With the unprecedented upheaval in retail in recent years, brick and mortar shops are undergoing an enormous transformation. Many were worried the retail industry would struggle to stay alive in the face of competition from eCommerce.
Contrary to expectations, physical stores have not disappeared, but are facing many challenges. In order to compete they need to provide an in-store experience that will keep consumers coming back.
What are the latest retail execution trends that brands and manufacturers can leverage to help their retailers deliver the best in-store experience?
Augmented Reality (‘AR’)
Retailers are already using augmented reality to help 'recreate' the in-store customer experience for online customers. But AR can also help brands and distributors with in-store operations. For example, it can show store staff how a properly set up end-cap should look. Another use-case is to assist merchandising reps in photographing shelf space, properly positioning products on shelves, or where to place new merchandising props. AR is a great technology to ascertain that your products are displayed exactly as they should be.
Artificial Intelligence (‘AI’)
What is AI and how can it help in-store merchandising? Simply put, AI technology takes big data sets, runs them through sophisticated algorithms and automatically produces insights and actionable information about your business, inventory, customer behavior and so on.
Artificial Intelligence can help with automatic inventory management, analyzing how products are stocked on shelves. Through image analysis, brands and wholesalers can analyze shelf allocation and check product display is in compliance with planograms.
AI is a real enabler of tactical, on-the-fly actions affecting field reps, and of strategic analysis by sales leadership, marketing and category managers. The applications are endless and as data is the retail industry’s “fuel”, the entire retail ecosystem will have to leverage AI to remain competitive.
Experiential marketing is providing consumers with the opportunity to fully understand a product or service by using their senses and engaging with it. By creating a more immersive retail experience, brands can drive people towards their customers stores and ensure they leave not just with products but also memories of an experience that will stay with them. ‘Retailtainment’ the fusion of retail and entertainment, is predicted to dominate retail merchandising through brands providing the resources to to provide consumers with fun, unique experiences that elevate shopping above anything it’s previously been. It’s a great way for brands to create new customers as well as retain existing ones.
The Internet of Things (‘IoT’)
The Internet of Things creates a network between internet-connected physical devices and is having a real impact on retailers. In fact, it is growing so quickly that an estimate from McKinsey states that the economic effect of IoT on retail stores will range from $410 billion to $1.2 trillion every year by 2025.
There are many IoT applications already being used but let’s focus on two examples that can benefit brands and wholesalers specifically with retail execution – image-based shelf analysis and RFID Smart Shelves.
With image analysis, images captured by cameras installed on-site, or photos taken with smartphone by field reps, can be transmitted for analysis, allowing brands and distributors to gain valuable insights such as share-of-shelf, out-of-stock items, compliance with merchandising guidelines and competitive intelligence (which competing brands sit next to mine? How are they being presented? etc.)
Smart Shelves are equipped with an RFID (‘Radio Frequency Identification’) reader, which is installed within normal shopping shelves. The reader scans tagged items on the shelf and tracks stock levels providing brands with data that can be analyzed and translated into customer preferences.
To Sum Up
Even with the increasing popularity of eCommerce, consumers still want to shop in actual retail stores. But their expectations have changed enormously. For brands to keep up with these expectations, they must take note of the emerging trends and the latest technology to merge the digital and physical worlds and create a seamless shopping experience.