Retailers with a bricks-and-mortar presence are facing particularly tough times, given the challenging economic climate and its negative impact on consumer confidence
But Retail Technology discovers that instore technology developments still have the power to deliver maximum return on investment
Consumers have reigned back their spending in response, prompting their migration online in search of bargains and increased downward competitive pressure on prices. Added to this, increased market volatility has led to an extra squeeze on margins.
The impact of these trends has had a negative effect on the UK High Street. The July 2011 British Retail Consortium KPMG Retail Sales Monitor found overall UK retail sales values were only 0.6% higher on a like-for-like basis from July 2010, when sales had risen 0.5%. “Shoppers were only tempted into stores by an unprecedented number of promotions, which come at the expense of margins,” commented Stephen Robertson, British Retail Consortium director general.
“This is a modest improvement on recent months but overall conditions remain very difficult for retailers. When you take into consideration inflation and January's increase in VAT, 2.5% growth effectively means people are buying fewer goods.” So what can merchants do to improve footfall and drive higher conversion rates in their retail stores?
Joanne Denney-Finch, chief executive of food and grocery market researcher IGD, observed: “Our latest ShopperTrack research reveals 51% of people say they are checking the price of every single item they put in their shopping basket. A similar number of shoppers are comparing prices between products and between stores. Food retailers, together with manufacturers, are responding with new ways to help shoppers keep to a budget via coupons, meal deals and price campaigns.”
So electronic point-of-sale (EPoS) systems – which have already been under pressure to evolve in response to multichannel consumers, who may want to return an item bought online or visit another nearby branch to purchase an item that might be out of stock in their local store – are a key IT-based battleground in the fight to boost retail store sales. Tony Saunders, sales and marketing director at payment systems vendor VeriFone agreed.
“We are in the midst of a major EPoS revolution. Retailers are under pressure to incorporate new payment technology into their existing retail architecture, while also remaining relevant and interesting to their consumers,” he said. “Successful retailers will be those who are quick to take advantage of new developments to stay competitive.”
Saunders added that, as payment devices continue to advance, with features such as touchscreens and the ability to play media, retailers would need to evolve how they interact with customers at the point of sale. “The challenge will be to provide a faster and richer customer experience instore with mobile PoS devices and self-service payment solutions able to connect retailers and customers at the till,” he added.
Attracting shoppers into the store
In addition to updating how retail staff and customers interact with instore IT systems, a common retail challenge is making a store stand out. “Some retailers struggle to create an eye-catching display when they have a small space to work with, and franchise retailers may have their creative freedom limited in terms of store design and layout, due to corporate requirements,” Daniel Rose, Panasonic Professional Projector & Display Europe category manager told Retail Technology.
“The secret is to generate content that is engaging to passersby and display it on a high-quality screen to maximise the impact on your customers,” Rose said. “This provides not only an eye-catching advertisement for the store, but allows retailers to keep content fresh, providing a compelling retail experience. As displays come in various sizes and are flexible in their application, they suit all retail outlets from small independent boutiques to large franchise department stores.”
As the implementation examples in the 2011 EPoS, digital signage and instore technology feature will attest to, new till functionality, promotional displays and even lighting and music are becoming increasingly popular among retailers as a way of encouraging customers to shop in their stores in a dynamic and entertaining way.