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
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 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.