The possibilities of digital aisles are endless for retailers

First published in Retail Week 21 August, 2014 | By Simon Hathaway

It’s easy for retailers to beat themselves up about the shortcomings of physical stores in the face of the onslaught of digital.

As online shopping becomes ever more sophisticated, more of the reasons to shop seem piled in its favour: convenience, choice, interactivity and price. It’s enough to make the manager of the average tatty chain store hold their head in their hands.

“By enlisting touchscreen technology, retailers can give customers access to more of their inventory than would be possible in many stores”

Simon Hathaway, Cheil

But all is not lost. Floor space may be one of the most limiting factors for retailers, but innovation is promising to revolutionise the in-store experience.

The concept of the ‘endless shelf’ is easy enough to understand. Basically it is an interactive shopping wall of the type seen in retailers as varied as Audi City and Tesco’s Seoul subway store. By enlisting touchscreen technology, retailers can give customers access to more of their inventory than would be possible in many stores, creating go-to retail environments in the most convenient locations.

Now the idea is starting to go mainstream. Adidas created a shopping wall that lets sportsmen and women select the right style, colour and size of sports shoe. Marks & Spencer followed suit with its ‘virtual rail’ of revolving fashions and now Argos is joining in by pulping its catalogue model in favour of iPads, with the opening of its first small-format digital store.

Endless aisles in use

Ditching the physical shelf, clothing rails and – one day soon perhaps – big-box store formats in favour of the endless shelf is closer than you think. Samsung is now raising the stakes with CenterStage. Developed by Cheil, The Barbarian Group and Samsung, this ultra-HD in-store system will be used to demonstrate Samsung’s home appliance range.

 Centre Stage

Already in-store in North America and expected in the UK this month, the interactive wall of screens with touch interface lets customers explore life-size fridges, washing machines and dishwashers.

The clarity of the HD images is four times sharper than most TVs, so consumers will feel like they are looking at an actual product and can even change the room setting to get a better idea of what a product might look like at home.

For customers, it’s an amazing interactive in-store shopping experience that clearly communicates product benefits. Retailers will see multiple benefits. It allows them to show a full range in a relatively small space, enabling smaller formats to widen their sales opportunity. It also creates a genuine reason to visit a store, something that many struggle to deliver.

Before I call the revolution in the high street, it’s worth pointing out that the success of the endless shelf will depend on retailers being convinced of its return on investment. At the moment, a lot of digital solutions are being included in refit budgets, rather than sales or marketing. But there will be brands that use this as an opportunity to take a content captaincy role, using it to enhance partnerships with key retailers.

This approach will lead to some interesting conversations between brands and retailers. What seems indisputable is that the endless shelf gives both a powerful piece of kit and that is unalloyed good news for the high street.

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Is The Best Before Date Due On Supermarkets?

First published by ESM, 03 August 2014

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Since the introduction of the supermarket format more than 80 years ago, its development has been a one-way tale of growing dominance to the point where Tesco boasted it accounted for one pound in every seven spent in the UK.

This week’s ousting of supermarket behemoth’s main man Philip Clarke is another indicator not just of the decline of Tesco, but the sector itself. It’s a slide is evident not just in the UK, but globally.

In a recent report, retail association the IGD predicted that sales from the UK’s ‘big four’ supermarkets will decline by 4% over the next five years.

They will still account for 34.9% of spend, but they are losing their grip as the dominant destination for grocery shopping.

It is ironic that big-box retailers blamed for killing high streets are now being challenged as being no longer relevant to how shoppers want to live their lives.

Competition from discounters such as Aldi and Lidl, convenience offerings, and online shopping provide a triple whammy for beleaguered supermarket bosses.

Further research by Shoppercentric offers little assurance.

It found that 70% of UK shoppers had changed their behaviour.

They shop more frequently, are unashamed users of discounters and coupons, and frequent more stores, no longer believing that one supermarket is best at everything.

Around the globe, supermarkets are facing similar challenges as connected consumers make greater use of mobile technology in particular to sidestep pitches for their loyalty.

Companies that have spent years betting on ever bigger out of town superstores are having to draw breath and think of another plan.

Tesco famously opined that every little helps – a promise based mainly on price.

Now retailers have to redefine their value proposition for consumers who expect more.

Shoppers juggle with three budgets: financial, time and frustration, and armed with mobile technology will seek out the best fit among all available players.

Technology has fundamentally skewed the price/quality value equation.

Whereas once it was limited to price x quality, now it is (price x quality) ÷ convenience.

And every time we experience something new that makes our shopping experience more convenient or personal, it resets our expectations.

All around the world, retailers are looking at ways to revitalise their offering in line with the new demands of agile and connected consumers.

In South Korea, Emart already understand that mobile devices are not just there for mCommerce, but also go in-store with their customers.

Understanding that you can’t push while holding a mobile, they added a phone holder to their shopping carts and introduced a mobile store navigation system that playfully directed shoppers to great deals.

It’s just the start of grocery retail getting personal again.

In the US, the epitome of big-box retail, Walmart, has also started to adapt with an ambitious approach in Walmart 2 Go, a shop and collect service.

Even Morrisons, the UK’s more traditional stalwart of supermarket retailing, is teaming up with home delivery network Ocado to offer online shopping for the first time.

Retailers are trying to decide between long term or short-term strategies.

Sainsbury’s has formed a joint venture with Netto to bring the discount brand back to the UK.

French group Auchan has hit the brakes on its online shopping developments pouring money into discounting in an effort to stem falling sales.

Carrefour’s price-plus strategy exemplifies how convenience is now one of the defining characteristics of success.

It is allying low prices with more non-branded items and a collection service for online shops.

Its UK counterpart, Tesco, is looking to build a retail experience with Harris + Hoole coffee shops, family-friendly Giraffe restaurants, and space given over the community groups and activities.

And then there is the spectre of new entrants.

Amazon is looking upmarket with its AmazonFresh trial, which delivers fruit and vegetables in urban areas.

The certainties that supermarkets built their businesses and reputation on are eroding.

Value is no longer just about price.

It’s a more complex equation for food retailers that now sees convenience rising up people’s agendas.

To survive and thrive supermarkets will have to assemble a basket of items that answers the demands of today’s agile consumer.

They will have to do all of the things they are currently doing and more.

Most importantly, they must show that they remain central and relevant to the lives of their customers.

 

I don’t miss the record store

I was £40 man, the guy who could not leave a record store without spending £40. Back when people bought records this was a recognised shopper, the individual who had to by at least 4 albums and they typically cost £10 each.

It was a magical shopping experience, the store was full of people thumbing through racks of records, all the same shape, but each different in colour and key visual. Band logos changed as they reinvented themselves to stay relevant, knowing that fans would be loyal, but true music lovers were always searching for the new. The store was a place to explore, to learn and it felt like there was no end to choice. The staff became our friends; they were our guides and editor, occasionally looking a little disapprovingly at our choices. Leaving the store with a bag full of music felt good, a mission accomplished and with all the excitement of the new music ritual to come. Exploring the packaging, reading every sleeve note and playing each track. Then the sharing.

Today I am £10 a month man, a fully signed up customer of a music subscription service. I love it and listen to more music than ever.

Every day I thumb through carousels of music, all the same shape, but each different in colour and key visual. I explore, learn and find what is new. There is almost no end to the choice and the guides are specialist curators I choose to follow. My friends are there to help me edit and then there is the sharing.

I don’t miss the record store because Spotify is a fantastic retailer.