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  POP Magazine 
1115 Northmeadow Parkway Roswell, GA 30076 - Phone: 770.569.1540 or 
800.241.9034 Fax: 770.569.5105 
Retail Technology And The Customer Interface

By Raymond R. Burke

There are two opposing views concerning the future of retailing.

The first paints a negative future for online shopping, suggesting that online shopping will be in demand for only limited product categories (e.g., music and books), and that consumers will prefer the in-person shopping experience. In addition, privacy issues will prevent many shoppers from buying online.

A second view is that online shopping will continue its rapid growth, due to increasing numbers of home computers and Internet access, greater selection of merchandise and the improvements of user interfaces. It predicts that once people have discovered the convenience of online shopping, they’ll visit physical stores less frequently, forcing retailers to close locations.

A recent study by Indiana University’s Center for Education and Retailing (IU) and KPMG suggests a third, more likely scenario. Conventional retailers will recognize that online shopping offers certain benefits that are not being provided in the physical store – interactive product search, detailed product information, extensive product selections, personalization and fast checkout. Rather than waiting for their customers to switch to purely online businesses, retailers will use in-store technologies to deliver many of these same benefits at the point of purchase. This has important implications for the future of POP advertising and promotion.

In-store technologies such as (from left) the hand-held shopping assistant, body scanning, self-checkout and information kiosks received an overall positive response from shoppers according to a recent study by Indiana University and KPMG.

The IU-KPMG study surveyed a nationally representative sample of over 2,400 consumers and asked them about their acceptance and likelihood of using 11 new retail technologies. The in-store technologies were electronic POS signage, product information/ordering kiosks, frequent shopper kiosks, hand-held shopping assistants, 3-D virtual-reality display cases, body scanning, price self scanning and item self-checkout. In addition, three online technologies were included: the electronic catalog (commonly used on the World Wide Web), the 3-D virtual store and the online store information site.

Consumers Positive About In-Store Technology Consumers were generally positive about online shopping, but they were even more enthusiastic about in-store technologies. Fifty-four percent of respondents felt that it would be a slight or big advantage for conventional retailers to sell their wares through the Internet using a typical online shopping site (with an electronic catalog format).

In comparison, more than 70 percent of consumers believed that they would benefit from the retailers’ adoption of six of the in-store technologies tested. These include technologies for providing more accurate and complete product information (product information kiosk, hand-held shopping assistant), pricing (electronic point-of-sale signage, self scanning) and promotional information (frequent shopper kiosk). Consumers were also enthusiastic about technologies that would expand the product selection (product ordering kiosk), allow them to purchase custom-fit clothing (body scanning) and scan their own purchases to speed checkout (self-checkout). Only nine percent or less of respondents believed that these six new retail technologies would be a disadvantage.

Technology Pros And Cons Each of the in-store technologies was perceived to have certain strengths and weaknesses. For the electronic POS signage, consumers liked having accurate price information on the shelf which allowed them to make faster product decisions and avoid errors and manual price checks at checkout. However, they worried that the technology might be prone to failure and that hardware costs would lead to higher store prices.

For the hand-held shopping assistant, shoppers were very enthusiastic about having access to accurate, detailed and current product information without the inconvenience of looking for a sales clerk who may or may not be knowledgeable. However, they expressed concern that the device might slow down the shopping process, especially if there are communication delays.

Body scanning was appealing because it helped consumers find clothes that fit without the time-consuming process of trying on items. However, consumers were concerned about their loss of privacy and the potentially higher cost of custom-made clothing.

Consumers were very positive about kiosks. They felt the product information/ordering kiosk would make shopping faster and easier by helping them locate as well as learn about the product in which they were interested. Shoppers liked the frequent shopper kiosk because it highlighted items that were on special and eliminated the need to clip and carry coupons.

Both self-scanning and self-checkout systems were appealing because they helped shoppers avoid long lines and speed up the checkout process. However, consumers were more positive about self-scanning because a human attendant accepted payment and bagged their purchases. (Only 6 percent of consumers indicated that they liked to bag items themselves.) Consumers also liked using the self scanner to check the prices of unmarked and sale items and to keep a running total of their purchases. Their main concern with self-scanning was that some shoppers would cheat the system by not scanning all items in their basket.

Applying This Technology In-Store
These technologies present several exciting opportunities for marketers. Web-enabled kiosks and hand-held shopping assistants will allow manufacturers and retailers to develop integrated marketing programs that communicate with consumers at home, at work and in the physical store. Firms can provide more detailed information and usage instructions for complex products and items that are purchased infrequently. Electronic shelf labels and signage will allow retailers to dynamically change prices and promotions in response to changes in product inventory, product perishability, consumer demand and competitive conditions. Body scanning systems will let apparel manufacturers show realistic images of their products and accessories on 3-D representations of the consumer.

Because these devices are interactive, marketers must adopt a new approach in developing promotional materials. Rather than creating one campaign that appeals to the mass market, they will be able to tailor the information to the unique needs, preferences and shopping habits of individual consumers. Information can be updated in real time and can be directly linked to consumer transactions, so marketers can quantify the impact of their promotional programs. Rather than spelling the death of conventional stores, these advanced technologies will usher in a new era of retailing combining the best features of online and in-store shopping.

Raymond R. Burke is the E.W. Kelley Professor of Business Administration and director of the Customer Interface Lab at Indiana University. For copies of the IU-KPMG study, please contact Professor Burke at [email protected]

Thank you very much AnneMarie!.
...Any chance we can get you to write an opinion article for us?...editor

Thanks Kinetic!

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