CHRIS MCLAUGHLIN: Good morning, and thanks
for joining this presentation on optimizing your retail business
with Chrome.
I'm Chris McLaughlin Strategy and Solutions Manager
for Chrome and Google Cloud.
And over the past couple of years,
we've spoken to many retail CEOs and IT business decision makers
to get an understanding of the most critical business
and technology problems they're facing.
And today I'd like to talk about what
we're seeing in the market in terms of how retailers are
confronting those challenges and offer our point of view
on what it takes to be successful.
I want to focus in particular on the role of the store
and how retailers are using technology to empower employees
and optimize the customer experience.
I'll talk about how Chrome stands apart in its ability
to meet these goals, while also optimizing IT
efficiency, which is an enormous challenge with traditional IT.
So to start, let's look at what's
happening in this industry that is driving technology buying
behavior.
Over the past five years, the percentage
of retail transactions influenced
by some digital interaction has multiplied by 10x.
That means before someone makes a purchase,
they've seen a marketing email or checked
out a product on your website or done
a bit of competitive research.
Now, what's interesting here is that the vast, vast majority
of shopping is still happening in the store.
So that means that the stores are really
still the key asset that most traditional retailers have.
It's the asset that separates them
from Amazon and other digital-first players.
Now, if we look at what's been happening with that asset,
the rise of digital has impacted it tremendously.
Sales at the nation's department stores
averaged $165 a square foot last year,
which is a 24% drop since 2006.
And over the same period, the stores
reduced their physical footprint by 7% in aggregate.
Shoppers have changed their behavior.
They're less loyal and more informed.
They have more options.
And if you project the economics of this trend forward,
it really represents an existential threat
to traditional retailers.
They need to fix the in-store experience
or be the latest casualty on the pages of "The Wall Street
Journal."
Now when top retail leaders were surveyed last year,
there were four opportunities that
emerged in terms of how to fix this in-store experience.
And these opportunities really clustered around two areas--
optimizing employee effectiveness and customer
experience.
So we're talking about things like educating and empowering
our in-store employees using technology and giving them
the tools to give more personalized attention.
On the customer side of things, this
is adding self-service customer-facing
functionalities, like kiosks, and just overall focusing
on a more convenient customer experience.
And these are problems chiefly faced by the store or store
operations org typically.
Now, if we double click into that first part, Employee
Effectiveness, a big component of this challenge
is really just addressing operational challenges.
A lot of large retailers have a distributed network of stores
that need to keep up with daily or even sometimes
hourly updates and marketing campaigns and promotions.
And on top of this, you have a constantly rotating workforce
that, in some cases, is impacted by seasonality.
So you need fast and efficient methods
to get these people trained and up to speed.
And these were the top operational challenges
for retailers in a recent study.
So off the back of that challenge,
the data shows that doing some level of training
for store associates is really critical
to their effectiveness.
The more knowledgeable a store associate
is, the more sales revenue they generate.
And if we think about the stats that we
saw on per-square-foot productivity for stores,
this is really critical in a time
when store productivity is dropping.
So let's talk about the customer experience side of this.
Part of what's adding to the urgency of having
a well-informed workforce is the fact
that customers are more well-informed
and they're less patient.
Expectations are much higher when
you have the world's information at your fingertips.
Almost half of in-store shoppers search for information
while they're actually in-store using their smartphones.
These people are comparison shopping.
They're looking for recommendations
and related products.
And perhaps even more shockingly, 90% of customers
leave the store when they can't find the right person
or the right information.
And retailers really have yet to adjust to this.
So in order for the store organization
to make these adjustments, in order for them
to enable employees with technology
and create a better experience for customers,
this typically involves adding more complexity
from an IT perspective--
adding multiple device types and patching legacy infrastructure.
Effectively what we're doing is we're
fixing a problem faced by the store or store operations
organization and creating a problem for the IT
organization.
And when we look at how this affects IT,
the number three and four budget items for IT
are already device management and device deployment.
And when you look at these together,
they're by far the biggest single item.
And aside from budget items, when you step back and ask IT
leaders what their key concerns are, what's keeping them up
at night, device manageability and dealing
with shrinking budgets are near the top of the list.
So really what this boils down to is that with traditional IT,
retailers are locked in a trade-off.
You can't improve the in-store experience without,
to some extent, hurting IT efficiency.
And this is really where Chrome truly
stands alone in its flexibility and efficiency.
And here's why.
One flexible Chrome device does the job of multiple devices,
allowing a store organization to optimize employee effectiveness
and customer experience, while actually eliminating
cost and management complexity for IT
instead of doing the opposite.
And to make this a little bit more concrete,
let's look at a day in the life of a couple
of different devices in a retail store
and see how they can seamlessly pivot between different jobs
and users.
And we'll start at the top here with a sleek, convertible
Chromebook.
Now, let's say your store associates and managers show up
at the store at 8:00 or 9:00 AM.
And you start off with that device
being in the hands of a store associate.
Perhaps they're checking their pay stubs.
Perhaps they're doing some training.
Perhaps they're reading a communication
from headquarters saying, these are the promotions and products
that you should focus on today.
Now, that store associate can log out, hand that device
over to their manager.
And when the manager logs in, they
see a completely different suite of applications
accessible to them.
That manager can look at a store performance dashboard.
That manager can get access to an application that allows them
to write performance reviews.
And that's all manageable through cloud profiles
through Chrome OS.
Now, let's say 9 o'clock, 10 o'clock rolls around.
The store opens.
That same device can be flipped into tablet mode
and taken out on the floor by the store associate
in an assistant selling motion to help customers
find the products that they're looking for,
perhaps to access their profiles,
and convert some sales that had been left behind
in a digital shopping cart.
Now, let's say on this day your store is running a promotion
around a private label credit card,
or perhaps you're trying to incentivize your customers
to sign up for you loyalty program.
So you're offering a discount.
And you need a way to get all these customers to sign up.
So you could take half of the devices
that you would have normally had in the back room
and set them up in kiosk mode or in public sessions mode.
So they can be out on the floor with customers,
helping them sign up for these programs.
And you can be confident that their private, personal
information is being protected.
Because when these devices are in public sessions mode
or when they're in kiosk mode, the session
is completely ephemeral.
None of that data is being stored at the device level
or at the user profile level because there
is no user profile.
Now, if we step back and look at these different use cases,
it would have taken three or even four, perhaps,
traditional IT devices to accomplish the same activities
that was done by really one device throughout the course
of the day.
And you could apply this same flexible paradigm
to a device that's out on the floor in a digital signage,
a presentation at the beginning of the day.
Let's say that that is an all-in-one touch
screen, Chrome-based, or perhaps a Chromebox hooked up
to a big display.
When a customer comes up and interacts with that device,
it becomes an interactive kiosk.
And let's say you have a big square footage store.
You don't want your employees to have
to go all the way to the back room
to help customers find inventory or clock in, clock out.
You can have that device be in public session.
So that an employee can come over, access an application,
sign on with their credentials, and get the information
and get access to the applications they need.
So same exact paradigms here--
one device was able to do the job of multiple devices.
And it freed up your store associates
to do what it is you want them to do,
which is provide great service to your customers.
So what's the core value prop of these flexible devices?
Again, it really boils down to these three components--
IT efficiency.
Because one device can do the job of multiple devices,
that means a smaller device footprint
with higher utilization.
And that leads to lower capital expense and fewer
devices to manage.
And because this is Chrome, it also
means drastically simplified management for the devices
that are deployed.
And really, these devices get out of your way
and allow IT to focus on more strategic initiatives
to drive your business which is increasingly the charter of IT.
Employee effectiveness-- we've heard from retailers
that employees are pulled away from customers when they have
to go to the back room and do a product look up or make
a schedule change.
We've also heard that they're encumbered by this expanding
tool belt of devices for these different specific tasks
they need to perform.
And with flexible Chrome devices, whatever
device is nearest your employee, whether it's
one of those convertible devices or a laptop in the back room
or perhaps a kiosk up in the front,
that device becomes the device they need.
And that frees them up to focus their attention on customers.
And I'll add here that we're seeing more and more
retailers move to a model where you have
a flexible bank of devices, multipurpose devices, that
can do any of these things.
And these devices, of course, have very high utilization,
as opposed to having rigid, fixed devices that
are only applicable to a set number of use
cases that only get used part of the time.
Finally, customer experience-- so Chrome allows retailers
to meet and even exceed the expectations of digitally
connected customers.
Signage can convert to self-service kiosks.
And when a customer needs additional assistance,
that device can seamlessly transition
into an assisted selling mode, right?
And that really delivers a layer of value beyond what
e-commerce can provide.
And that's really a critical component of retailers
surviving digital disruption.
You can't go out-Amazon Amazon.
You need to deliver value beyond what pure online players can
provide.
And that must be delivered through
a superior in-store experience.
So if we take a step back and we look
at how is it that Chrome can enable retail employee
effectiveness and customer experience while
improving IT efficiency?
It's really because no other platform
has these core features.
Start with security.
Chrome is secure out of the box down to the hardware layer.
All of your data is encrypted.
Every application is sandboxed, and security updates
happen automatically in the background.
So there's really no need for anti-virus software.
You can be confident that switching between users
and entering sensitive information,
knowing that your data is safe.
Chrome is fast.
It's fast out of the box.
And it's faster over time as the OS is continually optimized.
With traditional PCs, shutting down or logging out
between users, that can be an incredibly slow and painful
experience.
Chrome devices boot in less than 10 seconds
because there's no legacy bloatware bogging
the system down.
And we talked about share-ability.
Chrome is the absolute best shared-device platform
because of cloud-based profile management.
Any Chrome device becomes your Chrome device when you log in.
Additionally, Chrome offers public sessions in kiosk mode
so that anyone can securely access the web or a lockdown
application of your choice.
And finally, Chrome is simple to use.
When one user logs out and another logs in,
all their data and settings and applications are there.
And it's also incredibly simple to administer
because of the Chrome Management Console.
So the Chrome Management Console,
which is also referred to as Chrome Device Management, CDM,
it's a tool that allows IT professionals
to quickly and easily apply policies
to their fleet of devices.
It's web-based.
It can be accessed from any browser.
And it really makes management easy
because you can simply create and apply policies
at the device level, at the user level, both individual
and groups.
And these can be temporary, or they can be permanent.
And if there are any issues that need troubleshooting,
devices can be remotely accessed.
And it also provides health system monitoring per device.
So really, this makes OS updates management a stress-free task.
It reduces dedicated resources and time.
Updates can be done on a schedule
over the course of days or weeks to preserve network bandwidth
and reduce user impact.
And we're increasingly hearing that.
As more and more connected devices go into stores,
this is another balancing act that IT is confronted with.
And you can speak with your Chrome sales rep
to get more information on the specific policies
that you can apply to your fleet of devices.
But the last thing I'll say here is that the Chrome device
management is really what sets apart a Chrome device purchased
for enterprise use from one that's
purchased for personal use.
The first step of Chrome management
is to enroll your Chromebook into what's
called enterprise enrollment.
And this is a very, very simple process,
where it's as easy as a simple keystroke and signing into,
which essentially connects your device
to that web-based Management Console.
Once configured to the policies associated with your user,
in this case, your retail sales associate,
these devices are ready for use.
And then one other thing I'll say here
is a lot of times retail customers are
thinking about cap ex when they move to Chrome.
They think about how inexpensive the devices are.
What they realize over time is it's actually
op ex that is the biggest savings.
It's being able to roll out devices to a different store
incredibly quickly and easily.
It's being able to replace devices and provision them
with a couple of keystrokes instead of doing
a series of truck rolls.
And finally, Chrome is really designed
to play well with others.
And these devices work great with your existing
infrastructure.
We know that you're not deploying
into a complete blank slate store ecosystem.
So we've made sure that existing infrastructure,
such as identity, networking, certificates, expand VPN
support, virtualization management,
file storage and printing, all of these things
work very well with Chrome.
And one additional thing to note here
is that we see a good number of retailers virtualizing
certain applications using Citrix and VMware as they're
on this migration path to the cloud,
with the eventual goal of moving all of their applications
to the cloud.
Chrome really acts as a bridge to the cloud future
as you're on that journey, which we're
seeing being a big differentiator for retailers
in this era of cloud disruption.
So that wraps it up for me.
Thanks again for joining today.
Please feel free to drop your questions in the comments
below.
And a Googler will respond soon.
Thank you very much.