One of the latest Retail System Reasearch papers released in June, reveals some interesting facts about how do retailers attempt to make their stores relevant to the 21 century consumer and what role is technology assigned in this endeavour. The study starts by acknowledging that if in-store traffic increased significantly in 2010, sales did so at a lower rate while online sales grew by 15%. Unsurprisingly, retail winners (those whose comparable store/channel sales rose by more than 3% in 2010) focus on improving customer service to turn this trend in their favour with 69% of them resorting to technology for achieving this, the research shows. It seems that, unlike laggards, winning retailers understood that a differentiated customer experience will give their stores a competitive edge over other channels and are empowering and educating their staff for creating this.
In 2011, more retailers used technology for this purpose (”make our employees smarter and better informed”), as compared to 2010 (51% vs. 35%).
Although the payroll to sales ratio stabilized in 2011, retailers still perceive the need to enhance customer experience while not increasing payroll costs as the major business chalenge they currently face (43% of the respondents). The research shows that in 2011 more retailers were concerned with improving employees’ productivity than in 2010 with more winning retailers seeing ”a lot of value” in this endeavour than the laggards (73% vs. 46%). An increasing number of respondents as compared with last year consider educating and empowering store employees to use new technologies as a highly important activity (56% in 2011 vs. 49% in 2010) which makes us think that retailers see a direct connection between this and enhancing productivity.
When it comes to quantifying technology’s ROI, fewer retailers than last year see it as a difficulty and an organisational inhibitor, yet the report suggests that they might not use the right metric for assessing it. Both retail leaders and laggards look at the ”percent increase in comparable store sales” for assessing the technology’s benefit while this phenomenon is the aggregate outcome of a series of factors and not just a separate one. The research suggests the average transaction value, customer retention and the usage of in-store technologies by shoppers, managers and employees as more appropriate means of quantifying whether technology has made for a better customer experience in the stores.
The reports ends with recommendations that are well known in the digital signage industry:
– get the stores Wi-Fi enabled. Even though it might seem a very basic one, 30% of the respondents had no wireless network available in stores. The report stresses out the importance of wireless devices to drive traffic to one’s store and create a two way communication through the use of social media. But for this to happen ”Wi-Fi is an absolute must”. The 4G networks’ advent could also imply that bandwidth of mobile networks will soon become more congested and connectivity less reliable making Wi-Fi a useful offer customers will appreciate;
– redefine the in-store experience. Technology enables retailers to offer entertain and offer professional customer assistance to their customers hence making in-store shopping more enjoyable and the option of choice next time they’ll consider shopping.
–offer deals only available in store to increase foot-fall and sales. Checking- in to receive a discount is an established and successful practice;
–integrate the store with other selling channels. The study doesn’t imply that online sales are to be discouraged but it concludes that for overall sales to increase the two channels must converge. 70% of retailers perceive technologies enabling this cross-channel synchronisation as highly valuable to support business opportunities while 60% of them admit that, at the present, their stores don’t enable this cross- channel experience.
Armed with this information what us- digital signage companies and publications can do- is explain retailers why and how digital signage increases the relevance of the 21st century store for the consumers. Sending a relevant message to customers right when they’re shopping to help them make better decisions based on the latest information is something neither the TV nor paper posters can’t do.
The superiority of RFID (Radio Frequency Identification) and digital signage over traditional advertising means cannot be stressed enough- the simple picking up of a particular product from the shelf triggering the corresponding ad on the screen means targeted communication at the highest standards with tremendous potential in terms of revenue (as the purchase of the advertised product can be made then and there).
To find out more about digital signage in retail, feel free to contact us.