Mobility pushes Neiman Marcus to up its networking game
Digital disruptors continue to change the pace of retail — and Neiman Marcus is ready.
Like many retailers, the luxury department store chain continues to introduce more mobile technology at store-level, a move that supports both in-store operations and consumer-driven tasks, from browsing through procurement.
“It is a trend that requires our network to be a mission-critical lifeline at every store,” said Scott Emmons, head of the Neiman Marcus Innovation Lab (iLab).
The chain’s mobility movement began in 2010 when associates used “rugged handhelds” to manage inventory. However, it began putting iPhones into associates’ hands as far back as five years ago. Within this timespan, the chain has improved the functionality of its mobile technology, including adding apps that give associates access to data right at their fingertips — an initiative that helps associates to meet customer expectations, thus improving customer service.
“Gone are the days when networks had to carry point-of-sale [POS] transaction data from the store to the data center,” Emmons said. “The amount of data is bigger and it moves faster, and retailers industry-wide must wrap their arms around how to support it.”
For Neiman Marcus, this meant creating a network that could securely deliver data from devices to “the point of need” — a process that becomes exacerbated as technology continues to modernize, and user demand increases.
As these factors began putting new strains on networks, Neiman Marcus started exploring how to expand its networking capabilities not just to support current business operations, but also to service “the customer of the future,” Emmons said.
Focusing on existing mobile services, such as geo-location technology to interactive digital signage and other interactive smart technologies, “all of these require network connections and increased bandwidth,” he said.
As a result, Emmons began designing what he calls the company’s “next generation network.” In its earliest iteration, which dates back to November 2011, the chain upgraded its wired network and switching equipment.
However, as handheld form factors gave way to smart devices, and wireless mobility quickly became the industry standard, Neiman Marcus began an upgrade strategy that included adding Wi-Fi at all store locations enterprise-wide.
“This was a big project to get in place, one that took a few years to complete,” he said.
This is an understandable timeline given how “spread out our stores are across North America, and the challenging networking environment that our distribution centers posed.”
The chain focused on an Aruba Networks Wi-Fi, and still managed a wired infrastructure comprised of several providers, including Cisco, Alcatel and Aruba for switching and routing.
The chain started implementing busier stores first, then kept up a steady pace until all 42 Neiman Marcus stores, two Bergdorf Goodman stores, 29 Last Call outlet centers, 13 Last Call Studios, and four CUSP stores, six distribution centers and its corporate campus were completely deployed in 2015.
Today, the chain is armed with a robust Wi-Fi network complete with a complex pathology that delivers redundant data connections to two diverse providers, “so if one of the wide area network [WAN] connections goes offline, they still have a means to conduct business,” he added. “It is an ongoing project that is constantly evolving, and thus never finished.”
These proactive efforts keep Neiman Marcus ahead of the curve, as many chains are still playing catch-up when it comes to adding wireless connections at store-level. Specifically, 51% of retailers added in-store wireless networks this year as a means of supporting performance management, POS operations and product related tasks, compared to a mere 25% in 2015. However, only 23% extend wireless networks to customers, compared to 19% last year, according to the “2016 Store Benchmark” from Retail Systems Research.
While Emmons didn’t share specific results, the next-generation network provides better reliability, more agility and faster speeds, all of which improve performance on smart device functionality.
“Our overall goal was to build a network that could satisfy the customer of the future, but in reality, that was table stakes,” he said. “It is a pre-requisite to remain relevant in a very data- and mobility-centric world.”
Commentary: Amazon Go — what it means for Amazon
On Monday, Amazon announced the launch of Amazon Go, a checkout-free convenience store in Seattle. The 1,800-sq.-ft. store is powered by what Amazon calls “just walkout technology,” which combines computer vision, sensor fusion and deep learning technologies. Currently open only to Amazon employees, Amazon Go expected to open to the public in 2017.
Here are excerpts from a report by Deborah Weinswig, managing director, Fung Global Retail & Technology, on Amazon’s new initiative, which, she said, has the “potential to revolutionize” the brick-and-mortar retail experience:
“While Amazon Go will likely not have an immediate impact on the market, we see the launch of the store as an industry catalyst that will likely stir up competition to deploy technology in brick-and-mortar spaces and ramp up ecommerce efforts even further.
Amazon Go, Amazon’s “checkout-free” convenience store, is the newest innovation from Amazon, and it has generated considerable interest since the news of the store’s launch was released. Described as running the “world’s most advanced shopping technology”, this innovative concept has the potential to revolutionize the brick-and-mortar retail experience, bridging the digital and physical worlds, and creating unprecedented convenience for the consumer.
If the “Just Walkout Technology” that is integrated in Amazon Go proves to be a success after its pilot run, it could have major implications for Amazon, such as the following:
• More consumer data will lead to better shopping recommendations: Amazon is known for its ability to gather and use data to offer an ever-improving customer experience. When shopping for convenience purchases and food, people inherently shop differently than when doing so online. This is why a brick-and-mortar convenience store is a new consumer touchpoint for Amazon, and one that is inherently different from online shopping. Having access to data from the store will likely enable Amazon to provide even better shopping recommendations to its shoppers.
• A feed into Amazon’s AWS business: The technology powering Amazon Go will likely become a commodity sooner rather than later, and Amazon can choose to offer it to other retailers as a complement to its Amazon Web Services (AWS), which include cloud-computing services, analytics and marketplace platforms.
• A play into health and wellness: As Amazon Go sells primarily meal-kits and ready-to-eat snacks, Amazon will in fact be collecting data on people’s food consumption and nutrition habits. We see this as an interesting opportunity to develop original products or integrate data with existing wearables that track fitness and health to offer a convenient 360 wellness-monitoring solution.
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The Barriers to Enterprise Mobile POS: Five Things Holding Retailers Back
A few years ago, there was considerable buzz in the retail industry about the enormous potential of mobile point of sale (mPOS) and its ability to transform the in-store customer experience. With online competitors driving new consumer expectations and shopping behavior, this was seen as a key strategy in blunting the competition and giving brick and mortar merchants an upper hand.
Indeed, we may finally be seeing large-scale adoption of mPOS become a reality. According to a recent report by Business Insider Intelligence, the mPOS device market is expected to grow from 3.2 million mPOS devices in 2014 to 27.7 million by 2020. The same report also highlights that retailers are the key group driving this growth of the mPOS ecosystem.
However, according to a recent study by HP, only 3% of enterprise merchants have fully deployed an mPOS solution, so adoption has been slower than analysts expected up to this point. There are a few reasons for this, and they involve some of the challenges retailers have faced with the prospect of implementing mPOS. In helping some of the world’s top retailers explore and implement mPOS in recent years, we’ve had many conversations about those challenges.
So what’s the hold up? Let’s take a look at some of these obstacles and see what technologies are needed to help speed up the adoption of mPOS within the enterprise.
1. Complex integration with multiple operating systems, gateways and more
Most retailers are capable of accepting e-commerce and in-store payments, but today, they typically use separate systems for accepting payments online vs. in-store; the same thing goes for mPOS. If these large merchants also want to implement mPOS to allow their sales staff to accept in-person payments at any point of interaction, retailers have typically had to add additional infrastructure to accept and process the corresponding payments. This can be expensive and time-consuming to deploy and maintain. Often it even meant having to integrate with a different vendor than they are using for their in-lane or fixed POS system. To add further complexity, many mPOS solutions use a different operating system (OS) than systems already in place.
To eliminate these issues, merchants need a standardized way to build their mPOS solution on the same platform and use the same method of integration as their fixed POS systems. This gives retailers maximum flexibility and provides a much simpler, easier and less expensive integration that doesn’t require adding additional layers to their payments infrastructure.
2. Insufficient battery life to handle high transaction volumes and a full workday
Many retailers who’ve adopted or experimented with mPOS have expressed their biggest issues is battery life. Larger retailers and those handling greater numbers of transactions are looking for longer battery life to minimize the need to recharge, meaning store staff can transact nonstop for an entire shift. This reduces overall recharging requirements and the number of devices retailers need to keep on hand.
To achieve this, the battery life within new mPOS solutions must be extended, similar to the advancements in battery life we have seen with consumer mobile devices such as smartphones. Retailers are also calling for batteries that can be swapped out easily for rapid replacement, along with docking stations that can be used to simultaneously charge not only their mPOS devices but their accompanying mobile or tablet devices as well.
3. Cumbersome device carrying: It’s hard to hold a tablet and a mobile point of sale terminal effectively
To provide mobile checkouts and superior customer service, store reps need to be able to carry their mPOS solutions easily. Typically, an enterprise-level mPOS solution consists of a mobile terminal and a mobile device or tablet that are either wired or wirelessly connected. Unfortunately, most cases designed to carry these devices are heavy and cumbersome, which makes them inconvenient to use in-store. If a sales rep has a tablet in one hand and an mPOS device in the other, it can be difficult to access applications that enable the tablet to improve customer service, such as barcode scanning, price lookups, etc. or even clumsy to perform a transaction.
New solutions such as tablet enclosures have the capability to hold an mPOS device along with a mobile device to ensure fast, easy access to tablet functionality and payment acceptance. With this flexibility and better approach to device portability, retailers can allow their associates to securely carry both a payment terminal and a tablet comfortably in one hand.
4. Threats of device theft and hacking
While mobility gives store reps the freedom to provide on-location and enhanced customer service, one major retail industry concern has been device security. Mobile devices and mPOS terminals can be targets for theft or hacking, which can be costly for retailers and potentially disastrous in terms of payment security and brand image.
The first way this can be addressed is through building mPOS terminals up to the same strong software and hardware standards as the design of in-lane terminal solutions. Additionally, strong physical security measures should be in place to secure mPOS devices and tablets while they are unattended or recharging. This can be achieved through docking stations that can be locked when needed.
The mPOS devices themselves need to be PCI and EMV compliant to ensure that merchants are meeting all industry security standards and keeping themselves safe from chargeback liability. These solutions should also be compatible with point-to-point encryption (P2PE), which ensures payment card information cannot be hacked or compromised as transactions are processed and transmitted via a mobile device or over the network.
5. The need for sleek, modern-looking devices
The design and aesthetics of devices also play a role in enterprise mPOS adoption. Innovative retailers want to project a forward-thinking and positive brand image, and they take care to cultivate the right aesthetics in their customer experience – this extends to their mPOS solutions as well. mPOS devices need to be more than just a tool or technology for accepting payments. Retailers want to show they are ahead of the curve and want their mPOS solutions to convey that image accordingly. Therefore, device designs must be sleek and modern looking rather than clunky or uninspired.
As the design and appearance of mPOS devices improves, retailers tell us this will make adoption easier and more widespread, particularly for those who spare no detail in nurturing a great brand image and delivering an exceptional experience for their customers.
Turning the corner on mPOS adoption
According to the HP study, 86% of companies are either currently in the process of piloting or are planning to implement mPOS in the next two years.
Adoption may seem slow thus far, but in order for mPOS to finally take off as a key component of retailer’s omnichannel payment strategy, technology providers must be able to address these pain points. Recently, new mPOS innovations have started to emerge that enable enterprise merchants to overcome these obstacles, and as a result, we’re expecting many more retailers to begin adopting mPOS and finally start taking advantage of its many benefits.