Retailers have struggled to change prices, promotions and product data in-store in real time, to deliver both personalisation and multichannel consistency. The necessary technology has been available for years but, until now, cost-justification has been rather harder to achieve.
Penelope Ody investigates.
While real-time stock visibility dynamic pricing, targeted promotions and customer data are all easily accessible and highly automated online, when it comes to the store it can be a very different story. Most retailers still struggle to achieve inventory accuracy in-store so must fulfil clickand-collect orders from distribution centres rather than using store stock.
Individually targeted promotions are difficult unless customers identify themselves at an early stage of their shopping journey, while universal pricing in grocery limits the opportunities for individual offers and price negotiation. Just because real-time flexibility is challenging that doesn’t mean retailers have abandoned any attempt to achieve it in-store. Among the latest initiatives to hit the headlines has been Tesco’s use of recognition technology to improve targeting of on-screen advertising at its 4,500 petrol stations.
The Quividi system identifies probable gender and suggests a likely broad age-range for the shopper (typically 35-65 or 15-34) and this information then triggers a relevant advertising message on the linked Amscreen digital media display. Face recognition technology, capable of identifying individuals, has been around for decades but concerns over privacy have forced both Facebook and Google to abandon attempts to integrate such systems in recent years and most implementations are still confined to security and border control.
However, companies like Zoomkube are focusing on retail applications with a kiosk that takes pictures of the consumer standing in front of the monitor. Using the kiosk’s touchscreen, consumers can then enter their email address and opt-in to receive offers. Software analyses the person’s face, determining gender, age and appearance.Once enrolled, the system then delivers targeted offers when the shopper is next identified at the store. Launched in the spring of 2013, Zoomkube expects to have its first installations during 2014.
ABSOLUTE ACCURACY
In theory, wi-fi and increased use of tablets should act as enablers for store staff, helping them to identify customer records and stock information to improve sales or enable price negotiation with valued customers: in practice that rarely happens. “In mainstream fashion, peak sales time are Friday and Saturday,” says Richard Traish, Senior Partner with consultants Kurt Salmon , “so while it should be possible to upsell by accessing customer records via a tablet, with the majority of customers store staff will rarely have the time to do that.
Tablets are certainly being used in stores but often it’s for little more than queue busting and has more to do with brand image than practical applications.” At the top end of the market where high value-low volumes are the norm, it is a different
matter. Companies like Burberry are integrating CRM with in-store iPads so that staff can access customer records to make targeted offers while in the US, Nordstrom is considering putting iPads in changing rooms so that shoppers can discover whether an item in a different size or colour is currently available in the store or in a nearby outlet – always assuming that the in-store inventory record is correct.
“Absolute inventory accuracy in store is very difficult to achieve,” says Traish. “Achieving above 90% availability can be very expensive.” Absolute accuracy can involve investment in RFID (radio frequency identification) systems or frequent labour-intensive stock checks.
Combining data and security functions in a single RFID tag is seen as a more cost-effective solution and a number of trials and pilots are underway, especially in the fashion sector. With sufficient RFID readers at touchpoints throughout the supply chain, real-time information giving whereabouts of each SKU – be that in a changing room, on a garment rail, in a window display, in transit or wherever – is achievable in real-time.
ONLINE/OFFLINE
Achieving consistency across channels in realtime can be another challenge for retailers. Price changes and promotions can be instigated instantly online but in-store much depends on task management, human resources or whether the right promotional stickers have arrived.
Electronic shelf-edge labels (ESLs) have long been advocated as an ideal solution, but despite numerous experimental pilots the technology has been slow to take off in the UK. ESLs allow prices throughout a chain to be changed concurrently while the latest graphical versions can also display barcodes, QR codes or may be NFC enabled allowing access to product information via a shopper’s smartphone.
Elsewhere in Europe there has been greater enthusiasm for the technology. Pricer – founded in Sweden in 1991 – has more than 7,500 installations using 80 million ESL tags in 50 countries. “Online stores are incredibly transparent and display a lot of information on each product,” says Niclas Qvist VP Marketing and Global Partner Management at Pricer. By combining the tangible ‘see transparency of onlineshopping, high-street retailers will be at a huge advantage. With ESL, you can not only tell the customer that this product is out of stock, but when it will next be available in store, give directions to another branch which has availability, display a QR code or include NFC which will take them to your online store so they can order it.”
UK ESL specialist ZBD will be raising the bar when the company relaunches, at NRF in January 2014, as “Display Data” with new products to include a range of highly graphic ESLs and a low energy blue-tooth beacon which will enable access for the majority of current smartphones.
“It is difficult to have an accurate pricing strategy across every channel because it is difficult to do everything at the same time and ensure compliance in every store,” says JacquieBoast, SVP Global Sales, Marketing and ProductManagement at ZBD.
“Until a year or so ago ESLs were seen purely as a price tool but with a graphical label capable of logos, QR codes and so on, they are now a source of in-store product information as well.” ZBD’s labels range in size from 2 inches to 10 inches so enabling both CPG brand promotion and use as a selling tool for store staff who can use the tags to access stock availability or margin information for price negotiation.
“Smartphones and tablets are not always NFC enabled,” says Boast, “so having an NFC tag is no use for BYOD and NFC can also add up to 30p to the price of the tag so is expensive. Most mobiles already have Bluetooth so retailers can push promotional messages in real time both to ESLs and consumer devices where shoppers have registered.” New ESL ranges from Display Data will also include a paper white version which is much easier to read than the current black-on-grey varieties and a three-colour tag which will be the first of a planned multi-colour range. “ESL is back on the retail agenda,” adds Boast. “It is part of the digital strategy in store. In the past the ROI for ESL really didn’t stack up as a price tag but as part of a total omnichannel offering there is much more cost-justification.”
IN THE UK
In recent months, Tesco and Dixons have extended their use of ESL while B&Q has admitted to “behind-the-scenes trials” with Kingfisher CEO Ian Cheshire adding that the technology is now: “…about special offers for individuals.” Identifying shoppers in-store also involves mobile apps with registered shoppers identified when they enter and being given additional benefits – be that queue jumping at Starbucks or using Paypal at Karen Millen – as a “reward” for giving the store real-time access to their whereabouts.
“It’s the way forward,” says Siobhán Géhin, Associate Partner with Kurt Salmon, “although the US is further advanced than we are in the UK. Around 10% of Starbuck’s US sales now come via the app while Macy’s has sensors in the store to remind customers to activate their app. Our clients are certainly looking at these technologies.It’s all about making the customer journey smooth and easy.
Retailers can get a better view of what customers want and when they come into the store so that they can personalise offers in real-time.” Providing the same real-time immediacy and flexibility in-store as online to deliver a truly seamless omnichannel experience may be technically possible, may even be cst-effective, but it may well be a few more years before it becomes the standard high street experience.
