experimenting with the iPad and attempting to integrate it into their existing systems.

Unfortunately for retailers, the lack of multitasking is a handicap. While apps like Square allow the iPad to do the transactional elements of point-of-sale, most chain retailers have either custom functionality in their point-of-sale system (such as processing gift cards) or access multiple applications using their register hardware (such as capturing email for CRM). The "app" model works fine for smaller retailers, such as this example found at a coffee shop in San Francisco, but deploying the iPad into chain retail would require at best a custom app, and most likely a whole new array of integration to make the device a true extension of the store systems.

The majority of iPad-as-POS examples currently come from the restaurant industry. For example, the Rydges Hotel in Sydney, Australia, has implemented ten iPads in their restaurant so customers can place their orders directly to the kitchen, as well as allowing for easier menu changes from the chef. The restaurant iPad POS system has begun to see some competition already, such as the competing systems from Lecere and 4ASoft. While both those videos show systems that appear to be clunky, over-complicated, and not very time-efficient, it is a tantalizing glimpse at what the restaurant of the future could possibly be like.

However, where the iPad really has a chance to shine in retail is in adding to the abilities of store associates. With the increasing adoption of smartphones, more and more customers are entering stores with more information available at a moment's notice about the items sold in that store than the associates actually have. If you walk into Best Buy and ask a random associate how much cheaper the DVD you're looking at is if you buy it online, chances are he or she will have absolutely no idea. However, the customer can easily whip out his or her cell phone and find the answer in a matter of seconds. The iPad, however, can level the playing field, and bring retailers' e-commerce strategies into their stores in a more controlled manner.

Not only will sales floor associates have as much information as the customers (or even more, since presumably their iPads would be able to virtually check the store's stock levels and other metrics), but the possibilities are almost endless as to how the iPad could revolutionize the shopping experience. A sales associate could easily find computer-generated recommendations for the customers in real-time, as well as doing nifty things like showing a shopper what the shirt they're currently holding will look like in a different color, or even offering demonstration videos of tools or toys in use! Or when shopping at the Home Depot, a sales associate could help you virtually break down your DIY project so you don't forget a piece of pipe or buy the wrong size screws. As you can see, the possibilities are legion.

While less portable than mobile phones, the iPad is a radical improvement over existing fixed-point registers and kiosks in allowing information to be shared with the customer to fully bring the online experience onto the sales floor. This will allow sales associates to be more knowledgeable, more helpful, and much more efficient salespeople, to keep customers engaged in the in-store experience and feeling as if they achieved truly the best possible deal and service from their shopping trip.

It's not hard to see why retailers should be excited about the iPad and other tablet devices. Whether or not these computers can successfully be worked into POS or other IT systems in-store, it is absolutely in a retailer's best interest to implement the iPad or a similar device into their customer experience strategies. With sales associates armed with these powerful, efficient tools, your customers will be guaranteed a shopping experience like no other, one which will keep them coming back for more.

The sign made it sound deceptively easy.

At the recent Food Marketing Institute 2010 conference and expo in Las Vegas, prominent signage on the show floor promised those of us with smartphones the ability to navigate the conference schedule and expo show floor more easily. "Works on any smartphone!!!" and pictures not just of the ubiquitous iPhone, but also an Android and Blackberry. Sounds good to me... I'd love to replace flipping through the bulky expo guide searching for exhibitors with a cool next-generation smartphone app.

Could it truly be that a conference ostensibly about food retailing had embraced one of the most important principles of mobile retail: don't alienate 80% of your customers?

You see, for all it's vaunted prowess (and ease of "app" distribution), the Apple iPhone isn't the only game in town. Though statistics vary, and depending on which geography, demographic segment, and cycle of the moon, the market share ebbs and flows... it is a relatively safe bet to say that the major smartphone players all enjoy some rough parity in market share:

• Apple iPhone
• Google Android
• RIM Blackberry
• Microsoft Windows Mobile
• Nokia Symbian

If we imagine each of these roughly equal, the average retailer would alienate 80% of their shoppers by embracing a single handset platform. So, needless to say, I was excited by the prospect that my new HTC Hero phone (sorry Apple, I just sunsetted my iPhone... so long AT&T, hello Sprint...) would be my guide to a show I was attending for the first time, and I eagerly followed the instructions on the sign:

"Download at supermarketnews.com or your App store (FMI 2010)"

So, you can imagine my disappointment when a search of the Android Market for "FMI 2010" yielded... nothing. Not a jot, not a tittle. Nothing. Apparently "works on any smartphone" and "your App store" have different meanings to some people.

This is serious fail, not because FMI failed to provide an app that ran on my Android phone, but because they literally promised it to me and failed to deliver on the promise. Had the signage promised only an iPhone app, I would have accepted that leaving my uncharged iPhone in my suitcase was MY failing, and simply considered bringing it the next day. But, to promise a consumer that their phone will, in fact, work with your application, then leave them high and dry does more than keep the consumer from the information. It causes frustration that borders on rage, and more often than not, leads to disproportionate consequences. For me, it's writing this blog. If you're a retail brand that does this, prepare for Facebook statuses and constant retweets griping about how you don't care about your shoppers that use smartphone "X."

The moral of the story: make sure shoppers know what to expect from your brand when it comes to a mobile experience. Don't mislead them and make them fail on their own if you aren't supporting the technology they've already bought.

On a recent trip to San Francisco, I accompanied a few of my friends as they spent the day shopping. We stopped in a shoe store because the girls wanted to look at the different types of shoes offered by TOMS. I had heard of TOMS before, but had never really paid much attention. However, what I saw in the store definitely caught my eye: As I sat there waiting, I saw girl after girl after girl grab pairs of TOMS from the shelves and try them on, and the store associates were almost constantly running back to see what was in stock. (Clearly they could have used the prototype shoe shopping application debuted by the GREC Mobile Retail Experience at CTIA last October...)And, invariably, the answer was always, "Sorry, we're out of that size." Unfortunately, the store could not keep up with the demand, and my friends were forced to resort to the internet to find the shoes they desired.

So what's the big deal about these shoes? Well, TOMS was founded in 2006 by Blake Mycoskie, with a simple idea: For every pair of shoes you purchase, another pair will be donated to a child in need somewhere in the world. To date, TOMS reports they have donated over 600,000 pairs of shoes (which means they have also sold over 600,000 pairs). And the company is only getting hotter. They've partnered with some huge retailers, such as Ralph Lauren, which offers specially branded Polo Rugby TOMS, or Element Skateboards, which offers limited edition TOMS + Element shoes as well as matching skateboards.

But why are these shoes so successful, particularly with Millennials? Quite simply, they offer the ability to not only show off your unique style (TOMS come in a wide variety of patterns and colors), but most importantly they allow the shopper to feel good about her purchase and the effect it has on the world. According to the 2006 Cone Millennial Cause Study, a staggering 83% of Millennials say they will trust a company more if it is socially or environmentally responsible, and 89% are "likely or very likely" to switch from one brand to another if the second brand is associated with a good cause! Keep in mind, Millennials represent $350 billion in retail buying power in the US... that's more than baby boomers! Without a doubt, retailers should realize that it is of the utmost importance to tie their brands to social causes, unless they're prepared to watch their sales go to the competition.

For retailers that do make the changes, the results are almost always positive. Gap, Inc. is one of the best recent examples. Suffering from reports of human-rights abuse related to their use of sweatshops, Gap finally stopped using sweatshops in 2004, and in 2006 partnered with Product Red, a brand focused on raising money for the Global Fund to Fight AIDS, Tuberculosis and Malaria. Gap has remained committed to many additional causes; Recently, they offered a 30% discount on a new pair of jeans to anyone who brought in an old pair. With the 270,000 pairs of old jeans Gap received, they plan on creating insulation for homes in "underserved communities." For practices such as this, Gap has been the top-rated retailer in The Corporate Responsibility Magazine's list of the 100 Best Corporate Citizens for the past two years in a row. And Gap's profit margins are also benefitting from this renewed brand image: In March 2010, sales were 12% higher than sales in March 2009, and all of Gap's brands (Banana Republic, Gap, and Old Navy) have similarly grown.

Tying your brand to social causes will not only create loyalty with Millennial shoppers, but it will also create loyalty with your Millennial employees. Here's a question: Do you know which employer received applications from 11% of all graduating Ivy League seniors of the class of 2009? (Hint: It wasn't anywhere on Wall Street.) It was Teach For America. According to a new survey by the Pew Research Center, 21% of Millennials say "helping others in need," is one of the most important things in their lives - more important than owning a home, having lots of free time, or having a high-paying career. What this means is that if a company is not socially conscious, not only will we not shop there, but we won't work there either (56% of Millennials say they would refuse to work for an irresponsible corporation). And don't think you can fool us with "greenwashing" or a faux-sense of social responsibility: we're cynical and connected too, and if it turns out your "living wage" garments are actually made in sweatshops, that news will spread through Facebook and the blogosphere faster than you can imagine.

Clearly, Millennials like to feel like they are making a difference, and this matters to retailers to keep both their customers AND employees happy. With such a staggeringly high percentage of Millennials saying they would switch to another brand that is more socially conscious -- and with our ability and willingness to easily compare similar products via our computers or mobile devices -- retailers can't afford to be selfish. The fact that products like TOMS shoes continued to fly off the shelves even in a recession shows that if a retailer is willing to open up to the world, we're more than happy to open up our wallets.

After the recent launch of SPAR International's 8000m² flagship hypermarket in Bangalore, India on 13 March, I had the chance to interview David Moore, International Retail Development - Country Manager India, Portugal, Global Retail Store Operations SPAR International, and the man who oversaw SPAR's strategy and development in India. While the launch in and of itself was impressive enough, David revealed some surprising insights into retailing in India, many of which cut against the "conventional wisdom" on that emerging retail powerhouse nation.

1. Unorganized retail... is pretty well organized. Over 90% of the retail market in India is labeled as "unorganized" because it isn't in conducted in Western chains or large store formats, but rather in 10m² "kirana" stores. But the moniker "unorganized" doesn't really apply. In one city alone, Delhi, every Monday 120,000 vehicles arrive delivering products to the kirana stores, and are unloaded in only three hours. While kirana stores don't have the cache of Western retail formats, the supply chain is incredibly sophisticated.
2. India is a very young market. 70% of the population in India is under 30 years old... putting this in perspective of the world population, this means that one in every six "Millennials" is in India, representing a massive proportion of next generation of shoppers. The formats in India reflect this youth-oriented market: over 50% of the shopping space in hypermarkets is non-food, including large areas focused on children's toys, books, and video games; electronics, and fashion brands. SPAR has been successful leveraging the demographics of this youth market to help its store launches, using SMS messages, Facebook, and Twitter to connect with young shoppers.
3. But demographics don't tell the whole story. Social dynamics in India mean that many times, the "head of household" isn't the actual shopper. In cities like Bangalore and Mumbai, the affluent men and women counted in surveys send their maids and drivers to do the household's shopping, meaning that retailers who rely solely on demographics to determine their offer will end up missing the mark with the actual shopper in their stores.
4. All retailers in India have to be world class. India is the proving ground for new ideas, offering both a fertile green field for new formats, technology systems, supply chains, and service offerings... set against the backdrop of an amazingly diverse shopper base, a challenging supply chain infrastructure, and a complex regulatory environment. To succeed in India, whether a global retailer like SPAR or an emerging native powerhouse like Reliance, requires best in class strategy and execution combined.