NEW YORK, Jan. 12, 2008 – As retailers gather in New York this week for the National Retail Federation’s (NRF) 98th Annual Convention & Expo, they do so during a time of unprecedented economic uncertainty. This dramatic change has consumers everywhere seeking trusted brands, superior quality and service, and – above all – compelling prices. Value is what keeps customers loyal to a store, brand or company, and a value-oriented customer creates challenges for retailers worldwide. PressPass spoke with Microsoft’s Worldwide Retail Industry Managing Director Brendan O’Meara and U.S. Retail Industry Director David Gruehn on using technology to attract value-driven consumers.
PressPass: Much of the talk around the retail industry these days is about the weakening economy and a decline in consumer confidence. What can retailers really do about this?
O’Meara: Well, there’s no doubt that retailers today are at a crossroads. Management is faced with increasing pressure from shareholders to cut costs and gain efficiencies, while customers are more demanding than ever. A new value-oriented, empowered consumer has emerged, and that makes it a difficult time to be a retailer. During times of crisis, some companies retrench. From our perspective, we feel this is a time for retailers to innovate – a chance to leap ahead of the competition leveraging technology. And we feel they can do this by focusing on initiatives that will lower expenses, improve efficiencies and operations, and most importantly, drive customer loyalty.
PressPass: You mention that it’s time to innovate, but how do retailers do that?
Gruehn: I think the key is fostering loyalty among consumers. And we believe the best way to do that is to help multichannel retailers create differentiated and “connected experiences.” What this ultimately means is providing seamless connections between back-office technologies and consumer-facing ones. In today’s 24/7 society, customers expect anytime, anywhere, any-device access and a common shopping experience across all channels – whether mobile, assisted selling scenarios, self-service kiosks, Web or point of service (POS). Take an example of a consumer who wants to buy a TV. Important information – such as a price promo on flat panels, a feature comparison with competitive TV products, actual availability of that TV in the store – all need to be consistently presented on a Web site that the consumer views at home, on the mobile phone in his or her hands, and in the in-store experience. This requires an enormous amount of connectivity between consumer-facing and back-office channels.
PressPass: How do retailers achieve these “connected experiences” with constricted budgets?
O’Meara: In the past few months we have visited with retailers in many countries and had many discussions about ways we can work through these trying times. Achieving “connected experiences” and saving money aren’t mutually exclusive. Retailers can gain efficiencies and improve the customer experience by connecting their channels through industry standards and service orientation. They can improve the usability of their current IT environments and reduce hardware and software costs with virtualization and management tools. They can gain insight into their businesses for smarter decision making by tracking metrics and key performance indicators with basic business intelligence solutions. They can cut back on travel costs and promote better employee collaboration and productivity with unified communications offerings, or manage their IT services or applications “in the cloud” through software plus services. All of these ideas go a long way toward creating differentiated, seamless experiences for customers, while also ultimately creating efficiencies and saving money.
PressPass: What kinds of technology solutions does Microsoft specifically offer to address issues related to the crisis?
Gruehn: It’s a good question, because in some ways our existing solutions are really well suited for these times. While technology certainly isn’t a cure-all for the economic crisis, at a time of cost-cutting and IT consolidation, the breadth of Microsoft’s platform and partnerships make us uniquely able to quickly unlock value by connecting systems that drive new efficiencies across retailers’ global distribution and services networks. Our platform is easy to deploy and use, widely supported and truly innovative. In fact, at NRF, we’ll be showcasing a lot of this innovation, such as Microsoft Surface, Virtual Earth, a preview of Windows 7 and Commerce Server 2009, a new mobile marketing solution called Microsoft Tag, and more. And we’ll also highlight examples of how retailers can save money, such as with our Hyper-V virtualization solutions, which helps consolidate server footprints and save power at store or datacenter locations. At the end of the day, it’s our both our consumer and enterprise footprint that allows Microsoft to uniquely help retailers create compelling “connected experiences.”
PressPass: Speaking of NRF, what is Microsoft officially announcing this year?O’Meara: In addition to the technology demonstrations David just mentioned, Microsoft is announcing the latest offering from our Windows Embedded Ready product line, Windows Embedded POSReady 2009. This next-generation point-of-service platform is a flexible operating system designed to connect POS solutions with peripherals, servers and services. We’re also announcing a multi-channel retail alliance with Accenture and Avanade, a global IT consultancy created by Microsoft and Accenture. The alliance will help retailers tackle the challenge of providing consumers with a shopping experience that connects with them through social networking and online communities, and on an ever-widening number of platforms, including in-store, the Web and mobile computing. Finally, we’re announcing the official launch of our new Retail Experience Center, which serves as a center of innovation for how Microsoft and the retail industry can address rising consumer expectations and competitive pressures during today’s challenging economic conditions. Located at Microsoft’s headquarters in Redmond, Wash., the Center is a private, 20,000-square-foot facility housing a fully functioning, interactive store environment, from point of service to receiving dock.
PressPass: What’s the purpose of the Center and what sorts of technologies are presented there?
Gruehn: The Center really represents a blend of Microsoft’s merchandising efforts as a consumer goods company and its solution capabilities as a technology provider for the retail industry, and it’s part of our continuing investment in the industry. The Center features in-store displays of Microsoft consumer products and showcases powerful ways to cut costs, create efficiencies, streamline operations, and promote and sell goods − within the aisles, in the employee break room, at receiving and shipping, at check out, across the Web, and even at home or on the go. Visitors to the Center can experience more than 25 technology innovations and partner solutions in action. A subset of these innovations will also be on display in our booth at NRF.