Information is the greatest tool when marketing a product to a consumer.
So why not embrace new technology by creating in-store solutions that address these missed opportunities?
These devices will almost certainly not be streaming in-store TV channels and mindless advertising, as in the past.
Why would customers want to watch more commercials when they are already in the store?
Plus the appeal of having suppliers pay for advertising on in-store networks has diminished as some of the world’s biggest retailers like Walmart and Tesco have discovered.
I can clearly recall my early days of sales training at Unilever when we learned the significance of communicating to the customer at point of sale – literally within 10cm of the product. We learned that the shelf edge is the final point of choice by the customer – should she buy Brand A or Brand B?
Think of the ramifications of that choice – a sale gained is twice as profitable as a sale lost. It is also an accepted wisdom amongst retailers that information equals a sale – and yet so much information at point of sales, such as bar codes and planograms, has no relevance to the consumer, and the really important information the customer needs is absent.
There is reason to believe that eventually there will be hundreds and even thousands of digital devices in the typical store, as technology develops, ISD costs will reduce with increasing volumes at the same time as labour costs and store operating stores increase.
I think there will be a whole range of new ISD devices on the market in the near future in a variety of sizes, formats and applications.
The devices will be networked, probably wireless – and will be managed by simple Content Management Systems(CMS) that are Internet based but controlled in-store via tablets and smartphones by everyone from the store manager to the shelf packer.
We refer to these new ISD systems as ecosystems in the sense that they coexist, are connected to the same source, are interdependent, driven by the same shared goals, and are all-encompassing in much the same way as different species coexist in natural ecosystems.
The main aims of ISD will be to engage the customer, provide information, improve navigation and increase sales.
We are so confident of the future of ISD that we already have a prototype ISD ecosystem being built in a digital lab in Melbourne for launch in March.
Some years in development, the first version of the ecosystem consists of 5 types of ISD devices, all interlinked, and each communicating with the shopper in a specific way depending on its location.
Interestingly, none of the devices is new or revolutionary. But how they work together certainly is. A clue to our strategy is an understanding of two 3 key shopper insights.
1. What does the shopper journey look like – including the Customer Decision Tree (CDT)?
2. What are the different shopper missions within the journey.
3. What messages do customers need at different points in their journey?
It is very sobering for retailers to discover how little engagement there is with shoppers in stores.
Recently RED has worked in 4 very different categories of supermarket products and a very consistent finding has been that shopper engagement in any particular aisle ranges from a low of 10% to a high of 30%.
The categories included carbonated beverages, health and beauty, household cleaners and health foods. A further challenge for retailers is how to present related products together using a solutions approach, instead of by category. Again ISD represents an avenue for helping customers find what they want.
How does it feel – Mr Retailer – to know that 70%-90% of customer do not stop or shop in any given aisle on a typical visit – and that includes destination aisles with special planograms and additional POP material.
Most of the focus on digital by retailers has been about building on-line sales, and rightly so. But reality is that stores will continue to exist and even if 50% of transactions take place out of store, there is still a major need to digitise the in-store experience.
By the way, I believe there is a natural law that says retail will eventually reach an equilibrium point where customers are equally inclined to shop a particular store brand online and in-store. So let’s start planning for a 50:50 ratio of in-store to online sales across the industry as a general rule, at some time in the future.
To my way of thinking it becomes even more crucial to provide customers with the same, seamless digital experience out of store and in-store. All that matters is that the customers shops with your brand – regardless of how, when and why.
I don’t subscribe to the trendy definitions such as multi-channel, or even worse, omni-channel.
Quite simply, it’s about a customer doing business with a brand.
I have presented the idea, somewhat tongue in cheek, of the Omni Customer.
In this model the customer is in charge, and traditional supply chain thinking will be overtaken by the demand chain in which the very word retail is in danger of extinction but more about this topic another day.
Back to our ISD ecosystem Lab trial.
We will demonstrate a strategy we call the ‘Hi to Buy’ method which greets the customer with a proposition, and then serves to navigate her to the solution and product she is looking for – right down to SKU level.
Quite simply we place ISD devices at various points of the shopper journey that communicate different messages depending on location and the customer state of mind.
They start with large screens at the store entrance – the ‘Hi’ devices as it were.
Then there are a number of ‘Buy’ devices such as screens on gondola ends in place of the usual flip tickets.
There are ‘Find’ screens above fixtures instead of pelmet signage, engage customers in-aisle.
Then we introduce a touch tablet device attached to the shelf as a ‘Browse’ tool – installed in such a way as to minimise loss of shelf facings.
And finally we clinch the sale with a new generation of digital e-labels – both as a ‘Find’ tool and ultimately a ‘Buy’ tool – only 10 cm from the product and at the most crucial point of customer decision making. All the millions of marketing dollars spent before this moment are now rendered meaningless unless the shopper chooses your brand from the shelf.
As I mentioned before, none of these devices is particularly new, although wireless networking is an updated feature. It is really the fact the content is managed across all these devices by a single CMS which is managed both centrally by the Support Centre and in-store by the store team that makes our ecosystem rather special.
What is also unique is how the ISD ecosystem has been devised. It’s been a collaboration between hardware and software specialists with significant technology strengths, with retail store designers and marketers who understand how customer shop and how retailers operate their stores.
Another key feature of our ecosystem concept is that mobile devices are part of the strategy. There are limitations to how much information customers want to access in-store, and time pressured shoppers can access ‘take-away’ information using their smart phones, for later consumption.
We are really excited by the potential of ISD and invite you to give us your thoughts and feedback on the topic.
We hope to be able to show you our Digital Lab in person sometime soon.