You know you’re onto something when you outline your vision for a whole new retailing experience and 20 minutes later the country’s chief technology officer tells a crowd he wants to use portions of it to improve government services.
That’s what happened after Gilbert Fiorentino, chief executive of Systemax’s Technology Products Group, which includes CompUSA, TigerDirect, Circuit City and several other businesses, gave a presentation on his Retail 2.0 strategy during the recent CEA Line Shows.
In a nutshell, the Retail 2.0 concept is about bringing the e-commerce tools and innovations Fiorentino implemented while heading up TigerDirect.com to CompUSA’s brick-and-mortar stores.
As part of his presentation, Fiorentino said CompUSA’s first Retail 2.0 store saw a 20-percent improvement in its conversion rate. It’s still too early to say how successful Retail 2.0 will be in increasing CompUSA’s sales and profits, but Aneesh Chopra, the country’s CTO and director for technology for the White House Office of Science and Technology Policy, and others liked what they heard.
“It’s about bringing these concepts of Retail 2.0 into government services and operations,” Chopra said during his keynote speech. “Imagine if we had the same conversion rates for someone who enters one of our employment centers…and to do so in an environment where we’re doing so cheaper and more effectively than we would have. This is not about adding more costs to the system, it’s about finding innovative ways of providing services.”
Besides the technology aspects of Retail 2.0 (so far, five CompUSA stores have been fully converted, with the remaining 20 U.S. stores scheduled for the third and fourth quarter), all the converted stores undergo complete redesigns, from lighting to product placement to making the repair counters visible to the public. The Technology Products Group has opened 11 CompUSA stores in the last year (with two more scheduled to open this month) and has re-opened Circuit City’s Web site.
Last year, revenue for Systemax’s Technology Group grew 14 percent to $1.9 million, according to the company, while TigerDirect.com, CompUSA.com, and now CircuitCity.com, rank among the top trafficked computer-related e-commerce sites.
Retail 2.0, however, will be the piece that’s most closely watched in the industry, mainly because it includes elements that other retailers, no matter their size, can borrow. “Clearly, it makes sense,” said Steve Baker, vice president of industry analysis at NPD. “We’re all struggling to find a new in-store experience that integrates the best parts of Web and the best parts of what people want to get out of a retail store environment. Everyone will eventually move to that type of environment.”
Fiorentino began to formulate Retail 2.0 shortly after Systemax bought CompUSA early last year. As Fiorentino visited the stores, he noticed the nearly 200 screens—TVs, PC monitors, notebooks—in each did little more than play clips of “The Lion King.” Many sales people were uninformed about the latest technologies. When they needed product, pricing or inventory information, they had to use a computer at the front of the store.
To improve the experience, Fiorentino connected all of the screens to the Internet for access to product info, promotions, customer reviews, videos and anything else that could inform customers and help close sales. Sales people benefited because they could easily find the answers for almost all customer questions. The stores also have bar-code scanners and configurators to help customers find compatible products, which can lead to more add-on sales.
“We are seeing customers become more loyal to us,” Fiorentino said. “Over time, we are seeing our traffic, [conversion rates and sales] increase. We are seeing the result of giving the customer a different experience.”
CompUSA still has to overcome several challenges, Baker and others said. Some of those include improving a tarnished brand name and adding more brick-and-mortar experience to a leadership team entrenched in e-commerce. Fiorentino has shown his group is working on those. Meanwhile, the industry is watching and waiting for its next step.
“Too much of the retail experience today is passive. There’s no reason why more can’t combine the strategies of the Internet with traditional retailing to create a more exciting experience,” said the CEA’s Gary Shapiro. “When was the last time you heard someone talk about taking brick-and-mortar retailing to the next level. His optimism is refreshing.” DS
Source: Dealerscope
