Positioned to profit

Rigorous planning and a long-term strategy come first for in-store technology implementations.
Positioned to profit
By Administrator
Sun 13 Jan 2008 05:37 PM

You have to build loyalty to be successful in retail," comments Birgit Nieschalk, director of B-Seen. Simple words, but ostensibly the driving force behind the growth of in-store technology in the FMCG industry.

Nieschalk's Dubai-based firm consults retailers on how to incorporate technology to support their businesses, a step which cannot be taken frivolously.

Retailers are turning to digital signage, contactless payment and self-service checkouts to help them retain market share in the face of growing competition

"There are digital signage screens in every store at Mall of the Emirates, but approximately 80% are a waste of time, however I help retailers to get a return on the investment."

There is strong potential for technologies that "support processes, inform, entertain and transport feeling," she says, such as loyalty systems and information terminals.

"It's much more expensive to invest in a new customers than to retain an old customer and there is more need to differentiate from the competition as everything the customer sees, feels and hears is creating his experience.

On-demand, rich media information - in the form of eye-catching self-service kiosks and virtual display cases - is on the rise and reaches out to consumers while they are in the buying mode, according to Rohit Fernandes, managing director of solutions provider Sequential Soft.

"Our kiosks allow shoppers to sort through catalogues, compare product prices, order goods, find merchandise in-store or, simply, be amused for some time.

Technology also serves to exploit store layouts. Closed-loop analytical CRM systems use continuous in-store video coupled with ‘image understanding' software to gather real-time data about where customers go and what they do during the shopping experience.

"The data is computer-analysed and turned into information that can give retailers insight into the effectiveness of store layout, or help brand marketers measure the stopping power of a display."

New technologies parade the potential to attract consumers' attention, provide detailed product information and make cross-sell suggestions, he stresses, including projection and holographic displays.

"Retailers are turning to digital signage, contactless payments and self-service checkouts to help them retain market share in the face of growing competition. Some digital screens can determine the sex and approximate age range of viewers, allowing the advertising to be tailored to the appropriate audience.

Display and merchandising can also be improved with Planogram software, which visually communicates how merchandise will fit onto a store fixture or window when it arrives, to guarantee shrewd visibility and price point options.

Digital signage offers the opportunity for in-store edutainment, which permits retailers to shorten waiting times and position their value to consumers, for example by providing information on food quality.

Selling space to third parties on digital signage networks could shift retailers' focus from their original target group and core business, Nieschalk warns, as rather they should make use of the expensive retail space and position screens next to checkout and products such as electronics which may require explanations.

"I would recommend retailers to have a content mix if they want to integrate digital signage to help support the ambience and interior design, and educate customers about their services, products and concepts. Do a mix of branding, entertainment and advertising, combine this with in-store radio as selling space should play a minor role in the installation.

Content is key, she says, yet the relationship between different departments involved in the installation is even more crucial, such as marketing professionals selecting the message, IT experts holding responsibility for hardware, and the shop fitting team's integration efforts.
"When people are working to build the interface between the retailer and the customer, the problem is they all speak completely different languages such as the marketing manager trying to explain why he wants certain pictures.

The most important move in the deployment of technology, she says, is the recruitment of "someone who can speak all of the parties' languages, aid communication between them and ensure none of them have a leading role.

Improving stock and inventory flow, making sure the right products are on the shelf at the right price and at the right time reduces costs and improves efficiency

Nieschalk is armed with a wealth of experience after working as project manager for interactive shopping projects with German giant Metro Group's Future Store, an initiative designed to set new technological standards for the consumer goods industry.

The project tested technologies including its Personal Shopping Assistant (PSA), which was attached to trolleys and recognised customers' shopping lists after they scanned a barcode; the Intelligent Scales, boasting an inbuilt camera to recognise items for weighing, and self-checkouts.

"The self checkout allowed customers to scan items and pay directly at a machine, which proved popular for small baskets during rush hours, while the PSA targeted family shopping, yet ultimately customers at the Future Store could decide whether or not to use the technology.

The group promotes the advantages of Radio Frequency Identification (RFID) for pinpointing the exact location of consignments - which are embedded with smart chips known as transponders - and keep an overview of processes throughout the supply chain.

RFID technology ensures retailers steer clear of out-of-stock situations and delivery bottleneck, as stock management systems send a message if stock levels are running low, and also recognises if goods are approaching their expiry dates.

Value-added reseller Columbus IT Middle East in Dubai advises retailers on Microsoft Business Solutions to "increase productivity and sharpen competitive edge.

Managing director Manjeeth Singh underlines the significance of technology to streamline operations in a bid to help manage products, processes and relationships for profitability.

Loyalty programs are positioned as the technology most likely to succeed, he comments, as profitability could soar with strong repeat custom.

Retailers are under pressure to track orders, invoices and cash payments from one location, he says, however he advises retailers to diagnose before they prescribe due to the plethora of nationalities within their workforce.

"There is an education issue here as retailers are from the old school, yet we know a lot of retailers who have big problems with their inventories and mismatches all over.

Middle East retailers are currently crying out for innovation in inventory optimisation, integrated credit card management systems, multiple sales promotions, advanced replenishment, SMS integration, kiosk services and queue busting systems.

"Improving stock and inventory flow, making sure the right products are on the shelves at the right price and at the right time reduces costs and improves efficiency," says Sveinn Aki Ludviksson, sales director, LS Retail.

"Handheld terminals have improved, so in addition to remote product enquires and replenishment features we provide support for queue busting and personal shopping."

The Iceland-headquartered company develops solutions based on Microsoft Dynamics Navision Financials and ERP Suite, used by more than 17,000 stores at 39,000 terminals worldwide.
Competitive promotions are in high demand in-store, he says, which have driven companies to deliver and tailor-make facilities, which track performance hour by hour if needed.

Retailers in the region also command state-of-the-art technologies for fresh food replenishment, mark down and loyalty systems, and sales trends reporting.

Retailers are also starting to place a considerable chunk of technology spend into their point-of-sales systems, backed by their ability to track information from consumers reliably while simultaneously improving customer service.

According to Annette Tarlton, marketing director for manufacturer Star Micronics retailers are keen to up their game with new innovations. The company boasts new clients including Harrods of Knightsbridge, London, and industry ‘firsts' including a multi-functional printer capable of generating receipts, barcodes, labels and tickets.

"Our TSP100 futurePRNT enables retailers to keep their current POS software and expand their abilities by adding word-triggered coupons to produce focused campaigns directly at the point-of-sale, thereby keeping their hardware costs down and extending their marketing capability at very minimal cost.

Queue busting is pivotal to technology trends and retailers rely heavily on excellent barcode scanners, according to Roberto Schiavo, regional sales director Italy and Middle East for Datalogic Scanning.

Digital signage hardware supplier NEC Middle East is chasing current demand for the technology by encouraging the use of touch screens and the combination of motion sensing and projection technology, where the advertising content reacts to consumer input.

"Such an application could be a brand message projected onto a supermarket floor, that reacts to the customer walking over it," says Ian Gobey, general manager.

"These technologies encourage more interaction with consumers in an environment where they are desensitised to traditional means of communication.

The company's hottest selling products in the region are LCD Multisync commercial displays sized from 32" to 65", often used at point of purchase to communicate brand messages.

Digital signage generates revenue, increases impulse and add-on sales, educates retailer customers, relays core information pertinent to products and services on a daily or seasonal basis, and reacts immediately to situations on regional and international levels.

According to Gobey, poorly executed and managed projects have damaged the reputation of in-store digital advertising.

"NEC is now picking up business from second time technology adopters who had their fingers burnt first time around by poor products and badly implemented signage systems," he says.

There has been an explosion of interest for transactional kiosks in the self-service space, according to Demetris Constantinou, area solution manager, retail self service, NCR Middle East & Africa.

The kiosks are spaces which should be monitored remotely, and in which increasingly advanced retailers can sell their services and settle bills without the cashier's invention, information kiosks where consumers can retrieve product information, locate goods on the shelves or check the prices of items.

"We see a great demand and increase in investment for POS solutions which reduce queues by making the checkout process more efficient or convey marketing messages at the point of time of the transaction to boost sales.

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