The last yard of retail in 2020
Since making this blog post, SignIQ has changed its name to Last Yard.
The last yard has long presented the biggest struggle for retailers. The last step in the supply chain, the last yard represents the movement of products from the shelf to the customers basket. With the rapid technological innovation we are seeing in retail, the last yard is quickly expanding to new frontiers. Once upon a time the last yard would have involved personalised, one to one service for every customer. Now, retail environments depend on multiple endpoints to convey relevant and impactful shopper communications.
Perhaps the most important element of the last yard in 2020 is data – obtaining it, analysing it and implementing it to the retailer and shopper’s mutual benefit. Data has always been at the core of what drives retail; knowing which products are selling and in what volume. Over the last two decades, that data has become more complex and more important. With the rise of omnichannel sales, having the capacity to analyse past behaviour, predict future behaviour and provide up to date product information to customers across an ever expanding sales network, has taken on a new significance.
We know data is key from the perspective of the retailer to maximise profit and efficiency across sales channels, but consumers are now beginning to demand the data that matters to them, both online and in bricks and mortar stores. Exposing product and sales data to the customer, to better inform their purchasing decisions, is becoming invaluable for improving customer experience and converting baskets. Price will always be an absolute necessity at the shelf edge, but it is no longer the sole deciding factor for all consumers. Information such as where a product is made, sustainability, ingredients, dietary requirements and other specifications are now taken in combination with price to result in conversions at the last yard.
The explosion of omnichannel offers yet another opportunity for retailers to utilise data to the advantage of the customer and consequently, themselves. If leveraged properly, data offers the potential for far more fluidity between online and bricks and mortar retail. Retailers with online platforms have begun to display their in store stock levels, so shoppers can find products online and know where they can make an in person purchase. Furthermore, the proliferation of click-and-collect shopping that we have seen over the last two to three years shows a preference on the part of shoppers to purchase online and pick up in store at a time that is convenient to them. However very often there is a lag time between the stock showing at a brick and mortar retail location and what is on the shelf and available for purchase. Customers will arrive in store, expecting to find products in stock and be disappointed when said products are not on the shelf. Eliminating this lag throughout omnichannel retail is becoming critical for retailers with a physical store presence.
The ready availability and reliability of all this data, to be pushed to any endpoint, is the direction the last yard is taking in 2020 and beyond.
The Shelf Edge
In terms of bricks and mortar retail, the shelf edge continues to be the most significant physical presence at the last yard. This is the last chance for retailers to communicate with their customers, increase basket size and convert products to purchases.
The shelf edge is where a range of data comes together. Regular and promotional pricing, offer type, product information and cross merchandising all combine in various ways at the last yard. In order to leverage the shelf edge to its greatest advantage, retailers must utilise the right shopper engagement platform. This platform should facilitate the amalgamation of data and have the ability to present it to the shopper in a way that captures their attention, sparks their interest and allows them to make an informed buying decision. Edge of shelf communication, when utilised correctly, has the ability to both reassure the shopper that they are making a good purchasing decision, whether based on price or product information, and also to lure the shopper into making unplanned purchases.
In 2020 the shelf edge is going digital. The traditional medium for communicating at the shelf edge is printed tickets and this will continue to be true. However, as digital technology has advanced in other areas, the retail sector has also been impacted. In the last few years retailers have been exploring the use of digital communication at the shelf edge. The digital shelf edge, when done well, should use the same data, perform the same function and convey the same information as a printed ticket, but with far more visual appeal. The real benefit to the digital shelf edge, apart from the obvious reduction in ongoing operational costs, is the ability to change the displayed data in real-time. Relatively speaking the digital shelf edge is still in its infancy, with suppliers and retailers still tentatively feeling their way around the new technology. Nonetheless, once this technology is more readily available we expect to see fast growth. Most likely this growth will pick up through the second half of this year and beyond.
Digital advertising and communication are becoming the norm, especially in retail. More and more retailers across different industries are leveraging digital screens and displays to share products and offers with shoppers, and we expect digital in store advertising to continue expanding.
In the past, much of the digital advertising space was run by advertising agencies, a third party that would create a retailers content, meaning the content static until a new campaign was completed. Having a system in place that allows retailers to manage their own digital content is a must.
When retailers have control over their digital messaging they are able to unlock the true value of digital advertising: Flexibility. Having a digital platform in store,over which the retailer exercises full control, allows them to have power over what is advertised and when. Highly reactive, intuitive, time of day advertising, that pulls product and pricing information from a central database is the future of retail.
The last yard doesn’t just exist in bricks and mortar stores, it also exists online. The rise of ecommerce, social media and mobile devices over the last decade have fundamentally changed consumer culture and therefore, the last yard of retail has evolved to a new frontier.
E Commerce is a format with which we are all very familiar. Social media as a platform for retail is a newer customer experience. Use of social media for retail marketing has evolved over time. Initially the platforms were used for advertisements, then came the ability to link individual products for purchase on the retailer’s website. It is expected that soon, omnichannel technology will make it possible to purchase directly from a social media platform, without having to be redirected to the source website. From a retailers perspective, this increasingly requires the ability to control and coordinate their omnichannel network from a single platform, connected to a single data source. From a customers perspective, it means being presented with consistent product and pricing information across a retailers omnichannel network. Consistency is key for both retailer and shopper when it comes to omnichannel.
The Internet of Things is changing the way we shop and the experience we have as consumers. As a greater network of interconnected data and devices becomes possible, the nature of what customers expect from their shopping experience necessarily evolves.
One of the persisting problems in bricks and mortar retail is knowing exactly who your customer is and what they’re shopping for. The IOT is steadily closing the gap between the retailer and the shopper. Consumers, especially millennials, are increasingly expecting a more individual, personalised experience. Thanks to smartphones, we are now in an age where location data, online activity and even purchase history is readily available and progressively accessible. Using this data, with proper consent, retailers will be better able to track returning customers, as well as a customer’s location and shopping pattern within a store. Beacons can be used to present offers and targeted product marketing and advertising to shoppers directly through their smartphones. With this same technology, digital shelf edges and end caps can likewise be tailored to give specific messages to passers-by based on accessible data. IoT can also help retailers keep better track of their stock levels, not only making life easier for the retailer themselves but also for the customer who is looking to make a purchase. Ultimately this in store personalisation can produce the same effects as an ad coming up in a person’s social media feed, mimicking the highly personalised experience that shoppers have come to expect in an online environment and ultimately, creating greater fluidity between the two spheres.
The last yard of retail is undergoing an exciting technological transformation in 2020. Digital and omnichannel endpoints are constantly expanding, as hardware and software become more advanced and capable of more complex functionality.
Click here to see how to make the best use of the last yard.