RETAIL TRENDSThe future of retail is not only a single-technology solution, it is an “all-the-technologies solution.” By Justin Patton 

Everyone knows how a point-of-sale system works. Stand in line, unpack items to the counter, and scan them for checkout. The process is tied together by that magic technology, the barcode scanner. With one tiny laser light, hundreds of items an hour can be accurately tallied and sold. In reality, the barcode scan is only one of an array of sensors all working together, with weight sensors in the hands, item identifiers in the eyes, and learning algorithms in the brain of the cashier that recognizes when pricing patterns don’t fit the items.

Bringing Sensors Together

This is why self-checkout kiosks usually include weight sensors, which often include human monitors nearby, and are rarely used for high value items. The barcode scanner appears as the star of the show, but it’s one of a whole suite of sensors for fast, efficient checkout, and one of the reasons human cashiers may not be going away as quickly as technology news headlines would have us believe.

This is sensor fusion at its most simplistic: bringing several sensors together on an item simultaneously, and using input from each in parallel, or even asymmetrically, to arrive at correct answers quickly, accurately, and with backup verification.

While the barcode scanner has reigned as the apex of store technology since the late 1970s, sensor technology has been progressing for 40 years in other fields of manufacturing, logistics and entertainment. Bluetooth in our phones can accurately locate exactly where we are. The Xbox Kinect can identify your child’s dance moves and match them with onscreen characters. RFID sensors quickly inventory mass quantities of packages.

We use these sensors to take family selfies with animated dog-ears imposed on them, or make race cars appear to zoom across photos through smartphone cameras. So why is it that your local grocery store’s most advanced piece of technology is the barcode scanner that’s been making the rounds of retail stores since Huey Lewis and the News were still new?

Sensor Fusion Elevates Retail

This won’t stand. Online retailers have been picking off consumers for years with tailored product offerings based on thousands of hours of browsing data and complete product purchase histories. Billions of dollars are being poured into virtual reality systems to make online experiences even closer to reality.

Meanwhile, brick-and-mortar retailers have the ultimate VR showroom, with reality minus the virtual, but little of the consumer tracking visibility of the online stores. Behind it all, we have truckloads, trainloads, and shiploads of product flowing all over the world, feeding both retail networks, and tethered by a tenuous web of paper manifests, complex email interactions, self-evolved data exchanges, and good old institutional knowledge.

This is where sensor fusion finally comes to retail, and things are changing quickly. Amazon’s Go store was a leader, with a whole bevy of sensors revamping the shopping experience. The Go store was the starting line, with almost every major U.S. retailer implementing advanced store concepts.

Sensor Fusion’s Benefits

The ways sensor fusion systems are benefiting retail include:

• Using multiple in-store sensors to gather and analyze data about shoppers’ habits, patterns and preferences.

• Understanding store traffic, from the number of people that enter the store to the way that shoppers navigate around the space.

• Measuring key customer habits to determine new versus repeat customers, customers’ visit frequency and duration, the routes they take throughout the store, what they buy, how much they spend, etc.

• Gaining unprecedented insights into shopper behavior and patterns, which can impact every part of the shopping experience, including store set-up and merchandising, marketing, customer service, improving conversion rates, identifying trends, determining staffing needs and more. Weight sensing devices on merchandising shelves can even provide real-time information about product sell rates.

• Using data about the precise location of merchandise within the store (e.g., shelves, racks, POS displays, etc.) to test the effectiveness of different merchandizing strategies to boost sales.

• Keeping accurate, real-time count of inventory coming into the store (including instantly tracking pallets of product), as well as tracking every product bought.

• Tracking products through the entire supply chain process, identifying in real-time where products are traveling throughout the system, identifying quantities and shortages, determining inventory in warehouses and throughout the sales network and pinpointing problems or backlogs in the supply chain.

• Preventing and tracking theft, using RFID tags for anti-theft and security that are removed or deactivated when the items are bought, and that sounds an alarm when active tags are removed from the store (indicating theft).

A Comprehensive, Holistic Solution

The future of retail isn’t a single-technology solution. It’s an all-the-technologies solution. Savvy operations, marketing, and innovation teams are learning how to galvanize all their sensors at once, with the fastest, most successful using it to view the big picture. The retail industry is now a data industry, and the amount of data that retailers need to understand and consider has become massive.

Sensor fusion is an efficient, holistic, comprehensive and accurate way to collect, review and analyze it all, allowing retailers to make more informed decisions that will determine whether they become the stores of the future or nostalgia of the past.

Justin Patton serves as director of the Auburn University RFID Lab, which specializes in the business case and technical implementation of radio frequency identification tech in retail, supply chain and manufacturing settings.

RETAIL TECH FEATURESData and technology can help ensure retailers’ kitchen and retail spaces are looking and performing their best during the busiest times of the week. By Jim English

Consumer grocery shopping peaks on weekends between 11 a.m. and 1 p.m., and weekdays between 4 p.m. and 5 p.m. While these hours have changed little in the last decade, retailers have found new ways to prepare for the rush and alleviate many of the issues that arise along with it, including inventory management and customer service.

Technology has emerged as one of the most powerful tools retailers can use to operate more efficiently during peak hours. E-commerce, in-store tech and behind-the-scenes innovations are all expected to play a large role in the future of supermarkets. However, retailers shouldn’t forget what drives customers to the store in the first place: delicious food.

E-commerce

Online grocery shopping is gaining popularity among consumers and retailers alike. Many merchants – including Amazon with its recent purchase of Whole Foods – are capitalizing on this movement, and it is one way brick-and-mortar stores can combat the challenges that intensify during peak hours.

One-third of shoppers used “click and collect” programs in 2016. Convenient for customers, online shopping helps them avoid crowds, reduce (or eliminate) the time needed for individual supermarket trips, and facilitate a more budget-friendly approach to household grocery procurement.

While online shopping options can help retailers better manage inventory and predict shopper behavior, as well as reduce labor costs, it can decrease sales per basket, based on the store’s inability to inspire impulse buys. Therefore, the in-store experience must offer consumers more than they can get sitting behind a computer screen or smartphone.

In-store Technology

Many grocers situate self-order kiosks near entrances so customers can place deli orders upon arrival, making their trips more efficient. And that’s where many consumers’ high-tech shopping experience ends – but it doesn’t have to.

In 2016, Italy’s largest supermarket chain, Coop Italia, launched the Supermarket of the Future, which provides consumers with a high-tech, engaging experience. Shoppers can access detailed information about a product, such as nutrition facts and store promotions, via an interactive screen with a simple hand motion and a little assistance from Microsoft Kinect sensors.

While this kind of innovative technology is certainly an investment, it ensures shoppers have their questions answered quickly, increasing customer satisfaction and decreasing labor costs. The novelty of this experience, if reproduced in the United States, could drive more in-store shoppers.

Cloud-based technology and other hardworking tools can help grocers ensure they have enough stock once those shoppers arrive.

Behind-the-Scenes Innovations

ChefSheet assists stores in continually monitoring inventory and food prices from any device, including laptops, tablets and smartphones, for free. Other solutions require a little more investment. These include smart appliances and robotics that can save labor, energy and processing time, among other efficiencies as well.

Many of the latest commercial kitchen innovations are hidden from public view, though not always. As transparency becomes more prevalent in the food industry, restaurants and retailers are amplifying their efforts to give patrons a peek into food preparation. While consumers do not enter the kitchens, these spaces still need to be clean and aesthetically pleasing, even during the rush.

Keeping kitchens tidy during peak hours can be particularly challenging with messy cooking processes such as frying, as traditional fryers need consistent maintenance and cleanup. Automated oil management systems eliminate the unsafe handling and filtering of hot cooking oil, and enhance cleanliness, as there is no unsightly mess from oil spills in the kitchen or oil-collection bins behind the store. The improved oil filtration also enhances the taste and quality of the food. And, let’s face it, finding delicious food is the No. 1 priority of most grocery patrons.

Fresh-Prepared Meals

Innovations don’t always come in the form of advanced technology; they can present themselves in new ways to cater to shifting consumer needs and desires. Americans are busier than ever and are widening their search for quick and easy mealtime solutions. Grocer deli’s and mass retailers need to respond to this demand by offering a variety of fresh and ready-meal solutions, especially during the peak shopping hours on weekdays.

Total dollar sales for perishables and deli prepared foods in the United States have climbed 7.5 percent in the last four years, and the category’s popularity is likely to only rise as more stores offer prepackaged heat-and-eat meals, chef-prepared foods and self-serve food bars.

It’s important to have a variety of selections on hand and enough stock available during the dinner rush. Supermarkets are going to find this preparedness to be worth their while, since trips for fresh-prepared foods correlate highly to additional dollar spend in-store.

The supermarkets that are able to survive and thrive in the changing retail landscape are likely to be the ones that invest in technology and other solutions to decrease costs, increase sales and enhance the consumer experience, whether there is one shopper in the store at midnight on a Tuesday or thousands during the weekend rush.

Jim English is the vice president of national accounts for Restaurant Technologies.

REVAMPING HOLIDAY STRATEGIESLearn key strategies to use when developing holiday marketing campaigns to not only increase sales now, but also all year long. By Ritchie Hale

The biggest time of year for retailers is right around the corner – holiday shopping season. As more than 154 million people shopped over Thanksgiving weekend in 2016, retailers should expect another record-breaking year.

This year, however, more than 75 well-known retailers are expected to close their doors on Thanksgiving Day, and some even on Black Friday according to Black Friday deals site BestBlackFriday.com, indicating a major move to online sales.

This digital transformation can be a great win for retailers of all sizes, but only if marketers implement the right strategies. From retention efforts to securing new customers, retailers must enforce a strong omni-channel marketing strategy that engages shoppers at every touchpoint. Engaging with the customer throughout the entire journey will be very critical to maximizing profits this holiday season.

In order to effectively revamp Black Friday and Cyber Monday strategies to increase sales and secure year-long customers, there are three areas marketers need to pay attention to: cost of acquiring new customers, sales from loyal customers and balancing acquisition and retention efforts.

The Cost of Acquiring New Customers

While most brands focus on offering steep discounts during the holiday season, being mindful of the cost of acquiring new customers should be a focus as well. When confronted with two price points for a particular item, shoppers are likely to choose the lower. But, other incentives, such as free shipping and returns, can also encourage new users to make a purchase.

With deep discounting, many retailers are faced with the challenge of trying to break even on the cost of acquiring that customer and making money from them as well. Do you offer the absolute lowest price in hopes that the customer will return to make continuous purchases? How can you best predict this will happen?

This is where retention and monetization come into play. Deciphering which users have repeatedly visited versus those who are clearly shopping around is critical in targeting retainable shoppers. The customers who have visited either the site or particular item numerous times are the ones marketers should target with deep discounts. The more engaged the user is with the site, the more likely they are to purchase again.

Re-engage Loyal Customers

Black Friday and Cyber Monday go beyond introducing new customers to your brand; marketers also need to engage with existing customers. Previous buyers that are already familiar with the product and/or brand are a key aspect to sustaining and growing sales, especially during the holiday season, as these existing customers will be more likely to complete the transaction than a first-time user.

By leveraging deep customer insights to fully understand who your best customers are, how often they’re buying and what they’re purchasing, marketers can send more personalized discounts to attract and re-engage customers. For example, if a customer has repeatedly purchased the same product on Black Friday/Cyber Monday in the past, or has been viewing that product frequently without purchasing it, retailers can offer a more attractive discount to encourage the purchase.

Balancing Acquisition and Retention

Like with acquiring new users, targeting existing customers with attractive discounts for a holiday transaction is also a balancing act. It drives retention by pushing additional transactions, but with an added risk.

Providing deep discounts all the time to existing customers teaches them to only make a purchase when presented with a sale or discount, which can impact a retailer negatively from a profit and loss perspective. Marketers can balance this by recognizing that once a client has been acquired, and the cost of marketing to pay for that client is recovered, the margin available for selling additional products to the existing client is higher.

With this, retailers can offer those deep discounts to existing clients and provide a profitable transaction, whereas the same discount offered to a new client would create a loss-making transaction. It’s this balance that is critical to understand when driving marketing efforts. Each part of the campaign needs to reflect this, as well as the CRM or marketing system being utilized. The CRM must be able to surface this type of data to know which clients to target and to help marketers manage those clients in the above way.

This move into the digital world marks a significant opportunity for retailers as e-commerce continues to grow each year. Marketers can use these above strategies as pinpoints when developing their holiday marketing to not only increase sales now, but also yearlong.

Ritchie Hale is the chief technology innovation officer and developer of TouchCR, an advanced e-commerce platform used by B2C companies to develop deep buyer insights and market with significant relevance. 

RETAIL DESIGNDesign elements are one of the underrated factors in the success of an ad or coupon. Here are the top ways retailers can get the best return on their investment. By Mike Tinz

According to the DMA Response Rate Report, the response rate for direct mail is 5.1 percent, proving that direct mail elicits a higher response than digital methods. When creating a direct mail piece, it is essential to properly portray your brand, products and services to consumers through various design elements. To get the best return on investment out of your direct mail ad or coupon, it is necessary to consider the colors used, images included, message of the ad, and how to get consumers to interact with it.

Color Elicits Emotion

The goal of an advertisement or coupon is to capture the attention of consumers long enough to elicit a response – preferably the use of the coupon. One of the most effective elements of an ad is color, as there are strong associations between color and emotions.

In a study titled “Impact of Color in Marketing,” researchers found that consumers make up their minds within 90 seconds of their initial interactions with products, and about 62 to 90 percent of their assessments are based on colors alone. Knowing this, it’s especially important to keep in mind that the colors you choose can influence consumers’ attitudes and feelings about the brand.

Certain colors, such as blue, emanate a trustworthy and dependable feeling while red can feel more exciting and bold. While these emotional associations may seem simple and straightforward, the primary and secondary colors you choose to incorporate could have a larger impact on consumer behavior than you think. Therefore, the colors you put together should strongly reflect the emotion or action you want your ad to prompt.

Appeal to Demographics

Aside from using color to elicit emotion, color choice is crucial when creating an ad that appeals specifically to your target demographic. If you’re targeting a certain gender with your advertisement or marketing materials, color choice can play an integral role in reaching the targeted consumer demographic. The feeling, mood and image that your brand portrays can play an important part in persuasion, so understanding how genders react to different color combinations is essential.

Men tend to heavily favor blue, while women are split between blue and purple. Men also prefer brighter colors and shades, and women preferring softer colors and tints. These factors can help shape the overall look and feel of your advertisement, and can ensure that you draw the attention of the demographic you’re targeting.

While not as impactful as gender, age also can play a factor in how consumers react to your advertisements and marketing materials. It’s been noted that as consumers grow older, the colors of orange and yellow grow increasingly disliked by both genders. Another aversion shared by both men and women of all ages are browns and oranges – depending on the way you use these colors, it’s safe to avoid using them as the main colors in your advertisement or marketing materials.

Utilize Effective Images

Another key element for an effective advertisement is the graphics. Your illustration should be easily identifiable within one or two seconds of looking at the advertisement, consumers should be able to recognize what you sell. Consumers are exposed to such a vast amount of messages each day that clear and concise communication of your product is important.

For retailers, it is most effective to display clear images of the products you sell to allow consumers to instantly recognize your retail category. Whether you offer sportswear, shoes or cosmetics, recipients should be able to quickly determine what you sell, what discount or promotion you are offering and where they can purchase the item.

Call to Action

Once your advertisement is designed, it’s time to work on what you say. The content of every advertisement is just as important as the font and colors used in it. An enticing offer and a specific call to action, such as “$20 off a purchase of $100,” are what will give members of the community a reason to visit you. Consumers are more likely to respond when the offer features a specific dollar amount in savings or includes the word “free” rather than an offer including a certain percentage off. Including an expiration date on your offer adds further benefit, as it creates a sense of urgency for the consumer.

Incorporate Digital Elements

As an additional form of consumer interaction, incorporating digital elements can help reach consumers that may not be exposed to print ads, and have proven to increase consumer’s desire to purchase a product. Digital elements, such as digital coupons and QR codes, allow consumers to easily interact and engage with your brand. While print coupons provide a higher ROI, digital coupons are easier to distribute, so a healthy balance of both is crucial for executing a successful coupon.

Mike Tinz is vice president of franchise sales at Money Mailer and has more than 20 years of experience within the direct marketing industry. Before joining Money Mailer in 2012, Tinz held positions as ValPak’s vice president of sales and has also managed sales teams in territories across the country. 

HOLIDAY TRENDSShoppers now expect special sales and deals to appear at any time of the year. Retailers should reevaluate what they can do for this new Cyber Everyday mindset. By Bart Defoor

The holiday shopping season, and the flurry of activity that comes with it, will soon be in full swing. Retailers know that their holiday sales will set the tone for the following year.

This has been the case since the dawn of mass retail and is the genesis of the industry. In recent history, retailers and media alike focus on two seminal shopping days: Black Friday and Cyber Monday, as an indicator for the year.

Nowadays, shifting consumer buying behaviors, driven by online technology, have retailers pondering two big questions: “How much will online shopping impact Black Friday turnout in my store?” and, “Is Cyber Monday still relevant?”

Everyday Deals

Today, what were once disruptive market forces have now become the norm. Consumers have Internet speeds at home that rival their business connections, as well as easy to use, powerful tools for finding, comparing prices, buying and receiving millions of products. Moreover, thanks to the ease of finding deals online, customers have come to expect sales all of the time – in fact, year-round – for their holiday shopping needs. As such, single day watershed shopping events, such as Black Friday and Cyber Monday, don’t hold the same weight they did even three or four years ago.

The notion of holiday shopping sales offering the best deals is also suspect. Take for example Amazon’s annual Prime Day, which occurs each year in July and has successfully created its own unique, recurring sales event and related media cycle. The ubiquity of everyday online shopping and competing deals offered at specific points-in-time has resulted in a loss of demand for and lesser need to focus all online sales promotions on one specific shopping day such as Cyber Monday.

With online deals beginning to show up days or weeks before the holidays, and extending well into mid-December, Cyber Monday seems to be transitioning more to a Cyber November, or even a Cyber Everyday mindset. For retailers hyping up their 2017 Cyber Monday deals - it’s time to take a step back and reevaluate what you can be doing now for this new Cyber Everyday mindset.

Blame the Kids

Generational differences are causing major shifts in the popularity of Black Friday and Cyber Monday deals as well. According to a recent study by Natural Insight, a workforce management company, 88 percent of consumers ages 45-59 plan to shop in stores this year and 80 percent of consumers age 18-29 plan to make purchases in brick-and-mortar locations from November through December. However, the survey also revealed only 15 percent of shoppers plan to shop on Black Friday itself. Many feel that they can get the same deals that the store flyers advertise from the comfort of their own couch without having to brave the crowds and frenzy that can come with Black Friday sales floors.

Understanding the “Me Channel”

Even with store traffic in decline in recent years, eMarketer noted that foot traffic was down 12.3 percent in November and December 2016 compared to previous averages – there is hope for the brick-and-mortar store. Consumers are still going. The difference is that now, they are looking for an in-store shopping experience that offers them something unique from what they get online.

Retailers need to quickly grab the attention of these in-store customers with the convenient experience they desire, or run the risk of falling prey to showrooming. This is even more important during the holiday season when consumers are more prone to mission shopping with a planned list.

Another shift in the nature of Black Friday and Cyber Monday sales is the actual products and services that consumers seek. Increasingly, shoppers are looking to buy experiences more than traditional gift items. Research from The Journal of Positive Psychology showed that “people enjoy greater well-being from life experiences and consider them to be a better use of money.”

Following this mindset, there is an expected surge in the purchase of subscription services (e.g., Birchbox or Lootcrate) and experiential giving (e.g., gifting a cooking class or a trip) projected for 2017’s holiday season. These experiential gifts are luring customers out of stores and onto the web, which is fostering the Cyber Everyday mentality of the modern day shopper, especially Millennials, who value experiences over goods.

Rolling with the Changes

History, and now, data, tell retailers that Black Friday is here to stay for the long haul even if it changes its form over time. The hyped phenomenon of Cyber Monday, on the other hand, may be losing momentum. The rise of e-commerce, generational differences, shifts in shopping behaviors and increases in experiential gift giving are all factors.

The holiday shopping season will always be a unique time for retailers, but the consumer mindset has shifted from single-day buying frenzies into a weeks-long journey of seasonal discounts both online and in store. Retailers who remain fluid, adaptive and frictionless will be able to survive and thrive by meeting consumers’ shopping demands and preferences.

Bart DeFoor is a principal consultant at North Highland with more than 18 years of consulting experience with the last 10 years concentrating on the retail industry. 

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