innovative thinking: talking trade
Consumers aren’t going to stop using technology – so make it part of the store experience
Dynamic display provider Displaydata director of marketing and product management David Hilton on how to deal with the changes technology is having on the store
U
K consumers spend more time using technology than they do sleeping, according to research
by Ofcom. It’s a frightening thought, but when you add up all the devices and opportunities the average person encounters every day – flicking through social media when you turn your mobile phone alarm clock off in the morning; surfing the net at your desk; browsing your iPad while watching television in the evening – it’s easy to see how digital interaction has become intertwined with our lives. Nowhere is this more evident than in
retail. This explosive use of technology, combined with the fact that Britain is only just emerging from economic recession, has created a culture in which shoppers want the best price for a product – as well as the most rewarding shopping experience. This value-driven mentality has given
rise to new shopping behaviours, which are changing the way consumers interact, in particular, with the store. For example, an increasing number of shoppers are indulging in a trend known as showrooming, where they browse for a product in- store before buying it online. Figures from Deloitte suggest that up to 84% of consumers have showroomed to get the best deal on a purchase. But there are also trends driving traffic into the store; many consumers are
researching products online before buying in-store, a trend known as webrooming. Recent research conducted by Displaydata found that 72% of UK shoppers have webroomed specifically to compare prices. This shows that while they want to go into the store and see the product up close before buying, they aren’t prepared to pay above market price for that item. It’s a complex landscape.
What does the digital obsession mean for electrical retailers? While the retail sector as a whole has been affected by these behaviours, electrical retailers specifically have been greatly impacted, as consumers are very price sensitive when it comes to big ticket items. Shoppers’ ability to check prices anytime,
anywhere has created a new mandate for electrical retailers to offer value in the store that’s consistent with pricing online – something that’s easily said, but much tougher to accomplish. The major issue is that online pricing
updates can be made instantaneously, giving ecommerce retailers the flexibility to make adjustments as often as they like. In the store, however, the process of changing paper labels takes much longer – and can often result in a price being out of date by the time it’s been rolled out across a retailer’s network. To make the challenge even tougher, continuous price checking by consumers is intensifying competition between ecommerce retailers, leading them to increase the frequency with which pricing is updated online. This means stores are trying to catch up with a channel that is accelerating away from them at a rising rate. It’s particularly tough for the electrical industry, where a large proportion of independent retailers are battling with dominant online operators.
How can retailers increase consumers’ love for the store? The pricing dilemma might sound like a
Electronic shelf displays allow quicker updating of product information, pricing and promotions than traditional paper labels
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www.innovativeelectricalretailing.co.uk
downward spiral, but there is good news: people still crave bricks and mortar. Our research found that 78% of UK consumers
do most of their shopping at a store, while 61% make the majority of their electronics purchases on the High Street. What causes this relationship to break
down is when consumers get the impression that stores aren’t offering the greatest value for money. This drives customers into a digital world where they have pure pricing transparency, alongside other virtual features such as extended product information, recommended accessories and consumer reviews. There will always be a market for both offline and online shopping channels, but the electrical store’s survival relies on retailers incorporating consumers’ love for technology into the physical environment – ensuring they don’t have to use an ecommerce site to get value for money. New digital display solutions, such as
electronic shelf labels (ESLs), are enabling retailers to bridge this gap. By dispensing with paper labels, stores can update product information in a matter of seconds, giving them equal agility to online platforms when it comes to updating pricing and promotions. More than that, the fully graphic capabilities of ESLs are empowering retailers to add richer content at the shelf edge, which supports the use of consumer smartphones in store – such as adding QR codes linking through to further product information or special offers. Some firms are even adding competitor prices and product reviews to their dynamic labels, to erode the need for mobiles altogether. The impact of retail technology in the
store isn’t just being felt by the consumer, either; making the transition from paper to electronic labels can save hundreds of hours for store associates, freeing them up to focus on customer service. And ultimately, it’s this one-to-one interaction that is unique to the store, and can’t be replicated with digital technology.
• Displaydata is a dynamic display provider, which has looked at the disparity between online and in-store pricing. More insights on adding value in the store can be found at
www.displaydata.com/rethinkingretail
March 2015
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