A year later, retailers are reporting positive results from iBeacon campaigns. There are, however, still challenges from the caveats associated with  iBeacons.

Specifically, customers must be iPhone users. They must download the retailers’ app. They must enable Wifi on their phone and opt-in to receive notifications. Many consumers are not willing to opt-in because they have privacy concerns about retailers collecting their data. Physical Cookie gives retailers and their customers the benefits of iBeacons without having to meet all of these requirements.

What is Physical Cookie?

Physical Cookie is a RFID-tag within a piece of plastic, usually on a key-fob,  which retailers can give to their customers as they shop. The customer puts Physical Cookie in their pocket and then has to take no additional steps. Electric readers are then placed around the retail store. The Physical Cookie key-fob collects data in real-time in the same way cookies on websites do (hence the name). Digital screens within the store, show customers advertisements based on their behavior. Customers do not sign up or register, so there are no privacy concerns involved. Physical Cookie has operated in the Citycenter shopping mall in Helsinki, as part of a trial since Fall 2014.

Physical Cookie is easier for the consumer to use than iBeacons. Unlike the Bluetooth technology used for iBeacons, Physical Cookie is always on. Instead of pinging a user’s phone, the actual retail environment reacts to the consumers behavior, which feels much less spammy.

The Physical Cookie Customer Loyalty Program

In the Citycenter trial, a customer loyalty program called VIP-key was launched. The VIP-keys were given to 14,000 randomly selected customers who were then automatically part of a loyalty program, without ever having to opt-in, register, or sign up for anything. The trial was in a shopping center but Physical Cookie has said this can work for both retail chains and for brands working within big-box retailers.

While this trial was conducted using Physical Cookies in a key-fob format, the company said in the future this does not necessarily have to be the case. The key-fob format was selected with the thought process that customers enter the shopping center with their wallet, mobile phone, and keys with them. The average customers wallet is already full of loyalty cards, and mobile phones would require opt-in. The key chain was chosen instead because it does not already have any smart device on it.



Results:

•     The VIP-key cost the equivalent of about two cents in US Dollars.
•     15% of the VIP-keys were active.
•     They showed a 14.5% increase in activity between floors.
•     There a was a 21.7% increase in time spent in the shopping center.

For more information on enhancing your customers’ retail experience, please visit our About page.

Photo Credit: Physical Cookie

David McCracken
President
Livewire Digital
 

Is it just me, or is virtual reality (VR) popping up everywhere? Whether you’re chowing down on pizza or waiting at a bus terminal, interactive VR technology is growing every day. Now, we’re seeing the first smart retail store using this technology.

You might think the Rebecca Minkoff flagship retail store would want the incredible technology it created with partner eBay to be the focal point of the retail space. But it’s precisely the opposite — they made it as subtle as possible.

Reflecting the Future

High-tech touch screen mirrors bring the online world into the physical retail space. At first glance, they look like regular mirrors, until shoppers tap to transform them into touch screen, virtual reality havens.

Shoppers select the pieces and sizes they want to try on and a sales associate will bring the items directly to a changing room. Shoppers receive a text message when their room is ready — hello, omni-channel networks!

One Step Further

The smart changing room takes it even further to enhance the interactive shopping experience. RFID technology allows the self-service software to recognize each item within the room. With one tap on the touch screen mirrors, shoppers can request different sizes, place items into virtual shopping carts, and purchase.

The software also attaches each item tried on and purchased to a shopper’s account. This allows it to make intelligent retail recommendations based on the customer’s taste in the future, further customizing the experience.

Touch Matters

The smart store understands that VR can’t replace the need to physically experience something. We’re seeing this with larger items too, like Audi’s virtual reality car showroom. For as amazing as this interactive technology is, Audi also incorporates samples of interior and exterior finishes for customers to touch.

Having physical samples is important for both large-item retailers and stores with mass customization options. A shoe store, for example, could have one sample pair of shoes with virtual images and physical swatches of all the different materials the style comes in.

Previously, we’ve always looked at an online store as an extension of the physical store, but the smart store flips this idea on its head. eBay views the physical items in the smart store as a manifestation of the online experience. Pretty crazy, right?

What do you think — would you want this technology in your retail experience? Or is this too much, too soon?

By Reflect Systems

Jessica Glynn
Reality Interactive

Fitting rooms can be one of the most dreaded parts of a shopping trip for the customer. For the retailer it is one of the most important. So how can brands enhance the experience for shoppers? One solution we see popping up is digital mirrors.

According to “Why We Buy” by Paco Underhill, shoppers are twice as likely to buy if they use a dressing room. Dressing room enhancements should be a top priority for retail stores as they make enhancements coming out of the recession. Digital mirrors are just one of the ways retailers can do this. Digital mirrors create an interactive experience for customers. Luxury brands are already testing digital mirrors in their stores.

Neiman Marcus

The MemoMi Memory Mirror is a digital mirror currently being tested in Neiman Marcus department stores. MemoMi allows customers to instantly change the color or the pattern of the outfit they have tried on. They can also try on additional items to complete their outfit virtually using the mirror. The mirror takes 360-degree video, allowing customers to see themselves from every angle. Customers who are shopping alone but would like a second opinion from a friend are able to share a full body still via email or social media. The mirror is controlled by the user either through gestures or through a mobile app.

Neiman Marcus employees have access to the sales associate interface which lets them send recommendations directly to customers from the mirror. Neiman Marcus is the first retailer to use this product, but MemoMi is working with other large retail brands.

Nordstrom

Last month Nordstrom added connected mirrors to their Seattle and San Jose locations. The mirrors are located in the fitting rooms and appear to be regular mirrors. However, customers can use the bar code scanner to can the tags of the clothing they bring into the dressing room. The mirror then displays item reviews, and shows what other colors and sizes of the item are in stock. It also shows additional related product recommendations, such as complimentary accessories or shoes.

The customer can use the mirror to request the suggested items be delivered to the dressing room by an associate. The sales associates are alerted via tablets. They can respond to the customers to let them know they are on their way. This message appears right on the mirror.

Rebecca Minkoff

Rebecca Minkoff’s Magic Mirrors in her interactive store, are worth a mention. The touch screens allow customers to change their lighting settings, select different colors or sizes, and to add the items into their online shopping basket.

Final Thoughts

The digital mirrors in these stores aren’t just a cool technology add-on. They all serve a purpose or solve a retail problem. In Neiman Marcus, the sharing feature helps customers who need advice from a friend before they are comfortable making a purchase. In Nordstrom they are used as a communications tool so that sales associates don’t have to stick by the dressing room, but remain accessible to the customer. In Rebecca Minkoff, the lighting settings helps customers who need to know how the outfit will look in real life. The digital mirror in each store offers it’s own unique experience tailored to the brand.

Ron Bowers (bio)
SVP, Business Development
Frank Mayer & Associates

Millennials controlling 70% of the spending power in the U.S. creates vast uncertainty amongst retailers; but with the strongest economy in years, optimism prevails as we begin 2015.

For many retailers, the Millennial consumer is an enigma: they are more suspicious of who to trust and yet, more likely to be influenced by apps and social media than any other generation. Only 19% of Millennials (versus 40% of Baby Boomers) say that, “generally speaking, most people can be trusted” (PewResearch). However, in order to make buying decisions, consumers look to a retailer’s online presence and social influence before considering a purchase.

This generation’s spending habits are moved by its self-paradox. Millennials are self-focused and at the center of their own global communications. It is vital for them to have a positive self-image while finding a sense of belonging when purchasing consumer goods. They desire self-preservation and a personal connection to a product or service.

So, what does this mean for retailers?

The heightened competition amongst store fronts and e-commerce will increase. Currently, roughly ¾ of consumers claim to showroom (Retail Future Trends 2015) or rather compare brands in order to receive the lowest price, best quality and/or widest selection of merchandise when shopping—many times without ever stepping foot in a store. This creates less in-store traffic and increased wavering among dominant brands. So, retailers must draw their target markets in through a strong online presence while providing feelings of exclusivity and individuality for a reasonable price.

To draw consumers into their store fronts, many retailers have begun incorporating various electronic capabilities; this includes the use of tablets, interactive kiosks and beacon technology. Tablets and interactive kiosks extend inventory past what can be offered in stores. The use of tablets has expanded into the retail environment to replace paper signage with digital advertising while providing sales associates quick and easy access to inventory, online ordering, product information and faster checkouts. Interactive Kiosks act in a similar way – allowing for added promotions through electronic ads specified to a department and the time of day. They also enable retailers to connect with consumers by blending in-store merchandising and virtual product displays. Beacon technology, on the other hand, provides the retailer with direct communication to the consumer and has the potential to completely change the in-store shopping experience by creating personalized and targeted marketing in real time. A beacon uses a Bluetooth signal to send special offers to nearby smartphones equipped with the store’s app. App users will receive targeted messages and deals while moving throughout the store.

Let’s say you’re shopping at a retailer equipped with these devices and have previously downloaded the store’s app. As you walk through the doors, your phone buzzes with an exclusive storewide discount. You wander into the home goods department and begin looking for a new blender when your phone alerts you of a sale on KitchenAid products. You can’t pass up the sale price and find the specified blender but are not happy with the color selections available in store. Scanning the product’s barcode at a nearby kiosk, you find additional product specifications, customer reviews and available colors. The color you’d like is available only online. No need to worry. Once your shopping is complete, you bring all of your selections to the nearby associate. They ring you up on their iPad and include the desired blender and ship it directly to your home.

As many stores have already begun implementing this technology, this experience won’t be a thing of the future for long. In fact, Macy’s has added 4,000 iBeacon devices nation-wide and provides coupons via this technology to customers who have downloaded ShopKick. They have also begun testing smart dressing rooms and an image search app. The smart dressing rooms have a wall-mounted tablet that allows customers to view various sizes and colors of a product while the image search app allows customers to snap a photo of an outfit or clothing item to find similar items on sale.

With these exciting advancements in technology, 2015 will be a year to watch how the in-store experience changes to accommodate the self-regarding Millennial. While it is clear that tech-enhanced stores offer an enriched shopper experience with benefits like improved productivity, inventory counts and use of store square footage, we have yet to determine exactly how to incorporate this technology so that it is most useful to each individual without overwhelming them.
 

David Anzia
Frank Mayer and Associates, Inc.

Once again this holiday season has only 26 days between Black Friday and Christmas, last year had 25 days. Shoppers and retailers are preparing for the biggest shopping season of the year. This less than 4 week window has retailers scrambling to grab and retain the consumer’s attention (and pocketbook). They are doing this in a variety of ways.

Macy’s was the first retailer to announce that they would again be open on Thanksgiving Day. The doors at Macy’s will open at 6 PM on Thanksgiving Day, two hours earlier than last year’s opening time. The department store chain stated this move was “in response to the significant, sustained customer interest in last year’s opening day on Thanksgiving, both at Macy’s and other retailers.” The Walnut Room, the famous restaurant on the 7th floor of Macy’s State Street store in Chicago, will be open for the first time serving Thanksgiving dinner, also at 6 PM. Maybe this is a start of a new tradition, Thanksgiving dinner followed by shopping? Target, Kohl’s, Sears, and J.C. Penney, along with other retailers have since posted they will also be open on Thanksgiving.

Some consumers state that greed has taken over this holiday; however, others have pointed out that the crowds these stores are receiving justify them being open. Jerry O'Brien, director of the Kohl's Department Stores Center for Retailing Excellence, stated that for some people shopping on Thanksgiving Day is no different than others playing football or going to a movie. Conversely, some retailers have opted to remain closed and allow their employees to celebrate the holiday with their families. Costco, Barnes and Noble, and Nordstrom’s are among those retailers remaining closed on the holiday.

Despite the gain in popularity of shopping on Thanksgiving Day, Black Friday still remains the king. According to the National Retail Federation, 2013 store traffic on Black Friday was 92 million people compared to 45 million shoppers on Thanksgiving Day. The high presence of loyalty programs, and the data collected when enrolled in these programs, allow for retailers to pinpoint certain Black Friday offers to a shopper. With offers made via direct mail, social media and email marketing, these campaigns allow the consumer to be well prepared when they arrive at the store.

Toy retailer Toys ‘R Us recently announced a revamped loyalty program for the 2014 holiday season. They have good reason to focus on their 18 million loyalty cardholders, they account for 70% of their US sales. Recently announced, in-store and online layaway programs are now available. As an added incentive to shop even earlier, Toys ‘R Us has offered cardholders 10% off their entire purchase every Saturday during the month of November. This is in addition to loyalty members earning $5 in “R” Us Rewards for every $125 spent. When the “R” Us credit card is used for these purchases, the earnings double to $10. For holiday shoppers with children on their lists these rewards will add up quickly.

Macy’s and Toys ‘R Us have also upgraded their omni-channel features prior to the upcoming holidays. Both retailers now offer Apple Pay. In select markets, Macy’s has implemented Smart Fitting Rooms, fitting rooms with wall-mounted tablets which allow associates and customers to scan merchandise items and see other sizes or colors available. Also, in select markets, Macy’s is offering same day delivery. Consumers can purchase merchandise on the company’s website to be delivered to the store the same day. Toys ‘R Us is offering a similar service. Toys and games ordered online can be picked up in store in less than an hour.open sign

Whether you are working off your second piece of pumpkin pie by racing to the stores Thanksgiving evening, or waking up at the crack of dawn the following morning, rest assured that the stores are ready for you and a few thousand of your friends.

By David McCracken
President
Livewire Digital

I don’t know about you, but it seems every time I’ve been in a Starbucks over the last few weeks, it seems like everyone is scanning their smartphone instead of paying with cash. The retail world is moving so quickly towards convenient technology solutions like these, and it’s showing no sign of slowing down. Craig W. Smith, founder of the New Channels Department at London retail giant Marks & Spencer, gave his predictions for the five pretty incredible in-store retail technology trends we will see in the next year. (Original source: http://retail-innovation.com/)

 1. First payment by smart watch

Smart watch payment…because reaching into your pocket or purse is too much effort (not!) Smith predicts we will move beyond paying with cash, credit cards, or even smartphones, to paying with your wrist wear. The smart watch will establish itself as a credible payment instrument.

2. First Google Glass in-store retail applications

Google Glass applications are popping up in the medical and hospitality industries, and retail will soon join them. Retailers will offer applications like customer recognition, personalized concierge services and pick, pack & dispatch.

3. Personalized targeting with beacon technology

Smith says retailers will start to engage customers with location-based personalized targeting. When customers enter a certain geographic range, retailers can send targeted promotions straight to their mobile phones.

 4. Pay and go using your mobile

Have you been in a grocery store that allows you to scan your items as you put them into your cart? Picture the same thing…but with your smartphone. In the next 12 months, retail stores will trial software that allows customers to scan items as they shop and pay on their phones before exiting the store.

 5. Payment on shop floor will move from trial to full-scale rollout

Some retailers are currently taking payments on devices like iPads, but mobile payment is definitely not without its challenges. Over the next 12 months, Smith predicts that hardware and solution providers will fix these problems, which will lead to more and more retailers adopting them. Mobile payments will move from proof-of-concept ideas into fully-fledged rollouts.

In which of these trends do you see the most potential? What other tech predictions do you have for the next 12 months?

Ryan Lepianka
Creative Director
Frank Mayer and Associates, Inc.

There is a fascination with studying Millennials since they are a cradle-to-grave digital generation and the heirs to vast purchasing power as their Baby Boomer parents pass the consumer torch. There are some noteworthy contrasts, and marketers should be asking what they need to do to change their stores and products.  

Because Millennials have grown up with a variety of mobile devices like smartphones, tablets and laptops, they are considered by some researchers to be more adept at task switching than older generations. Nielsen’s 2012 State of the Media Report identifies characteristics like multi-sensory processing power and response to intense color palettes when comparing Millennials to their Boomer parents.

In planning for marketing to Millennials at retail, younger people may respond positively to more vibrant graphics and interactivity, but there is still a commonality of experience that requires in-store merchandising not to lose sight of the fundamentals.

In the end, the human animal doesn’t change much. We are all looking for a path to an ideal, especially when we’re young. On one level or another we are often searching for a way to become what we perceive to be ‘more than we currently are’.

For example, I’m going to purchase the pair of headphones that costs $100 more than the next pair if it has been effectively communicated to me, that if I purchase THIS product, in some way, I am receiving some of that famous rapper’s DNA. In making this purchase, I am now ‘more’. This purchase is a step on the journey to actualizing my ideal in a real, tactile way.

As designers, we’re most successful when we design a retail piece that sets the stage for that kind of transference. We utilize the most appropriate technology available to extend that offer in a way that breaks through the noise, to make that offer to ‘become’ heard and understood.

I’m curious what you think. Perhaps we’re turning up certain tactical elements of marketing and merchandising to appeal to a younger, purely digital generation while acknowledging some universal common aspirations.

by Joe Holley
Frank Mayer & Associates, Inc.

Millennials are as large a demographic group as their Baby Boomer parents and their presence is already felt at retail. Their power to purchase and influence is on the rise.

Despite having lived through the Great Recession and carrying an average of $25,000 in student loan debt, Millennials’ $600 billion of spending is projected to increase to $1.4 trillion by 2020. The U.S. Chamber of Commerce is naturally interested in this economically powerful group and concludes they will “completely upend many of the established businesses, methods, and processes that have defined the U.S. Public and private sectors for decades.”

This generation is moving at a pace that legacy retailers are hard-pressed to keep up with. The physical store is still the focus of the vast majority of sales, but there is a plodding but undeniable “any channel” transformation being influenced by Millennials’ desire for shopping without boundaries.

Besides renovating disparate technology platforms, what are retailers doing to court this powerful, ascending generation? Their responses include changes to format, visual merchandising, product displays, digital signage, interactive shopping experiences, location-based mobile communication and targeted product offerings.

Take for example, Macy’s, which is incorporating many of these strategies. They’ve developed apps and installed Wi-Fi. They’re using Shopkick and testing iBeacon for location-based in-store offers. They’re integrating interactive technology into numerous departments to satisfy expectations for immediacy, access and engagement with fresh content. Localized product assortments catering to specific Millennial sub-segments are a part of their merchandising strategy. So committed to this target is Macy’s CEO Terry Lundgren that he has breakfast monthly with a group of Millennial employees to get their feedback.

There are numerous other examples of retail transformation in our latest whitepaper Succeeding with Millennials as well as a list of implications for marketing to Millennials that emerge from vast amounts of research being conducted on them:

• Embrace the multi-channel mindset by catering to expectations for relevancy and accessibility that are rooted in online experience.
• Create store environments that merge physical and digital elements.
• Create environments that are vibrant and dynamic.
• Balance deal-oriented incentives with exceptional experiences in order to win hearts and pocketbooks.
• Develop marketing and merchandising plans that incorporate multi-directional engagement.
• Incorporate opportunities for validating purchase decisions through peers and ratings/reviews.

I’m sure you have others to add.

 

David Anzia
Senior Vice President - Sales
Frank Mayer and Associates, Inc.
 

Tablets have been touted as “reinventing” and “revolutionizing” retail. Retailers and consumer-facing businesses have been testing the use of tablets to gain operational and marketing advantages, and they like the results. Here are some ways retailers are getting big impact out of small screens.

Brand Collaboration

In some cases brands have joined forces with key retailers to test tablet kiosks.
Target is reported to have tested iPads loaded with product content from Johnson and Johnson’s BabyCenter parenting website in baby departments of 10 Illinois stores. The test initiated in 2013 also included trained staff members with the aim of providing a more specialty store type of experience for new parents.

Engagement Tools

Tablets can also improve the process of trying on clothes either by providing convenient access to inventory for additional size, style and color options or virtual mannequin software that lets shoppers try a look digitally. They can also be tools for social feedback.

The flagship store of London retailer Karl Lagerfeld has installed iPads in dressing rooms to allow shoppers to take selfie photos with their clothing finds to send to friends.

Product Creation Stations

Tablet touchscreens provide a functionality that allows shoppers to try out design options and get creative. A number of athletic shoe brands like Puma and Nike have incorporated tablet customization into their retail strategies. To add impact to the experience a digital signage connection allows customers to show their creations to a wider in-store audience.

Signage

Tablets can replace paper signage. In fast changing categories this means up-to-the-minute product information. They give retailers the ability to cater to sophisticated shoppers who want detailed product specifications for high-end purchases like electronics, creative content for categories like fashion or pairings and source of origin for food.

Kate Spade has replaced paper signs with iPads placed strategically throughout the store to display product information and relevant content. Part of that content will be user-generated images designed to increase dwell time.

POS Devices

Using tablet at restaurantRetailers who are using tablets for checkout appreciate their multi-functionality.  They can accommodate inventory checking, ordering, product information and sales associate training.

The IHL Group reports (Mobile POS: Hype to Reality, May 2013) that tablets have been most popular as POS devices with independent retailers and mall-based specialty chains. Falling into neither of those categories, Whole Foods Market plans to expand checkout locations in several of its stores by testing tablet checkout stands at fresh sandwich and coffee stations.

There’s so much more to launching a tablet program than just choosing a tablet and an enclosure. Our latest whitepaper Using Tablets to Transform Retail Experience can walk you through all of the considerations that go into planning a successful program.

By Bill Bishop
Chief Architect
BrickMeetsClicks.com

Stuart Armstrong was pushing the boundaries of using POS data at IRI to understand shopping behavior when I first met him. Today he’s pushing the boundaries of using digital screens to communicate with shoppers inside stores at ComQi.* In between, he developed multi-channel marketing strategies for the consumer goods and retail industries.

I think he has important things to say about where we’re going with the technology-enhanced shopping experience, which changes in the retail environment are most transformative, and how retailers and brands are using interactive screens to build customer relationships.

You’ve spent a long time at the intersection of retail and communications media. How would you describe where we are today?

A lot of the things we’re doing today with omni-channel, big data, technology, millions of dollars, and many hours are taking us back to the future – back to something retailers used to know how to do very well. It’s taking us back to the intimacy of customer service that retailers used to offer.

Back in the day, Sam the grocer might stand on the sidewalk beside his nice-looking produce. When Mrs. Smith walked by with little Patty, he knew what she’d bought, what she liked and disliked, and even that what flavor of penny candy her daughter preferred. It was a great customer relationship. It was personal. He knew her needs and he met her needs. And she talked with her friends about Sam the grocer, the original social media.

Then we moved to the other end of the spectrum with individual consumers. Broadcast media came on the scene, and we went through a bubble. Brands and advertisers developed a theory of reach and frequency, and they built a whole economic structure around mass media: Bombard enough people with messages and the small percentage of individuals that responds will be enough.

Today, we’re trying to get back to the level of intimacy we used to have with individual customers. We may be using technology to get there, but in the end, retail is a high-touch story, not a high-tech story.  We’re using purchase histories and data analysis to re-establish relevance and recency. The more we can relate to consumers at a specific time with relevant information, the greater share of mind we gain and the greater the opportunity to influence purchases.

Which recent developments in retail strike you as most important?

There’s been a tsunami of change in the past 5 years. I think these three are important to recognize.

1. BYOD (bring your own device). Smartphones have spread far and wide in the last 5 years, and 40% of shoppers want to use their device while they are in the store – to compare prices, to scan QR codes, to look up alternatives. It’s changed the in-store experience, and now that people can shop anytime, anyplace, retailers and brands need to be present in the digital space as well.

2. The endless aisle concept. Retailers are trying to do more with less – offer more variety, greater selection, better experiences, but with less square footage. This means smaller on-site inventory and fewer back shelves. The endless aisle enables retailers to say “Sure, we can get that for you” and deliver fast.

3. The potential for technology and data to underpin greater levels of customer service. Frequent shopper programs have mostly delivered a sea of discounts. It degrades the brand and takes away the intimacy. There’s huge potential to use technology to improve customer service.

Powerful synergies arise from these developments. Check-in, for example, is a huge opportunity that touches on at least two of them. Say you go to the big electronics store to buy a smartphone and check in by swiping your device. And say check-in triggers the ability of the sales associate to call up your purchase history. The associate will understand your needs better, and you’re going to get much better service. Using technology and data to deliver customer service like this can bring retailers closer to the kind of relationship Sam the grocer had with his customers. Using it just to push promotions doesn’t create the same kind of intimacy or trust, and the more our customers trust us, the more information they will be willing to share.

What do these changes mean for product brands?

Brands are building stronger presence in stores using the “store within a store” concept. Fashion brands have done this for years in department stores, and CPG and cosmetics brands do it in grocery and drug stores mainly with displays, but brands are branching out into other venues now.

Remember that smartphone purchase? The last time I bought a smartphone, my sales associate walked me over to the manufacturer’s display and introduced me to Sally. “Sally will show you how to use your phone,” he said, and for the next 20 minutes Sally did exactly that. Sally works for the manufacturer, and she was servicing, not selling – but because she was servicing, she was selling.  (Sometimes brands are delivering this kind of service via kiosk or screen.)

Brands used to print and send out mass mailings and figure that ½ to 1 percent of people would trip over them and buy.  Now they’re starting to target stores where they have particular opportunities to grow sales and investing larger amounts of money in those locations. 
 
You talk about the importance of screen-rich environments. What do you mean?

Screen-rich environments are playing a big part in the increasingly interactive store shopping experience.

•     “Public screens” deliver one-to-many messages. You find these on the aisle, over the aisle, or even worked into the décor as part of the millwork; they don’t have to be a screen on a stick.  
•     “Private screens” deliver one-to-one messages and are the best vehicle for customer service. These are the mobile phone screens of individual shoppers, where they can download information and receive personalized offers, support or instruction.

Some screens can do double duty. My company recently helped roll out a digital price board in the automotive service sector that doubles as a “video on demand” screen. Remember Mrs. Smith? Imagine she comes in for an oil change and notices the price difference between synthetic and regular oil and asks about it. Her sales associate might or might not know the answer, but now he or she can use the same sign to show her a 90-second video that explains the difference. Now Mrs. Smith gets the answers she needs to make a decision from a credible source. This would be a powerful tool for many areas within grocery and drug store environments such as health/pharmacy, organics and even the wine department. By the way, it's important to note, that supporting sales in this manner has dramatic effects in increasing sales and trading up the purchase.

Finally, screens can now interact with each other – which means that Mrs. Smith can download the video explaining the difference between synthetic and regular oil to take home and discuss with her husband, and not just in English. If the household is Hispanic why not furnish the information in Spanish? Another example of delivering better customer service that results in increased sales and shopper loyalty.

Which retailers are doing the best job with screen interactivity?

Burberry’s High Street store in London is one of the best. They’ve created an entirely new shopping environment. They can even create a rainstorm to inspire shoppers to buy a raincoat.

There’s a similarly great use of digital screens in the Victoria Secret Harold Square store in New York that includes a 3-story video wall and screen synchronization following the shopper up and down the escalators. (In the interest of transparency, that’s our technology.)

What do you see on the horizon?

More wearables. Google Glass is a prototype, but heads-up display will evolve and wearables will become more common. And more augmented reality, where you can place your phone over a digital or static menu item and it will tell you about calories and nutritional value. Digital signage will serve up targeted content and mobile with will deliver a lot of the information people want without having to print it on a label or a menu or a shelf tag.

*ComQi is a global leader providing a cloud-based Shopper Engagement Technology that influences consumers at the point of decision, in-store, using all digital touch-points: digital signage, mobile, video, touch, web, and social networks. ComQi’s mission is to deliver an end-to-end solution that is tailored to engage consumers by optimizing communications and marketing strategies that provide the best ROI. Learn more about them at comqi.com, follow them on Twitter and Facebook, or visit their YouTube channel.

Joe Holley
VP New Business Development
Frank Mayer & Associates

I know most readers are concerned about what’s happening tomorrow and next month and before the end of this year, but there’s a hopeful trend in retail that will bear fruit in the years to come. Companies that began as pure-play online retailers are discovering the power of having physical stores to build their brand.

In some cases plans begin with flagship stores, but for others they signal a more deliberate move into bricks and mortar. Take Warby Parker, a trendy eyewear retailer, for example. They realized a physical presence would be integral to their growth.

The business which began online four years ago now has eight locations either completed or in the works. Their website says, “Our retail spaces combine the snappy ease of online ordering with the fun and serendipity of real-life shopping (with a photo booth or two).”

Warby Parker’s statement is acknowledgement that businesses can develop a base with online shoppers, but growth in select categories requires the kind of awareness, product credibility and experience that a physical presence can achieve. The two channels work together in that customers who make their first purchase in the store may then be comfortable making future purchases online.

What can be achieved when you build a retail presence from the ground up? You can create imaginative spaces. You can have seamless experience between channels from the start. You can create an extraordinary brand experience. You can seize new opportunities.

Unique settings

In repurposing existing spaces, Warby Parker is creating unique store environments that blend the old with the new. In April 2013, Warby Parker opened its flagship store in NYC’s SOHO district. This maiden store features high display shelves, a rolling ladder, and old brass library lamps. The cool, old library vibe is juxtaposed with the most up-to-date technology.

Multi-channel without multiple barriers

Warby Parker intertwined vintage atmosphere and new technology without being bound to a multiplicity of existing systems. The installation of Wi-Fi sensors throughout the store tracks the flow of traffic, customer browsing trends, and product preferences. The customer data collected helps improve the shopping experience both in-store and online.  POS on tablets allows sales associates to move freely about to serve customers where they are.

Built-in experience

In its first foray into bricks and mortar, four-year old online cosmetics retailer Birchbox is devoting the second floor of a new Manhattan store to building community and offering things that can’t be obtained online. They will hold classes on makeup application and skin care and offer styling services. Technology will facilitate the in-store experience. Self-service touchscreens throughout the store will enable customers to input information and pull up relevant, personal product recommendations and reviews.

Space to collaborate

Long-time e-commerce stalwart 1-800 flowers, which realizes 73 percent of its business online and on the phone is adding franchise stores in more markets so it can pursue collaborative business that isn’t easy to achieve with just  an online presence. Among other things, they found they were missing out on business opportunities like weddings and events.

These kinds of retail developments make sense for those young shoppers – the kind who would use Warby Parker’s photo booth. While Millennials are more likely than their parents or grandparents to shop online, 81 percent of their dollars are still spent in stores, according to NPD Group. They still value the experience of shopping and seek entertaining and fun venues. They will use all the channels and switch among them according to their needs and desires.

This pursuit of total retail offerings is a helpful trend.
 

Joe Holley
VP New Business Development
Frank Mayer & Associates

Mizuno Golf DisplayShoppers are bringing a set of expectations and a cache of knowledge gleaned from online research through the doors of stores like never before.  New consumer behaviors have impacted especially categories like electronics, books, clothing, household goods and sporting equipment. Numerous studies of multi-channel shoppers make it clear that online research doesn‘t lead just to online purchases. There are plenty of occasions when the store has the final influence on purchase decision.

Increasingly the in-store experience will incorporate tools like touchscreens, digital signage and mobility, but ask any retailer or brand and they will say that merchandising and point-of-purchase displays where the product is the hero are integral to conveying information and making an impression. Products that are prominently and expertly displayed can be a call to action, whether that action is immediate or takes some alternate path.

So what should retailers and brands focus on to create the maximum amount of impact from a display? Here are some of the tips from the pros that are encapsulated in our latest POP guide, Traditional Merchandising in the Age of Self-Service.

Linda Hofflander, director of vertical marketing with the enterprise business division of Samsung:

People get bombarded with signage, and sometimes it’s what is unique or a little bit of a surprise that can be most effective

David Anzia, vice president of sales at Frank Mayer and Associates, Inc.:

With customers already armed with so much pre-purchase information, retailers have the ability to utilize less copy on their displays. The marketer is able to simplify their message, content copy and photos to distract the customer.

Kevin Lyons, senior vice president of e-commerce with h.h.gregg:

A customer wants to know the most important ways the product will help them, not just everything it does or can do. For example a ‘super radiant heating element’ on a stovetop means nothing to the average consumer, but ‘boils water in 60 seconds’ does! Traditional signage takes on a new role in today’s retail environment as it relates to supporting the mobile customer, those that are researching as well as comparing/reinforcing their purchases.

Dean Cole, brand support manager Mizuno, USA:

If the display can help communicate the benefits of the product and help the consumer visualize how those benefits will improve their experience, the odds of that product being chosen are improved greatly.

Ryan Lepianka, creative director at Frank Mayer and Associates, Inc.:

Having the ability to touch a product and make a connection with it can beat nearly any other way of selling, and some of the most effective displays the company has designed are those that encourage physical contact.
 

David Anzia
Frank Mayer & Associates

Consumers today face an almost unlimited array of media and merchandise to compete for their time and resources. According to a recent Nielsen Newswire, Americans’ retail trip frequency has decreased by 15 percent over the last six years, while basket size has only increased by 9 percent. This is a trend that cuts across income levels and has implications for a wide range of retailers.

With shoppers visiting stores less frequently and ever present competition, retailers have their work cut out for them to attract customers to their stores and increase their dwell time. With hyper-connected shoppers, there’s much thought and discussion about interactive in-store experiences, but a recent visit by a colleague to the flagship store of Whole Foods Market reinforced the importance of visual merchandising and store ambiance to retail experience.  

Retailers have a lot of competing demands and a whole host of touchpoints that didn’t exist a decade ago, but they can’t lose sight of the power that physical design and in-store merchandising have on customer experience. Whole Foods Market is not a current client, but as an in-store merchandising company serving a mix of retailers and brands across a variety of categories, we admire the way Whole Foods has carried out its philosophy to create store environments that are “inviting and fun, and reflect the communities they serve”.

As much as any retailer can, Whole Foods embodies the notion that stores aren’t simply places to buy things; you can buy things--even groceries—online.   Careful planning of every detail naturally occurs when company headquarters sits atop your store, as it does in the heart of Austin, and the effect is awe inducing, a retail feast for the senses.

The Austin flagship is an example of store as destination – a concept that can maintain the health of physical retail. The store itself is large, but each department is, in fact, a destination made manageable and engaging by display materials that reinforce a natural, wholesome, clean positioning and ample, friendly, sometimes whimsical, signage that reflects the Whole Foods brand.

The Austin venue is more than a market, it is a social center with outdoor dining that draws people off the street and multiple indoor food bars that invite people to linger and interact. It has the feel of a community hub.

Reflective of its location in a music-loving city where even the airport has live musicians, it is an entertainment venue that attracts people and invites them to stay. The store contains a live stage; where on a Friday afternoon musicians were setting up to usher patrons into weekend mode.

Common design elements are a necessity for all chains, but Whole Foods strives for product and visual connections that reinforce a local feel. The local ambiance is reinforced in part by a neon “Love Austin” sign hanging above merchandise that celebrates the city. In Detroit, for example, it is reflected in Motown 45-LP records that adorn the checkout lane markers. These are elements that might appeal to civic pride and spark a little allegiance in an era when it is harder to come by.

Not every retailer can be Whole Foods Market, but every retailer should be focused on the elements that ensure that physical stores are places of discovery and delight and can instill some sense of loyalty so we are enticed to get out from behind our screens, loosen our pocketbooks and experience retail with all our senses and some of our emotions.
 

By Jon Stine
Director, Internet Business Solutions Group
Retail-Consumer Products
Cisco Systems

Trust. It’s a powerful human emotion that often drives our behavior. The level of trust, or lack thereof, between a retailer and its customers can literally make or break the business. Given the importance of trust, many retailers are asking: How much do customers trust retailers? What are the benefits of increasing trust? How do retailers gather the information needed to provide the  personalized experiences many customers want, while maintaining and even building trusted relationships?

These questions are especially important given the critical juncture at which we find ourselves—the convergence of people, process, data, and things called the Internet of Everything (IoE).

To help retailers build customer trust in an increasingly digitally connected world, Cisco Consulting Services surveyed 1,174 consumers in its fourth annual Digital Shopping Behavior survey.* From a behavior perspective, shoppers are becoming more digital. In fact, eighty percent of respondents are what we call Digital Mass shoppers—people who research, browse, and purchase digitally. Within this group, Über Digitals, who almost always use a smartphone to shop, increased from 11 percent last year to 18 percent this year. Clearly, your customers are digital.

Before we discuss “how,” it is important to understand “why.” Our research showed $100 billion of IoE value was available for retailers in the United States to capture in 2013 by offering more personalized shopping experiences. If you missed your share, don’t worry. This number is expected to increase slightly in 2014. Realizing this value, however, isn’t easy.

When it comes to trust, retailers are starting from a low base. When asked, “How much would you trust these companies/institutions to protect your personal data and use it to provide something you value?” respondents ranked retailers second to last, at 31 percent—behind government agencies (37 percent), and ahead of Internet companies (18 percent).

Even so, shoppers want personalized experiences. When asked, “Which personalized experiences do you prefer?” respondents ranked promotions via touch-screen or smartphone first (Digital Mass: 46 percent; Über Digitals: 53 percent). This was followed by personalized products, personalized shopping lists, and personalized service.

So, how do we solve this dilemma between a lack of trust and the desire for personalized shopping experiences, which require the collection of personal information? For answers, let’s look at a few of the research findings.

•     Shoppers want personalized offers that are easy to use – Most people want to receive personalized offers via email at home. This suggests that shoppers — even Über Digitals — start the shopping process while they are in their home environment. The vision of in-store offers may simply not be in sync with the reality of shopper decision making and in-store behavior.
•     Shoppers are willing to share information – Both Digital Mass and Über Digital shoppers are willing to share past purchase history and basic personal information (name, age, etc.) with retailers to receive a more personalized shopping experience. Topping the list of acceptable information for retailers to use are time spent in the store, location in the store, and products you try but don’t buy.
•     Shoppers want something in return – To give personal information, however, shoppers must get something in return. By far, the top two factors that would lead shoppers to share more personal information are guaranteed percentage savings on their next purchase and specific dollar savings on their next purchase. Interestingly, a world-class privacy policy ranked third, 21 percent below the second choice for the Digital Mass, and 14 percent below the second response for Über Digitals.

Based on our experience working with many of the world’s leading retailers, there are three key takeaways and actions when it comes to building trust:

•     Shopper trust must be earned. Retailers can do this by delivering a clear data policy and making the benefits of providing personal information transparent and easy to understand.
•     IoE is already here. To capture your share of the $100 billion value at stake, develop a strategic plan that takes into account the information above.
•     Über Digitals are too important to ignore. Selling to these shoppers requires an architecture and infrastructure that can support their increasing expectations for connected, digital shopping experiences.

To gain even more insights into developing trust in an IoE world, take a look at:

    http://www.cisco.com/web/about/ac79/docs/IoE/IoE-Retail-Key-Findings.pdf
    http://www.cisco.com/web/about/ac79/docs/IoE/Digital-Shopping-Behavior.pdf
    http://www.cisco.com/web/about/ac79/docs/IoE/Digital-Customer-Infographic.jpg

*  This year’s Cisco Consulting Digital Shopping Behavior survey includes responses from 1,174 consumers who are representative of the United States broadband population by age, income, and region. It is the fourth in a series of popular “Catch ‘Em and Keep ‘Em” studies by Cisco Consulting Services.

Provided by Frank Mayer & Associates, Inc.

Retailers are both optimistic and realistic about challenges heading into 2014. Either way, they should be intent on making each touch point with the customer as meaningful as possible. Here are some of the ways our thought leaders see this imperative playing out in stores.

What role does in-store merchandising play in positioning retailers for a new and challenging year ahead?

Mike Mayer, President: Our success and that of our clients going forward will come from helping marketers face a changed environment, changing consumer and rapidly evolving technology. The biggest challenge we can help our clients meet is keeping the in-store experience vibrant and relevant in the midst of upheaval.

We create solutions that keep shoppers coming into stores, help them make sense of categories, and keep them engaging with products so that in the end they appreciate the advantages of the in-store experience and are enabled to shop the way they want to.  Sometimes it isn’t the newest, shiniest technology, and sometimes it is. Fitting the right technology to the environment and the consumer leads to the best outcome.

Are there new tools that will be put to use in the realm of interactive retailing?

Ron Bowers, Senior Vice President Business Development: I’m watching to see if 2014 will usher in a new wave of in-store communication with shoppers. Proximity marketing enabled by beacon technology gives retailers a new tool to interact with connected consumers at precise locations in stores. People in retail, entertainment, transportation and other industries are paying attention to news about Apple’s iBeacon.

I’m rooting for this technology to work because from an in-store merchandising perspective, iBeacon has the potential to increase ROI and make even non-interactive displays “smarter.” A beacon could send a prompt to engage, a purchase incentive, or information.  This solution helps address the “if you build it, will they come” question that often arises when ambitious interactive merchandising solutions are used, and it could enable something as simple as knowing when and where a display gets put up.

Retailers are the real harbingers with beacon technology. If several retailers have successful tests and roll beacons out to their stores in 2014, it will add an exciting new layer of relevance to in-store communication.

This development begs the question: Have we finally reached the point of cultivating true one-to-one relationships with important customers that Peppers and Rogers espoused in their book One to One Future a decade and a half ago?

What will 2014 bring from a display design perspective?

Ryan Lepianka, Creative Director: As online shopping options become more enticing due to cost savings and ever faster shipping, brick and mortar retailers must differentiate themselves evermore from their virtual counterparts.  One aspect that really sets physical retail apart is the presence of well-crafted, hands-on experiences. A live demo allows potential purchasers to gain a tactile knowledge of products that is impossible to attain from a jpeg and a few questionable product reviews.

Heavily branded custom demo stations – for electronics and gadgetry for example – give premium products the pop they need to stand out in a crowded retail environment. They help consumers answer questions like: Does this product have the quality build I’m looking for?  Do I trust this product?

The quality of the demo station itself helps to reinforce a premium message.  These types of displays have elevated in quality of construction and features of late, and I see a continuation of this trend. More enticing lighting, less visible fasteners and more premium-looking materials are defining the preferred brands at retail today.

What worked well at retail in 2013 that we are likely to see more of in 2014?

Joe Holley, Vice President New Business Development–Displays/Merchandisers: The “less is more” trend from retailers this past year will carry into 2014.  A growing number of retailers are focusing their efforts on a detailed consumer profile for a category and only offering products – including top sellers – that fit that profile.  Omitting some SKU’s in the lineup creates opportunities to develop point of purchase displays on a higher level.

Displays and merchandisers have more real estate available to communicate to the consumer and can present a category with more style and simplicity. The “less is more” trend also opens the door for innovative ways to showcase the product as well as provide guidance to the consumer to shop the display/merchandiser with ease at the point of sale.
 

Kisha Wilson
Marketing Manager at Slabb, Inc.

It seems that the word "interactive" is being used in various forums and mediums. But what makes interactivity so important, especially when it comes to kiosk design?

In the simplest terms, I think we can all agree that in this age of advanced technology, where everything is more accessible, faster, more responsive and ever changing that the "interactive element" is a must, in order to stay ahead or simply keep up with competitors. In addition to this, we live in a world of the informed consumer – they know what is available and what is possible and they demand it.

Just look at the technological advancements in our lifetime and the rate of change ... we have already seen five iterations of the iPad, six of the iPhone, there are over 100 tablet models – a number that continues to increase, laptops that are rivaling the thickness of paper and the technological evolution shows no signs of slowing down. This is our normal and the kiosk industry is no exception.

Kiosk interactivity gives a business one additional touch point (no pun intended) to their customers. This provides many unique opportunities for businesses, namely:

• A kiosk that enables interactivity will allow the input of customer data, providing both quantitative and qualitative information that can track buying patterns and assist in driving sales.
• Interactive kiosks reduce the amount of staff needed allowing a company to reduce training and staffing costs.
• The increased presence of interactive kiosks has encouraged the creation of customized software that can facilitate several web‐based applications, thereby reducing implementation costs.
• It is an ideal platform for a company to showcase their product while providing a modernized brand experience.
• It allows a business to differentiate itself by creating a unique, quick and efficient self‐service option for customers.
• An interactive kiosk is the perfect solution for brick and mortar retailers with an online presence to bridge any divide that may exist between the two channels. It is also an easy transition for customers who shop online to use the kiosk to purchase their products.
• And we haven't even mentioned the benefits to customers yet...
• An interactive kiosk can provide 24 hour access to products and services allowing customers to shop at their convenience.
• It gives customers a self‐service option which reduces the time that could normally be spent doing a traditional transaction; not to mention, it eliminates the need to stand in line.
• Customers get the opportunity to view products on an interactive platform that can simulate the physical attributes of the product, assisting with final purchase decisions.
• It is a source for easily accessible, updated company and product information.

By: Kisha Wilson
Marketing Manager at Slabb, Inc.

 

A company should offer a good product, great customer service, exceptional after-sales service and options to attract customers. But even with all of this, is the deciding factor when purchasing a product all about convenience?

We may know what product we want, if not, we research and identify various options. It is also great when the salesperson we communicate with is knowledgeable and helpful. A warranty on the product and the assurance that having the product maintained and repaired when needed is also a plus. Let's suppose we get all of this at a store and have our much needed product in hand only to face the prospect of a long, meandering line or slow checkout service?

Just think of the angst you experience at Thanksgiving and Christmas when you're faced with long lines. It can also be like this if the store or product is popular. Would facing this, ultimately change your decision about getting the product? For some people, it wouldn't.

I think for me it would. I have three children, two under the age of four and my time is literally never my own. There are so many options and alternatives now that a long line is definitely a deterrent for me. It is even more infuriating when there are several check-out counters with only one or two being manned. I often wonder why businesses do this when they can choose the alternative of providing a self-service method such as an interactive kiosk. Think of how much easier flying is when you check-in beforehand or you avoid the lines by going straight to the check-in kiosk.

Some may argue that it may seem impersonal and limit a company's ability to create a lasting relationship with a customer. Could it also be a missed sales opportunity to promote the benefits of additional products at the check-out line? Maybe not. There have been so many times when things are just so busy the salesperson cannot dedicate their time to the customer in front of them or forgets to offer add-on purchases anyway.

Most customers would return to a store that considers their time, and makes their shopping experience easier. On that account, being less harassed by the sales experience, they might even take the time to answer a quick survey at the kiosk, or entertain add-ons to their purchase which, once programmed correctly, the kiosk will never forget to offer.

According to the Zendesk Benchmark Q2 2013, there has been an increase in customer satisfaction reflected in an average customer satisfaction score of 81 percent. One of the main factors contributing to this is the increase of self-service offerings such as kiosks.

Interactive kiosks are the machinery of choice when it comes to giving the public as many options as possible when conducting transactions. We used to be limited to ATMs, but now self-service kiosks are everywhere, from supermarkets to theatres, to every type of retail location where transactions take place. Depending on the industry, businesses can choose outdoor models, freestanding, desktop or wall-mounted self-service kiosks that offer superior convenience and serve a variety of needs.

This makes it important for companies to choose the right kiosk provider that can understand their needs and provide service and support for the unit. A company with experience, that will ensure that every element of programming and maintenance will be taken care of with the utmost care and precision, as well as ease-of-use for both customers and employees. A kiosk provider should offer custom solutions with both hardware and software to ensure smooth operation at all times.

Previously posted on www.KioskMarketplace.com

 

By: Ifti Ifhar, CEO, ComQi

Thanks to smartphones, consumers have unprecedented access to boundless shopping options conveniently placed at their fingertips. Retailers are now facing the challenge of how to bring the attention back to their brick-and-mortar stores and revamp their sales.  However, through an innovative and brand-controlled mobile experience, the retailer can expect increased customer engagement, enhanced loyalty and boost in sales.    

Brick-and-mortar stores are still by far the top revenue generators, accounting for 94.2% of total US retail sales in Q2 2013 – a staggering $1,052B – according to the US Department of Commerce.  The retailer’s goal is to marry the offline and online sales for increased total revenues and EBITDA.

The solution lies in customer engagement which is the connection between a customer and a company or brand. Providing a positive, interactive sales experience, coupled with a quality product and on-demand convenience is essential. Being synonymous with sales and attrition, it is well known that retailers who invest in customer engagement enjoy premium ROIs. Based on a study conducted by PeopleMetrics, companies with the highest customer engagement levels were found to yield an annual ROI increase of 8% above the industry average, while companies with low engagement levels saw a ROI 23% below the industry average. 
 
The disruptive technology for in-store customer engagement is a real-time, two-way mobile interactive communication channel between the shopper (smartphones and tablets) and the brand (through the store’s digital displays). It is a cloud-based SaaS technology platform incorporating mobile, web, digital signage, social and video.
 
There is software complementary to digital signage and social media marketing that provides a dynamic experience to include two-way mobile interaction, personalization and influence to the shopper. Customers are stimulated and feel valued because they are getting tangible rewards and emotional gratification, which leads to future purchases and increased loyalty towards the retailer.

Further integration with the brand’s POS, inventory and loyalty programs leads to a seamless storefront structure: ultimately, customer engagement at its best.  The consumer gets custom discounts, instant product information, availability, price comparisons and reviews, access to online forums and a registry to the brand’s loyalty program for additional benefits. 

The retailer successively collects the social identity of the store visitors and can converge it with the analytics derived from the online platform for creating unified retailer’s shoppers Big Data, improving future marketing efficiencies.

We live in a technology-based, interconnected world, and consumers are entering brick-and-mortar stores with smartphones firmly in hand. They are more informed than ever, and have clearly defined expectations of retailers. Luckily, they are more willing to interact with brands and products in totally new ways. With in-store access to detailed product information, personalized promotions, and an expedient way to shop, customers are experiencing the brand as envisioned by the retailer. The right solution can provides a 360 degree customer engagement vehicle, supporting the customer’s journey and the retailer’s longevity in the competitive and digital retail environment.

 

By David Anzia, Frank Mayer & Associates, Inc.

I recently gave an interview where I was asked about the challenges of managing retail self-service projects given the rapid progression of in-store technology.  With the array of tactical mobile options and digital innovations, there are seemingly limitless opportunities for in-store merchandising to connect retail shoppers to the online and virtual worlds.

We can now provide a call to action for consumers to interact with content on demand on any type of retail display or self-service kiosk. Still other “next big things”, like gesture-based interfaces and virtual imaging, are competing for attention.

The challenge in planning for retail merchandising and self-service projects is navigating with our customers through the practical versus the promising.

Retailers are looking for ways to draw traffic and accelerate their omni-channel agenda in-store. Retailers and marketers straddle the line between wanting to evaluate new technologies and wanting to deliver an experience that is intuitive and accepted by consumers.

Forrester Research recently issued 2013 Mobile Trends for Marketers, which evaluated the readiness of “game changing” mobile technologies.  All of these offer the potential of being combined with in-store merchandising. To summarize their analysis:

We expect significant progress in mobile technologies in 2013 — especially around indoor positioning — but not major breakthroughs…While we believe that mobile technologies like GPS, NFC, augmented reality, image recognition, and 2D bar codes will offer phenomenal potential to enhance real-world experiences for consumers, they can’t do so in isolation.

Gaps in infrastructure, the cost of scaling, availability of specific applications on smartphones, and consumer education are all factors that marketers have to consider when making the decision about whether to incorporate promising mobile ‘’on ramps” into in-store merchandising.

Decades of attending trade shows, seeing new technologies demonstrated, engaging in trusted partnerships, and listening to retailers who are constantly taking the pulse of their customers have given us insights that help us evaluate the latest innovations.

What we know is:

•     The number of NFC enabled phones is growing but still small.
•     More people are scanning QR codes, but the absolute numbers are small. Context and content are important in making these deliver.
•     Texting behavior is more pervasive than QR code scanning.
•     Augmented reality is still a young and developing industry. ROI is an issue.
•     At the same time we are in the midst of rapid change with the ramp up in smartphone ownership – 56 percent of all U.S. adults according to PEW Research.
•     Young, active mobile users are a growing force at retail.

While a dose of reality is necessary, the pace of change and the stream of innovation should keep us continuously evaluating the parade of “next big things.” You might say it’s like driving on the highway; we’re aware of what’s right in front of us, but we’re focusing several car lengths ahead.
 

By Richard Ventura
Director of Sales – Vertical Solutions for NEC Display Solutions

 

While digital screens have been deployed in a variety of retail applications such as menu boards in restaurants, digital end caps in electronics stores, directory boards in malls and digital mannequins in clothing stores, the true power of digital has yet to be fully tapped.  You may ask, what is that true power?  It is the power of full engagement via interactive digital signage.

Traditionally, retailers have used digital signage as a way to run advertising of products and goods with very little integration into store systems.  Those that have integrated focus mainly on inventory databases and their point of sales (POS) systems to capture customer data that can be mined to better align with customer preferences.  Further, many retailers utilize traditional kiosk systems to allow for online ordering, guest registry access and even for hiring future employees. 

What many are missing, though, is how to utilize their systems and capture customer interactions in order to create a full engagement between the brand and the consumer. When looking at interaction and engagement, there are three types:  passive, active, and mobile.

In the restaurant space, many brands have deployed customer-facing kiosks where people can place their orders and learn about specials without any human interaction.  This is an active way for the brand to interact with the consumer, and increase sales and efficiencies.  Following more of a passive way to interact with the consumers, others have deployed “order-ready boards,” where patrons are informed when their meals are complete.  While guests wait for their food, they have become a captive audience, a fact not lost on these businesses, which are cross-marketing and up selling various services and goods to them.

Interactive wayfinding kiosks in malls, hotels, airports and other retail businesses let consumers print maps and coupons, make dinner reservations, and purchase goods and services.  This creates an engaging experience, even if for only a few seconds, that allows the consumer to fully experience the brand(s).

Forward-thinking businesses also are letting consumers use their smart phones and tablets to interact with digital screens, kiosks, store end caps and video walls.  Many top restaurant brands have created iPhone and iPad apps for ordering food selections and counting calories – and through Near Field Communication (NFC), enabling interaction with digital screens themselves for scanning QR codes, downloading coupons and making purchases.  Also, many retailers are utilizing these applications to create a virtual store-within-a-store concept.  A consumer can pull up reviews, check inventories, place orders, and in some cases, test-drive a product all via their smart phones and tablets.

Research firm DisplaySearch says the market for public displays across industries is showing strong growth, set to push near 12 million units sold in 2018, an increase from just under 3 million in 2011.  DisplaySearch’s Jennifer Colegrove asserts, “Touchscreen penetration is rapidly increasing. Over the next several years, touchscreens will undergo strong growth in large-size applications.”

Through these devices and technologies, retailers gain opportunities to engage customers and build relationships.  But as the phenomenon of interactivity grows, the question about customer service looms large.  Is customer interaction with machines better for brands than dealing with company employees?

From my perspective, the answer has more to do with customers and supplying them more options than to say that human interaction is always better.  Interactive digital screens can empower customers to bond with a brand in ways that they choose and in ways that enhance their retail experiences.

As we’ve seen more and more, some people would rather shop online than walk into a brick-and-mortar store.  When these types of people do step into stores, they prefer to shop on their own, peruse in-store kiosks for more information, make their purchases and leave as soon as possible.  Salespeople won’t impact what they want to buy or have the opportunity to upsell additional items.

But there are others who want that personal attention.  The upshot is that the retailer can match the demands of a variety of consumers where and how they want to interact with the brand.  These options give retailers a better chance to capture more of an audience.  Interactive technologies introduce a new dynamic to selling.

Some stores are availing themselves of this new dynamic.

Best Buy, for example, has introduced interactive kiosks in airports to sell iPods, headphones, game cubes and other technologies.  It’s the “big box” retailer’s way of meeting the needs of the marketplace by giving people options on how and where to buy.  At the same time, it continues to offer its bricks-and- mortar department stores and the Best Buy Mobile stores.

Apple has done a phenomenal job of making sure that before a buyer can close out a sale online, in a store, or through its IOS application, that options for cables and extended warranties appear and are part of the sales equation.  That breeds additional sales.
While these are some of the best practices, the retail industry still has to make progress, according to a recent study.  SapientNitro’s Insight 2013 Report indicates that most retailers are failing when it comes to deploying digital signage and interactive technologies.  Just 22% were rated as truly interactive with a value-add beyond just merchandizing or a display.

Here’s how to make the interactive experience relevant:

• Deliver the right content and messaging  
• Design a technologically sound kiosk that people will be drawn to
• Deliver a meaningful experience. 

If the interaction with a kiosk or digital screen is “bumpy,” or if consumers have to scroll through too many products to place an order, they will walk away.  There needs to be a way to guide them through the process with a series of questions and interactions, and their time must be respected

An interactive system built on good design, tied to other sales channels and offering a solid customer experience will increase sales.

Here are the questions retailers need to ask themselves before deploying interactive digital signage:

•     What are our goals and strategies?
•     How will we execute the plan?
•     How will we measure results?
•     Who will support our interactive system?
•     How will we expand the deployment?
•     What types of technologies will be used?
•     Who will manage the content?
•     How do we keep the content fresh and impactful?

The question is not whether to deploy interactive technologies, but when, and to have the plan in place to do so.

Watching young children interact with technology is a particularly noteworthy barometer.  Whenever they encounter a computer screen, their expectations are that it is interactive.  A touch mentality is so ingrained in this generation that it should give retailers pause.  These little patrons are the formation of a digital interactive society.

This article was originally published in Retail Merchandiser magazine.

 

 

By David Anzia, Frank Mayer & Associates, Inc.

Two big motivators are pushing retailers to transcend walled-off commerce and implement omni-channel strategies.  The first is connected consumers who have expectations of both individualized and seamless interactions with retailers. The second is the pressure certain retailers are feeling from shoppers engaged in showrooming and the unrelenting competition from online retailers like Amazon, who are the beneficiaries of that behavior.

You need only to attend a retail conference or engage a few retail executives in conversation to understand the need for speed in overcoming infrastructure hurdles to erase the barriers between consumer touchpoints. More than half of respondents to RSR’s 2013 Cross Channel Benchmark survey feel consumer expectations outpace their ability to deliver on a consistent retail experience.

On the consumer-facing side of this retail upheaval, continuity of experience – enabled by engaging interactive merchandising, a choice of self-service options and informed assisted selling – will be the driver for garnering the loyalty of digitally savvy Millennial shoppers. Those are the shoppers that will account for nearly a third of retail sales by the end of the decade.

As an in-store merchandising company whose projects often involve bridging retail channels, it is clear to us that omni-channel retailing offers benefits that transcend the challenges of implementation. Beyond the infrastructure changes and organizational realignments required is a vision for attracting and retaining high value customers and driving greater sales.

Improved Customer Perception

Customers expect integration and will become impatient waiting for it to become a reality. The blurring of channels isn’t just a retail phenomenon. It is advancing into other aspects of consumers’ lives like entertainment, where two-screen viewing is becoming a behavioral norm. Retailers are in a transitional time where speed of implementation can be differentiating and brand-building or slow response can be frustrating and damaging.

Increased Sales

Retailers who have inventory visibility and availability in the customer’s channel of choice have a better opportunity to complete the sale. The proof of this tenant is in the success of department store shopping kiosks and category tablet kiosks that give shoppers access to a wider selection and provide multiple points of access to complete the purchase. Consumers who shop across channels are actually spending more with their favorite retailers.

Better Data Collection

Visibility across channels means a more customized experience. Retailers that can track customers across channels and understand preferences can better serve their customers.  They also gain insights into crafting offers that motivate customers to get out from behind their screens and engaged in store, where the likelihood of impulse purchase is greater.

Enhanced Productivity

An omni-channel strategy can arm store associates with tools that increase access to information and promote efficiency. Tablets have become the front line of defense against customers armed with more information than store employees and a great offense for turning customer data into loyalty-building service.

There are benefits and best practices involved in the use of technologies – tablets, smartphones and touchscreens – that are the face of omni-channel retailing for consumers. The Convergence of the Connected Consumer and Omni-channel Retailing is a new resource we’re offering. It examines how retailers can take advantage of these tools to carry out their omni-channel strategies.
 

By Joe Holley, vice president, new business development, Frank Mayer & Associates

In-store merchandising is an integral, tangible representation of a brand and a reflection of the retail environment for which it is created. It is unassailable that the partner you choose to bring your project to fruition can impact factors like design, speed to market, project cost, user experience and so on — things that ultimately determine success. So, how do you make sure you’re applying the right criteria to the evaluation of the merchandising partner that will translate your objectives into a tangible, customer-focused, handsomely-branded, solidly-performing solution.

First, you should approach your choice with more than a one-and-done mentality. Look for continuity. Ask how far back the longest-running client relationship goes and how many clients have been around for a decade or more.

Though not an exhaustive list, there are at least three qualitative areas where you can focus your evaluation of an in-store merchandising partner. We can talk about being creative, and nimble and detail-oriented in a theoretical way, but real-life examples illustrate the true value, so I asked our account executives to provide some.

Creative

Everyone in a creative business says they’re creative. You’ve probably heard the adage, “Don’t tell me, show me.” When you’re evaluating an in-store merchandising company, does creative talent come through strongly in the completed projects they showcase? There is more to creating effective in-store merchandising than designing to stated objectives.

Ask yourself if creative capabilities shine through in their work in a way that sets them apart. At GlobalShop 2013, we had a visitor to our booth who saw an electronics display we’d done for a competitor. Without reservation, he exclaimed, “I’ve seen those everywhere. I love them, and I wondered who did them.”

Find out about the depth of creative talent and how it is deployed. Does your potential retail merchandising company have the capability to put more than one designer on a project when necessary. Be sure they’re not stretched so thinly that multiple viewpoints and fruitful collaboration can’t be employed.

Ask to see examples of display-enhancing features that the client never thought to ask for. As an example, we were asked to design and produce customer-facing lens demonstrator kiosks. When we did our research, we realized not all of these kiosks would be placed against a wall in optical shops, and we designed the back of the display to hold a mirror that added value for the retailer and the customer.

Investigate the creative process. When we were asked to design a collateral piece for a display client that included a sliding feature, we didn’t research just within the product category. The category was eye care, but our creative team decided to look beyond the obvious. They studied the construction of candy boxes to understand how slide-out trays were designed.

Nimble

The greater the array of in-house capabilities, the more responsive an in-store merchandising partner can be. Look for an environment of tightly integrated resources for complete project management from creative design through store delivery. A broad scope of resources will provide you with the greatest flexibility in accommodating program changes, compressing time frames, and delivering a product that is on pace and on budget.

Is it apparent how the team responds when clients come in with revised expectations? The willingness and flexibility to modify solutions and meet challenges as they arise, while continuing to work toward a set date, should be part of the company culture.

It is particularly telling how a partner responds when designing and engineering a display that interfaces with client product and client-supplied equipment that gets incorporated into the overall piece. Neither of those aspects is within the control of the in-store merchandising partner, but the partner should be nimble enough to make the necessary modifications and keep the project on track.

Into the Details

An in-store merchandising partner should be able to assign you team members with the experience that allows them to focus on details you, as a client starting a new project, may not even recognize need to be addressed. Focusing on the details of design and understanding the appropriateness of components can impact user experience and long-term viability. A thorough in-store merchandising partner should know what makes for ease of installation, user interface and durability and be able to show you numbers that indicate a high success rate in the field.

We were recently called to redesign two different projects that were in tests initiated by other companies. They came up with interesting designs and incorporated technology but did not have the depth of experience to integrate successfully the two elements and anticipate problems on the retail floor. Units were becoming damaged in the natural course of use and store maintenance and needed to be pulled.

Being detail oriented doesn’t translate into having an incremental focus. We were approached by still another company that already had a display in the field and were asked to redesign it. Our designers and engineers didn’t come up with just a better-looking display; they noticed the original piece had far too many screws and took too long to set up. They took a holistic approach and the result was a fully collapsible display that didn’t even require the use of tools. Not only did it have the aesthetics they were looking for, it was much more efficient to install. Oh, and the shipping costs were cut in half…

A company’s focus on being creative, nimble, and detail-oriented will tell you a lot about how they approach their work and can ultimately impact the success of your project. What other qualitative criteria would you add to the list?
 

by Ajay Chowdhury, Chairman of ComQi

Ten years ago the received wisdom was that cinemas were dead. The rise of Blu-ray, home surround sound, 50-, 60-, 70-inch screens in the home and the fall in DVD prices as contrasted with the inexorable rise in cinema ticket prices were all factors that had everyone convinced that cinema theatres could not survive.

Ten years later, cinema box office takings are at record levels, films are regularly breaking records for opening weekends, ticket prices are even higher and a carton of popcorn costs as much as a full meal in a restaurant.

What happened to the doomsayers?

What happened was that cinemas reinvented themselves. They stopped being a place to just go and see a film and became a community experience. It was no longer about just seeing a film, it was about the experience of a night out with friends in a plush, comfortable environment. Cinemas now offer comfortable seats that lean back, huge IMAX screens, amazing sounds, sofas, food that is served by waiters at your seat, alcohol and much more. They are also getting clever about pricing – different prices on a weekend, lower prices for families with babies during the week, a different experience for seniors and so on.

What they got right was that it was not about the film, it was about the experience.

Today, rumbles are being heard about the death of bricks and mortar retail. No less a visionary than Marc Andreessen (co-founder of Netscape and one of the savviest investors in Silicon Valley) said a month ago “Retail guys are going to go out of business and ecommerce will become the place everyone buys. You are not going to have a choice.” And this is apparently being borne out on the high street. Large brand name chains that have closed include Borders, HMV, Jessops, Circuit City, Virgin Megastores, B. Dalton, Woolworths UK and the list gets longer every month. And for those retailers who are surviving, they face the threat of ‘showrooming’ (consumers checking out goods in the store and then buying them online or on their mobile), increasing rent, reducing store sizes, lack of qualified staff, customers wanting to order online and pick up in store and so on.

When we speak to retail CMOs, the top two concerns on their mind are: ‘How can we be more like Amazon?’ and ‘Should I get a mobile app?’ But are these the right questions? Amazon is a unique company that is truly visionary and has reached an amazing scale with very forgiving capital markets. (It was loss making on $61bn of revenues last year and is capitalised at $125bn. Contrast this with Target that made a profit of $1bn on $22bn of revenues and is capitalised at a third of Amazon…).

Similarly getting a mobile app is also not necessarily the answer. There are 775,000 apps in the iPhone App store and 80% of them get less than 100 downloads. Of the ones that do get downloaded the majority get used less than five times a year. Not quite a recipe for success. (As an aside, on these numbers, 620,000 apps get less than 100 downloads. If we assume they cost an average of $10,000 to make – that is $6.2bn wasted in app development effort.)

So what should retailers be thinking about? Well, the threat from e-commerce and mobile is real. Although forecasts do say that in five years over 90% of shopping will still be in bricks and mortar retailers, there is a huge variation in this number. A majority of music and book sales is now online. Electronics and white goods are moving the same way. Fashion remains largely a high street activity but e-commerce is certainly beginning to eat into this as well. (See the success of Zappos' and Amazon’s move into clothing…)

Grocery, food and drug are still largely done in person but a small minority is moving online. So what should retailers be doing to ensure they maintain their brands and hold onto their customers? We believe that retailers should be looking at three core principles to succeed over the next decade.

1. Provide a superb in-store experience
2. Link your online, social, mobile and in-store media experiences
3. Use the data generated by your customers to provide real insights

1) Provide a superb in-store experience

"Stores will become more theatrical, more immersive, and more of a life experience rather than simply a place to get something. As much as they are selling products they will be selling a good time, a lifestyle.” Christopher Studach, creative director, KRS

Just as cinemas reinvented themselves over the last decade to provide a great experience, retailers need to do the same over the next decade. Walk into Victoria’s Secret on Herald Square in Manhattan and you will see a true brand experience. Media and technology are cleverly used to move the customer through the store and get them to make a purchase. We believe the in-store experience is about mapping the customer’s journey base on their frame of mind and then providing the right media and incentives to make shopping a pleasurable experience and getting them to buy more. The experience starts outside the store with the show windows using dynamic video projection, holograms and the like to entice people into the store.

Once they are in the store, the use of touch screens for wayfinding, linking to customer’s online accounts and making recommendations can be powerful. As they move through the store the use of videowalls, digital signage, music, virtual mannequins and so on get them to a decision point where they want to buy and buy more. Other technologies like Delay Mirrors in the dressing room (a screen with a camera showing a live reflection of the customer, yet delayed by a few seconds to see themselves in an outfit from all angles) provide an experience that cannot be had anywhere else. Finally, linking these screens to the customer’s smartphone allows them to get recommendations, find out more information or link to loyalty cards providing a truly holistic experience. This is what makes them come back and recommend it to their friends.

2) Join up your online, social, mobile and in-store media experiences

Most retailers have e-commerce sites, a Facebook or Twitter presence, mobile sites and some media in-store. But these are all in silos and not linked up. Imagine the immense value of recognizing an online customer as they enter the high street store. You can offer tailored promotions as they enter your store and give specific recommendations based on their shopping habits. We believe you can do this by using one technology platform for your in-store media to manage your experiences effectively. This platform then links to your external systems such as your e-commerce site, Facebook, loyalty card systems, smartphones, EPOS systems etc. to provide one view of the customer.

We provide a cloud based platform that does exactly this. It allows our retail clients to manage different digital media on a global basis and collect information on their customers. Using our technology we can link customer smartphones to digital media in a store without an app so customers can check in as they enter the store and be identified so that tailored offers can be made to them. The platform links to Facebook, Twitter, Instagram etc. so it provides a bridge between the online and offline worlds. This allows two things to happen: The retailer has one view of the customer: Whenever the customer interacts with you, you know exactly who they are, where they are and can make the appropriate offer based on their shopping history The customer has one view of the retailer: Whenever the customer interacts with you, they have the same brand experience and can seamlessly move from one medium to the next.

3) Use the data generated by your customers to provide real insights

Finally big data. This is a real buzzword these days. Retailers have a huge amount of data on their customers but only a tiny fraction of this data leads to insights. Working with companies like Dunn Humby, DS-IQ and Path Intelligence allows retailers to take the data they collect and create real actionable insights which then feed back into the in-store strategy to create a virtuous circle. The world is changing and as the consumer has the power retailers also need to change.

”Steve Jobs didn't ask, 'How do we build a phone that can achieve a two percent market share?' He asked, 'How do we reinvent the telephone?’ In the same way, retailers shouldn't be asking, 'How do we create a store that's going to do $15 million a year?' They should be asking, 'How do we reinvent the store to enrich our customers' lives?'”
- Ron Johnson, Apple’s ex Head of Retail

 

By Paul Shwabe, Practice Leader - Retail Solutions, RMG Networks

The next mega-challenge for retailers is their ability to measure and analyze when, where and how consumers “touch” each fulfillment channel along their path-to-purchase.

Retailers are spending millions to development modern processes in this era of agile commerce with flexibility to meet the consumer’s multi-channel demand. Presently retailers are struggling with actually tracking the entire journey beginning to end (web, mobile, in-store) as a consumer jumps from one channel to the next channel as they get to the moment of purchase.

Before retailers can solve this question/problem they must ask themselves more questions about the consumer. It is critical for retailers to understand the context, content, and community which the consumer will travel… and only then will retailers be able to analyze and build metrics of commerce.

Consumer

In the past retailers used to control the entire brand message and communicate it in a very linear and one-directional modality to their consumers. Clearly, those days are long gone and today’s consumers are liberated and free to research a brand to their hearts content, price compare, and now “buy anywhere” (web, mobile, in-store) and even abandon a specific channel experience only to resume their quest later with another channel with the eventual purchase with the demand “get anywhere” (in-store, store-pickup, store-delivery, delivery-to-home).

Context

Retailers need to recognize the relevancy of a consumer’s awareness and selection of a brand product or category based upon the physical proximity and decision proximity. The context of proximity will dictate the consumer’s preferred channel.
As well content and community will influence a consumer based upon whether they are making a product choice or comparison or simply looking for more category educational information. Retailers / store associates whom understand each aspect of relevancy of a consumer will also drive a consumer’s behavior.

Content

Retailers and advertisers blend the physical environment as well as every imaginable digital asset (music, video, and graphics) and technology (WiFi, interactivity, augmented reality, RFID, NFC) to influence and shape the consumers experience in their purchase decision.

The skill and balance is that content visually presented and personalized can be used for both Educational – early in the awareness stage and then Selection – later in brand product comparisons or product choice.

Community

Retailers and brands are recognizing the power of social networks (YouTube, Facebook, Twitter, Pinterest and Google+) as well that consumers are inclined to reach out to family, friends, co-workers, store associates, and even strangers with whom have made similar life style purchase choices for their opinions, feedback, how-to, knowledge before they will make their final decision.
Consider the number of retailers that are launching other web sites, mobile apps, blogs to support their brand community (MyLowes, Home Depot’s – The Apron, Macy’s mBLOG, Neiman Marcus’ NMdaily).

Commerce

Retailers must re-educate their store associates as well sponsor increased employee communicate to alter an era of transaction based culture & attitude toward the consumer so it is transformed to a relationship culture. There is a shift in thinking with both Retailers and Consumers as reference in “The AVATAR moment for Consumers and Retailers.” Commerce maybe a primary objective, but relationship is critical to sustain and grow.

Technology helps support the consumer experience, but consistency in the consumer’s path-to-purchase is the first step to innovation and transformation.

photo credit: VinothChandar

View original article on the RMG Networks blog

 

As the days of 2009 dwindle, I find myself crisscrossing the country, talking to retailers of every stripe. These conversations have revealed a few consistent themes, which are likely to drive customer-facing retail technologies in the coming year.

To my relief and that of probably everyone in the industry, there’s a sense the economy is coming back. Earlier this month I was at the Kioskcom Self Service Expo in New York, and I would describe the mood as "unexpected optimism." Retailers and technology buyers of all sorts were on the floor in surprising numbers with specific projects they needed to execute. One exhibitor even exclaimed, "We’re on the way up!" while making a swooping airplane motion towards the sky. Now that’s what I call a return to confidence. It is a safe bet that retailers who have been waiting on the sidelines will resume investments in their store experiences in the coming year.

The dominant theme I have heard from retailers is the need to inspire shoppers. Retailers are seeking technologies that do for any product category what mannequins do for apparel—show the customer how to bring many items together into a compelling, personalized solution. An expectant mother furnishing a baby’s room, a couple designing a home theatre, a parent building a fish tank for their child—shoppers need to be inspired and guided to a final solution. Retailers understand that addressing a consumer’s end goal is the key to driving more sales, yet doing this with human interactions is expensive. So, I expect to see increasingly sophisticated shopper assistance tools emerge from the simple product selectors of today. Retailers are keenly focused on the problem, and a few are ready to test solutions.

Closely related to inspiration is the idea of cross-selling. Retailers are interested in technology that helps them add items to a shopper’s basket by reaching across the store to cross-sell many product categories. I get the sense from retailers that this is an area in need of improvement. Customer-facing technologies that draw upon in-store and online inventories to automatically suggest the best complementary goods will likely be tested in the coming year.

Another recurring theme is a desire to provide quality customer service where today’s economics simply do not allow it. Many complex products do not sell in enough volume or at high enough prices to justify having human experts in the store. Several retailers see technology as the way forward. Expert systems can give customers the additional product education they need to make an informed choice, while sparing the cost of additional store labor. Expect to see customer-facing technologies deployed most commonly around these so-called "marginal" product categories.

Finally, with recessionary pressures on staffing levels, retailers want to make the most out of their store staff through sales process automation. They want humans doing what humans do best—guiding customers through complex, personalized, real-world product problems and decisions. For the 80 percent of any selling process that is the same for every customer, retailers are looking for technological solutions that do this work, letting store associates handle more customers in a given period of time. In a sense, self-checkout was only the beginning. The phrase I have heard is "moving customers from questions to the counter" as quickly as possible. I personally view this as challenging to execute in practice and anticipate some failed trials, given the need for seamless integration between store personnel and in-store technology. However, the first retailer to do it will reap significant rewards and set the stage for the future of retail.

Supermarket giant Tesco recently created a buzz in the industry by opening a concept store (in Kingsley, Northampton) with just self-checkout lanes and no cashiers. Understandably, the reaction to this initiative from various quarters has been mixed. While Tesco claims that customers have reacted positively to the idea, workers’ unions have predictably expressed serious concerns over the implications of completely eliminating cashiers at the checkout point.

This move shouldn’t come as a surprise to anyone tracking the evolution of self-service in the retail sector. In fact, it was entirely along expected lines. Despite the sizeable initial investment, there has been a clear shift towards self-checkout since the turn of this century, especially by big-box chains. Retailers are studying ways to attract new customers (in addition to retaining existing ones) and in this context, self-checkout has been positioned as a technology solution that can drive up customer satisfaction levels, leading to a more lasting relationship. Not to mention the cost savings.

And therein lies the rub.

Studies reveal that 20 percent to 30 percent of the payroll in retail is typically directed toward cashiers. With self-checkout, this figure can be brought down considerably. The key is to get a commitment to the cause at all levels, from top management to store managers and cashiers. While it’s true that self-service lanes would create some redundancies, the primary aim is to redeploy resources to service-oriented areas in the store. The redistribution of cost savings to other productive areas needs to be clearly articulated to store-level staff for this to work.

And there are the operational realities, of course. Retailers often tend to understaff self-checkout lanes, which can cause considerable delays if inexperienced users create a bottleneck. More often than not, consumers who become confused or embarrassed about their inability to complete a transaction tend to avoid self-checkout in the future. This makes the initial few transactions crucial from the retailer’s perspective. Studies also indicate that self-checkout systems lead to a marked decrease in impulse purchases — low-priced products such as candy, mints, chocolates, soda, water, chips and gum are placed around the cash counters. This can be attributed to the fact that customers have to focus on the checkout process completely. Inevitably, there are nagging security issues that need to be addressed as well.

None of this detracts from the obvious value proposition of self-checkout — when designed and implemented correctly, it can enhance the customer experience at the store and drive top-line growth. Most importantly, it leads to an increase in labor productivity and resource utilization. Labor productivity essentially refers to two aspects: The first is to remove the labor element itself, as an obvious cost-cutting measure. The second is to redirect the labor or resource into other departments where it can be better utilized, such as restocking shelves, bagging groceries or helping customers as they make purchases. Counter-intuitively, self-checkout can end up enhancing personalized service at the store, although it might appear to be leading to impersonalization. The consumer experience, always driven by speed, is made more efficient as customers can get out of the store faster. The privacy and convenience provided by these systems doesn’t hurt either.

The bottom line

Customers like choice. Studies show they are growing increasingly comfortable with self-service systems, such as ATMs and kiosks at airport terminals. Self-checkout, if offered alongside an optimal number of staff cashiers, is a definite positive. With time, the number of cashiers needed to supervise checkout lanes will decrease. In fact, the future might be even more radically different once RFID/mobile-POS/smartphone-enabled checkouts gain prevalence. Although the industry is not ready for a widespread rollout of self-service-only stores, this is the right time to experiment. Besides, the marginal cost-savings offered by self-checkout might be too good to pass up on during these tough economic times.

Aravindh Vanchesan is a program manager with the Frost & Sullivan North American ICT practice. He focuses on monitoring and analyzing emerging trends, technologies and dynamics in retail markets worldwide.

In the ongoing battle to attract and retain consumer mindshare, retailers are increasingly turning to innovative marketing mediums to engage and stay top-of-mind with consumers. Gone are the days of unlocking the door and turning on the radio; today’s retailers are pressing fast-forward to fully customized soundtracks. Paper POP table tents and static signage are being replaced by sophisticated digital media networks.

Smart companies are implementing ways to take the in-store experience beyond the lease line to extend brand affinity, drive consumer behavior and provide relevant lifestyle content to the consumer. All these advancements aim to enhance the shopping experience, lifting it to more than just a trip to a store, but rather a theatrical experience where purchasing merchandise is only part of the journey.

Not only are these solutions successful at engaging consumers, but they have also been proven to extend dwell time and increase brand awareness – key factors in ongoing loyalty and long-term buying relationships. Keeping consumers inside the store is even more important today than it has been in past years. The current economic downturn has meant a loss in revenue, so on those days when consumers are out and about, it is imperative that a retailer attract them, keep them in store, and close the sale. Just as important is that, as your customers go mobile, so must your brand.

A recent Retail Systems Research report ("Walking the Razor’s Edge: Managing the Store Experience in an Economic Singularity," June 2009) states 70 percent of retailers surveyed said they use in-store technologies to maintain or improve the customer experience and extend that experience past the lease line. According to the same report, two-thirds of the retailers surveyed said they have reduced their payrolls in the wake of the economic slide, but those same two-thirds of retailers surveyed have not changed the expenditures devoted to in-store technology.

So, what are some key elements of the "store as theater" retailers can take advantage of to increase mindshare, and stay connected and engaged with their customers?

The eyes have it

Digital signage is becoming the fastest-growing segment of retail media and advertisers are taking note; a 2007 Forrester survey found 72 percent of advertisers are looking at in-store media as an alternative to traditional advertising. In-store digital signage has the power to effectively relay brand messages to consumers by providing the message diversification needed to captivate shoppers in a new way.

With digital signage networks, advertisers can target consumers in different parts of a store, in different locations, in different ways, at different times of the day, delivering some of the most target-specific visual marketing yet. For example, signage content at an athletic retailer might run footage and/or related product advertising in the footwear section of the store, while the exercise equipment section highlights an instructional video on a specific piece of equipment. According to industry research, in-store messaging drives a 40-percent uptick in sales. It does this because it has the ability to be personal and connect with a consumer on a different level.

Digital signage increases traffic, which in turn increases the capacity to capture the consumer. Gaining a shopper’s attention by placing that consumer into the messaging is a key factor in increasing brand awareness and sales. For instance, a person who is passionate about surfing may see themselves as the focal point of a sign on display at their local surf shop. They connect with the image and are therefore drawn to that store, creating a more loyal following.

They’re all ears

Much like digital signage has the ability to draw a shopper’s attention through visual elements, music attracts consumers through emotion and sound. Customized playlists that put brand to music have the ability to focus on specific demographics, catering to a certain genre and style while staying true to your brand essence. And with choices ranging from commercial satellite subscriptions and pre-arranged "mixes" to regularly updated fully custom programming, there is an option to fit every environment and budget.

In-store music is another area that has benefitted from technology. While many retailers still opt for their programming to be delivered via CD, more and more are choosing to have their tunes delivered over the Internet. Internet delivery has a number of advantages, including ease-of-use and fewer requirements of the on-site store employees. More sophisticated systems/services even allow for track selection and message insertion right from a Web browser.

In selecting a music provider, it is vital to make sure their service enables a level of customization that will fit your current and future needs. Things like day-parting — arranging music for different vibes to coincide for different times of the day — and a true understanding of how to convey your brand via music can make or break the in-store experience. Finally, make sure your chosen provider is current with their licensing agreements. In-store music is "public performance", and leading providers can handle all licensing so you know you’re legal.

Brand on the run

It is more important than ever that retailers implement strategies to take the in-store experience to consumers, wherever they are, to extend brand engagement beyond the lease line. This "anywhere concept" truly extends the lease line of a retailer by allowing consumers to be exposed to branded entertainment media at any moment, whether its an hour or a week after the consumer has left the store.

Mobile, Web radio, branded podcasts, artist promotions and compilation CDs are powerful vehicles for reaching consumers. They provide the means to remain engaged with consumers across multiple touch points, while delivering personalized content that extends brand visibility and affinity. Whether cooking dinner in their kitchen, out for a jog, or sitting in their cubicle at work, an entertainment media campaign keeps your brand in front of consumers on their terms, making sure you stay top-of-mind.

Retailers that can target consumers with multiple touch points at various points of the day and week, in various locations and regions, with branded content and messaging are the retailers who become most successful. These retailers have learned that, for consumers, the shopping experience is not just about selling products — it’s about creating a shopping experience which is fun and exciting, and establishes a true brand connection.

Craig Hubbell is executive vice president of media services for PlayNetwork Inc., where he is responsible for all media services, including music services, video display, and advertising and entertainment services.

Last month, I was invited to visit the Microsoft Retail Experience Center near the company's headquarters in Redmond, Wash. We've talked about the REC before, as well as shared with you a video walkthrough, but I didn't want to miss the opportunity to see it first-hand.

It's a truly remarkable retail test lab, one that could easily be mistaken for a real electronics superstore, but you'd never know it if you drove by: The 20,000-square-foot facility is tucked away inside an unmarked building with no Microsoft signage anywhere to be seen. It's an invitation-only affair, a place where the company can bring retailers, partners and focus groups to test-run merchandising strategies and in-store technologies.

Stephen Sparrow, Microsoft's senior industry marketing manager for U.S. retail, is the driving force behind the center. He said his emphasis is on making the retail experience more connected, a word he uses a lot. It's at the core of his philosophy of what retail must become in order to thrive ? connecting stores with one another, with their employees, and with their customers.

"Disney used to say, when you're on a Disney cruise line, we'd better be able to recognize you as someone who just dropped four grand on a cruise," he said. "(We want to) create a world where you have more transparency, where you can deliver the right information and business insights to the right person, in an actionable way, when they need it and where they need it."

SLIDESHOW: Take a look inside the Microsoft Retail Experience Center

The store itself is a faux electronics store, replete with big-screen TVs, laptops, Xbox games and boxed software. But beneath the surface, the emphasis on connectedness bubbles up in some unique and new ways.

Take the shopping cart, with integrated touchscreen. Anyone who has attended a retail trade show in recent years has seen any number of such smart carts, but here it is integrated with the store's loyalty program to connect store database with shopper from the moment the shopping experience begins. An interactive store map, with turn-by-turn directions, not only delivers the shopper to the right place but builds an ever-growing pool of behavioral data.

Most of the products the shopper passes by in the store bear a Microsoft Tag, a technology that Sparrow calls "leveraged capital" ? a unique example of an in-store technology that the customer paid for himself, the cell phone. Giving a shopper a handheld scanner is one thing, but utilizing a device that is already in his pocket is quite another.

Giant touchscreens dot the walls, allowing customers to browse never-ending catalogs in a very intuitive fashion. Similarly hands-on experiences are served up by a Surface tabletop computer. In each instance, the devices in the store are pulling from the same central database, which not only insures a consistent experience, it saves the retailer time and money ? a screenshot or a product photo or a box cover need only be scanned once, and can then be automatically resized and repurposed for whatever touchpoint needs it.

Making the supply chain fully visible from source to shelf requires tagging, and in a perfect world, retailers will have RFID tags applied by the manufacturer. But for smaller retailers or those with a manageable assortment of products (or perhaps assortments from a large number of sources), the answer lies at the back of the REC. A desk bears a computer station with an RFID printer; as products come in the back door, a staffer prints a tag for each one and applies it to the box. Boxes are walked through a pair of reader gates, and from that moment on, the store is aware of each and every product for sale in the house.

In the back office, the database is mined through a data-rich but easy-to-understand management dashboard. From a single location, a manager can see any idiosyncrasy at the device level, and can make smart scheduling decisions. Color-coded feeds give real-time sales data, out-of-stock alerts, camera arrays, and even comparison charts detailing other stores in the network.

Sparrow pointed out that it's not just customers that benefit from the connected experience ? it empowers store managers to do their job better.

"You look at store managers ? retailers typically take their best sales rep and make him the manager and put him behind a desk with a Monday morning report," he said. "We say, give him that report mobile. And do it quickly, so he can get back on the sales floor, helping customers."

Sparrow said the REC is a "living, breathing facility," one that is evolving over time. In recent weeks, his team has begun experimenting with interactive storefront windows and new merchandising strategies.

"We understand that it's all about the customer? how do you help them find what they need," he said. "And how do you help the employee help that customer."

Learn more about the exhibitors at this year's NRF show at Retail Customer Experience: Part 1, Part 2, Part 3

I love Southwest Airlines. The low fares are great. The egalitarian boarding system is great — even after they implemented the new numbering system. Snacks and meals? No big deal. Airports have restaurants. The main things to me are a cheap seat, getting where I’m going on time with as little trouble as possible, and dealing with employees who give a damn about me and what I want.

That's why I was so disappointed with a recent change Southwest made to its beverage service.

I fly enough with Southwest and drink so little on planes that I usually have some coupons in my computer bag for that occasional glass (or two) of bourbon I'll tip back on a late-night flight home. But if I don't, I like to pay cash. It's easy. If I charge something, there are receipts to worry about, and I harbor this secret dread that something will be wrong with my credit card and the attendant will yell out in the cabin that I’ve been declined.

But if I'm buying drinks for a client on a flight, or if I've left all my cash in Las Vegas, the card is good, too.

Bottom line: I like choice. And Southwest has taken away one small sliver of it. Now, if I don't have coupons, I'm forced to swipe. In the words of the immortal poet David Spade, "me no likey."

Making matters worse, the explanation just doesn't feel right to me. In justifications published in news accounts as well as announced over cabin P.A. systems, the airline says it went to credit-only payment because customers wanted it.

Nonsense. Do some travelers want to pay by card? Of course they do. But it's hard to believe there were many travelers clamoring for the elimination of the cash option. Did a single flyer utter the words, "Please, don't let me pay by cash. Force me to use my card?" I doubt it. Once my current stack of coupons goes, I may never have another drink while I roam about the country. (I might not have anyway, since they stopped serving Maker's Mark. But that's another column for another kind of Web site.)

Here's the point for self-service deployers: Keep customer options open. And if you do shut an option down, level with the customer about why you’re doing it.

I would never shop at a grocery store that is self-serve check-out only. Sometimes I don't even know what kind of fruit my wife has tossed into the cart, let alone how much it costs. Sometimes a box is too big and I don't want to fuss with getting it out of the car before I get to my car. Sometimes I just get lonely, for heaven's sake, and like a cute cashier to ring me out!

But even worse, though, is when I want to use self-service and walk through a store with rows of self-service checkout stands sitting closed, red LEDs warning me away as though there were some latent danger lurking beneath the cold scanners and inside the folds of plastic bags. If you're going to deploy self-service, have enough of it available that the option is a meaningful one.

Same thing for hotels and others: If you're going to offer self-service, have enough of it for the option to be meaningful. And while we still shouldn't have to say this, make sure the kiosks are working.

Home Depot learned the choice lesson the hard way a couple of years ago, when the CEO oversaw a mammoth self-service deployment that overtook, rather than augment, the human side of the checkout process. Customer-service ratings fell. Sales dropped. And soon enough, the CEO was printing resumes, perhaps (one hopes) at a self-service copier somewhere.

Must customers have everything? No. They don't. Despite the gotta-have-it-all hype used to describe the modern consumer, truth is, most folks know there are limits to what stores — and airlines — can and cannot do. What is important, however, is to make available everything feasible. And if you're not going to do so, to fess up on why, and prepare for the consequences.

 

 

• Pay attention to the fees that are assessed
• Look at how these fees are applied
• Different types of processors can have different fees so search for one that has the best fee
• Have a comprehensive view of the situation before entering that market
• Interchange fees are “the deciding factor” for the category you’re in

• New communication options exist, such as cellular or IP/internet-based connections, instead of the traditional costly and slow land line.
• Terminals and leased lines are cheaper than they used to be.
• There is a greater ability for companies to accept credit cards and set up a merchant account.

 

"Baby boomers are all about being in control. This generation wants to control everything, from the food to the words to the order of the service. And this is one area where consumers feel out of control."

• Enhanced payment options, including contactless (RFID-enabled) payment and fingerprint recognition, provide consumers and retailers with added convenience and efficiency
• Integrated Electronic Article Surveillance (EAS) deactivation antennas increase customer convenience by deactivating EAS tags while ensuring security for store owners
• Multiple language capabilities break down language barriers and open the world of self-checkout to customers across a spectrum of cultures

Looking to the future, RFID readers may someday be integrated with self-checkout, as well as assisted-service checkout, to read RFID tags on individual merchandise packages. Germany’s METRO Group has installed self-checkout with an RFID reader in its RFID Innovation Center. In this METRO Group demonstration, the self-checkout deactivates the merchandise security function of the RFID tag on selected merchandise during the scanning process, enabling customers to exit the store without triggering a security alarm.