Today’s shoppers expect retailers to have the same or better information available whenever they interact with the brand — online, in-store or via a mobile device. In addition to product information, retailers are wise to have all relevant cross-channel customer information available and accessible. The truth is that 40% to 70% of shoppers already have researched their desired products online before going to the store. And, of the consumers who enter the store knowing what they want to buy, 50% leave empty-handed because they can’t find what they are looking for. But when store associates are armed with mobile devices, they can personalize their interaction with customers by suggesting upsells and cross-sells; accessing product ratings and reviews; providing comparisons with other products, looking up inventory; and finally completing the transaction on-the-spot using mobile payment or processing a return. Industry-leading retailers realize the importance of implementing mobile commerce. Starmount’s Mobile Selling Assistant, called Engage, currently is deployed in all Urban Outfitters, Anthropologie and Free People stores; and the device is also being piloted by several other nationally recognized retailers. This webinar will provide answers to key questions on retailers’ minds as they plan to integrate mobile commerce in-store. A selection of those questions include: How will mobile commerce affect store operations? What infrastructure must be in place? Will the mobile commerce system be secure? What is the best way to communicate with customers going forward? To learn more about the best strategies to implement mobile commerce, and hear real-world retailer success stories, click here to register for the upcoming webinar titled “The Roadmap To In-Store Mobile Commerce.”

1. #MobileRoadmap December 1, 2011
Roadmap To In-Store
Mobile Commerce
#MobileRoadmap

2. Welcome to the Webinar
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4. About Retail TouchPoints
 Launched in 2007
 Over 20,000 subscribers
 To provide executives with relevant,
insightful content across a variety of
digital medium
Free subscription to our weekly newsletter:
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5. Panelists
Steve Rowen Jerry Rightmer
Managing Partner President
RSR Research Starmount Systems
Moderator
Debbie Hauss
Editor-in-Chief
Retail TouchPoints
#MobileRoadmap

6. Retailers’ Roadmap to In-
Store Mobile Commerce
ST E VE R O WE N
MANAG ING PARTNE R , R SR R E SE AR CH
DE C E MBE R 1, 2011

7. Our Mission
To provide the best research in retail built on:
• Expertise gained through real world practitioner experience
• Objective views
• Unique, high value products & services
• Perspective: industry view from consumer to source
• Focus on customer experience
Because RSR is built entirely of retail veterans, we are the only analyst
firm that can truly provide:
• Genuine insight into business and technology challenges facing the
extended retail industry
• Thought leadership and advice on navigating these challenges for
specific companies and the industry at large
7

8. Mobility in Stores
• RSR’s 5th Annual Store Benchmark – 85 Retailers, Spring 2011
• Every year, we look at “the state of the store”
• Retailers always understand the importance of creating a better in-store
shopping experience.
• However, in 2010 it became clear that armed with more technology than most
store employees and managers, the consumer was crafting her own experience
– much of it outside the boundaries of the store’s four walls
• Our Goal in 2011: As this evolution and proliferation of consumer-held
technologies has brought stores to their Rubicon, we sought to
understand how retailers are adapting their in-store strategies and
systems
• Our Top line Findings:
• The Store has to evolve – retailers have no choice
• Customers demand a more relevant experience
• A differentiated experience must involve educated employees
• Technology, training, and productivity are all required to facilitate the
necessary change
• Inaugural Mobility Report – 83 Retailers, Summer 2011
8

9. Better-Educated Employees a Must
Top Three (3) Uses of In-store Technologies
2011 2010
69%
Maintain and/or improve the customer experience
67%
51%
Make our employees “smarter” and better informed
35%
39%
Increase revenue while holding down operational costs
57%
32%
Put actionable information into the hands of managers
36%
Help the company win new customers and retain current 29%
customers 37%
Create competitive advantage and new sources of revenue 26%
generation 30%
26%
React quickly to changes in the business environment
22%
Help us keep up with the competition (avoid competitive 20%
disadvantage) 11%
Source: RSR Research, June 2011
9

10. Technology the Key to Education
How long has your company been actively involved in adding technology-enabled
touch-points for employees in your stores?
2011 2010
70%
Longer than 1 year
49%
8%
Less than 1 year
18%
3%
Budgeted project
8%
14%
Project planned, not yet budgeted
8%
5%
No plans
11%
Source: RSR Research, June 2011
10

11. Winners Already Seeing More
Sales
What percent of your annual sales come from the mobile channel?
More than 5% 3-5% Less than 2% None Don’t know
Winners 10% 17% 24% 41% 7%
Others 5% 5% 27% 55% 9%
Source: RSR Research, September 2011
11

12. Getting the Store Manager Back
on the Selling Floor
How long have you been actively involved in adding Mobile technology-enabled
touchpoints for Store Managers within your store?
2011 2010 2009
25%
Longer than 1 year 14%
12%
28%
Less than 1 year 23%
22%
3%
Budgeted project 9%
7%
22%
Project planned, not yet budgeted 14%
15%
22%
No plans 32%
36%
Source: RSR Research, June 2011
12

13. Business Challenges
A BUMPY ROAD AHEAD
13

14. Skating Towards the Puck
Top 3 Mobile Business Challenges
Winners Others
Consumers are using mobile as part of their shopping experience 92%
and we need to be there 81%
We're seeing significant online traffic from mobile sources and 42%
need to respond 29%
38%
Mobile technology is moving too quickly; we can't keep up
48%
38%
Store sales are getting cannibalized; mobile can help
33%
31%
Our competitors don't have a mobile strategy
24%
23%
Our competitors have a mobile strategy and we need to respond
33%
4%
Mobile price comparison at the shelf is hurting our business
24%
Source: RSR Research, September 2011
14

15. Consumers Moving Too Quickly
Mobile Philosophy - Statement Agreement
Strongly agree Agree Neutral Disagree Strongly disagree
The customer has evolved so rapidly that we are forced to have
35% 43% 13% 6% 3%
a mobile presence
Mobile's impact/best uses are not yet fleshed out 24% 57% 9% 9% 1%
We have completely different goals for mobile shoppers than
9% 37% 35% 16% 3%
eCommerce shoppers
Source: RSR Research, September 2011
15

16. Opportunities
NO SHORTAGE OF WAYS TO IMPROVE
16

17. Opportunity to Differentiate
Mobile Opportunities
Very valuable Somewhat valuable Not valuable
Deeper customer engagement to build loyalty through mobile
73% 25% 2%
channels
Identify innovative mobile use cases that no one else is doing yet 61% 27% 11%
Deeper customer engagement to drive sales through
61% 27% 11%
personalized offers
Deeper insights into shopper behavior through mobile site or app
59% 34% 7%
insights
Empower store employees through mobile site or app access in
41% 41% 18%
stores
Mobile "save the sale" at the shelf 40% 42% 18%
Stop the decline in store sales 30% 36% 34%
Mobile in-store concierge to alleviate some of the sales burden
27% 44% 29%
from store staff
Disrupt other retailers by providing a mobile experience that
27% 48% 25%
encourages the use of my app/site at their shelf
Discourage the use of price comparison by offering another
16% 41% 43%
mobile option
Source: RSR Research, September 2011
17

18. The Case for a Mobile Compass…
Smartphones' Value in Driving Traffic TO the Store
Lot of Value Some Value No Value
2011 31% 56% 13%
2010 20% 45% 35%
Source: RSR Research, June 2011
18

19. Only More Powerful Once In-store
Smartphones' Value Once Customer is WITHIN the Store
Lot of Value Some Value No Value
2011 41% 26% 33%
2010 11% 41% 48%
Source: RSR Research, June 2011
19

20. What’s Not a High Priority?
Mobile Capabilities Rated "Not Important"
Purchase gift cards 22%
View weekly ad 18%
Check loyalty status 16%
Use barcodes to check price or availability 16%
Register/redeem gift cards 16%
Source: RSR Research, September 2011
20

21. Organizational Inhibitors
FRUSTRATION IN THE WORKS
21

22. Stuck in the Mud
Please identify the top three (3) organizational inhibitors standing in the way of
taking advantage of these opportunities:
ROI is hard to quantify 60%
Budgeting - there is little capital investment available 51%
We don't have enough eCommerce/Mobile resources to manage all the
40%
available opportunities
Difficulty getting IT resources for eCommerce/Mobile projects 37%
Mobile technology changes too quickly for us to be able to make solid
28%
investments
Stores don't understand the mobile, social, or cross-channel
19%
opportunities
Stores are a higher technology investment priority 19%
Our executive team doesn't understand the mobile opportunity 16%
We don’t know how to turn data gained from mobile channels into
16%
actionable business intelligence
The marketing organization does not understand the digital strategies
9%
we need to support eCommerce/Mobile
Source: RSR Research, September 2011
22

23. Less Budget, but Better Projects
Persistent Economic Uncertainty Taking its Toll
Top Three (3) Organizational Inhibitors
2011 2010
Overall Capital Requirements – we never even get to 61%
the subject of ROI 40%
54%
Hard to quantify technology return on investment
66%
The existing technology/infrastructure is preventing us 49%
from moving forward with new solutions 50%
We generally don’t want to be an early adopter of new 39%
technologies 43%
The TCO of in-store technologies makes it hard to 32%
justify many of the newer technologies 28%
Management believes stores should be able to just 22%
“do what we tell them” 12%
We are trying to simplify our in-store technology, not 15% Positive Sign
make it more complex 32%
Source: RSR Research, June 2011
23

24. Mobile Opportunities Cannot Be
Realized without a Mobile
Infrastructure
Which of the following statements best describes the
technology your company uses to support wireless
networking in the store?
2011 2010
Wireless available only for receiving and other 30%
inventory control related tasks 25%
30%
No wireless network available in store
38%
Wireless available throughout the store for 27%
performance management, POS and product related
tasks 30%
12%
Wireless available for customers
8%
Source: RSR Research, June 2011
24
Persistent lack of investment – cost likely trumps fear as an issue

25. Technology Enablers
VARIED VISIONS, LOTS OF PRIORITIES
25

26. Massive Shifts in Perception
2010: The Year of Omni-channel and Mobility
Potentially Very Valuable Technologies to Support Opportunities
2011 2010
Cross-channel customer and inventory synchronization 70%
through real time updates 50%
Deliver information to customer-owned cell phones and 62%
PDA’s 30%
Deliver information to store-owned cell phones and PDA’s 57%
21%
Employee selling tools on the sales floor 55%
43%
Modern POS Hardware and Software 52%
52%
Personal scanners, self-service scales, product information 43%
kiosks, employee product information training 25%
In-store rewards and/or coupons 43%
42%
Distributed Order Management (buy in one store, fulfill in 43%
another) 26%
KPI’s and alerts to store managers on mobile devices 38%
25%
Source: RSR Research, June 2011
26

27. Wireless Value Drastically
Outweighs Adoption
Which of the following best describes your stance on retailer-provided Wi-Fi in
stores?
It adds some value 32%
It is a must 30%
It adds minimal value 16%
It's a PCI/data security risk 9%
We don’t have stores 7%
It adds no value at all 7%
Source: RSR Research, September 2011
27

28. Early Days
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
An ecommerce site that can extend to mobile 10% 36% 18% 23% 13%
Public WiFi in stores 8% 18% 13% 5% 56%
A mobile-specific development provider 8% 21% 18% 21% 33%
Downloadable shopping app 5% 26% 5% 31% 33%
Mobile-capable content management 5% 33% 18% 33% 10%
Device/OS management and maintenance services (to keep up with
3% 15% 18% 21% 44%
changing devices)
Mobile capabilities delivered via the cloud/SaaS 3% 10% 21% 23% 44%
Downloadable branded apps (games, lookbooks, etc) 3% 16% 8% 26% 47%
Write once/deploy many mobile development platform 3% 23% 23% 23% 28%
Mobile PCI certification 15% 18% 18% 49%
An advertising agency with mobile experience 23% 15% 21% 41%
Source: RSR Research, September 2011
28

29. Retailer
Recommendations
29

30. What Does Mobility Mean for
Retailers?
• The Store Has to Evolve – Retailers Have No Choice
• Don't Let Speed of Change Frighten You
• Use Consumers to Help Shape your Strategy
• Carefully Consider/Approach a Customer Experience
Officer
• Strategize Across Platform
• Make a Wireless Decision Now
• Don’t Make Promises your Employees Can’t Keep
30

31. Roadmap
to
In-­‐Store
Mobile
Commerce
Jerry
Rightmer,
Starmount
©2011
Starmount
Confiden9al

32. The
Connected
Shopper
The
ul9mate
shopping
companion?
Or
a
compe99ve
threat?

33. Just
yesterday
we
were
asking
ourselves
how
to
make
our
websites
as
good
as
our
stores,
and
now
we’re
working
hard
to
get
parts
of
our
stores’
experience
as
good
as
our
website.
Glen
Senk,
CEO,
Urban
Ou1i3ers

34. Enhance
the
Shopping
Experience
Enable
Your
Associates
with
Mobile
• Personalize
sales
interacAon
anywhere
on
the
store
floor
• Access
deeper
product
and
customer
informaAon
• Simplify
up-­‐sell
and
cross-­‐sell
• Drive
efficiency
on
the
sales
floor
• Deliver
more
customer
inAmacy
• Achieve
a
higher
close
rate

35. Who’s
Doing
It?
The
Pioneer!
Fully
deployed
in
Urban
OuKiLers,
Anthropologie,
and
Free
People
stores
Pilo9ng
now
Pilo9ng
now

36. The
Big
QuesAons
• What
will
this
do
to
my
store
opera9ons?
• What
infrastructure
will
I
need?
• What
devices
can/should
I
use?
• How
will
I
manage
my
mobile
devices/apps?
• Is
this
secure?
• How
do
I
integrate
mobile
solu9ons
in
my
enterprise?
• How
does
this
change
my
customer
engagement
model?
• What
doors
does
this
open?

37. Store
OperaAons
Common
Concerns:
• Merchandise
handling
– Security
tags
– Bagging
• Tender
handling
• Customer
egress
model
• Floor
layout
• Device
management

38. Wireless
Infrastructure
Common
Concerns:
• Coverage
• Security
• Up-­‐Time

39. Devices
• Consumer
grade
versus
commercial?
• iOS,
Android,
Windows
7,
HTML5?
• Handheld
or
tablet?
• Mobile
peripherals
– Scanner,
magstripe,
NFC,
EMV,
printers

40. Mobile
Device
Management
• Security
• Loss
preven9on
• Power
• Provisioning

41. Security
• Wireless
• Data
• Device
• Architecture

42. IntegraAon
CRM
Product
Sugges9ons
Loca9on
Master
POS
Ra9ngs
and
Controller
Reviews
Perpetual
Inventory
Product
Master
Digital
Content
Online
Ordering

43. Customer
CommunicaAons
• Print
vs.
email
• E-­‐signature
• Languages
• Engagement
model

44. OpportuniAes
Product
Search
Product
Product
Details
Cross-­‐channel
and
…
Comparison
w/
RaAngs
&
Inventory
• Clientelling
Reviews
Lookup
• Up/cross
selling
• Endless
aisle,
save-­‐the-­‐sale
• Associate
educaAon
• Customer
returns

45. Closing
Thoughts
In-­‐Store
Mobile
Selling:
1. Your
Customers
Expect
It
2. Your
Compe9tors
Are
Doing
It
3. You
Can
Profit
From
It

46. Q&A Session
Your GoToWebinar Attendee Viewer is made of 2 parts:
1. Viewer Window 2. Control Panel
Type your question here
#MobileRoadmap

47. Q&A • Panelists
Steve Rowen Jerry Rightmer
Managing Partner President
RSR Research Starmount Systems
Moderator
Debbie Hauss
Editor-in-Chief
Retail TouchPoints
#MobileRoadmap

48. Thanks for attending!
You can download this
presentation here:
http://rtou.ch/mobile-roadmap
#MobileRoadmap

49. Contact The Panelists
sdrowen@rsrresearch.com jrightmer@starmountsystems.com
#MobileRoadmap