keeping up with the mobile consumer

Keeping Up with the Mobile Consumer

2011 Benchmark Report

Nikki Baird and Steve Rowen, Managing Partners

September 2011

Sponsored by:

ii

Executive Summary

In RSR's collective years in the retail industry we have rarely seen a technology act as such a

galvanizing force on the retail industry - and in a positive way - than consumer mobile. It is a sea-

change in how consumers engage with retailers, for the first time truly bringing together the physical

and the virtual in ways that cross-channel efforts to-date have not. And it is relatively inexpensive to

experiment with on the part of retailers. But so far, it is a Retail Winners' game (those respondents

that outperform their peers in year-over-year sales growth).

Business Challenges

Overall respondents report that they haven't yet figured out how to identify and accommodate

different customer segments, that they have difficulty coordinating the mobile experience with other

channels, and that the consumer technology landscape is evolving too quickly. While that makes for a

very challenging environment for developing a mobile strategy, perception of ensuing challenges vary

drastically by retailer performance and size. The largest retailers are more challenged by the difficulty

of coordinating across channels, while Winners are more likely to focus on a more definable business

need.

Opportunities

Optimism about the channel is widespread. Overall, 51% of respondents say that their mobile sales

will grow "significantly" in the next 3 years, and another 42% expect at least some growth, if not a

"significant" amount. The top three opportunities have a natural focus on the customer: deeper

customer engagement to drive loyalty, the opportunity to drive innovation through mobile offerings,

and deeper customer engagement to drive sales. More than twice as many Winners as their peers

report that they have been using consumer mobile and either are starting to get an idea of what to

measure or already feel comfortable with the results that they're getting.

Organizational Inhibitors

Resource challenges top the list of reasons why retailers haven’t seized more of the opportunities

they see mobile solutions providing. In ascending order of difficulty, the top-three roadblocks are

having the necessary resources to manage all of the available eCommerce and Mobile opportunities,

overall budgetary constraints, and difficulty in quantifying Return on Investment. More problematic,

however, are the number of retailers who are frozen in their tracks due to the rapid pace at which

mobile technologies change. Sixty percent of retailers admit that a single executive, charged with

ensuring the customer has a seamless experience across whichever channel – or technology – she

chooses to engage is vital to becoming “unstuck.”

Technology Enablers

Retailers are vaguely ambivalent as to what a strong mobile offering even looks like. While 79% know

that a cut and paste version of a full eCommerce site is simply not a viable mobile strategy, the field is

split nearly down the middle as to the value of a downloadable app. Though a vast majority of

retailers ascribe value to retailer-provided wireless in stores, very few have yet to do anything about

it. While technology adoption is still in very early days, twenty three percent of all retailers have

budget set aside to ensure that the mobile developments they take on are repeatable across multiple

platforms; 21% already have budgeted for mobile capabilities delivered via the cloud (or a Software

as a Service model). All retailers recognize that mobile devices, their capabilities, and shoppers’

iii

willingness to use them are very difficult to predict, but Winners understand that “the next big thing” in

mobile devices – or platforms – may be just around the corner at any given time.

BOOTstrap Recommendations

mCommerce's learning curve will be much shorter, but it will also be more complex - a moving target

on the process side, as consumers try to figure out how to best use mobile as part of the shopping

process, and a moving target on the technology side, as leaps and bounds in technology constantly

change what mobile phones are capable of doing. As a result, we offer the following baseline

recommendations, explained in detail at the end of this report: Use consumers to help shape your

strategy and make sure what you’ve done works, carefully consider/approach a Customer Experience

Officer, rethink wireless, strategize across platforms, and most importantly, don’t be afraid to get in

the mobile game.

iv

Table of Contents

Executive Summary .......................................................................................................................... ii Table of Contents ............................................................................................................................ iv Figures .............................................................................................................................................. v Research Overview ......................................................................................................................... 1

Why This Study Was Conducted ................................................................................................. 1 Early Mobile Efforts are a Winners' Game ................................................................................... 1 Methodology................................................................................................................................. 3 Defining Winners and Why They Win, and Why Laggards Fail ................................................... 3 Survey Respondent Characteristics ............................................................................................ 3

Business Challenges ....................................................................................................................... 6 The Consumer Made Us Do It ..................................................................................................... 6 Uncertainty Abounds .................................................................................................................... 7 What about the Impact on the Store? .......................................................................................... 8

Opportunities ................................................................................................................................. 10 Engagement, Innovation, and . . . Engagement ........................................................................ 10 We're Working On It ................................................................................................................... 10 Defining Consumer Mobile Capabilities ..................................................................................... 11

Phone-Friendly ....................................................................................................................... 12 Personalized ........................................................................................................................... 12

The Bottom of the List ................................................................................................................ 13 Winners vs. Peers: Day and Night ............................................................................................. 13 The Lowest-Hanging Fruit Gets Picked Quickly ........................................................................ 14

Organizational Inhibitors ................................................................................................................ 17 Mobile Has an Uphill Journey .................................................................................................... 17 The Way Forward ...................................................................................................................... 18 More Players Required .............................................................................................................. 19

Technology Enablers ..................................................................................................................... 20 To App, or Not to App ................................................................................................................ 20 Winners Keep Their Eye on the Ball .......................................................................................... 20 The Wireless Story Continues ................................................................................................... 22 Early Days .................................................................................................................................. 23 Too Soon to Lock In ................................................................................................................... 24

BOOTstrap Recommendations ..................................................................................................... 25 Don't Let Speed or Change Frighten You .................................................................................. 25 Use Consumers to Help Shape your Strategy ........................................................................... 25 Carefully Consider/Approach a Customer Experience Officer .................................................. 25 Rethink Wireless ........................................................................................................................ 26 Strategize Across Platform ........................................................................................................ 26

Appendix A: RSR’s Research Methodology .................................................................................... a Appendix B: About Our Sponsors.................................................................................................... b Appendix C: About RSR Research ................................................................................................... c

v

Figures

Figure 1: Retail Winners See Early Sales From Mobile .................................................................. 2

Figure 2: Winners Cite Mobile Presence More Often Than Peers .................................................. 2

Figure 3: Skating Towards the Consumer Mobile Puck .................................................................. 6

Figure 4: Uncertain End-Users, Business Process, and Technology ............................................. 7

Figure 5: Consumers Just Move Too Fast ...................................................................................... 8

Figure 6: Consumer Price-Check Ignorance ................................................................................... 9

Figure 7: A Whiff of Opportunity for Differentiation ........................................................................ 10

Figure 8: A Race Up the Mobile Learning Curve ........................................................................... 11

Figure 9: Top Mobile Opportunities Leverage the Phone or Personalization ............................... 12

Figure 10: Payment Types Near the Bottom of the Priority List .................................................... 13

Figure 11: Performance-Based Priorities: Purchasing vs. Promoting ........................................... 14

Figure 12: Fast Progress Against Capability Gaps ....................................................................... 15

Figure 13: Big Spending Plans on Mobile Capabilities.................................................................. 16

Figure 14: Stuck in the Mud ........................................................................................................... 17

Figure 15: Much Help Needed ....................................................................................................... 18

Figure 16: Input in Demand ........................................................................................................... 19

Figure 17: Lots of Neutrality .......................................................................................................... 20

Figure 18: Device Sales Dictate Platform Importance................................................................... 21

Figure 19: Wireless Value Drastically Outweighs Adoption and Plans ......................................... 22

Figure 20: Follow the Budget and Plans ....................................................................................... 23

Figure 21: Winners Take the Long View ....................................................................................... 24

1

Research Overview

Why This Study Was Conducted

Consumer mobile. Can you think of a hotter topic in retail right now? In RSR's collective years in

the retail industry we have rarely seen a technology act as such a galvanizing force on the retail

industry - and in a positive way. You could perhaps argue that eCommerce was such a force, but

in many ways it was an isolated initial event - retailers established a separate team, often in a

separate building, and tasked them with figuring out "this internet thing." Stores were relatively

unaffected by the eCommerce business in the beginning - and stores to this day are where most

of the action is, when measured by sales.

You could argue that Y2K was a galvanizing force on the industry, but it was not a positive one.

Yes, it caused retailers to upgrade their point of sale software and take a fresh look at some very

old systems on their books. And yes, in some cases it led to an increase in capability that made

some of eCommerce and cross-channel commerce possible today. But it wasn't customer-

focused. It was something retailers had to do in order to keep their systems from blowing up

when 1999 turned over to 2000. In fact, between Y2K, Sarbannes-Oxley and PCI, it's amazing

that retailers were able to do anything innovative with the customer experience in the first decade

of this century.

That is why consumer mobile is so exciting for retail. It is a sea-change in how consumers

engage with retailers - for the first time truly bringing together the physical and the virtual in ways

that cross-channel efforts to-date have not. And it is relatively inexpensive to experiment with on

the part of retailers. Anecdotally, CIO's have said that they can get into the consumer mobile

space for the low-low starting price of $15-30,000 for an app. Even better, with all of their

regulatory- or emergency-driven investments mostly behind them, retailers are ready and willing

to spend some tech money on the customer experience - perfect timing for mobile.

But that leads us to the question of this report. Within the retail enterprise is consumer mobile

being pursued like eCommerce - a dedicated team, their own building and t-shirt, hundreds of

thousands of dollars poured into it? Or is it more like initial social media efforts - the "intern" does

it, or a Russian sub-contractor who whipped up a mobile app for pennies on the dollar? Or is it

strategic - designed from the outset to be an integrated part of retail's cross-channel strategy?

And what capabilities are retailers pursuing in their mobile efforts? Are they driving innovation, or

are they responding - panic-mode - to a more informed and demanding mobile-engaged

consumer?

Early Mobile Efforts are a Winners' Game

There is no doubt that mobile is "hot" in retail right now. In our overall look at cross-channel

commerce strategies this year, we found that mobile was by far the fastest-growing channel for

retailers.1 But it is also a Retail Winners' game (those respondents that outperform their peers in

year-over-year sales growth). Over half of Retail Winners report that they are seeing sales from

their mobile channel vs. 37% of their peers (Figure 1).

1 Enabling Buy Anywhere/Get Anywhere: The Future of Cross Channel, RSR Research, July

2011

2

Figure 1: Retai l Winners See Early Sales from Mobi le

Source: RSR Research, September 2011

Optimism about the channel is not limited to Winners. Overall, 51% of respondents say that their

mobile sales will grow "significantly" in the next 3 years, and another 42% expect at least some

growth, if not a "significant" amount.

However, it is Winners that have made the strongest moves into the mobile channel (Figure 2).

Figure 2: Winners Cite Mobi le Presence More Often than Peers


Winners outnumber their peers nearly 3 to 1 in the number of respondents reporting that they

currently operate a dedicated mobile site, and are also more likely to report having a

5%

10%

5%

17%

27%

24%

55%

41%

9%

7%

Others

Winners

What percent of your annual sales come from the mobile channel?

More than 5% 3-5% Less than 2% None Don’t know

48%

19%

38%

10%

81%

33%

86%

48%

28%

28%

31%

72%

38%

83%

Social channels

Downloadable mobile app

Mobile SMS campaigns

Dedicated mobile/mCommerce site

Online/eCommerce

Catalog

Stores

What Channels do you operate today?

Winners Others

3

downloadable mobile app. Their peers, on the other hand, are most likely to report their mobile

presence is an SMS campaign, rather than something targeted to a smartphone.

Methodology

RSR uses its own model, called the “BOOT,” to analyze Retail Industry issues. We build this

model with our survey instruments. Appendix A contains a full explanation of the methodology.

In our surveys, we continue to find differences in the thought processes, actions, and decisions

made by retailers who outperform their competitors and the industry at large – Retail Winners.

The BOOT model helps us better understand the behavioral and technological differences that

drive sustainable sales improvements and successful execution of brand vision.

Defining Winners and Why They Win, and Why Laggards Fail

Our definition of Retail Winners is straightforward. We judge retailers by year-over-year

comparable store/channel sales improvements. Assuming industry average comparable store/

channel sales growth of six percent in 2010 compared to 2009, we define those with sales

above this hurdle as “Winners,” those at this sales growth rate as “average,” and those below this

sales growth rate as “laggards” or “also-rans.” It is consistent throughout much of RSR’s research

findings that Winners don’t merely do the same things better, they tend to do different things.

They think differently. They plan differently. They respond differently.

Laggards also tend to think differently. They may have spectacular vision, but often fail on

execution. They may forget the power and breadth of choices today’s customer has. They fail to

re-invent themselves when it becomes obvious their existing business model is no longer

working. They don’t change their business processes in an effective manner, and so they either

eschew technology enablers, or don’t gain expected Return on Investment on those they DO buy.

In good times, they skate by: in tough times these weaknesses come back to haunt them.

Survey Respondent Characteristics

RSR conducted an online survey from June-September 2011 and received answers from 83

qualified retail respondents. Respondent demographics are as follows:

• Job Title:

Senior Management (e.g., CEO, CFO, COO, CIO) 23%

Vice President 13%

Director/Manager 44%

Internal Consultant 15%

Staff/Other 8%

• 2010 Revenue ($ Equivalent):

Less than $50 million 24%

$51 million - $249 million 16%



$1Billion to $5 Billion 30%

4

Over $5 Billion 10%

• Year-Over-Year Comparable Store Sales Growth Rates (assume average growth of 3%):

Worse than average 12%

Average 31%

Better than average – single digit growth 40%

Better than average – double digit growth 17%

• Headquarters/Retail Presence:

USA 47% 56%

Canada 4% 36%

Latin America 8% 20%

UK 6% 20%

Europe 14% 26%

Middle East 0% 6%

Africa 6% 8%

Asia/Pacific 16% 26%

5

• Primary Category:

Apparel, Footwear and/or Soft home 18%

Consumer Electronics 10%

General Merchandise and Hard Goods 14%

Groceries 20%

Hardware and Construction 2%

Drugs 7%

Jewelry and Accessories 2%

Home Furnishings 4%

Music, Books and Entertainment 4%

Prepared Food 4%

Fuel (Petrol) 0%

Auto Parts 2%

Miscellaneous Services 0%

Other 20%

6

Business Challenges

The Consumer Made Us Do It

According to survey respondents, the primary reason they are addressing a consumer mobile

strategy is because they see that consumers are already there and using it as part of their

shopping experience (Figure 3).

Figure 3: Skating Towards the Consumer Mobi le Puck


But while respondents clearly indicate that consumer need is overwhelmingly the biggest

business challenge they face, there are some big differences in perception of the business

challenges beyond that first clear one.

Retail Winners are more likely to focus on a more definable business need - that they are seeing

the traffic on their online site increasingly come from mobile devices. They are also slightly more

inclined to feel that store sales are getting cannibalized, while simultaneously seeing an

opportunity - that their competitors have not yet figured out their mobile strategy. Laggards and

other peers, however, are six times as likely to say that mobile price comparison is hurting their

business (more on that below), as well as ironically noting that their competitors have a mobile

strategy and they need to respond. More troublesome is the overall challenge for both Winners

and their peers in struggling with the fast pace and "wild west" feel of the consumer technology

landscape - citing the speed of change in consumer mobile technology as a top-three business

challenge.

The largest retailers in our survey report something of a double-bind: fully 50% of retailers with

revenue greater than $1 billion say that mobile technology is moving too fast to keep up, but 45%

24%

33%

24%

33%

48%

29%

81%

4%

23%

31%

38%

38%

42%

92%

Mobile price comparison at the shelf is hurtingour business

Our competitors have a mobile strategy andwe need to respond

Our competitors don't have a mobile strategy

Store sales are getting cannibalized; mobile canhelp

Mobile technology is moving too quickly; wecan't keep up

We're seeing significant online traffic frommobile sources and need to respond

Consumers are using mobile as part of theirshopping experience and we need to be there

Top 3 Mobile Business Challenges

Winners Others

7

of these respondents also report that their competitors have a mobile strategy and they need to

respond.

Uncertainty Abounds

Uncertainty is not limited to the largest retailers. When it comes to identifying the top challenges

to creating a differentiating mobile experience, overall respondents report that they haven't yet

figured out how to identify and accommodate different customer segments, that they have

difficulty coordinating the mobile experience with other channels, and again that the consumer

technology landscape is evolving too quickly (Figure 4). In other words, "we don't know what

consumers want, we can't get organized internally to deliver it, and by the time we do, consumers

have moved on." That makes for a very challenging environment for developing a mobile

strategy.

Figure 4: Uncerta in End-Users, Business Process , and Technology


The largest retailers - those over $1 billion in revenue - are more challenged by the difficulty of

coordinating across channels. This is understandable to some degree - these retailers have

larger investments in a larger status quo - especially with the existing investment made in

eCommerce channels. It's also much rarer for a CEO to put a stake in the ground and say "we

must do this" at this level than at a retailer in the $250 million or less range - where the CEO is

most likely the primary owner of the business as well.

At the smaller retailers, $250 million in revenue or less, the pace of technology change is far more

threatening, which is also understandable. They don't tend to have the cushion to experiment that

larger retailers do, even when the going-in investment is tens of thousands of dollars.

5%

10%

20%

25%

30%

15%

25%

60%

60%

12%

12%

16%

16%

28%

36%

44%

60%

64%

We don't want to do what our competitors aredoing

The technology is not advanced enough to createthe kind of experience we'd like to offer

Consumer expectations limit how quickly we caninnovate

The transparency - competitors can see and copyinnovations too easily

We don’t know what the customer perceives as valuable/differential

Consumers privacy concerns over how we collector use data

The consumer technology landscape evolves tooquickly

Difficulty coordinating with other channels tocreate a seamless cross-channel experience

Understanding and accommodating how differentcustomer segments engage with us

Top 3 Challenges to Mobile Differentiation

Winners Others

8

These complex challenges carry through to our pulse on retailers' general philosophy and

approach to a mobile strategy. Overall, respondents agree that the consumer has evolved so

rapidly that retailers have little choice but to have a mobile presence (Figure 5).

Figure 5: Consumers Just Move Too Quick ly


They also pretty strongly agree that mobile's impact or best uses have not yet been fleshed out.

However, we also found that retailers that are already selling via mCommerce (those that

reported any sort of mobile sales) were much less likely to agree with this particular statement

than peers. In other words, they are finding that they're already on the learning curve and

gathering important information about how consumers want to use the mobile channel - and what

retailers can do to best position themselves to meet those needs.

What about the Impact on the Store?

All of these challenges are well and good, but one of the main findings from our cross-channel

strategy research was that retailers are increasingly concerned about cross-channel's impact on

the store.2 Mobile only exacerbates these challenges by exposing the inconsistencies between

online and store, whether in pricing, product information, or even product availability.

So how do retailers perceive how their mobile business challenges are impacting the store? To

some degree, they see it as a non-issue, with 25% of respondents reporting that they haven't

seen any mobile price comparison going on in their stores, and another 9% say that they

completely ignore the impact of mobile price comparison at the shelf.

However, these numbers have fallen significantly from our research of a scant eight months ago,

when we focused specifically on the impact of price transparency on the retail enterprise. At that

time, 43% of retailers said that they had yet to experience the joys of consumers using their

phones to check competitive prices on items at the shelf.3

2 Enabling Buy Anywhere/Get Anywhere: The Future of Cross Channel, RSR Research, July

2011 3 Optimizing Price in a Transparent World, RSR Research, April 2011

9%

24%

35%

37%

57%

43%

35%

9%

13%

16%

9%

6%

3%

1%

3%

We have completely different goals for mobileshoppers than eCommerce shoppers

Mobile's impact/best uses are not yet fleshedout

The customer has evolved so rapidly that weare forced to have a mobile presence

Mobile Philosophy - Statement Agreement

Strongly agree Agree Neutral Disagree Strongly disagree

9

While we delve more deeply into the topic in our recent store research, The 21st Century Store:

The Search for Relevance, we did ask in this survey whether retailers were turning to employee-

facing technology to respond to this more mobile-savvy consumer. We found that retailers, for the

most part are still ignoring the topic (Figure 6).

Figure 6: Consumer Pr ice-Check Ignorance


However, an interesting trend is emerging - here, Winners slightly edge out their peers in

reporting an interest in leveraging employee-owned devices to meet the information challenges

that mobile-armed consumers are presenting in stores (13% vs. 9%, respectively). But the gap is

just as apparent among retailers who have already achieved some kind of mobile sales - 13% of

those retailers also report an interest in getting employees to use their own devices to compete

with mobile-armed consumers, vs. 9% of those that have not yet achieved any mobile sales.

27%

18%

9%

32%

23%

17%

13%

40%

Provide mobile devices to all employees

Provide mobile devices tostore/department mangers

Encourage employees to utilize their owndevices in stores

Not yet an issue

What is the best policy for store employees to contend with mobile-informed consumers?

Winners Others

10

Opportunities

Engagement, Innovation, and . . . Engagement

Retailers report their top three opportunities that a mobile strategy presents to the business, with

a natural focus on the customer: deeper customer engagement to drive loyalty, the opportunity to

drive innovation through mobile offerings, and deeper customer engagement to drive sales

(Figure 7).

Figure 7: A Whif f of Opportunity for Di fferentiat ion


It's important to note that there is a certain amount of resignation when it comes to dealing with

mobile price transparency - at the bottom of the list in terms of opportunities, only 16% of retailer

respondents say that it is very valuable to them to try to use mobile to discourage the use of price

comparison at the shelf.

We're Working On It

In terms of maturity, clearly retailers are early on the consumer mobile maturity curve. This

survey's respondents report that for the most part they are working to choose the right

components to include in their strategy for consumer mobile (Figure 8).

16%

27%

27%

30%

40%

41%

59%

61%

61%

73%

41%

48%

44%

36%

42%

41%

34%

27%

27%

25%

43%

25%

29%

34%

18%

18%

7%

11%

11%

2%

Discourage the use of price comparison byoffering another mobile option

Disrupt other retailers by providing a mobileexperience that encourages the use of my…

Mobile in-store concierge to alleviate someof the sales burden from store staff

Stop the decline in store sales

Mobile "save the sale" at the shelf

Empower store employees through mobilesite or app access in stores

Deeper insights into shopper behaviorthrough mobile site or app insights

Deeper customer engagement to drive salesthrough personalized offers

Identify innovative mobile use cases that noone else is doing yet

Deeper customer engagement to buildloyalty through mobile channels

Mobile Opportunities

Very valuable Somewhat valuable Not valuable

11

Figure 8: A Race Up the Mobi le Learn ing Curve


However, more than twice as many Winners as their peers (24% vs. 10%) report that they have

been using consumer mobile and either are starting to get an idea of what to measure or already

feel comfortable with the results that they're getting. No Winners reported that they had no plans,

vs. 14% of their peers.

Consistent with the entry price tag to play in consumer mobile, the smallest retailers report being

the most aggressive in their progress along the maturity curve - 36% of retailers with less than

$50 million in revenue say they have been using it and are either seeing benefits now or are

defining the right measures. However, they are also the biggest group to say they currently have

no plans: 18% of these smallest retailers vs. 6% of overall respondents.

Defining Consumer Mobile Capabilities

If the bulk of survey respondents are still working to identify which capabilities they want to

include as part of their mobile strategy, then the next logical step is to take a look at the

capabilities they report as being the most valuable. From a long list of possibilities, the top mobile

channel capabilities that present the greatest opportunity for our retail survey respondents include

search for merchandise, store locator, receive coupons/offers, and access product reviews

(Figure 9).

14%

19%

14%

43%

5%

5%

0%

12%

15%

50%

12%

12%

No plans

We are willing to experiment even if we don’t yet know the outcome

We would be willing to experiment if we couldmeasure the impact we are having

We are working on selecting the rightcomponents to our mobile offering(s)

We’ve been using it, know what we are trying to achieve, but need to know how to measure

We’ve been using it, are already targeting the right audience, and are happy with the results

Consumer Mobile Strategy

Winners Others

12

Figure 9: Top Mobi le Opportunit ies Leverage the Phone or Personal ization


This list can be grouped into two general areas: those that leverage the innate capabilities of

smart phones, and those that take advantage of the fact that a mobile phone tends to be a fairly

personal device - one owner per device, in other words.

Phone-Friendly

Store locator, access product reviews and ratings are all capabilities that make the most of

technologies that smart phones tend to come with these days - cameras for scanning, GPS for

finding location, even click-to-call to contact a store directly. The retailer doesn't need to know

anything about the customer in order to provide this information, but a customer with a smart

phone will have a much easier time accessing richly detailed information than one with a basic

"feature phone."

Search for merchandise, while number one in terms of our respondents' opportunities, is a little

more complex. While it may be possible to leverage smartphone capabilities to make product

search faster - cameras for either barcode scanning or for image identification, for example - if the

search involves any kind of browsing, retailers need to be very careful. RSR has done other

research to evaluate mobile app capabilities and quickly found that browsing on a mobile phone

requires a very well-thought-out approach to categorizing merchandise for browsing, with a

deeper hierarchy (letting the user get closer to a limited set of results before presenting

bandwidth-heavy images), and with more summarized product detail pages that load quickly.4

Personalized

In the other category, personalization, retailers value opportunities that let them reach individual

consumers via their personal devices. Receive offers/coupons, check order status, and redeem

coupons/offers all fall under this type of capability - either through a login on a mobile site or via a

"registered" mobile app, shoppers can quickly access personalized information delivered right to

them from the retailer. The only thing to keep in mind with these capabilities is to make sure that

your company's priorities match up at least reasonably well with your customers. We have 4 Answering the Call: Emerging Best Practices in Consumer Mobile, RSR Research, October

2010

53%

54%

55%

61%

63%

76%

83%

35%

38%

35%

29%

31%

24%

11%

12%

8%

10%

10%

6%

0%

6%

Redeem coupons/offers

Access product ratings

Check order status

Access product reviews

Receive coupons/offers

Store locator

Search for merchandise

Mobile Channel Capabilities

Very Important Somewhat Important Not Important

13

found in other areas of consumer research, for example, that consumers much more highly value

being able to redeem offers via their personal mobile phones than being able to receive offers.

Our survey respondents have the exact opposite priority.

The Bottom of the List

The least important capabilities to our survey respondents (those that received the highest

percent of respondents rating it "not important") include purchasing and redeeming gift cards,

viewing the weekly ad, checking loyalty status, and the always-disruptive using barcodes to check

price or availability (Figure 10).

Figure 10: Payment Types Near the Bottom of the Pr ior i ty L ist


Given all of the recent movement in mobile payments, it's not surprising that retailers are putting

relatively less importance on managing electronic forms of payment, including and most

especially gift cards. However, again, it's going to be important for retailers to make sure that their

priorities (or lack thereof) match up with consumer expectations. If retailers don't provide what

consumers want or expect, someone else will - as the popularity of mobile apps like

RedLaser have already proven when it comes to scanning barcodes. If shoppers are going to

do it anyway, is the retailer better off fighting mobile price comparison, or enabling it - and

tracking it, and giving themselves an opportunity to either head it off or at least have a competitive

shot at winning the price-checking shopper's business?

Winners vs. Peers: Day and Night

Looking at opportunities by retailer performance yields a stark difference between the priorities

that Winning retailers assign to certain mobile capabilities vs. the priorities assigned by their

peers. Winners seem to be laser-focused on opportunities that relate to selecting and purchasing

products (Figure 11).

16%

16%

16%

18%

22%

Register/redeem gift cards

Use barcodes to check price oravailability

Check loyalty status

View weekly ad

Purchase gift cards

Mobile Capabilities Rated "Not Important"

14

Figure 11: Performance-Based Priori t ies: Purchasing vs. Promoting


In fact, when you look at the list of capabilities that Winners valued more highly than their peers,

you get a basic description of a path to purchase: search for merchandise, access product

reviews and ratings, buy merchandise, and if there are any issues along the way, have easy

access to click to call for help.

Non-winners have a completely different list of capabilities that they gave higher priority to, and

with the exception of the store locator at the top of the list, the rest of the capabilities are mostly

about promoting to consumers: receive and redeem offers, view the weekly ad, price check using

the barcode (which could be especially powerful when combined with the ability to send offers to

a consumer's device).

Consistent with our past research on cross-channel, we find that Winning retailers are focused

more initially on what could be considered basic commerce functionality - the minimum needed

today for a consumer to make a purchase decision. Each of these steps also have a different sort

of value proposition when considered as part of a cross-channel purchase - you don't need a

"buy" button on the phone to give in-store shoppers access to product reviews. But if the product

doesn't happen to be on the shelf, having that buy button sure helps capture a sale that might

otherwise have been lost.

The Lowest-Hanging Fruit Gets Picked Quickly

Overall, retail respondents to this survey report that they are making good progress against the

capabilities they most value. While the biggest gaps are big - search for merchandise and receive

coupons/offers in particular - these gaps are still narrower than many cross-channel capabilities

that RSR has evaluated in the past (Figure 12).

36%

45%

48%

55%

77%

48%

52%

56%

67%

86%

Click to call

Buymerchandise

Accessproductratings

Accessproductreviews

Search formerchandise

Mobile Capabilities That Winners Value More

Winners Others

45%

55%

59%

81%

82%

33%

48%

44%

48%

70%

Use barcodes tocheck price oravailability

View weekly ad

Redeemcoupons/offers

Receivecoupons/offers

Store locator

Mobile Capabilities That Non-Winners Value More

Winners Others

15

Figure 12: Fast Progress Against Capabi l i ty Gaps


Store locator, especially when GPS-enabled, becomes almost a requirement to have available on

mobile, but even more difficult capabilities show a surprising amount of progress. For example,

check order status and redeem coupons/offers both require a lot of integration with other systems

- including POS systems for redemption - and they each have at least a quarter of retail

respondents reporting that they have those capabilities in place today. Contrast that with a little

over half of retail respondents to RSR's cross-channel strategy survey, who report that they

currently enable buy online/pick-up in store - and that’s something retailers have been chasing for

at least the last four years.5

It won't take four years for retailers to double some of the more complex mobile capabilities,

either. According to survey respondents, it looks like mobile access to product reviews will be

widely available by the end of 2012, with receiving coupons/offers and search for merchandise

close on its heels (Figure 13).

5 Enabling Buy Anywhere, Get Anywhere: The Future of Cross-Channel, RSR Research, July

2011.

29%

31%

25%

26%

32%

48%

35%

53%

54%

55%

61%

63%

76%

83%

Redeem coupons/offers

Access product ratings

Check order status



Store locator

Search for merchandise

Mobile Capabilities -Value ("Very Important") vs. Current Use

Value Use

16

Figure 13: Big Spending Plans on Mobi le Capabi l i t ies


In some ways, the massive amount of intended progress reported by retailers is emblematic of

mobile opportunity in retail today: because of retailers' experience in eCommerce, their appetite

to take on some of the more complex capabilities available to mobile is larger than it has

historically been for say, cross-channel or even eCommerce alone. When you couple that with a

relatively low cost of entry and a cadre of vendors focused on making that entry even easier and

cheaper, one key difference that we expect to see between mCommerce and eCommerce is

that mCommerce's learning curve will be much shorter - and the ride that much faster.

17%

17%

17%

17%

17%

23%

28%

17%

21%

21%

21%

28%

19%

15%

Register/redeem gift cards

Click to call

Purchase gift cards

Check loyalty status

Buy merchandise



Mobile Capabilities - Investment Plans

Budgeted Project Planned, Not Yet Budgeted

17

Organizational Inhibitors

Mobile Has an Uphill Journey

We aren’t surprised to see that resource challenges top the list of reasons why retailers haven’t

seized more of the opportunities they see mobile solutions providing. In ascending order of

difficulty, the top-three roadblocks are having the necessary resources to manage all of the

available eCommerce and Mobile opportunities (a gating factor reported by retailers in virtually all

of RSR’s eCommerce-specific research to date), overall budgetary constraints, and difficulty in

quantifying Return on Investment. More problematic, however, are the number of retailers who

are frozen in their tracks due to the rapid pace at which mobile technologies change (28%, Figure

14).

Figure 14: Stuck in the Mud


As we’ve already noted, this rate of change is not going to slow down; in fact, if a brief history of

modern technology teaches us anything, it’s that the rate of change will only accelerate at

breakneck speed. Consumer adoption is certainly not going to slow, and the technological

capabilities of mobile devices and their users are guaranteed to “hockeystick” in an upward

direction. For this reason, it is imperative that stores understand the mobile, social, and cross-

channel opportunities of mobile technologies – currently, 19% of retailers cite this as an inhibitor

to forward progress. What then, do retailers self-identify as some primary means to get past the

notion that they can wait to implement mobile solutions until a time when the technology is no

longer such a moving target?

9%

16%

16%

19%

19%

28%

37%

40%

51%

60%

The marketing organization does not understand thedigital strategies we need to support…

We don’t know how to turn data gained from mobile channels into actionable business intelligence

Our executive team doesn't understand the mobileopportunity

Stores are a higher technology investment priority

Stores don't understand the mobile, social, or cross-channel opportunities

Mobile technology changes too quickly for us to be ableto make solid investments

Difficulty getting IT resources for eCommerce/Mobileprojects

We don't have enough eCommerce/Mobile resourcesto manage all the available opportunities

Budgeting - there is little capital investment available

ROI is hard to quantify

Please identify the top three (3) organizational inhibitors standing in the way of taking advantage of these

opportunities:

18

The Way Forward

Much of the answer resides in a role that does not currently exist in most retail organizations: a

chief customer experience officer. Sixty percent of retailers admit that a single executive, charged

with ensuring the customer has a seamless experience across whichever channel – or

technology – she chooses to engage is vital to becoming “unstuck” (Figure 15). However, the

opportunities to get past roadblocks do not stop there.

Figure 15: Much Help Needed


More coordination between selling channels and the marketing department are fast becoming

hot-button issues for retailers looking to embrace more – and better – mobile opportunities (51%,

above). This trend has also emerged in our recent eCommerce, Omni-channel, Merchandising,

and Store-based research over the past 12 months as an important step to overcome internal

barriers.

Further, Retail Winners are even more bullish on utilizing third parties to help guide them through

the bewildering mobile landscape: 48% of Winners cite high value vs. only 21% of all other

respondents in employing third party mobile expertise. Yet in a very interesting data point, while

Winners look to third party experts more so than do their competitors, one place they are not

looking to for guidance is from the customer, herself. Only 13% of Winners ascribe value to

utilizing more customer involvement in mobile development programs; 27% of average and

lagging performers look to glean insight from this type of increased customer involvement.

Winners are clearly placing their bets, and the future of their mobile strategy, on expert

information. As such, Winners perceive that the customer may be just as confused by a future of

how they will utilize their personal mobile devices in the shopping experience as retailers are

themselves right now.

24%

26%

33%

36%

37%

47%

51%

60%

More customer involvement in mobiledevelopment programs

Case studies/success stories in my vertical

Investment in a streamlined technologyplatform or infrastructure

Third parties to help guide us through abewildering mobile landscape

More experimentation

Solutions that don't burden our ITdepartment

More coordination between selling channelsand marketing

An executive tasked with managing andimproving the overall customer experience

Please rate the value of the following in overcoming the organizational inhibitors you face to improving the

mobile customer experience:

19

More Players Required

Even though retailers want more coordination with the marketing department than they currently

have, in aggregate, our respondents tell us that marketing, and the chief marketing officer in

particular, are appropriately involved to-date in the strategic direction and management of mobile.

The same cannot be said for the CIO, eCommerce Executives, and to a lesser degree, the CEO

(Figure 16).

Figure 16: Input in Demand


Further, when asked which departments can benefit the most from information gained via mobile

solutions, 82% of survey respondents cite marketing, 68% say customer service, 52% cite store-

specific sales, and 50% site online-specific sales.

From this data, RSR can decisively suggest that every retail organization consider enacting a

cross-functional team to map out its mobile strategy, comprised of IT, marketing, eCommerce,

store operations, and financial line of business executives. In fact, when a chief customer

experience officer has been established, that person becomes an important driver of the strategic

conversation. However, absent that role (as is currently the case for most retailers), such a team

is absolutely imperative.

Let’s now examine the ways in which technology can help with forward progress.

18%

20%

30%

35%

38%

45%

52%

52%

62%

17%

29%

26%

37%

40%

34%

26%

51%

26%

Supply Chain Executive

COO

CFO

Chief Merchandising Officer

Store Operations Executive

CEO

eCommerce Executive

Chief Marketing Officer

CIO

Who CURRENLTY particpates in the strategic direction and management of Mobile/Who SHOULD increase their

participation?

20

Technology Enablers

To App, or Not to App

So far, we’ve seen that retailers find no shortage of opportunities from mobile technologies. But

due to copious resource and infrastructure challenges, as well a pervasive sense that the

consumer’s adoption of mobility and its evolving capabilities is moving at a pace too quick to

catch, many are still in wait-and-see mode.

It should come as no surprise, then, that retailers are vaguely ambivalent as to what a strong

mobile offering even looks like. While 79% know that a cut and paste version of a full

eCommerce site is simply not a viable mobile strategy, the field is split nearly down the

middle as to the value of a downloadable app. In fact, 33% of retailers are entirely “neutral” on

their feelings about mobile apps, another 20% completely disagree that it will yield more

engagement than a mobile site, and another 47% think it will hold value for their brand offering.

Figure 17: Lots of Neutral i ty


It is RSR’s strong contention that only those brands who can thoroughly justify frequent (if not

daily) interaction with a downloadable application consider it the backbone of their mobile

strategy. Consider your brand’s place in the customer’s lifestyle: do your products and services

evoke passion in the consumer? What value would she derive from opening – and engaging with

– your brand’s application as part of her already-crowded list of daily activities? Only those who

can guarantee value from such engagement will avoid being relegated to a back screen/folder –

or worse yet – deleted entirely from the consumer’s personal device.

Winners Keep Their Eye on the Ball

In aggregate, the platforms retailers identify as most important to tackle fall squarely in line with

retail sales of mobile devices, as iPhone and Android-driven devices take top honors (92% and

87%, respectively, Figure 18). Because this is the first study of its kind, we do not have year-over-

year data available for comparison, but based on the recent spike in Droid sales, we anticipate

that Android will only continue to grow in importance for retailers. However, Retail Winners

1%

9%

7%

38%

12%

33%

51%

19%

28%

1%

A cut and paste version of a full eCommerce siteis a viable mobile strategy

A downloadable app will yield more engagementthan a mobile site

Please indicate the degree to which you agree or disagree with the following statements:

Strongly Agree Agree Neutral Disagree Strongly Disagree

21

disproportionately ascribe higher value to all of the platforms offered to them: 54% selected RIM

(vs. 43% of all others), 32% chose Windows 7 platform (vs. 10% of all others), and 29% of Retail

Winners (vs. 19% of all other retailers) said they still feel feature phones are important to support.

In short, Winners are not backing away from any mobile platforms – wherever and however

customers are using mobile phones, Winners feel it is important to be there. This also

applies to tablets – 54% of Winners identify tablet platforms as important to support, vs. 38% of

their underachieving competitors.

Figure 18: Device Sales Dictate Platform Importance


6%

23%

25%

49%

51%

87%

92%

HP Com

Feature Phones (SMS, very basic mobileweb)

Windows 7

Tablets

RIM (Blackberry)

Android

iPhone

Which mobile platforms are most important to tackle?

22

The Wireless Story Continues Earlier this year in our annual State-of-the-Store Report, The 21

st Century Store: The Search for

Relevance, retailers told us they see vast opportunity to interact with in-store customers in

fascinating new ways via the consumer’s personal mobile device – both by driving customers to

the store, and in communicating with them once inside. One missing link in this chain has been

how retailers will engage with consumers via mobile devices - will they rely on cellular networks?

Or provide their own public wireless network? Figure 19 confirms that retailers are rapidly moving

away from anticipating that cellular carriers will shoulder most of the burden.

Figure 19: Wire less Value Drast ical ly Outweighs Adoption and Plans


However, just as in our Store Report this year, it is somewhat jarring to see that even though a

vast majority of retailers ascribe value to retailer-provided wireless in stores, (78% of retailers in

this case) very few have yet to do anything about it. In fact, in Figure 20, below, 56% tell us they

have no plans whatsoever to fold in public WiFi to their stores. We did not mince our words

earlier this year – from that report:

Quite simply, as it pertains to wireless networking in the store, retailers just aren’t moving

quickly enough… they are steadily warming to the fact that wireless devices are driving

traffic to the store, but they have become red-hot for tapping those wireless devices’

potential once inside the store, itself. Even further still… they want to use social

networking opportunities to engage with consumers while they are in-house. Yet… 30%

still have no wireless network – of any kind – available in stores, and only 12% have

wireless available for their customers.

As anyone who has ever tried to access Facebook during peak hours on a cellular

connection will tell you – this just doesn’t cut it. In order to interact with customers in any

way via the consumer’s personal device, Wi-Fi is an absolute must.

7%

7%

9%

16%

30%

32%

It adds no value at all

We don’t have stores

It's a PCI/data security risk

It adds minimal value

It is a must

It adds some value

Which of the following best describes your stance on retailer-provided Wi-Fi in stores?

23

And as the widespread advent of 4G networks promise to increase the amount of

content-rich data streaming to smartphones at any given moment, many

telecommunications experts believe that the bandwith of cellular networks will soon

become even more congested, causing cellular connectivity to become less reliable than

the 3G networks of today. If this holds true, free Wi-Fi will become an even more

compelling reason for customers to shop your stores."

Early Days

Across the board, even when looking at the highest performers, retailers have not done much

with mobile yet. However, based on the sheer volume of opportunities they’ve already identified in

the Opportunities section of this report, coupled with the amount of budgeted and planned

projects shown here in Figure 20, we expect that will not be the case when we conduct this

research again in 12 months’ time.

Figure 20: Fol low the Budget and Plans


Twenty three percent of all retailers have budget set aside to ensure that the mobile

developments they take on are repeatable across multiple platforms. And while 21% already have

budgeted for mobile capabilities delivered via the cloud (or a Software as a Service model),

another 23% have plans for offerings that leverage such delivery models.

3%

3%

3%

3%

5%

5%

8%

8%

10%

23%

15%

23%

16%

10%

15%

33%

26%

21%

18%

36%

15%

18%

23%

8%

21%

18%

18%

5%

18%

13%

18%

21%

18%

23%

26%

23%

21%

33%

31%

21%

5%

23%

41%

49%

28%

47%

44%

44%

10%

33%

33%

56%

13%

An advertising agency with mobile experience

Mobile PCI certification

Write once/deploy many mobile development platform

Downloadable branded apps (games, lookbooks, etc)

Mobile capabilities delivered via the cloud/SaaS

Device/OS management and maintenance services (tokeep up with changing devices)

Mobile-capable content management

Downloadable shopping app

A mobile-specific development provider

Public WiFi in stores

An ecommerce site that can extend to mobile

How long has your company been actively involved in the following technology-enabled processes in attempting to

improve your Mobile presence?

More than 1 year Less than 1 year Budgeted Project Planned, not Budgeted No plans

24

Too Soon to Lock In

Because retailers are so early in their adoption cycle of mobile solutions, it is important to

examine those technologies which they perceive to hold the most value for them in the near

future – particularly for those retailers whose sales are already outperforming the competition

(Figure 21).

Figure 21: Winners Take the Long View


Retail Winners are slightly less inclined to envision a future where the eCommerce site is simply

extended out to the mobile channel (77% vs. 88% of all others). In a related notion, they look to

outside advertising agencies with mobile experience less than do their competitors, as well (18%

of Winners, 31% of all others). Instead, Winners are much more focused on the ability to write

once and deploy across multiple mobile platforms than are average and underperformers (73%

vs. 35%) – another clear indicator that the best performers take a broader view of what mobile

really looks like as it relates to how consumers use mobility. While all retailers recognize that

mobile devices, their capabilities, and shoppers’ willingness to use them are very difficult to

predict, the best retailers understand that “the next big thing” in mobile devices – or platforms –

may be just around the corner at any given time; these are not static times, and therefore any

mobile offering must be built with an innate flexibility to accommodate whatever trends emerge –

and quickly.

31%

19%

35%

47%

25%

31%

38%

71%

35%

88%

18%

27%

27%

36%

36%

41%

45%

64%

73%

77%

An advertising agency with mobile experience

Downloadable branded apps (games, lookbooks, etc)

Mobile capabilities delivered via the cloud/SaaS

Downloadable shopping app

A mobile-specific development provider

Device/OS management and maintenance services (tokeep up with changing devices)

Mobile PCI certification

Mobile-capable content management

Write once/deploy many mobile development platform

An ecommerce site that can extend to mobile

How do you perceive the value of the following technologies? (% 'Very Valuable')

Winners Others

25

BOOTstrap Recommendations

Mobile commerce’s learning curve will be much shorter, but it will also be more complex. Mobile

is a moving target on the process side, as consumers try to figure out how to best use mobile as

part of the shopping process. But it is also a moving target on the technology side, as leaps and

bounds in technology constantly change what mobile phones are capable of doing. The following

are some baseline recommendations to optimize your mobile efforts.

Don't Let Speed of Change Frighten You

Indeed, the retail uses of mobile technologies are still in their early days. Even so, it is safe to

predict that uses of new mobile innovations will become deciding factors for some retailers’ ability

to thrive, and an accelerant for others’ demise. While significant R&D is still required (much of it

will occur on trial and error basis), the good news is that the playing ground is relatively level for

retailers of all segments and sizes. Piloting new ideas which capitalize on mobile technologies

comes at a much lower price tag than have more “traditional” lessons in eCommerce or store

systems experimentation. The key is to at least be in the game.

Use Consumers to Help Shape your Strategy

While it's true that consumers probably would not have given useful feedback for the idea of a

Sony Walkman or iPod - or automobile, for that matter - there is still an important role for

consumers in developing your mobile strategy. Even though consumers may not be able to tell

you exactly what they want in a mobile offering, you should use them to validate that what you've

done works. User Interfaces might be different, use-cases might be different, but it’s important to

remember that mobile consumers are often operating in a different context than eCommerce

consumers browsing from the comforts of home.

Laggards currently pursue using the device as a promotional foothold into consumers' lives – this

is a bad idea. While sorely tempting to try, it is something you can only achieve if you have their

trust to begin with. The best way to win that trust is to be useful – which can be established by

providing in-store access to product ratings and reviews, or enabling purchase at the shelf of an

out-of-stock product.

Carefully Consider/Approach a Customer Experience Officer

Absent this role in the modern day retail enterprise, retailers will continue to fall short on

guaranteeing a seamless shopping experience across channels. We are very confident in this

recommendation, based not only on survey responses from myriad current research reports, but

also because RSR has recently undertaken several projects to evaluate top retailers’ cross

channel offerings: we were thoroughly surprised (and in many cases, let down) by even top-

ranked brands’ inconsistencies across such channels as stores, eCommerce, and mobile. The

temptation is to "just throw it all into one organization" - headed by a Chief Customer Experience

Officer. While this offers some benefits, it also comes with risks. Hence, for retailers who want to

approach the idea of implementing a Chief Customer Experience officer, we suggest maintaining

realistic expectations for what this person should own and manage, a move away from matrixed

organizations, and ensuring that the candidate has enough credibility to wrangle both

eCommerce and store operations.

26

Rethink Wireless

For those retailers who do operate stores, consumer-owned mobile devices provide endless new

opportunities to engage with their customers inside the store’s walls. The caveat here is that to

communicate effectively, particularly as richer mobile media emerge, retailers must have the

wireless infrastructure to engage in the first place. Relying on cellular is not enough in concrete

big-box stores and malls. The time is at hand for a hardened rethink of customer-facing and

secure wireless networks in stores.

Strategize Across Platform

Retail Winners have spoken: no mobile platform should be left behind. From its inception point,

any mobile offering must be built with the flexibility to operate across multiple mobile platforms

and devices in order to make best use of already-strained internal resources.

Lastly, not all new endeavors will be successful. But consider this: the consumer already wants to

use the device she has in her purse; even if a new tactic falls short, she’ll be eager to try it, and

will likely reward you for trying. Certainly, if you don't provide something, someone else will -

disintermediating the retailer at their own shelf, in their own store.

a

Appendix A: RSR’s Research Methodology

The “BOOT” methodology is designed to reveal and prioritize the following:

• Business Challenges – Retailers of all shapes and sizes face significant external challenges. These issues provide a business context for the subject being discussed and drive decision-making across the enterprise.

• Opportunities – Every challenge brings with it a set of opportunities, or ways to change and overcome that challenge. The ways retailers turn business challenges into opportunities often define the difference between Winners and “also-rans.” Within the BOOT, we can also identify opportunities missed – and describe leading edge models we believe drive success.

• Organizational Inhibitors – Even as enterprises find opportunities to overcome their external challenges, they may find internal organizational inhibitors that keep them from executing on their vision. Opportunities can be found to overcome these inhibitors as well. Winning retailers understand their organizational inhibitors and find creative, effective ways to overcome them.

• Technology Enablers – If a company can overcome its organizational inhibitors it

can use technology as an enabler to take advantage of the opportunities it identifies.

Retail Winners are most adept at judiciously and effectively using these enablers,

often far earlier than their peers.

A graphical depiction of the BOOT follows:

b

Appendix B: About Our Sponsors

Google Commerce Search is a hosted search solution for your e-commerce store that leverages

Google’s tremendous search expertise and computing infrastructure to deliver a superior

experience that bridges the gap between brick and mortar stores and online shopping. Robust

features include a product recommendation engine, instantaneous search results, targeted

promotions, smart synonym and spelling detection, and extensive merchandising options. Google

Commerce Search works seamlessly on desktop e-commerce sites as well as both mobile sites

and apps, and customers who have implemented the solution include General Nutrition Centers

(GNC), Westfield Shopping Centers, and Forever 21 among many others.

SAP is the leading provider of application solutions for the retail industry. SAP helps retailers of

all sizes to understand, anticipate and inspire their shoppers by providing a compelling shopping

experience. The SAP® for Retail solution portfolio provides specific solutions for retail companies

in the food, fashion and hardlines businesses. The solution portfolio is built around understanding

the shoppers, or Shopper Insight, and consists of building blocks that cover the areas of

Merchandise Lifecycle (including planning, merchandise lifecycle pricing and promotion

management); Supply Chain (forecast & replenishment, supply chain planning and execution);

Shopper Experience (workforce management, customer loyalty and a portfolio of POS solutions);

and Corporate Operations (finance and human resources).

Learn more about SAP at http://www.sap.com/retail/.

c

Appendix C: About RSR Research

Retail Systems Research (“RSR”) is the only research company run by retailers for the retail

industry. RSR provides insight into business and technology challenges facing the extended retail

industry, providing thought leadership and advice on navigating these challenges for specific

companies and the industry at large. We do this by:

• Identifying information that helps retailers and their trading partners to build more

efficient and profitable businesses;

• Identifying industry issues that solutions providers must address to be relevant in the

extended retail industry;

• Providing insight and analysis about a broad spectrum of issues and trends in the

Extended Retail Industry.

Copyright© 2011 by Retail Systems Research LLC • All rights reserved.

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