How To Reinvent The Store Shelf Edge
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1 IN Rethinking Retail Series: Reinventing the store shelf edge in the age of omni-channel shopping STORE E SL Product $4.99
2 Reinventing the store shelf edge in the age of omni-channel shopping The meteoric rise of ecommerce hasn t just modified shopping habits, it s changed them forever. Consumers now have the power to research, buy and review products anywhere, anytime which is having a phenomenal impact on traditional bricks and mortar retail. These changes in shopper behaviour are blurring the lines between digital and physical, redefining the store s role within the omni-channel shopping experience. The bricks-and-mortar store is not dead! It is a powerful asset when it comes to creating a shopping experience. The trick is to connect the dots along your customers purchase and to engage with them consistently, yet also in a momentappropriate way. 1 Deloitte In order to secure the store s new position, retailers are using new display technologies to unite their online and offline channels, improving the shopping experience at the shelf edge. The following pages detail how the omni-channel consumer likes to shop 01 1 Deloitte, The New Digital Divide, April 2014
3 The everywhere shopper Today, ecommerce is part of almost every shopping journey. A survey of 2,000 people in the US and UK conducted by Displaydata in 2014 revealed that 97% of consumers now shop online, taking advantage of round-theclock convenience. IN With further advantages such as detailed product information and a greater range of products than can be displayed on a physical shelf, it would be easy to assume that ecommerce is a more attractive proposition than shopping in-store. 97 % of consumers now shop ONLINE Top reasons consumers prefer online shopping: IN Convenience Believe they are getting a better deal Find it easier to compare products and prices Wider choice of products 02 2 PricewaterhouseCoopers, Understanding how US online shoppers are reshaping the retail experience, 2012 Where does the store fit in?
4 Consumer hearts still lie with the store However, the retail store still plays a critical role in many shopper journeys our survey showed that 83% of US consumers and 78% of UK consumers still make most of their purchases in stores. In sectors such as grocery, health & beauty, homeware and DIY in particular, bricks and mortar retail performs strongly (see chart), as shoppers desire the ability to see, touch and try items. Our poll showed 75% of shoppers in the US rising to 80% in the UK - ranked this as the most important reason for visiting a store. How do consumers prefer to buy goods? 1. Top reasons for shopping in-store: Being able to see, touch and try goods Books, CDs, DVDs & Video Games Cosmetics & Toiletries Designer Goods DIY & Home Improvement Materials Home Furnishings Furniture Electronic items Footwear & Accessories Clothing Alcohol Groceries Ability to buy the product immediately Take advantage of in-store promotions Easier to ask questions Buy mostly from a store Buy mostly online Don t buy these items 03 How has omni-channel shopping complicated the path to purchase?
5 New complexities Clearly neither ecommerce nor the store is the complete journey for most shoppers. As global consultancy A.T. Kearney notes, the shift to an omni-channel shopping experience means the value of physical stores traditional role as standalone venues accountable only to the customers on site has changed. 3 Omni-channel retail is profoundly impacting the shopper journey long before the point of purchase. Our survey revealed that 85% of US consumers and 76% of UK consumers will do some form of web-based research before visiting a store. Many consumers will treat the store as a showroom, using their smartphones to find better deals online or look up product reviews. Conversely, services such as Click and Collect are driving online shoppers into the store, with lucrative consequences on average, consumers spend up to a third of their original order value on additional products whilst collecting goods in-store. 4 This complex behaviour is forcing retailers to rethink the role that stores play in their omni-channel experience. 85 % 76 % US will do some form of web-based research before visiting a store UK 04 3 A.T. Kearney, Omni-channel Shopping Preferences Study, July Citrus Lime, Click and Collect, 2014 What are the store s main challenges?
6 The challenges for the store Our research has identified four key areas in which the rise of ecommerce has created new expectations for omni-channel consumers shopping in stores, which retailers must address: Consistency Availability Knowledge Personalisation Although the mash up of digital and physical retailing into a seamless shopping experience is the new normal, many retailers have yet to make the leap in an effective way that delivers high satisfaction to shoppers. This has produced gaps in omni-channel services between what shoppers expect and what retailers deliver. 5 RIS/Cognizant USA UK 42 % 52 % 26 % 47 % 46 % 28 % 21 % 48 % think retailers offer different prices online and offline find stock availability an issue compared to online shopping think staff are poorly informed think the online promotions they are offered are not available through offline channels 05 5 RIS/Cognizant, Shopper Experience Study, August 2014 How can stores address these challenges?
7 Rethinking the value of the store shelf in the shopper journey To address the challenges of ecommerce influence, retailers must view the store as the consumer does as one part of a flexible, omni-channel journey. This means bridging the gap between digital and physical shopping to influence shoppers at the shelf edge. New retail digital display solutions and electronic shelf labels (ESLs) are the uniting force linking online shopping s capabilities with the store s unique benefits. They enable retailers to create a better shopping experience, increasing the sales of products from their shelves. Technology will enable shoppers to control their shopping experience. These stores will be venues for collaboration and experiences that cannot be provided online. 6 Platt Retail Institute ESLs provide retailers with the agility to respond quickly to other market influences such as competitor pricing, time of day and weather creating dynamic sales promotions that increase sales and profits. Consistency Availability Knowledge Personalisation Ability to display consistent pricing across all channels in-store updates can be made at the same speed as online, which is not possible with printed promotional material. Drives loyalty by building shopper confidence and trust that they are getting the best deal. Promotions can be rolled out in tandem with online offerings, enabling retailers and consumers to benefit from those promotions today. Dynamic digital displays can show real-time stock information so shoppers don t waste time waiting for an assistant. Capacity to direct people to an alternative product if an item is out of stock. Enables store staff to better manage stock availability. Capability to link to retailer digital content through QR codes from the ESL, helping to improve product information available at the shelf edge. Less time spent changing paper labels in-store frees up store staff to spend more time advising and serving customers. ESL integration with retailers apps (either using QR codes or Bluetooth beacons) can deliver personalised promotions to shoppers in store Platt Retail Institute, The Future of Retail, February 2014 When is the optimum time to implement display technology?
8 Dynamic digital display solutions: the time is now The retail industry is poised to accelerate adoption of in-store digital display technology, with ESLs becoming a key part of retailers store innovations. According to a recent report, Next Gen Retail: Electronic Shelf Labels, published by ABI research, ESL revenues are set to increase six fold to almost US$2 billion by With digital display solutions, retailers can now bring together their ecommerce offer with their store shelves giving shoppers a consistent, best of both worlds experience. And by doing so, they will increase sales conversion rates, improve operational efficiency and create stronger customer relationships in all channels. As the industry moves forward, technology is and will be as integral to retail success as brand and location. 7 ABI Research 07 7 ABI Research, Next Gen Retail: Electronic Shelf Labels, August 2014 Find out more about electronic shelf labels
9 Displaydata is the leader in the design and supply of dynamic digital display solutions incorporating fully graphic electronic shelf labels (ESLs). With our advanced dynamic digital display solution, you can manage your omni-channel pricing and promotions strategy with speed, agility and consistency. You ll improve both the shopping experience and your profits quickly, easily and securely. IN IN We re rethinking retail. Copyright Displaydata 2014 all rights reserved. No part of this report or any of its contents may be reproduced, copied, modified or adapted, without the prior written consent of the author. 08
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