By Mark Hill, VP and GM, Global Innovation and Solutions Development, Retail Branding and Information Solutions for Avery Dennison.
As if the retail market wasn't challenging enough, bring on the frantic holiday season where it's make or break for the entire year! With the state of the UK retail environment remaining shaky as we head into the busiest time on the retail calendar, there is even more at stake as retailers rush to capture their fair share of consumers' wallets. To capitalise on a predicted increase in consumer spending, retailers must get an early start to the season and perform at their peak from now and through until the end of the year. Having disorganised racks and shelves, miss-matched and missing shoes, and employees being preoccupied with getting markdowns completed instead of focusing on serving the customer just isn't going to cut it. Retailers need to take charge of the situation and implement a technology strategy to optimise their performance throughout December.
40 percent of consumers report that a savvy store associate has more impact on their final product selection than a website. Retailers need to equip their operations with the right technology to not only inform and guide customers to additional purchases on the store floor, but also streamline inventory and price management processes to leave more time to focus on a consistent level of the ever-necessary customer service.
Many retailers are evaluating smart mobile devices to put the power of information in the store associates' hands, enabling them to provide a similar customer experience similar to shopping online – with a personalised touch, or help the customer check out immediately, without waiting in line. The new wave of consumer-style smart mobile devices can not only improve the sales experience with full colour screens, but also requires a lower investment in training, as most associates already know how to use these devices. However, this technology cannot stand alone. If a smart device has to rely on bad inventory data, the system will not work and will send the store assistant on a wild goose chase through the stock room or, even worse, sent a potential customer across town to a store where the item they desire is also out of stock. If the customer sees the wrong price on an item, they walk out to another store and never take advantage of easy check-out. Fortunately, there are technologies available to address both of these issues.
The advice store associates provide is irrelevant if the inventory the customer is looking for is not available. Unfortunately, the average inventory accuracy for retail apparel is only 65-70 percent accurate at the size/style/colour SKU level that the customer wants to buy. Fortunately, radio frequency identification (RFID) is a proven, ready-now technology that can address this and ensure the right product is in the right place, at the right time. On the sales floor, a single retail associate using a hand-held RFID reader can take a complete inventory in just a few hours with 99 percent accuracy. This allows the retailer to detect and address an out-of-stock item issue.
Goods are therefore available customers are ready to buy so they don't move on to the next store empty handed. With more than 40 percent of consumers reporting dissatisfaction with stock availability and time spent at check-oust, there is a huge percentage of potential customers who just aren't happy with their in-store experience. Better inventory availability through RFID can have a significant positive impact on customer satisfaction and retention.
RFID can also enable a more accurate central monitoring of inventory by store, highlighting shops that don't have goods available on the floor on schedule, as well as target in-season replenishment to fast-moving stores, reducing both out-of-stock cases for popular goods and future markdowns on surplus items. For example, if green sweaters are the must-have present in one region, but are not selling in another, a retailer can easily move the stock from the area where it it is not popular to the area where they are on the verge of selling out, getting the most out of merchandise, delivering a great customer experience and eliminating the post-season discount. This results in better availability of the merchandise, and helps associates focus on the customer rather than the stockroom, delivering a better shopping experience that ultimately drives customer loyalty.
The next building block for any retailer must be effectively executing a price markdown strategy. Price markdowns are usually a time-consuming, tedious task for store associates. Even after hours of effort, manual markdowns are only approximately 60 percent accurate, which means many customers see the original price instead of the markdown and may leave without purchasing. This is a big concern during the competitive holiday season when you can almost guarantee the retailer next door is offering some sort of specialised sale. However, this doesn't have to be the case. Automated scan, print and apply handheld markdown systems can deliver 97 per cent accuracy, which directly translates to stronger sales. A large vertical retailer based in the US recently reviewed the impact of scan, print, and apply handhelds, and found that the stores piloting the new technology generated over 5 per cent higher sales during the markdown period, vs. comparable stores using a traditional manual approach. Since the retailer had already paid for the goods, those incremental sales fell straight to the bottom line. Additionally, these systems are 84 per cent faster than traditional "red pen" markdowns, helping to control payroll costs and leaving more time for store employees to spend directly serving customers in-store.
UK retail demand is expected to increase in the final quarter of 2012, especially in December, providing retailers with a huge opportunity to attract new and existing customers and get ahead of the competition by improving customer service across the board. While it may be too late to implement the right technology for this season, it is never too early to start planning for the future. With the right technology, retailers can improve customer service and provide a seamlessly integrated in-store and online shopping experience, thus attracting choosy holiday shoppers to maximize holiday sales.
Mobile Fuels Consumers' Price-Comparison Habits report, Apparel magazine, September 2012
- 40% of consumers report a savvy store associate can impact their final product selection more than a website
- 40% of consumers reporting dissatisfaction with stock availability and time spent at check-outs
Pre-Holiday 2012 Consumer Intentions, Google/Ipsos OTX, October 2012
- 54% of consumers starting their shopping before Black Friday