The retail industry at large and specifically retail merchandising has seen rapid changes due to innovations in tech. As the internet becomes more ingrained in our daily lives, the expectations of customers shift. Retailers are now expected to not only embrace innovative tech but have it integrated into the core of their shopping experience.
In the next decade, we will see a number of new tech applications begin popping up in stores. These innovations will largely be driven by big data and internet-of-things tech, which lend themselves extremely well to retail applications. New age technology will change the shape of merchandising, and allow early-adopters to stand out from the competition.
Let’s take a look at some of the biggest changes that in-store merchandising will experience in the next few years:
Big Data Merges Science and Art in Retail
Throughout the history of retail, merchandising was often regarded as more of an art than a science. Creative people who understood customer motivations were able to create displays and merchandising strategies that resonated. However, testing various merchandising strategies was always difficult. Often, stores didn’t have the customer numbers to pursue accurate testing, along with the bandwidth to accurately track those tests. For smaller companies, reaching statistical significance was almost impossible. Small chains didn’t have the data to conduct reliable tests, and national chains required the collaboration and data-sharing to make that kind of broad-scale testing possible.
The rise of big data has already changed the face of retail and will continue to do so moving forward. Big data analytics are already applied to every stage of the retail process. It’s used to predict trends, forecast demand, optimize pricing, identify customers, and determine which marketing materials to show them.
Moving forward, big data will only become more integral to retail and merchandising. If there is data that can be used to inform a process, it will be. Merchandising presents a huge opportunity for big data implementation. In the future, we can expect to see it used in a variety of strategies including custom-tailored displays for customers, content delivery, and dynamic pricing.
Interactivity Encourages Engagement
The internet is a very interactive place. Customers are invited to leave their thoughts on every story they read and product that they purchase in comment sections. Over time, this interactivity has become a natural part of the lives of customers – and an important part of how they shop. They now expect brands to interact more personally with them, learning about them as their relationship ages. We may see this kind of interactivity quickly begin to make its way into retail stores.
According to RetailTouchPoints, more than 90% of customers use their smartphone to read reviews about products while shopping in a store. Expect more businesses to embrace these trends in physical locations moving forward. We’re already seeing companies add review ratings and quotes to signage and merchandising. By providing this information to the customer directly in the store, you can limit the chances that they read poor reviews or find another product that they would rather purchase.
A great example of interactive merchandising can be seen in the Scala Lift and Learn Wall. Designed for shoe retailers, the stand allows customers to pick up a shoe, then learn about the specs and best uses for the product on the screen. They are also shown similar products that may be a better fit based on their interests. The potential for this kind of merchandising is limitless. Scala has already applied this tech to other products like smartphones and tablets. In the future, we may see displays that invite customers to answer a few short questions, then receive a product recommendation that matches their specifications
This kind of interactivity allows the customers to feel like they’ve been walked through the decision-making process. Interactive merchandising like this can be a great way to deliver content to customers at a physical retail location.
Alternative Checkout Could Alter Merchandising Strategies
Retailers have placed a lot of focus on alternative checkout methods in recent years. Going forward, you can bet that the checkout process will be a shell of what consumers today are used to. As retailers face increased pressure on margins, they are increasingly looking for ways to automate those processes. Meanwhile, customers are becoming more likely to prefer automated checkout systems.
While traditional checkout lines will likely stick around for a long time, alternative methods will become increasingly preferred by customers. This trend was first seen with the sudden rise in self-check kiosks in grocery stores. That tech quickly found its way into many different industries.
According to StatisticBrain, 66% of shoppers responded to a survey stating that they “wanted self-checkout options when shopping.” In that same survey, 91% of people 35 and younger stated that they had used a self-checkout stand before. We are likely to see self-checkout options become the expectations among consumers, with other low-effort alternative checkout methods making their way into the market as well.
In Amazon’s recent advertisement for their Amazon Go store, we see a great example of how the future could look when it comes to retail checkout. In this example, shoppers enter the store, fill their basket with the items that they want to buy, and then simply walk out of the store. The items that are added to their basket are tracked and the transaction is processed through their smart device. Their only interaction with the store or its employees comes when they “check in” on the way in.
Using this example, it’s easy to see how alternative checkout methods like this could change merchandising and retail as a whole. When customers can simply pick up an item and walk out of the store with it, retailers aren’t fighting so hard against that feeling of regret after consumers add an expensive item to their cart and wait in line. Any checker can tell you how common it is for customers to re-think a purchase at the checkout line. In the future will we see a shift in messaging that reflects these changes?
IoT Will Allow for Real-Time Display and Pricing Updates
We’ve previously written about dynamic pricing and covered what a huge role it will play in retail’s future. For years, dynamic pricing has played its largest role in eCommerce, with only a few large retailers having the bandwidth to truly implement it in physical locations. With the cost of displays and the rise of IoT devices, we should see a rise in physical stores using dynamic pricing strategies.
When digital displays for most items become the norm in merchandising, we will see marketing materials and pricing change to reflect what the data is showing. With the flip of a switch, stores will be able to ensure that their products are priced to compete. That price can change based on a number of factors including inventory.
At some point, stores may also implement customer-centric merchandising through IoT displays, catering their messaging to what the data shows will be most effective with each particular customer. This data could potentially include information about previous purchases, trends within their segment, or historical pricing information.
New Age Tech Presents a Huge Opportunity for Retailers
Over time, the technologies outlined in this article will be adopted by retailers in many industries. Until that time, there is an abundance of opportunity available to forward-thinking retailers that are willing to jump ahead of the pack and start adopting these technologies now. Not only will it be impressive to customers, but it will give companies more outlets to put their data to use. These are just a few of the innovative tech solutions that are driving innovative merchandising strategies. There will be more to come. For retailers, it is important to keep a close eye on the trends in this space and adopt early.