Digital-savvy customers expect merchandisers to deliver websites with rich content, plenty of product information and personalised offers. Thanks to technology, explains Penelope Ody, they can.
Successful retail merchandising has always involved matching assortment planning, eye-catching presentation and appropriate promotions to target market and customer demand. In store, sales staff have been on hand to connect product to shopper and close the sale. Online, search and chat have replaced the shop assistant while photographs and videos have replaced the window display, with numerous tools evolving to identify customers and appropriate product presentation and promotions.
Initially, these tools were fairly basic, often resulting in bizarre search results and broad-brush customer segmentation that led to inappropriate promotions, while broadband limitations restricted the delivery of high level content. Even Amazon’s habit of suggesting additional purchases based on basket content often fell wide of the mark, especially when Christmas shopping.
Today, it is all very different. As digital technology has evolved, so too have customer expectations. Shoppers no longer tolerate websites that are slow to load, use limited imagery, deliver irrelevant search results or are unable to instantly provide product information, stock availability or well-targeted offers.
Fortunately, new technology and improved broadband width are now meeting these expectations. Around 88% of EU households connecting to the internet now do so via broadband, giving suitably fast download speeds for websites peppered with countless images, zoom capability and stylish video clips. This is something that leading retailers in this Dimension exploit. Dunelm, for example, has ten or more photographs illustrating each item, while Otto includes a dozen or more for even the simplest outfit. Stradivarius puts a revolving shoe on its home page.
Other digital technologies, such as augmented reality (AR) are also being used to enhance merchandising. Lego began experimenting with AR back in 2010, later developing a system which enabled store shoppers to see a 3D image of a model by holding the box in front of a screen. Mobile apps then followed, including a development this year with Argos that allows shoppers to view models on their smartphones via the retailer’s app.
Other AR enthusiasts include IKEA. The retailer’s Place app uses Apple’s ARKit tool to let shoppers see just what IKEA products would look like in their own homes by virtually adding them to a scanned image of their room.
Behind the scenes, new IT techniques, big data and machine learning are all transforming the ways that retailers target their customers, turning broad segmentation into precise personalisation, as well as delivering instant insights about product availability and real-time delivery information to customers.
Various systems that can link individual promotions to match customer’s real-time actions are already available, while retailers such as IKEA have declared that they will “embrace the digitalisation of retail” and plan to use customer data to “be more in touch with, and closer to, its customers than ever before”.
A study by Ecrebo earlier this year found that 74% of shoppers surveyed said they would be more likely to shop with a retailer if they received personalised offers, while almost a third of this group said that personalised offers demonstrated that the brand understood them.
That understanding can start early. Many leading retailers, such as Victoria’s Secret, use a pop-up inviting shoppers to sign up for a newsletter or join a loyalty scheme – often with the carrot of a first purchase discount – as soon as a potential customer lands on the site.
With AI underlying many systems, delivering personalised offers and product suggestions becomes feasible for every shopper and – who knows? – eventually an individually personalised website for each customer, with appropriate high-tech merchandising as well.