Recently, Dr. Hugh Phillips, a cognitive psychologist who focuses on in-store communications, and Dan Wittner, EVP and COO at RBM Technologies, connected to discuss their mutual interest in campaign management/compliance and in-store communications, and share their thoughts on what the future holds for many big name retailers. Below is an overview of their conversation.
In-store marketing is a proven tactic to impress and interact with buyers in order to create loyal customers that will actively contribute to the bottom line over time. Over the last century, retailers and marketers have seen that in-store marketing has remained effective in the face of the decline of other traditional media such as print ads. The problem is that the way most retailers go about executing campaigns has not advanced to meet the needs of the stores they manage, leading to lost revenue and increased supply chain waste.
Wittner explains, “Most in-store marketing is being dictated by spreadsheets that are not specific enough to unique retail stores, generating confusion and too much “noise” on the store floor. Retailers know this is hurting them, and their campaign compliance levels are suffering as a result. Many are begging for tools to help them better manage their merchandising strategies and bring those levels up.”
The average compliance level of a retail store is around 29 percent, according to Dr. Phillips. What’s more, 80 percent of campaigns have no long-term effect on the store’s bottom line due to poor execution and competition from other retailers.
“You would be better served to cut your number of stores in half and double your compliance rate,” says Dr. Phillips. “Until you can effectively communicate merchandising objectives between headquarters, store managers and your sales staff, you will be hard pressed to increase revenue per square foot. It is best to keep in-store communications simple and to the point, and make sure they are implemented correctly before looking to expand your footprint.”
One way retailers can increase the percentage of campaigns that are properly executed is to invest in technology that allows them to better plan, unveil and report campaign compliance. This includes creating a streamlined communication system between corporate headquarters and individual stores to ensure merchandise makes it onto the right fixture, at the right time.
“The main reason many retailers have not yet deployed new technologies across their network of stores is because of a fundamental resistance to changing methods that have always been in place,” says Wittner. “Change has never been more critical for retailers as it means innovation and those retailers that don’t innovate will lose.”
Now for some good news.
With the right suite of visual merchandising management solutions, accurate in-store communications and merchandising planning processes are attainable. With these tools, communication becomes clear and precise, and retailers save time and money. These solutions enable retailers deliver real-time directives to store teams out on the sales floor and visually track those changes occurring as they happen.
When the right product and messaging is delivered to the right store, at the right time, on the right fixture, retailers can drive the customer experience envisioned in the original planning process.