Retail store

Smart products – The future of the connected retail store!

How can your next generation of products enable your retailer to provider a better In-store experience, driving increased sales and better conversion rates? How can entrance systems, gates, shelves, refrigerated counters, lights or price tags become smart products that helps in the battle between the online vs the offline customer?

Well, making your products connected and equipped with sensors could be part of the answer and by doing this you could extend your offer to not only be an inventory in a store but also a think tank that can collect and gain a lot of understanding of the customer. By collecting and storing all the produced data from your products you will be able to use smart analytics to turn this data into new exciting services that you of course should charge for!

The “Amazon problem”

“Retailers don’t have weather problems, they have Amazon problems.” Those are the words coming from Scot Wingy, one of the co-producers to the weekly podcast  “The Jason and Scot Show” at RetailGeek [1].

It´s no surprise that the discussion within retail today aims at how to manage the battle between online vs offline and the questions I hear quite often is if it will be possible to get the customers back to the store again? Maybe, maybe not, but one thing is for sure. If we are going to succeed in attracting customers to the store, we need to be able to gain much more knowledge about what’s happening in the store and how we can influence the customers when they actually are there. Compared to an online-retailer, who’s got access to a never ending story of analytics and campaign tools for optimizing the online experience, we don’t have that many (if any at all) in the physical store,

So what if we could gain as much knowledge about the offline customers and their habits as the online retailer can? How could that impact your average retailer?

POPAI claimed in their “Shopper Engagement Study 2014” that up to 82% of all buying decisions were made In-store  [2]. That means that today’s shopper is making more decisions in-store than ever before and can very much be influenced in the buying moment.

What are the new retail store opportunities?

So in this context, what are the new opportunities in your offer when all your products all of a sudden become connected and maybe equipped with sensors?

Let’s give an example of a dumb simple product that now is connected – a hanger. What value could that possibly add to the in-store experience? Let’s have a look at the picture below:

What does the number show – price, weight, inventory level? It’s actually the number of “likes” on Facebook in real time. The brazilian fashion retailer C&A has connected their hangers and if you, while walking the shop’s racks, find something likeable you just touch the Facebook-connected hanger and your “like” will immediately be up on the network. An exciting idea that may help some undecided shoppers to do the right pick purchases based on each items popularity.

At LumenRadio we think this trend of connecting products and making them smart, is just the start of a really big wave of new exciting value added services that will be provided by the manufacturers.

Engaging the customer

How can your products influence in-store customers to become more engaged in their purchases and decision making? I dare to say it doesn’t matter if you provide entrance systems, gates, shelves, refrigerated counters, lights or price tags. All of them can become smart products that helps in the battle between the online vs the offline customer

Imagine a customer journey where the customer is just window shopping. Imagine developing a concept named, let say, “The Barker” – with the purpose of attracting more customers into the store. “The Barker” could be a solution that detects the number of visitors passing outside the store window and when a potential customer is passing by it triggers an event (the sound of a whistle, something moving) making the customer look into the store while at the same time the spotlight is dimming up over a real bargain deal, making the customer enter the store.

Equipping your product with sensors and connectivity you would not only be able to see how many are entering the store but also how many that you are able to attract into the store (conversion rate).

But today’s retailers aren’t just interested in WHAT the customers buy… they also want to know HOW they shop. Taking the concept one step further – when the customer enters the store, where do they go? Where do they spend time? And what do they touch or interact with?

This is just one of many examples on how existing products can provide exciting value added services. So how can your product be a part of the customer journey? How can your product collect data, help increase sales or cut costs?

If you want know more about how your products can get connected and optimize the in-store experience drop me an email at alexander.hellstrom@lumenradio.com.

References

[1] National Retail federation

[2] POPAI Mass merchant shopper engagement study