Many retailers around the world are hoping to win back lost market share by making their customers' shopping experiences a little more meaningful - and even theatrical - with emphasis placed on the sensuous elements of an in-store shopping trip, according to a report from Datamonitor.
As the growth in multichannel and discount retailing grows, retailers are turning to technology to refine the in-store experience, and retain market share. But these technologies bring with them a variety of challenges for vendors and retailers alike, in terms of integration and standardisation, and also in terms of achieving the maximum ROI.
The next stage in customer retention
The report, entitled 'Shop X: Where's the store heading?' suggests that the next step in the battle to retain customers is to streamline the buying experience, bringing it more in line with internet shopping in terms of ease and speed of transaction.
Datamonitor believes that new technology will shortly enable digital signage screens (suitably equipped with image capturing hardware and image processing software) to guess the sex and approximate age range of customers looking at the screen, as well as to differentiate between individuals and groups. In this next stage of development, screens may also be able to log when people point at a particular product on a shelf and then display more appropriate adverts and offers on the nearest screens.
Proximity sensing systems
As well as incorporating increasingly sophisticated display functions, proximity sensors can already enable these systems to determine when someone is nearby. When the system receives notification that a shopper is within a certain distance range, the screen's sound level can increase accordingly, and then decrease again when they leave the area. To help reduce noise pollution in the store environment, these sounds can be even made relatively directional, targeting only the area where shoppers are actually standing.
Tests carried out to-date on in-store digital signage systems have showed them to be an effective method of advertising, leading to increased spending and elevated brand awareness. And although the cost of installing and maintaining a digital signage system is significant, the authors of the report believe that the benefits of deployment are likely to make it worth investing in, for larger retailers at least.
Technology reduces 'ad fatigue'
Given the commonly quoted statistic that the average consumer is targeted with approximately 3,000 messages per day, retailers are keenly seeking to differentiate products through any medium more engaging than static signposting and traditional television screens. Digital signage, the report concludes, offers retailers a good means of doing exactly that.
The report also found that near field communication (NFC), in itself an off-shoot of radio frequency identification (RFID) technology, can also help remove the need for physical touch and contact. In retail, NFC technology is already being used for contactless payments such as Visa PayWave and MasterCard PayPass, among others. Consumers and merchants both benefit from this technology because transaction times are faster, and research has shown that in some circumstances consumers also tend to spend more when paying contactlessly.
The rise of the NFC mobile phone
Of course the inevitable growth of NFC technology in consumer markets means that the mobile phone is set to become an important tool for retailers, due mainly to its capability as a fast and relatively secure payment device - particularly when the handset is NFC-enabled at the factory.
But retailers have another opportunity that arises as a result of NFC's growing popularity among consumers. NFC or Bluetooth enabled mobile phones can also become a means of direct marketing to consumers in-store. If consumers are encouraged to use their mobile devices for NFC payments, the report suggests, retailers will then have an opportunity to establish more of a personal relationship if they use a consumer's mobile handset to deliver well-focused and relevant adverts and promotions. Better still, this can be achieved in real time just before the point of purchase decision - while the customer is still standing in the store.
According to the report, the point of sale (POS) is also an important battleground for retailers because it represents the last chance in a shopping visit to increase sales, advertise to a captive audience, and reinforce brand values.
Within the POS industry, self-check out is one of the technologies currently garnering the most interest. The technology is popular due to its ability to cut checkout times, with a single attendant being capable of overseeing up to six terminals. It also appears to enjoy favour with consumers so far, with a study in Woolworths' Big W stores in France last year reporting 25% of customers choosing the self service option. Other grocery stores that have conducted similar tests have reporting anything between 20% and 50% of their daily transactions being processed via self service check-outs.