How Technology Is Shifting Consumer Buying Patterns

July 25, 2012

Creating a retail environment that is an extension of the web experience and helps to enhance customer experience, strengthen brand awareness and promote products will have a positive impact on direct sales.

As advances in the technology of communication continue, including the rising influence of social media, it is important that retailers, advertisers and marketers are able to adapt to this type of consumerism. In its Q3 2011 "The Social Media Report," Nielsen noted that social networks and blogs reached nearly 80 percent of active Internet users in the United States. The same study shows that from this group, 60 percent of those using three or more digital tools for product research learned about the product through a social networking site. Not only can the consumer find information about a product, they can also see which of their friends purchased the same item and simultaneously promote what they buy. More simply, keeping up with the Joneses has taken on a whole new meaning.

The increase in visits to online stores could also be due, in part, to the evolution of digital marketing and advertising strategy. Increasingly, brands are pushing the barriers of communication through technology and social media, which are often seen as low-cost, target-specific ways of pairing a particular consumer with a specific product.

Despite recent predictions, the retail space will not disappear overnight. What is shown, however, is that consumer shopping patterns and behavior are changing, and that retailers need to address these changes by taking advantage of technology to integrate social media into the retail architecture. Embracing, rather than avoiding, technology offers a viable, sustainable, lower-cost solution that will maximize profits over time and address the growing need to engage the consumer outside of traditional retail methods.

Digital signage has positive impacts in retail.

Digital signage is blurring the definition of what used to be two very different experiences (shopping in-store and shopping online) and stands as a driving force behind the evolution of in-store digital marketing.

The introduction of new technology has made web-based purchasing more accessible and product information more readily available. The challenge for marketers today is how to address trends in online shopping by bringing online behavior into the retail space. This is not as simple as it sounds, and involves more than installing a computer and modem near the POS. Marketing professionals need to understand how to create a retail environment that is an extension of the web experience, one that helps to enhance customer experience, strengthen brand awareness, and promote products in a way that has a positive impact on direct sales.

The reality is that people – consumers – still want a tangible experience and the ability of a brand to capitalize on this involves the integration of digital technology into the retail environment. The retailers of the future will need to seek a comprehensive, profit-minded, solution that will provide the tools now associated with consumerism right at the local mall or department store.

This, however, did not happen overnight. In fact, the transition has taken far longer than the advent of new technologies. The success of digital signage, or rather the acceptance, in retail verticals has spawned a population of consumers who are increasingly comfortable with digital and a growing number of businesses, organizations, and public entities that are embracing digital solutions over the traditional forms of marketing, merchandising, and informing.

When discussing this transition from analog to digital, by no means a new discussion, we need to consider not only changes in the retail environment, but also changes that have been taking place in all public spaces, termed the “out-of-home” environment, from airports to hospitals, nightclubs, and educational institutions. The retail landscape has changed and we are now in the era of “shopper marketing.” Retailers are seeking ways to engage the customer in a personalized experience, different for each individual and tailored to a specific consumer’s purchasing habits.

For example, New York-based Duane Reade, the drug store chain, has implemented technology where a customer shopping in the store can approach a self-service kiosk to scan a loyalty card. In turn, the scanner will print promotional coupons specific to the customer’s purchase history. While the concept is nothing new, the self-service implementation indicates a shift in marketing strategy and the personalization of the in-store experience. Similar promotional installations have also been seen at CVS drug stores in the U.S. and at Woolworth’s in Australia.

Despite the relative slow growth in DOOH marketing, its popularity is based on its comprehensive management features and cost-saving value of a digital campaign. Technology allows the retailer to reach a much broader audience, in different ways, with different content, constantly engaging and reinforcing the brand image. The Internet, that alternative medium for consumerism and all the attraction it holds, has made its way onto the showroom floor. Retailers now have the fusion of tangible experience and digital marketing that will come to dominate in the modern marketplace and the only way to accomplish this is through digital signage.

In the Arbitron "Digital Place-Based Video Study" 2010, it was reported that 72 percent of teen and adult U.S. residents (an estimated 186 million people) have visited a large retail or department store in the past month, with 27 percent of these visitors viewing a digital video on location. According to these Arbitron figures, the monthly reach at large retail stores is roughly 69 million people, or a quarter of the American population.

As cost is an issue for any retailer, it becomes important to find a digital solution that helps to lower overhead while maximizing profits. Digital marketing and digital signage offer a comprehensive solution to the problem, whereby the retailer is able to centralize campaign management and content creation, while distributing and displaying in the retail environment, with the added advantage of simultaneously reporting on sales uplift and inventory levels.

Americans are still shopping in person, but the retail landscape is changing dramatically. There is something irreplaceable in the physical experience of in-store shopping, be it mall, market, or Madison Avenue. In other words, Americans can download any kind of music they want, whenever they want it, but nothing can replace the feeling of seeing your favorite artist live. Digital signage is blurring the definition of what used to be two very different experiences and stands as a driving force behind the evolution of in-store digital marketing. Next time you’re at the mall, take a look around. Chances are you won’t even notice how inconvenient shopping used to be.

Noam Levavi is the founder and CEO of YCD Multimedia, a provider of in-store digital media solutions.

Copyright © Platt Retail Institute 2012 and reprinted with permission. All rights reserved. See the entire PRI Resource Library at www.plattretailinstitute.org/library.

Comments

Mr. Levavi makes a great argument here and he's right in my opinion on most accounts. I just have a couple things to add which are 1) simply making the brand website available in-store isn't going to cut it. Although much of the content found there can be repurposed, the UX needs to reflect the fact that you in the store 2) Integrations need to start happening at the local level to provide truly relevant local experience i.e. what's in stock in the store right now, what campaigns might perform best in specific loca conditions (weather, events, time of day, etc.) 3) You really need to take a holistic approach and look at what is the purpose(s) of the network, what will be accomplish those uses, and build from there. Brand building and merchandising are two very different uses which would for example warrant a completely different hardware/software/content makeup. 4) Cross platform approaches need to be considered in every case, but not every channel need to be used every time. Vendors need to be open to playing well with other platforms without trying to own the entire ecosystem Good piece, hope to see more of these types of articles. Once we get these things figured out and prove ROI above and beyond other available mediums, the industry will reach it's full potential.

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