Marketechnics 2006: Technology and the shopping experience

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Feb 03, 2006
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By Ronald Margulis, Managing Director, RAM Communications

(www.rampr.com)


The nature of retailers is that they want to sell stuff that appeals to customers and they want to sell it in a manner that appeals to customers. The Food Marketing Institute’s Marketechnics Conference in San Diego this week featured both workshops and vendors that talked up the use of technology to make this happen.


One of the better-attended sessions was on using technology to improve customer experiences while shopping. Three specific tools were discussed by three retailers – Spartan Stores is using a variety of kiosks; Wegmans is developing a comprehensive, interactive web site; and Loblaw’s is installing self-checkouts.


The first of the presenters spoke of the results they are having. “Kiosks definitely enhance the shopping experience,” said Dave Couch, CIO of Spartan Stores. “For us, it’s been a very positive experience.”


The second spoke of the importance of technology to expanding the shopper base. “Your web site is a strategic communications vehicle to your multi-channel customers,” said Josh Culhane of Wegmans.


And the third gave a warning. “It is important to allow all of the same activities to be done by customers in self-check as cashiers can do in their lanes,” said Kevin Koehler of Loblaws.


On the exhibit floor, several vendors were hawking solutions designed to enhance the shopping experience. Galleria Retail Technology’s booth featured solutions that help right size the center store, so supermarket operators can expand the area devoted to the more exciting perishables departments. StoreNext showed Electronic Shelf Labels that offer expanded information available to the consumer. And there were many more.


Moderator’s Comment: How can technology best be used to enhance the shopping experience?


While technology can help automate certain customer centric activities like checkout and offer generation, it is best used in conjunction with a knowledgeable,
enthusiastic and motivated sales team. No technology can replace the good feeling a fellow human being can deliver in a time of need.

Ronald Margulis – Moderator

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16 Comments on "Marketechnics 2006: Technology and the shopping experience"


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Matt Werhner
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Matt Werhner
15 years 1 month ago

Yesterday’s article, Trendy 2006, seems to missing the same thing this article is missing: customer service (and this should never be a trend, it should always be a concrete standard). I know this article is dealing specifically with Technology, but I agree with Ron.

Retailers should never replace personable service with a machine(s) alone. Retailers will benefit from combining human service with technology concurrent to their customers’ wants.

I don’t believe there is one specific technology on the rise that will transform the shopping experience. This is evident in the above Instant Poll (what about biometric and contactless payment options?). Companies must learn how their current technology performs for their customers and apply those conclusions to the decisions regarding implementation of new technology. Kiosks might work in one arena but not another. Customers could perceive self-checkout as extremely beneficial in one industry but cumbersome in another.

Race Cowgill
Guest
Race Cowgill
15 years 1 month ago
Yes, Stephan, if I read you correctly. Unfortunately, the technology the industry is focusing on is a huge distraction from a fundamental problem: customers’ basic expectations are met poorly in the grocery industry. Data on that in a moment. Meet customer expectations better, and customers will shop more, they will be more loyal, they will spend more, they will be less sensitive to price, etc. The studies we have conducted indicate that shoppers become more sensitive to price — focus on it and make it more important — the lower their other expectations are met. This dynamic, poorly understood in the industry, has led to the terrible black spiral we are in: grocer’s have seen consumers say price is more and more important, so they focus more on lowering prices and put less investment into meeting other expectations, consumers become more unhappy and so price becomes more important, etc. If you take the price sensitivity out of the data, you are left with key weaknesses in how grocery meets shoppers expectations. Below are ten of… Read more »
Stephan Kouzomis
Guest
Stephan Kouzomis
15 years 1 month ago
One can appreciate the belief that technology may help the shopper experience; especially in the younger generations that are impatient and want everything yesterday. But, it isn’t true with the Boomers and generations that want more than what tech gizmos offer. The richest generation is into the human factor of the shopping experience that many retailers and businesses still don’t GET! So these retail corporations and owners look at second and third level activities that they deem important; especially to their data information program… what about to the consumer? Have you asked them? Hence, everyone thinks Boomers will flock to a retailer that has the list of tech activities, at the beginning of this subject today. Wrong, wrong, wrong. Until the executive culture changes, and importantly, starts to initiate a consumer centric attitude; benefits; and atmosphere in the outlets; as well as its organization, like better:a) information, for example, about dinners and wines availability, and how to cook a certain meat in a sauce, on their web site; and b) then, have a friendly, greetings… Read more »
Camille P. Schuster, PhD.
Guest
15 years 1 month ago

Just because someone says that a piece of technology “worked for them” or that you “should do something” doesn’t mean it will enhance your profitability or the consumer’s shopping experience. Have you spent time observing your consumers? Where and when are they frustrated? What about your current systems are issues with your consumers – good or bad? What about your current technology works or doesn’t work for your consumers? What do your consumers want from their experience? What would make your consumers have a more pleasant shopping experience? Then choose the technology to enhance the experience. As with other technology decisions — decide what you want technology to do and how it will integrate with your current systems and then adopt the best version.

Ray Burke
Guest
15 years 1 month ago

There are many ways in which technology can enhance the customer experience, but the best applications depend on consumer needs and expectations, product characteristics, and the
retailer’s brand equity. Indiana University’s Center for Retailing published a study with KPMG on this topic in 2000 (click
here for study
) and many of the conclusions are still valid today. For a more recent look at approaches for enhancing the shopping experience, see our report on measuring and
managing retail shoppability, which appeared in the book "Future Retail Now: 40 of the World’s Best Stores," published by the Retail Industry Leaders Association (click
here for PDF
).

Herb Sorensen
Guest
15 years 1 month ago

Interactive technologies spawn massive amounts of data, as exemplified by scan data. Each new technology has the potential to add another layer of data, and each layer can provide a richer, more actionable view of the other layers. Comprehensive management of shopper intelligence, generated by technology, is the key to enhanced shopper experience (read: more profits for the retailer.) This is the key, too, to wider adoption of more technologies.

It’s easier to imagine ways in which cart-based information might be helpful to shoppers than it is to actually do something helpful for shoppers. The more the shopper is asked to alter their own behavior, the less successful the technology will be – unless the payoff perceived by the shopper is huge, as, for example, with self checkout.

Jeremy Sacker
Guest
Jeremy Sacker
15 years 1 month ago

We are in the most exciting time in retail, ever, in my opinion. No longer are retailers focused on cutting costs at all costs. We are giving thought to how to cut costs WHILE either enhancing, or at a minimum, not negatively impacting the consumer experience. Also, the technology is not necessarily aimed at the high end consumer, we are taking a more holistic approach.

Personally, the most enjoyable shopping experiences I have are ones that mix the traditional with technology. Someone in the aisle cooking a flavorful dish? It is likely I will buy the ingredients and try it at home. Kiosks with recipe ideas, again, if it sounds good, I’ll try it. Self-check out, again, if it saves me time, I’m there. These are a mix of cost cutting and sale generating activities that enhance the shopping experience for everyone. If we could just get over the privacy hurdle (both from a technology and a public policy point of view).

Mark Lilien
Guest
15 years 1 month ago

What technology would enhance the shopping experience the most? It’s always the technology you don’t have yet. If you aren’t staffing using technology, customer service isn’t being maximized. If you haven’t got electronic shelf labels, suspicion of price errors will be greater. If you have a mediocre web site, your marketing leverage is poor. Will you wait until your primary competitor offers cart scanning so that people can see what they’re spending as they shop, or will you offer it first and get the recognition?

Michael Richmond, Ph.D.
Guest
Michael Richmond, Ph.D.
15 years 1 month ago

Clearly, technology has a place in enhancing the consumer experience, and it can help take costs out of the system. The Future Store, a Smart Store in Germany owned by Metro, is a great example of what technology can do: you can put anything on a produce scale and it knows what it is and it is priced accordingly; you can have wines selected for your meals and spotlights will direct you to the location, and they will even offer a comparable store brand selection. All the tags are electronic and you can use personal shopper technology in your cart to help you shop and find products. Pretty neat stuff! Now the real answer – find out what the consumers/shoppers want and then build and assemble the technologies to support those concepts. And, we see this in almost every column – there is no substitute for great customer service.

Kai Clarke
Guest
15 years 1 month ago

Technology certainly has a role in the retail experience. However, as many panelists have pointed out, it should not be to replace the human experience, but rather to enhance it. Doing so profitably is the other part of the coin. Taking advantage of in-store broadcasting to inform and relax the customer (both audio and video) are a great example of doing this. Alternatively, RFID and electronic shelf tags are not quite ready for profitable deployment. When examining a technology alternative, Retailers must look at how technology would improve the shopping experience.

Joseph Peter
Guest
Joseph Peter
15 years 1 month ago
Lets talk technology at Roundy’s and Marsh when it comes to telephone systems. I was recently at a Pick’n Save, Rainbow Foods and Marsh Supermarket that all took a step back with in-store communications. I work for a large 5000+ RX chain and all of ours stores currently have Nortel Meridian phones, and so do countless other retailers from Borders to TJX to Safeway. We use the phone system for in-store communication (paging/internal calls) and for outside calls and voice mail. Marsh and Roundy’s are currently buying phone systems and separate intercom systems, as noted in the most recent Pick’n Save store I visited. Someone at these retailers needs to realize they are wasting BIG money by buying two systems, plus inconveniencing the customers due to lengthened customer wait times and basically showing they are an outdated retailer. These separate intercom/telephone systems were eliminated by many big retailers such as Kmart, Jewel-Osco, Walgreens and others in the 1980’s. I cannot understand why there is such a resurgence of this outdated technology at these otherwise innovative… Read more »
Maxine Katchen
Guest
Maxine Katchen
15 years 1 month ago

Mobile media (cart-based information) is the way to go. Although nothing can replace great customer service, this technology will become loved by most. It can be used to scan an item (price & additional product info pops up). It can have a search feature where you input the item you are looking for and the aisle number pops up. You can even put in what aisle you are in and all items on sale in that aisle pop up. If the supermarket allows customers to store their shopping list on their website, the customer can then pull up their shopping list so they don’t forget anything. You can pull up recipes to make sure you have all the ingredients to make a certain dish. The possibilities are endless. Suggestions for Super Bowl snacks or holiday dishes can all be made available at the touch of a button. That’s the way I want to shop…

Ron Verweij
Guest
Ron Verweij
15 years 1 month ago

“How can technology best be used to enhance the shopping experience?”

Simple. Tune into the head of your customer. First talk about human behavior, human needs and human experiences then apply technology onto that. Good retailers know their customers and know a good retailing experience is not about technology at all. Technology can enhance the shopping experience but only when its supporting the experience. Realize that the shopping experience starts way before a customer enters your store.

Simple…well it should be like that. It gets better.

Ryan Mathews
Guest
15 years 1 month ago

Ron’s right — the best retail technologies are transparent and just reinforce the total customer experience. That said, I think we need to expand our current view of retail technologies. Why shouldn’t loss prevention technologies be used to enhance merchandising for example? Why doesn’t POS data actually benefit consumers? Why can’t we use kiosk technology to help lower income shoppers plan meals instead of just running closed loop advertising? And why do we still have so many stand-alone, proprietary systems operating independently in so many stores? One answer may be that (as evidenced by this discussion) we still talk too often in terms of technology and retailing as though they were inherently separate activities rather than integrated tools for safely and efficiently selling product and enhancing both margins and the consumer experience.

Peter Fader
Guest
15 years 1 month ago

There seems to be an implicit assumption here that “enhancing the shopping experience” will also enhance profitability. But the reverse may not be true: some of the most profitable initiatives may not be aimed at customer experience, per se. For instance, I think there’s incredible upside to the use of electronic shelf tags (and the smart use of dynamic pricing). It will drive some consumers crazy (and will likely spawn a PR backlash), but it will have a far greater impact on long-run retailer profitability than some of the more faddish experiential activities that are receiving much attention today.

Bernice Hurst
Guest
15 years 1 month ago

Just want to toss in my tuppence in support of Ron’s comments. The best way for technology to enhance the customer experience is to recognise it as one part of an overall, comprehensive mix of customer services. It is not the be all or the end all but it is an important and significant contributor to customer satisfaction when it is viewed in context and offered up as a choice that customers can make as and when it suits their requirements.

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