Why may technology at the shelf edge not be keeping pace with what consumers expect and what can be done about it.
It is well known that consumers have for some years been using their smartphones in store for a range of purposes. Even seven years ago, according to Retail Dive, 56% of consumers were using their smartphones while shopping in brick-and-mortar stores to research products or look up product information, while 58% said they were using them to check or compare prices.
The publication also found that consumers who used their smartphones also spent more, as much as 41% more, which belays the old fears that price checking would somehow lead to lower spend.
More recently, according to Scandit, 83% of consumers now use some type of shopping app on their smartphones while shopping inside of the store. Nielsen has also revealed 84% of consumers rarely enter a grocery store without a shopping list, whether on paper or on phone, while 88% always compare prices in-store to find the best deal and cut back on spending.
Two trends have collided – growing use of mobile phones in store and greater caution over prices as the cost of living crisis leaves its mark on consumer behaviour, notably greater price checking and bargain hunting. Proof of this comes from Clear Channel research conducted this year, that shows 75% of people have had to change their grocery shopping behaviour due to the cost of living crisis. 45% are cutting down on luxuries and treats while 38% are doing their best to avoid impulse purchases.
The research goes on to show, other ways of adapting to the cost of living crisis include shopping at cheaper supermarkets (37%), swapping usual brands for own labelled goods (35%), and shopping less frequently to avoid overspending (26%). Only 13% of Brits said they didn’t have to adjust their spending in the wake of the financial insecurity.
It is clear that shoppers are creating their own journeys in store and their trusted source is their own devices. According to Paymnts.com, consumers are more satisfied with merchants that integrate mobile and digital features into the physical store experience.
They go on to say that consumers who use their smartphones when shopping in-store have far smoother shopping journeys than in-store customers who do not use their smartphones. Merchants that offer “smartphone-as¬sisted” shopping features provide an in-store experience 49% less friction-laden for consumers than non mobile-assisted shopping.
To date, also according to Payments.com, 59% of merchants now offer cross-channel-capable digital profiles, although the makeup of these profiles varies, but our experience working with retailers is that there is often a mismatch between what consumers are doing and what retailers are doing.
This is understandable because both parties do not always share the same priorities. The catalyst for using technology at the shelf edge may well be to do with lowering operational costs, by replacing paper with electronic labels.
Customer convenience is of course an important part of the decision-making hierarchy, but it may need to be reconsidered as consumers become even more comfortable with using their devices for every aspect of the shopping journey.
In some countries, this is true of the trend to offer dual pricing for both members and non-members of loyalty schemes. So successful has this strategy been that even supermarket chains that said they would not follow suit have now jumped on board.
Electronic labels make price changes easy
Electronic labels are particularly suited to dual pricing and can be adjusted instantly and automatically as retailers change discounted product profiles in line with demand, trade deals, seasonal trends and competition.
And these are not passive but active communications as grocers can use shelf-edge technology to inform customers that live price comparisons have already been conducted, and then dynamically manage prices. In this way, retailers can at least reassure customers that they won't get a better price elsewhere, which should cut down on showrooming.
Retailers have enough of a challenge on their hands to ensure consistency of prices and messaging across multiple channels, both physical and digital, without worrying about what is happening at the shelf edge. In short, consumers that can see for certain that what they are seeing online is entirely in line with what they see at the shelf have the confidence to buy and to remain loyal.
Key to this is the use of electronic shelf labels (ESLs) which offer several compelling benefits that go beyond mere operational efficiencies. First and foremost, ESLs ensure pricing accuracy across all platforms, seamlessly bridging the gap between online and in-store pricing.
This synchronisation not only boosts consumer confidence but also reduces the likelihood of price discrepancies that can lead to customer dissatisfaction, lost sales or even fines. By displaying real-time pricing and promotional information, ESLs empower retailers to respond swiftly to market changes, ensuring that customers always see the most accurate and up-to-date prices.
Moreover, ESLs contribute significantly to improving the overall customer experience. In an era where consumers are increasingly reliant on their smartphones for shopping, the integration of ESLs with mobile and digital technologies enhances the in-store experience. ESLs can be used to display detailed product information, promotional offers and even dynamic price adjustments based on loyalty programs. This interactive and responsive approach to pricing not only meets but exceeds customer expectations, fostering greater engagement and loyalty. Ultimately, the adoption of ESLs is not just a technological upgrade but a strategic move to stay competitive.
One final, perhaps glaringly obvious point but perhaps also overlooked is, consumers that keep pace with technology are more likely to shop with a supermarket that is doing the same. As retailers look to take market share from their competitors, this then becomes the compelling reason to implement technology at the shelf edge.
This article was originally published in Modern Retail in August 16, 2024
