Happy New Year!
We’ve made another jog around the sun and look forward to what 2018 has in store for our industry.
This past year, the expansion and fluidity of e-commerce has continued to challenge traditional retailers to reinvent their strategies of engaging customers.
However, brick and mortar stores are answering back, personalizing the shopping experience to compel consumers to keep venturing through their doors.
Our industry experts at Frank Mayer and Associates, Inc. sat down to discuss the long-term trends they envision for retail along with how that translates for the point-of-purchase business.
Retail Gets Personal
By using predictive technology to analyze consumers’ digital behavior, e-commerce sites have the luxury of personalizing a customer’s shopping experience to align with his or her interests. We see it when the webpage we’re browsing suggests a scrollbar of similar product options or when the exact pair of shoes we considered a day ago now appears on our Facebook feed.
How do stores compete with this acme in customized attention?
Senior Vice President of Business Development Ron Bowers reminds retailers to forget their own needs, and instead, focus on meeting the shopper’s desires. “The consumer has become more sophisticated about what experience he or she wants in a retailer’s store and has come to expect personalization to achieve convenience.”
Loyalty programs have become an important leverage point to offer these unique individual experiences. Have you ever received a coupon packet from your local supermarket that felt eerily catered to your usual grocery buys? That’s no accident.
In fact, in response to why Kroger collects specific customer information for its loyalty program, the supermarket chain’s website states it wants “[to send] relevant information and personalized communications, including ways to save on items you buy most often.”
Brands and retailers have come a long way from the traditional points programs of the past and have embraced omni-channel approaches to engage consumers.
Starbucks serves as an example of a company capitalizing on its investment in the customer experience with its Starbucks Rewards program and app. Not only can customers use the app to check for coupons, keep track of “star” points and pay at checkout, but patrons can place orders before arriving at the store.
Technology is also changing the scenery in brick and mortar stores, and it’ll only continue to propagate. Bowers says, “We’re seeing more technology that relies on facial recognition to cater experiences based on gender, age and much more. Imagine a customer walking up to an interactive display and having a different brand experience than the next person. It’s the ultimate in pinpointing promotions to a targeted demographic within a physical store.”
Finding the Edge with Category Management
The end goal with personalization is to create convenience for a prospective customer. To do this, stores must find that edge to differentiate themselves from the larger e-commerce sites and attract shoppers through their doors.
According to Creative Director Ryan Lepianka, more retailers are turning to category management to display comparable products made by a variety of brands.
“It’s not uncommon to walk into a big box electronics store now and see its own branded display featuring five similar thermostats produced by different manufacturers,” Lepianka states. “It allows the retailers to choose which products would appeal to shoppers in their region, and it also offers convenience to the customer who wants to compare similar products side by side without all the brand marketing noise.”
So now that the retailers have enticed the customer to visit, what trends will we see for the point-of-purchase displays? Read on.
Building that Brand Loyalty
Millennials. It’s that familiar buzzword about a generation of young adults, and you might be hard-pressed to name a day you’ve gone without hearing it referenced. However, there’s a reason this group of early 20 to late 30-year-olds are factoring in to so many marketing plans.
Having surpassed the baby boomers, millennials are now the largest living generation, which equates to some pretty robust purchasing power.
How does this translate for brands eager to reach this audience?
In an interview with Forbes, Kira Karapetian, VP of marketing for cloud-based product data engine Label Insight, touches on the mentality of the generation and its buying habits as well as how brands and retailers need to find a way to connect.
She states, “…when millennials make purchase decisions, they’re considering more than the traditional drivers of taste, price and convenience. They value authenticity, and make decisions based on the way they perceive brands to impact their quality of life, society as a whole, and how that brand may be contributing positively to the world.”
Vice President of Business Development Joe Holley has noticed the trend toward integrating technology more in standard merchandising to educate consumers and help brands discern themselves from competitors.
“Brands have become more attracted to telling their story because it resonates with this generation of purchasers and builds brand loyalty. Consumers want to know where their coffee beans come from and are interested in the charitable work supported by a clothing company. Hence, we’re seeing more video loops and audio features built into displays in order to deliver the message in a clear and concise way.”
Over the coming years, Holley predicts brands will continue to integrate more and more technology into their point-of-purchase programs in order to distribute content in a way familiar to a generation of digital natives.
A Self-Service Market
We live in a world where we can learn the weather forecast for a zip code 200 miles away with a quick tap of an app, appeal to Google for help with a last-minute science project, and program our phone to direct us turn by turn to a destination. Instant gratification and immediate access to information is not just desirable – it’s expected.
This same connectivity is key for displays, which are responsible for consumer education in a realm where self-service has become the new norm.
Remember those millennials? Meet their younger siblings, Gen Z. If you think the first group is digital savvy, you haven’t met the latter.
This next generation is eager to help themselves and is open to experimenting with new services and technology. This is important for brands to remember as they cater their merchandising efforts to this group.
Frank Mayer and Associates, Inc. President Mike Mayer offers, “It’s more important than ever for interactive programs to educate a customer and assist him or her in locating and buying a product, because as shoppers become less reliant on sales associates, the kiosks will step in as educator and facilitator.”
David Anzia, Senior Vice President of Sales, agrees. “We’re seeing endless aisles becoming more popular in department stores so that limited in-store inventory doesn’t hinder an impromptu purchase. Providing the convenience of finding the shirt you like in the right size is a terrific resource to shoppers.”
Further, some quick service restaurants and fast casual establishments have begun offering self-order kiosks for those who want to avoid the line or customize an order easily. Many of these businesses feel the investment is paying off in the form of increased revenue due to the upsell of meal options as well as better labor productivity. And of course, the customer wins with a superior experience.
If we could sum up our predictions for 2018 in one short phrase, it’d be “customer experience.” Nothing drives ingenuity and change more than the customer, because with a barrage of messaging and numerous purchasing avenues available to him or her, brands and retailers will need to rely on providing an experience he or she can’t get anywhere else.
Some questions to ask for 2018
- How will brick and mortar stores contest the e-commerce experience?
- What will point-of-purchase displays look like for big brands as they keep the coming generations and their spending power in mind?
We’d love to hear your take on what’s ahead for the coming year.
Happy New Year!