The Communications Category – future trends

May 2012
Jeff Rogut

At the recent launch of our ‘AACS 2011 State of the Industry Report’, reference was made to changing trends within the Communications category. The following article from a leading communications analyst, Paul Budde, will be of interest. Take a look at the website location http://www.buddeblog.com.au/frompaulsdesk/australia-still-waiting-for-in-store-e-shopping/ for further reports into communications and developments.

Australia still waiting for in-store e-shopping

Retailers have been slow to tap into the new opportunities emerging from the new practice of customers bringing online devices into their stores.

Retail outlets will need to upgrade their merchandising capability holistically by integrating:

Customers and their devices,
Communication facilities including in-store WiFi,
Internal IT systems including –
Store information databases,
Point-of-sale checkout systems
Pricing information,
Analytical information in relation to demand tracking, price elasticity, promotions, merchandising data,
Back office processes such as assortment planning, promotions and campaigns.

This became very apparent when, on walking into a supermarket, we saw a large sign advertising the company’s new online shopping application. Unfortunately, it proved impossible to download the app. There was no WiFi connection and, because of the basement position of the shop, there was also no mobile connection – surely a missed opportunity for the retail organisation.
If the shop had had a WiFi hotspot customers would have been able to download the app and the company would instantly have had an opportunity to communicate in an interactive way with its shopper. It could provide a shopping guide, assisting people to find products, offer alternatives, promote specials, and so on. Extending the interaction to the customer’s home it could send shopping tips, recipes, specials and assist in preparing shopping lists.

Here are some more ideas and suggestions for locations to attract the attention of people by using the combination of WiFi and apps:

Shopping centres organising bargain hunts, shop comparisons, best deals in the centre, organising QR code games (promoting its tenants). In general add new features to shopping and entertainment to keep attracting customers to retail outlets.

Train and bus stations with latest updates, alternatives – also provide these services at shopping centres.

Real-time information on parking and in-shop traffic – attracting targeted shopper groups at specific times, through promotions, actions and so on.

At airports they can scan smartphones and they could potentially trace people to get them to the plane on time, instead of those annoyingly repetitive public address announcements about people holding up flights. Other scanning applications can be developed for shoppers, hotel guests, etc.

Sportsgrounds and stadiums could offer WiFi-based services showing certain angles or other games on your tablet, just for a few dollars on top of the price of the ticket. Sponsors can participate with retail offerings, discount vouchers, etc.

The imagination is the only thing stopping marketers from adding many more examples to this list.

Increasingly enterprises are coming to understand the power of telecoms in combination with smartphones and tablets, so there certainly is increased interest. The American retail sector is leading these developments, but Australian retailers are lagging behind.

Telcos could play a key role here as well. Often they already have base stations at prime locations that could be used for such enterprise offerings; or they could add another one based on (wholesale) business they could generate this way. It will be hard to charge the user for access, but enterprises could pay for a well-managed service. However the telcos unfortunately are not very proactive in these developments either.

Having said that, things are changing and new business models are being implemented to make such services more attractive.
Retailers don’t have to wait for the telcos. Enterprise WiFi solutions are easily available and they are not all that expensive to implement:

Fibre is now available in many enterprise locations that would warrant a WiFi connection. This makes the running costs of the service very low;
The internet of things (IOT) is another development that will see more and more devices connected to the network – the barcodes and QR codes can be scanned by shoppers and retailers can provide additional information;
Smartphones and tablets are going to see an increased demand for such services; and
Connected retailers and other businesses have an opportunity to be in contact with their customers at key locations.

These retail developments are not taking place in isolation. We already see similar developments with smartphones and tablets in homes, cafes, offices, hotels, etc (hotspots). Most internet use on smartphones and tablets (80%) takes place at WiFi locations in the home (wireless modems), office, cafes, schools, universities, etc (hotspots), and 65% of tablets have only a WiFi connection (no mobile connection).

SmartTV and other entertainment devices will be connected through Gigabyte WiFi to the fixed network.

Paul Budde