How the Internet of Things Will Impact Retail Sooner Than You Think

In the popular sci-fi film Minority Report, there’s a scene where the main character, played by Tom Cruise, walks through a mall and is bombarded by personalized greetings from digital billboards and holographic retail offers based on his previous purchases.

When Minority Report hit theaters in 2002, we were carrying around black and white feature phones and pagers–the Motorola Razr was still two years away from being released. If companies wanted to gather mobile data on consumers, they lacked the tools (or the network) to do so.

Thirteen years later, targeted, data-driven advertising is a reality, and personalized retail recommendations (at least online) are becoming increasingly sophisticated. Neither have really crossed over into the in-store environment.

How close are we to that vision of the near future? And is getting there worth the cost and effort?

I recently debated those questions onstage at San Francisco Design Week, where I sat on a panel focused on how retailers will use the Internet of Things to improve customer engagement both in-store and online. I was joined by panelists Matt Allred from Walmart.com, Scott Amyx from Amyx+McKinsey, Mariel Vargas from Macys.com and Kevin Weston from Float. Our moderator, Robert Burns Nixon, executive producer at the Retail Tech Summit, guided a wide-ranging discussion.

Highlights:

How do you define the Internet of Things/Internet of Everything in shopping?

The panelists had different definitions of IoT and IoE, based on their background, defining it as either:

  • A product or physical object that gives you information, knows you and reacts to you.
  • A networked device or object that gathers data or acts on data.
  • A body area network that connects to a connected home- or work environment, a wireless sensor network or wide-area ambient computing network.
  • Devices that are connected to the Internet that are either passive (data collectors) or active (they interact with the user).

What are the engagement opportunities for retailers who invest in IoT?

This was an area of some debate and disagreement, which made for entertaining discussion:

  • The Internet of Things can make things easy for consumers when it comes to shopping, such as the refrigerator telling me when it’s out of something, or that my shoes are wearing out. Many home electronics, such as televisions and home theater systems are already WiFi enabled; a WiFi-enabled refrigerator isn’t far off, from my point of view.
  • Inventory planning and returns for retailers, to improve production efficiencies and the demand-driven supply chain, allowing for just-in-time production and replenishment.
  • Miniaturization of sensors, to the point they can be embedded into consumer products to signal to the owner and the supply chain.
  • Consumers can get personalized experiences in the store (similar to the Minority Report example) through data collected by sensors and cameras.
  • Giving retailers the ability to measure the emotional impact of store displays through social media analytics and sensor data inside the store.
  • Addressing issues such as shopping cart abandonment in the physical store–which currently can only be done through embedded sensors.

What are retailers doing to address omnichannel and IoT?

  • A simple thing retailers can do today is making sure the merchandise buyers for their online and physical stores are the same, to maintain inventory consistency and efficiency.
  • Technology investments need to be made–either through a usage-based cloud model or through traditional licensing. Due to a retailer’s high volume of transactions, both models represent a significant investment.

What are the top challenges facing retailers in this space?

  • It’s difficult and expensive to get high-end network connectivity inside a retail store.
  • It’s expensive to produce omnichannel content (digital images, video and personalized messages).
  • There’s typically an inverse relationship with complexity–the easier that a retailer makes things for a consumer, the harder and more complex those technologies are to implement.
  • While retailers have steadily made investments and progress in online shopping and the supply chain, the technology powering in-store experiences hasn’t changed much over the past 10 years.
  • Retailers cannot afford to lag behind their peers; consumers dictate the pace of how stores and shopping will change.

Ultimately, it’s about overcoming the inertia of past practices and investing in technology that drives hard metrics: revenue-per-square-foot inside stores and better data leading to higher revenue online.

I’d like to thank the Retail Tech Summit for inviting me to speak on the panel, and my fellow panelists for a spirited and educational discussion. For more thoughts on IoT and to read posts from other Avaya executives on the subject, visit http://www.avaya.com/blogs/archives/tag/iot.

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News & Solutions at ENGAGE 2018 Show Avaya is Back in the Fight!

Now back from last week’s Avaya ENGAGE 2018, our annual customer and partner event, we’re finding the energy of the conference continues to drive the cadence at Avaya. What a show! In my last blog I wrote about taking time for a bit of introspection—thoughts echoed by our CEO Jim Chirico during his ENGAGE keynote. One of his points really resonated with me: how you get up off the mat. All of us face challenges everyday—most of them are manageable but occasionally an event comes along that can really take the wind out of your sails. Jim pointed out that while we all get knocked down from time to time, what really matters is how you get up. How you carry yourself and how you get ready for the next challenge.

In 2018 Avaya is back up. We’ve got our gloves on and we’ve come out swinging! ENGAGE 2018 was a great opportunity for us to thank our customers and partners for their outstanding support over the past year and give them a taste of the new Avaya: poised, fit, and ready to win.

Our commitment to win was reflected in a number of key announcements from last week, but the headliner was the acquisition of Spoken Communications, a leading innovator in the Contact Center as a Service (CCaaS) market. The Spoken platform is based on the Avaya Aura® Platform and Avaya Aura® Call Center Elite, making it a perfect architecture for both Avaya omnichannel offerings, such as Avaya Oceana®, and its Unified Communications as a Service solution. But Spoken brings much more than a proven xCaaS capability to Avaya—the really exciting news is Spoken’s transformative real-time customer experience management applications built on conversational artificial intelligence (AI). A true innovator in AI, Spoken will be accelerating our “Think Avaya, Think Cloud” strategy with solutions that not only provide a clear path for customer migration, but offer improved efficiency, drive more intelligent responses, and gain deeper insight into customer sentiment and experience.

And there was more news at Avaya ENGAGE on the AI front: Avaya introduced Avaya AvaTM , a cloud, messaging-agnostic solution that offers new AI capabilities for social messaging integration and automation of digital interactions. An evolution from our Ava technologies offered for over eight years, Avaya AvaTM delivers AI 2.0 architecture including natural language processing and machine learning. And innovative analytics enables effortless customer engagement through social media and messaging platforms.

Last year we introduced the Avaya Oceana® Solution—our omnichannel context-driven contact center solution. Now we are thrilled to bring the Workspaces environment to our existing customers later this year. This modern agent desktop will take advantage of key elements such as context and customer journey and be made available to our existing customer base, enabling them to transform their CXs.

Avaya also unveiled compelling enhancements to its signature unified communications user experience, Avaya Equinox®. These include:

  • Enhancements to Avaya Equinox Meetings Online, a cloud-based meeting and conferencing service that can be deployed with or without an Avaya infrastructure. The economical, pay-as-you-go cloud model offers the same capabilities as an on-premises deployment, making it easy to take a hybrid approach and mix and match between the two.
  • The new Avaya Equinox Attendant, which enhances customer service and brings the power of unified communications to front-desk operators. We will extend Avaya Equinox to the IP Office platform—providing a single UC platform for all our customers.

Devices remain a key part of Avaya’s strategy to deliver a unique UC Experience Everywhere. Avaya has shipped over 100M phones to date and currently ships almost 10,000 new devices every day. For 2018, Avaya is expanding customer options for UC devices like never before. The Avaya Experience has evolved to be more modern, connected and personalized, and tailored to vertical specific needs such as hospitality and retail. Key additions include:

  • Launching Avaya’s new Essential Experience portfolio of industry leading phones for a state-of-the-art user experience that includes Bluetooth and WiFi connectivity.
  • Extending the Avaya Vantage Experience to include support for IP Office.
  • Announcing the new Avaya CU-360 Collaboration Unit, which provides easy set up and collaboration in huddle room spaces.

Providing our customers a bridge to the future is a key focus for Avaya this year—and this goal will drive a great deal of our activity. To start, Avaya has launched a number of new promotions:

  • Loyalty2gether: This exciting and bold offer provides all our loyal Communication Server 1000 customers with a path forward to either IP Office or Avaya Aura with full support for the surrounding applications like customer contact and messaging. It’s an opportunity to reinvent what communications, customer experience, and collaboration can mean to your business and to do so with an unprecedented level of experience and investment protection.
  • Oceana NOW: This program focuses on helping organizations evolve and transform their CXs.
  • Automate CC NOW: Through the use of automation capabilities, Avaya is helping organizations modernize for less.

These programs are a prime example of our focus to ensure no customer gets left behind.

ENGAGE 2018 was a very busy week of announcements, meetings and demonstrations, and the energy and enthusiasm of our customers kept us going and underlined our confidence that Avaya is back and ready to do battle. Continue to watch for updates and details on Avaya.com and let us know how the new Avaya can support your plans in 2018.

A Closer Look at MiFID II Recording Requirements

The Markets in Financial Instruments Directive II (MiFID II)—arguably the greatest reform to hit Europe’s financial industry—is finally in effect as of January 3, 2018. This EU legislation serves as a much-needed upgrade from the original MiFID, enacted in 2004, and addresses key issues that resulted from the 2008 global financial crisis.

The directive requires all national governments in the EU to adopt certain laws, which they are free to do in their own way should the resulting effect be the same. Financial services institutions—specifically investment firms, credit institutions and trading venues—are subject to MiFID II, including companies that are headquartered outside of the EU but do business there (for a more thorough overview, see this blog by industry analyst Sheila McGee-Smith).

Recording Regulations: Raising the Bar

Perhaps the greatest impact of MiFID II is the law’s tighter recording regulations. Under the 2004 MiFID directive, there was no mandatory requirement to record communications involving client orders. To ensure fairer, safer and more efficient financial markets, MiFID II now requires firms to record communications (both phone and electronic) for the following investment services:

  • Reception and transmission of orders
  • Execution of orders on behalf of clients
  • Dealing on own account (takes place when a firm puts its own trading books at risk)

The specific customer interactions that are required to be recorded in relation to investment services include:

  • Receipts of client orders
  • Transmissions of orders (both where the investment firm transmits and executes the order)
  • Conclusions of transactions when executing orders on behalf of clients
  • Conclusions of transactions when dealing on own account, regardless of whether a client is involved in the transaction

Important note: MiFID II covers all communications relating to activities intended to result in the conclusion of a transaction or the provision of client order services, even if they do not result in a financial transaction.

Communication of orders placed through channels other than voice—postal mail, faxes, emails, SMS, face-to-face conversations recorded using written minutes—must be stored in a durable medium.

Keep in mind a few rules that apply to this ‘durable medium’:

  • Records must be able to be replayed or copied
  • Records must be retained in a format that does not allow the original to be altered or deleted
  • Firms are required to ensure the quality, accuracy and completeness of all phone records and electronic communications
  • Records must be kept for a minimum of 5 years and, if requested by the National Competent Authority in a specific country, up to 7 years
  • Clients must be notified in advance of recording
  • Records must cover communications made with, sent from or received by equipment provided or permitted by the investment firm (privately-owned equipment used by employees or contractors is not prohibited)

Ensuring Compliancy with MiFID II Recording Regulations

If your business is involved in financial services in any way—even if it’s not your main focus (i.e. credit institutions performing investment activities, branches of third country firms)—you’ll need to investigate to understand whether this new legislation will affect you and, if so, what you need to do to comply.

We recommend a thorough review of compliance across all channels (including back office processes) to determine if they meet the new regulations. If not, you’ll need to deploy a workforce optimization (WFO) solution to demonstrate that policies, procedures and management oversight of the new recording and monitoring rules are in place. Here’s what you’ll need to consider in a WFO solution:

  • Continuous recording: This goes for all inbound and outbound voice and other electronic communications based on business rules. You need a WFO solution that will capture, search and retrieve calls, offer encryption for secure storage, and offer pause and resume capabilities.
  • Desktop screen capture: This is an undetectable back-end process that records desktop screen activity during each customer interaction. Supervisors and managers can use this both in the contact center and back office to view customer interactions from beginning to end via synchronized screen and call recordings.
  • Quality management monitoring: Identify and capture areas of non-compliance, while measuring how well employees are delivering services that align with customer experience expectations.
  • eLearning and coaching tools: Bring employees fully up to speed on regulatory changes and any new requirements, as well as correct any non-compliance behaviors.
  • Voice analytics: Proactively identify, measure and isolate areas of non-compliance by mining intelligence from large volumes of recorded calls.
  • Workforce management: Schedule employee compliance training while ensuring you have enough support personnel with the right skills to serve customers.

The greatest threat to reputability, revenue and customer experience is the thought that your technology is “good enough” to meet current needs. Your ability to innovate and grow are hinged on technology that meets the next-gen needs of today, tomorrow and beyond—something that only 24% of companies say their workforce optimization and recording systems achieve.

To complete a thorough review of your current MiFID II processes, connect with Avaya. For a deeper dive into MiFID II (including a few WFO features not mentioned above) download the white paper MiFID II: What Does it Mean for Your Organization?

Avaya ENGAGE 2018: Connected Experiences

Avaya ENGAGE 2018 is now only days away and the hard work of the last several months will soon be on display. Flights are booked, bags are packed, and the last few i’s are being dotted and t’s crossed on a lineup of keynotes and breakouts that, if we do say so ourselves, sets a new high mark for content at the International Avaya Users Group. 2017 was a year like no other for Avaya. We are invigorated by the opportunities of a new corporate structure and our re-emergence as a public company. Times like these often lead to a bit of introspection—a chance to take stock, think about what gets you out of bed in the morning and where you’re headed. For us, that introspection has led to some thoughts about what makes Avaya a great place to be in 2018 and what Avaya brings to our customers that no one else can.

Taking stock in the business world always begins with the customer and the experiences they receive from the people they do business with. Those experiences, more than anything else, will define the difference between success and failure. Experiences often vary widely, based on the industry, the product or service, or even the stage of the customer relationship. But one thing that doesn’t change is the fact that the customer sees a business as a single entity and expects to be treated appropriately at every interaction. They want personalized connections, not indifference. They want productive connections, not those that waste their time. They want connections to increase their satisfaction, not ones that diminish it.

To satisfy these demands businesses must perform two critical tasks: they must provide appropriate and flexible ways for connected experiences to occur, and they must enable those experiences across the enterprise. It’s no longer enough to provide your employees with the latest collaboration or mobility solutions. It’s no longer enough to make agents accessible by voice, text, video, email or chat. These solutions must work together. The customer sees a business as a single entity—and businesses must respond to the customer as a single entity.

At Avaya, our job is to connect experiences in ways that drive both the top and bottom line. Think about what customers need. Do they have the right options to connect with your business when and how they wish? Can they get the information they need from their couch, or the subway or the coffee shop? Can an employee get an answer to an urgent question from a colleague a thousand miles away? Or roll out new training to 5 or 5000 new employees? And how do you make all this work together so that everyone is creating the right connections for the customer?

Making those connections work is what we do at Avaya. Seamlessly, quickly, intelligently, intuitively and in ways that make a business capable of responding as a unified whole—not a collection of silos and disjointed applications and processes. No other company can rival Avaya’s expertise in creating enterprise and customer experiences. And no other company can bring these experiences together to create better cross-enterprise connections.

So now you know what gets us out of bed: the drive to create connected experiences that make our customers nimble, responsive, flexible, productive and able to put a single, positive face on all their connections. We’ve been doing it for about a hundred years. And we plan to do it for a hundred more.