Shop floors get a technological transformation

Technological advances are making in-store environments more engaging and customer-friendly, and breaking down barriers between the online and offline worlds.

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From eye-catching digital displays in stores to contactless payment facilities and touch-screen facilities, retail has become a technology driven arena, making shopping easier and more fun.

And shoppers’ experience of digital signage is set to move up a gear as more retailers are preparing to install touch screens in their shops, according to research launched yesterday (26 January).

Currently just one in five retailers use interactive screens but nearly half of those surveyed say they will be introducing them in 2011. The research, by Point of Purchase Advertising Association (POPAI) UK & Ireland, and LG Electronics, shows that a further 25% of shop brands are considering putting these screens into shops this year.

POPAI head of digital Nick Gale says: “Touch-screen technology has the potential to bring huge benefits to an organisation’s customer service.” He adds: “It can aid the shopper by acting as an interactive guide to a product or as a service finder in a department store.”

Leading the way in digital retail environments have been luxury fashion brands Ralph Lauren and Burberry, which have used technology to increase customer interactivity and create a sense of excitement around a store set-up that is no longer static.

Our vision is for the store experience to be the best 30 minutes of a child’s day

Jonathan Storey, Disney

British brand Burberry developed a Retail Theatre concept for the launch of its spring/summer 2011 range in September last year. It streamed its catwalk shows live into 25 stores worldwide via ’video walls’, and customers could purchase items from the catwalk right there and then using iPads provided by the brand.

Meanwhile, Ralph Lauren launched its first interactive window display in 2006, which enables customers to buy clothes by scanning their phone over the window display, at any time of day. The brand’s senior vice-president of advertising, marketing and corporate communications, David Lauren, told Marketing Week in December that the move has created a ’24-hour window’ concept. Customers can design a rugby shirt using their mobile phone and then point this into the window. Other people can then buy that design.

Technology is blurring the line between online and offline to such an extent that it is making those classifications seem irrelevant within the retail sector. Bespoke content is on the rise, according to POPAI’s study, with 58% of in-store digital content being updated weekly, 25% daily and over 20% hourly.

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Ralph Lauren in-store

New Look is one high street retailer using in-store screens to not only promote product ranges but to broadcast bespoke messages through in-store marketing specialist Mood Media. New Look head of brand marketing Amy Thom says: “The beauty of digital displays is that you can change the messages in real time. They are also good for calling out extra messages that we would struggle to get the space for in store, such as inviting people to join our Facebook page. Every store is different so the content has to reflect that.”

New Look’s flagship store in Dublin opened in November last year, designed to be a platform for the brand to showcase its technological innovations. While its digital displays encourage customers to particular areas of the shop, it also aims to entertain.

“In the Dublin store customers can have their picture taken which they can upload to Facebook, but it is then also incorporated into an animation programme where it shows the customer being the star of their own magazine cover, and beamed onto a screen in the store,” Thom explains.

New Look has opted to evolve its technology strategy on a store by store basis. For example, in Birmingham it has enhanced its fitting room mirrors with cameras to capture an image so customers can see an outfit from different angles. Thom claims this approach enables the brand to trial different technologies and monitor customer feedback before committing further.

Technology has also helped the toy sector make its stores more experience oriented. For example, Disney has begun rolling out concept stores designed to amaze visitors with technology that to children simply looks like magic. The aim is to create desire for repeat visits and get people talking about the brand (see Q&A, below).

A substantial number of retailers are considering 3D digital signage this year

Nick Gale, POPAI

Lego, meanwhile, has introduced augmented reality displays to its own-brand stores, which enable customers to hold a product box up to a screen to activate an animation that reveals what the model looks like when built. Lego director of global trade marketing Bernd Larsen Linde says it is a way to address the uncertainty that might prevent someone making a purchase, as well as creating excitement among children.

The displays are already demonstrating results. Linde claims that customers who engage with them are spending between 20-40% more than customers who don’t.

The displays are currently only capable of storing data for 24 out of the 400 Lego models available. Once this is addressed, along with other challenges such as availability of the best type of lighting for the technology, the displays will be rolled out to department stores.

“This is the first big move we have made with technology, but we are working on other things, such as a product finder,” says Linde.

But it isn’t only big, obvious shows of technology that are changing the in-store environment. Small yet practical moves, such as contactless payment and mobile till facilities (see top trends predictions, below), are helping retailers increase footfall by shortening queues.

Barclaycard has been a pioneer of contactless technology, with quick-service food outlets McDonald’s, Pret A Manger, Eat and Subway among the first to implement it. The Co-operative has become the first supermarket chain to commit to rolling out contactless payment facilities, and Barclaycard head of UK payment acceptance Stuart Neal says there is potential for the system to be adopted by other types of shops.

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But before this happens, he adds, there would need to be more fluidity around the transaction limit, which in the UK is currently £15. Where it exists in Europe, however, the limit is €50 (£42).

“We need to revisit the £15 limit once we have more experience of it,” says Neal. “We need to look at how we can use the speed and convenience to open up higher value transactions without opening up unnecessary fraud risks.”

John Bovill, group IT director of Aurora Fashions, which owns the Oasis and Warehouse brands, says extending the transaction limit would make the business more interested in this technology. “Once the banks and mobile operators agree on fraud management liability, I can see how contactless would make sense. It’s only a matter of time before we see real movement here.”

Certainly the convergence of contactless and mobile will see the technology adopted by more users as well as payment outlets. “What gets the marketers we speak to excited is the opportunity to communicate to customers in store via mobile phones, through loyalty schemes, rewards and discounts. It’s a whole new way of reaching customers and influencing their behaviour in store,” says Barclaycard’s Neal.

The increasing use of technology to enhance store environments will soon give customers a reason to visit one brand’s outlet over another, based on what excites, engages and motivates them. Marketers who can use it effectively will be able to better connect the online with the offline so that customer engagement won’t have to end when a retailer’s doors close.

top trends 2011 predictions

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Stuart Neal
Head of UK payment acceptance, Barclaycard

Once the mobile phone becomes the preferred way of paying for goods it opens up a whole host of opportunities with what you can do. As with anything technological, there will be early adopters and then others will follow. Current solutions involve making changes to handsets to include Near Field Communications technology, so an investment like this does take time.

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Jonathan Storey
Head of marketing, Disney stores, Europe

There is no doubt that mobile technology will play an ever growing part in our in-store strategy. As we extend the roll-out of our concept stores, we are looking wherever possible to duplicate the experiences online, so that online and in store will increasingly feature similar content and technology based experiences.

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Amy Thom
Head of brand marketing, New Look

Technology lends itself more to the big store openings, so the next big one for most retailers will be Westfield in Stratford. I expect that a lot of brands will be planning big things for that.

Linking offline with online is working well and that is going to a big trend in retail this year. That’s a real challenge because if you give content to customers to have a play with you have less control over it. But it’s about how you give them a moment to star in [digital content], to create deeper engagement.

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Bernd Larsen Linde
Director of global trade marketing, Lego

Displays and signage where you can manage a message from a central point is going to increase as it’s an effective way of targeting your messaging. We are looking at ways to better target our in-store messages according to different customers, because we have so much content we can display.

Shoppers want to seek out the best price, and this is where mobile technology will become more important. There will always be a place for paper and cardboard displays, but we definitely see digital as a permanent vehicle.

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Nick Gale
Head of digital, POPAI UK & Ireland

There is already a substantial number of retailers considering the possibility of 3D digital signage this year. Demand is likely to increase with future advancements that would enable 3D viewing without needing glasses. Of those surveyed, multi-touch, augmented reality and gesture technology are highlighted as examples of new technology being considered.

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John Bovill
Group director of IT, Aurora Fashions (owner of the Oasis, Karen Millen, Warehouse and Coast brands)

More and more retailers like us are looking into technology to support ’mobile tills’ where transactions can be processed by staff members on mobile devices. This technology can also lend itself to creating more valuable customer relationships through functions like helping customers ’build their wardrobe’.

brand in the spotlight

Q&A

DISNEY
JONATHAN STOREY, HEAD OF MARKETING, DISNEY STORES

Marketing Week: How has Disney evolved its retail marketing strategy over the past year using customer-facing technology?Jonathan Storey (JS): We have launched a series of concept stores. The first one opened in June in California and since then we have
been rolling them out across Europe and North America.

MW: Can you give an example of what the experience offers in these concept stores?

JS: There are different ’icons’ shoppers can engage with. One is a giant princess castle, and in the castle there is a mirror. At first glance it looks like a regular mirror but when you pick up any of our Disney princess wands and wave it in front of the mirror, an animated princess talks to the child (see below).

MW: What difference have you noticed in engagement levels of customers between the concept stores and regular stores?

JS: We have had fantastic feedback. We are also holding free special events throughout the day, such as animation classes, which
give families another reason to visit regularly. Our stores become like a community hub.

We want our stores to be more than just a place to come and buy Disney merchandise. Our vision is for the store experience to be the best 30 minutes of a child’s day.

MW: How has the use of technology changed the delivery of your retail marketing strategy?

JS: If you look at retail experiences in the past they were static and could become dated quickly. But technology filled with media content can be refreshed much more regularly.

It also helps us bring our stories to life. For example, a Disney cast member can say to a child, “Did you know Tinkerbell lives here, and if you clap your hands, she will appear.”

At the press of a button we can make an image of Tinkerbell appear, and children don’t realise there is technology behind this.

MW: What is your roll-out plan?

JS: We have a plan over the next five years to convert as many of our current stores as possible into concept stores. In the UK we have them in Milton Keynes, Aberdeen, Belfast and Glasgow. This year, our Oxford Street store is going to be converted.

DISNEY
See them animated: Disney can bring its stories to life through techn

fact focus

What is RFID technology?
Radio frequency identification technology involves the contactless transmission of data via radio waves and a chip containing data which is read by a corresponding scanner.

What is augmented reality?
A display where computer-generated imagery is superimposed onto an actual object via a webcam.

What is contactless technology?
A payment method where the customer holds their card over a contactless terminal without the need to enter their PIN.

figure focus

46k stores are now using digital signage, up from 12,500 in 2007

£5k the amount retailers are prepared to spend on digital signage per store

20% of retailers use interactive screens

50% of those surveyed say they are considering installing interactive

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