That the future is digital, connected, and omnichannel are by now common refrains in the retail industry, made even more common by the challenges of the last many years.
The idea is simple: by bringing the advantages of eCommerce’s algorithmically-powered personalization to the immediacy and experientialism of brick-and-mortar, physical storefronts can continue competing with eCommerce’s projected growth.
It is a marriage of two worlds, yet therein lies all the difficulty. While many storefronts have come a long way in digitizing their operations, much is still to be done, especially with the AI ‘revolution’ knocking at our collective doorsteps.
Argues Martin Bailie, Global Retail Board Executive & RETHINK Retail Board Advisory Member:
“Technology is improving the in-store experience, [but there is] still a long way to go without a shadow of a doubt. We need more immersive experiences…to be more convenient…to be seamless, and personalized. The future is an omnipresent future both in-store and digitally.”
A question for many brick-and-mortar operations becomes where and when they should be investing in customer outreach. What are your contact points? When is what you have to offer most relevant? Where is the customer most likely to make a purchasing decision?
The answer to all of these will often be one of the most intuitive: at the store shelves, where they’re purchasing product from you and your brands. “From our perspective, where better?” asks David Morgan, VP Customer Value Propositions SES-imagotag.
In fact, a study of 3,000 shoppers found that 82% of purchasing decisions are made in-store, at the shelf.
Additionally, how you organize and present your shelves matters: according to a recent study in the Andrean Research Journal, 79% of consumers ‘preferred the idea of shelf placements and an orderly environment.’
Another 68% shop using lists they prepared ahead of time, but are still attentive toward product placements.
“Shoppers end up in an almost autopilot mode, and there are things they are not spotting that [could bring them real value]…that retailers are brands want them to take note of,” continues Morgan, explaining that there needs to be greater engagement with customers to learn what they think and care about.
He further explains that those customers aren’t thinking about their visits in terms of ‘channels,’ but as an overall experience, and that properly monetized store floors (that examine foot traffic and other key data points) can succeed even going into the future and even across a myriad of product categories by leveraging digital marketing at the shelves.
It’s an investment that creates new avenues for marketing ad spend previously unattractive to brands looking at brick-and-mortar spaces.
Traditionally, marketing budget goes to online spaces that try to connect customers with brand recognition, while sales/trade budgets go to retailers wherein retailers are paid to run promos in stores.
However, these promos have traditionally been difficult to track or audit, leaving the investment questionable in a way online market ad spend is not. This can be thought of as a trust deficit in in-store sales budgets.
Digital shelving solutions address that by introducing the IoT and even AI-powered capabilities of digital systems to store shelves. Now, marketing spend can go straight to those shelves, where brands can monitor progress via cameras, sensors, and other monitoring technologies and curate campaigns in real-time.
It’s that real-time flexibility that also creates previously impossible avenues for collaboration and connection between brands and retailers.
“Retailers now have the ability to offer brands a targeted advertising opportunity based on their own customer data and behaviors,” notes Baillie. “Brands are in turn able to reach the target audience a lot quicker and more effectively, and for the first time, they’re able to truly measure the impact of their advertising campaign.”
Indeed, it’s those connections that create greater ad spending in stores and, ultimately, better sales between happier partners, Morgan goes on to explain. “We’ve seen sales uplifts anywhere from 30% to 300% without damaging the [given] category.”
Kalman Mezei, Store Manager at Budgens, has experienced the benefits of digital shelving for himself, his employees and his customers: “Our store is a digital store…what works for us most is the video rails, the movement, that it’s very eye-catching. Any areas where we have introduced video rails, we have seen such a significant uplift. Customers love the experience and there is [greater] brand recognition as well.”
He goes on to explain that while it has been a learning experience, they were quickly able to ascertain what was best in terms of placement and particular ad campaigns, noting that ‘mixing things up’ and moving the rails around helps to prevent them from becoming ‘static’ in customers eyes.
In short, at a time when investments into digital transformation tech need to be balanced carefully against tightening budgets in the face of labor and inflationary crises, bringing digital experiences to store shelves is a no-brainer for retailers looking to not only increase engagement with customers but buff up their data collection operations while improving relationships with their brands.
To learn more, watch the full panel discussion here.
