Retail Communications Survey Report 2013

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1 Retail Communications Survey Report 2013 A report on the findings of the unified communications and retail technology survey

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3 Content Executive Summary Introduction Research Objectives Survey Conclusions Recommendations

4 Executive Summary Leading unified communications provider, Elite Telecom, commissioned a survey to shed light on the role of commercial communications in the retail sector. We looked to understand how the industry plans to adopt new technologies and what role next generation services will play in retail development. Our research found that over half of retailers (68.9%) are not aware of unified communications or how unified communications platforms can benefit retail establishments. Of the 27.7% of retail respondents who stated that they had heard of unified communications, 38.7% further stated that they were not aware of the benefits. Shockingly, 3.6% of retailers claim that they will never implement unified communications into their commerce business. Despite retailers identifying the upcoming trends in mobile and multi-channel communication, this survey shows that most of them are not aware of the technology solutions in place to support emerging developments. However, despite the lack of understanding in the industry of next generation communications, 34.9% of survey respondents stated that they will be investing in some form of unified communications in the next two years. This statistic does not reflect the worldwide average that suggests 80% of businesses will be implementing unified communications in the next two to three years (Ovum, 2013). This suggests that the retail industry risks being left behind as technology continues to advance faster than they are adapting

5 80% of businesses will be implementing unified communications in the next two to three years (Ovum, 2013) 69% Of retailers are not aware of unified communications 3.6% retailers claim that they will never implement unified communications

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7 Introduction Elite Telecom is the UK s leading unified communications provider, delivering an unrivalled product portfolio to businesses that is designed to increase efficiency, cut costs and deliver return on investment. As the first independent telecoms provider, we are not tied or bound to specific products or vendors, which gives us a unique, consultative approach to business solutions. It also allows us to cherry pick services from different carriers to produce bespoke contracts to customers. Elite is primarily focused on bringing valueadd IT and telecoms services to the work place, including next generation solutions such as VoIP, unified communications and MPLS networks. We joined forces with Swyx, a globally recognised provider of software-based unified communications, to ascertain the use of the technology in the retail sector. Working in conjunction with Retail Week, we were able to produce an eight-question survey which was supplied to over 100 key retail executives. The survey was filled in via web, promoted via the Retail Week website and newsletter, and through Elite Telecom s social media channels. We had 119 survey respondents in total that highlighted emerging trends as well as a gap in the market for UC development and marketing. Elite Telecom is the only unified communications provider to feature in the Sunday Times Tech Track 100, which recognises the 100 fastest growing technology businesses across the UK. Elite Telecom provides a range of unified communications and is a Gold Partner Provider of Swyx. Swyx is a German-based unified communications manufacturer that currently sits second in Europe for its share of IP switches. As one of the first providers of software based UC solutions, Swyx has been providing unified communications to Europe since 2000.

8 Research Objectives As a business, we are always looking to solve problems and add efficiency; this led us to look to the shift currently taking place in the retail sector. Consumer needs have changed - we now shop online, via our mobiles and expect to be listened to on social media - but not many retail chains are executing these strategies particularly well, and as a result, are not getting through to customers. Technology and innovation play a huge role in the way successful businesses are able to remain prosperous and operational during periods of huge change. As a unified communications supplier, we know that unified communications is the perfect platform for retailers to be able to converge physical shopping experiences with virtual ones, while cutting costs and allowing for flexible expansion across all platforms. Our objectives therefore were simply; To identify if retailers are using unified communications to drive forward their business To understand how retailers are using unified communications to drive forward their business

9 1 How many staff does your retail business employ? 28.6% % 5% % % This highlights that the majority of retail respondents were businesses with under 50 staff, however a good percentage (29%) of participants have over 1000 staff, which is where unified communications can be especially beneficial. 2 Do you know what unified communications is? Combined 68.9% of retailers do not know what unified communications is 41% have never heard of unified communications I ve never heard of it 41.2% Yes, I do and I am already implementing UC for my retail business 13.41% Yes, I know what UC is and understand the benefits but I am not using it in my business 17.6% I ve heard of it but I don t know what it is 27.7%

10 3 What do you think are the key benefits of deploying unified communications? 38.7% Don t understand the benefits Reduces costs, expenses and overheads 15.1% 0.8% Support for more devices and mobility Seamless flow of communication between staff, suppliers and customers 34.5% 8.4% Improved customer service Business continuity 2.5% 38.7% of retailers do not understand the benefits of unified communications Results show that retailers significantly lack an understanding of the benefits of implementing unified communications Only 0.8% of respondents said that the support for more devices and mobile working was a key benefit contradictory of the trends they later identify (Question 6)

11 4 What do you consider to be the key driver for upgrading your telephone system? 8.9% 7.1% Need new functionality or existing system no longer supported Introduce Unified Reduce Communications solution Overheads 19.6% 7.1% Be more competitive 17.9% Improve Staff Productivity 39.3% Improve Customer Service Three respondents stated they had never thought about it Shows lack of understanding in how technology can help improve productivity and make businesses more competitive 39.34% stated that the key driver was to improve customer service which is a sign that some retailers know that improvements in technology can assist in other areas of the business Only 7.11% said that they would upgrade their telephone system to implement a unified communications solution which is the way the current market is heading again depicting retailers are getting left behind Other influencers included the need to reduce overheads (19.6%) and increase staff productivity (17.9%)

12 5 Rate the following IT priorities for the coming year in terms of importance to your business Question 5 and 6 are aimed to identify key trends in the retail sector over the next 12 months and areas where retail businesses will be looking to invest in. These trends were purposely picked as areas that are vastly improved, or made accessible, by unified communications. All answers were based on a scale of 1 (not at all important) to 5 (very important). How important to your business is improving customer service? % 11.9% 11.9% 27.4% 46.4%

13 How important to your business is reducing costs for communication? % 21.7% 25.3% 28.9% 16.9% How important to your business is enabling staff to communicate/work wherever they are? % 11.0% 21.9% 25.6% 35.4%

14 How important to your business is supporting flexible working? % 19.1% 21.4% 22.6% 23.8% How important to your business is enabling staff to communicate/work wherever they are? % 14.5% 18.1% 28.9% 28.9% Most survey respondents stated that improving customer service using IT was the key priority over the next 12 months Secondary priorities were to ensure adequate business continuity plans are in place, reducing communications costs and enabling mobile/remote working Support for flexible working appeared relatively low on the agenda compared to other IT priorities

15 6 What do you think will be the most important trend in retail communications over the next 2 years? 40.54% Support for multi-media (e.g. social media/web chat) 33.33% Mobility and fixed mobile convergence i.e. tablets on sales floors 7.11% All communications will run over IP (Internet Protocol) 19.02% Full integration of communications system with back office apps (e.g. Accounts/Stock) Here we see retailers identifying key areas where unified communications can play a big role: Most respondents think that multi-media convergence including social media will be the most important trend over the next 24 months 33.33% think that support for mobile devices and mobile working will be the second biggest trend However, only 7.11% state that IP communications will be a big area for investment, suggesting that most retailers do not understand that IP comms provides the support for the mentioned emerging trends

16 7 When will you be planning to integrate unified communications? 38.6% I don t know what unified communications is Over the next year 14.5% 3.6% Never Next 2-3 years 34.9% 8.4% More than 4 years time Worryingly, 38.6% of survey respondents admitted to not knowing what unified communications is. A further 3.6% said that they will never implement unified communications into their business. Those retail businesses not investing in UC face being left behind and risk not being able to keep up with competitors. However, it s not all bad news for unified communications; 13.4% of retail businesses have implemented or are currently implementing unified communications (Question 2) 34.9% of retail respondents will integrate unified communications within the next two to three years These results contradict the recent results by market research firm, Ovum, which found that 80% of businesses will be implementing unified communications over the next two years with 78% already setting aside dedicated budgets to do so. This suggests that the retail sector is severely behind the global investment into unified communications, putting them at a serious disadvantage

17 8 What is the biggest obstacle to UC? 11.29% Time Cost 37.46% 7.49% Training and deployment 43.76% Understanding Security 0% 43.7% of retailers say that UNDERSTANDING is the biggest obstacle to unified communications 37.5% of retailers say that COST is the biggest obstacle to unified communications 11.3% state TIME as the biggest obstacle to unified communications The results paint a bleak picture as it is clear that retailers do not understand the installation and implementation process. Furthermore, it shows a misunderstanding of costs, security and ease-of-use.

18 Survey Conclusions There has been plenty of research into the uptake and investment into UC across the globe, with the most recent results being published by the likes of Gartner and Ovum. However, there has not been much research into UC implementation on a sector by sector basis. Therefore, by drilling down into an industry that seems to be failing to keep pace with changing technology, we found that it s not a reluctance to change, but that they are simply unaware or misinformed of change. Retailers know that a shift is happening, but do not know what solutions to implement to accommodate key trends. Ultimately as more industries continue to invest in UC, and benefit from the advantages and cost savings, this will have a detrimental effect on the retail sector. This year we have already seen many retail businesses fall as a result of not keeping pace with technological innovations (HMV, Jessops, Blockbuster) which is increasing the pressure on retailers to adapt and combine physical and digital journeys to please the customer. All of our findings show that retailers lack even a basic understanding of the advancements in communications technology, with 68.9% misunderstanding the solution and its benefits. This leaves them at a serious risk of being left behind as other industries progress with the installation of hosted, cloud and unified communications solutions. A total of 43.7% of survey respondents state that a lack of understanding into unified communications is stopping them from investing, which explains why they can identify key trends (mobile, multimedia convergence) but cannot effectively utilise them as part of their business processes. Interestingly, we found that despite this lack of knowledge, 3.6% of retailers commit themselves to never investing in unified communications. We are worried that retail businesses not investing in features unified communications will not be around for much longer. It is important not to generalise on the results of the survey as there are many retail businesses implementing and using UC to their technological advantage and that are already experiencing positive results. Marks & Spencer, Tesco and Macy s are retail businesses currently executing at least some functionality of unified communications convergence to the benefit of them and their customers

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20 Recommendations Our survey points to a clear need for significant time and investment to be put into raising the awareness of advantages of unified communications in the retail sector, in particular this can be excelled by marketing campaigns and case studies

21 About unified communications Unified communications is the collaboration of devices and channels in the workplace, by combining mobile devices with data services and voice networks, retailers are able to work more efficiently while keeping costs down and staff connected. UC helps retail businesses keep up with advances in technology by offering a scalable and flexible next generation platform that is easily modifiable. Retailers are able to take advantage of emerging trends such as; VoIP, fixed mobile convergence, multi-media support and flexible working. The solution effectively combines mobile devices and social media channels with back office systems. This means they have one intuitive interface for all the company s communications needs, across a variety of devices including desktops, smartphones and tablets. This gives access to voice services, video conferencing, call conferencing, social media, IM, and text all in one place. Unified comms is relatively misunderstood in the marketplace as the solution is quicker to integrate than traditional hardware solutions and can actually help retailers achieve real ROI. It reduces telecoms bills by using the internet as a voice system and streamlining all of your communications into one bill, meaning you are not paying for separate services from different carriers. Furthermore, unified communications services enhance the communication at every stage of the purchase cycle, improving quality in the user journey and offering loyalty to the customer to increase sales and profits. It leverages customer satisfaction by offering virtual and physical journeys combined with great online shopping across tablets, mobiles and laptops. The best retail strategies will be those that use technology and communications solutions to deliver value at every customer touch point, converging the physical and digital aspects of all sales. Unified communications can integrate with existing telephone systems, or replace them entirely with a Voice over Internet Protocol (VoIP) solution. This helps reduce costs and resources, improve customer service and incentivise staff. It also makes businesses more competitive by giving them a bigger and better platform for communication. To find out more about unified communications in retail, contact Elite Telecom on

22 Head Office 33 Cornhill London EC3V 3ND Dawson House Matrix Business Park Chorley PR

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