One of the big things coming out of Shoptalk 2019, held in Las Vegas recently was: Stores need to get digital. Why?
Although nearly 80% of purchase decisions and, importantly, up to 60% of brand switch decisions are being made impulsively at the shelf edge, many retailers are not optimizing the pulling power of the shelf. In fact, one of the things I notice going on store visits, is that the more expensive the item, the less impactful the shelf edge is. Can you believe that?
The shelf-edge tickets have been used so far to inform the customers of the price of brands. However, digital technology is rapidly innovating every aspect of the retail industry. The merging of online and offline is creating a whole host of new brand communication opportunities, right at the point of decision.
The easiest scenario to consider is making it easier and, most importantly, less resource-intensive to change the shelf labels – that can be up to 10 million changes a week for the bigger networks. Changing all those printed labels? Well, you can look at e-tickets, but they can be a bit expensive. Park print or ESEL for a moment, though, and let’s get back to what the retailers are really trying to achieve. We’re talking about taking the action to the shelf edge:
Dynamic or Surge Pricing as a driver of sales uplift
In today’s retail, the consumer sits in the driving seat. Online has upped the pricing game significantly, and the pricing is top of the retailer’s strategic agenda more than ever.
- Offensive pricing
- Reactive pricing
- ‘Shelf by date’ pricing
- Demand-led pricing
- Promotion slot pricing
- Season pricing
In an ideal world, online and offline pricing are integrated. Some retailers are changing prices of their online channel – looking at how many times Amazon does that a day, you soon get the picture.
Central control – tell customers you are changing the pricing
The coming together of mobile phone and digital shelf-edge technology creates an opportunity to make really fast pricing moves. Retailers can experiment with different data-driven pricing campaigns, exploit the peak times of day or – perhaps more importantly – attract the off-peak customers.
With mobile and digital, the pricing can be changed by the hour or even by the minute. Spot pricing or target specific customer groups at specific times of day on specific days is well within reach. Data is easy to capture and can be used to provide better deals encouraging loyalty.
The ability to dynamically control the pricing across an entire portfolio of stores from one single location also means that the managers can react to the competitive pricing at a local store level, as well as ensure that all the prices are consistent regardless of the store's location. Faster, more data-driven decisions can also help to improve the margin management, and drive the level of up-sells and cross-sells throughout the store.
In-store messaging – shelf to mobile
Different reports suggest that up to 80% of customers use their mobile devices to do the pricing research whilst shopping in-store.
By integrating the shelf-edge technology with software that monitors competitor prices, the brands can dynamically update their prices in real time. Using the digital content, the retailers can inform customers that the live price comparisons have already been conducted, providing reassurance that they won't get a better price elsewhere. This results in a shortened buying cycle, and can also help to combat the consumer trend for showrooming.
Bring your online channel in store at the shelf edge
You’re buying a big, bulky, expensive item in store – a TV or a bed. It might be much more convenient to do that in store, online with the comfort that the customer is getting the best price. Mobile, shelf edge and online dynamic pricing technologies make that happen. By the way you won’t have to carry the bed home either – even if it did fit in your car.
But it’s not all just about the price
- The offline retail catalogue business is booming in an online world
- Millennial or Gen Z, almost all read the online reviews which directly impact the purchase decisions
- Reviews drive nearly a 20% uplift in sales
- Over half of young people aged 18-34 say they trust the online reviews more than the opinions of friends and family
The product reviews are an intrinsic part of the online shopping experience. Consumers trust the genuine consumer reviews more than anything else – placing just as much faith in those written by the fellow customers as the recommendations from friends and family. With today’s digital technologies, those reviews and, more importantly, brand options can be delivered right at the shelf edge.
Product recommendations right where the action is
The retailers can use the digital shelf-edge displays to deploy a captivating animated content highlighting and recommending the complimentary products, such as specific makeup brushes for makeup palettes, or the most suitable paste for wallpaper rolls. Alongside the product recommendations, interactive content revealing hint and tips on getting the best out of the chosen product can also help to create a customer experience that is engaging and has real value. Of course, don’t forget the combo deal right at the shelf edge.
Is your brand talking at the shelf edge? Mobile. Digital. Price.
Bluntly, the retail technology has to drive the sales uplift and operating efficiency (read: getting the best out of your people and reducing wastage – product and materials). Digitally networked stores with data driven pricing technologies is the future. Those who engage the customer at the shelf edge and nudge market at the shelf edge will win. Are you right where the action is?
Shoptalk is where the entire retail ecosystem comes together to create the future of retail based on the latest trends, technologies and business models, including changes in consumer expectations.