As the nature of retailing undergoes technology-led change and flux, Jane Lewis looks at the role of in-store multimedia. Meanwhile, identity strategy consultants Arthur King and Tim Holt look at the changing shape of the brand
Bottoms Up is on the Internet, Sainsbury’s has just launched a virtual reality store; how long before all our shopping is purchased at the touch of a button? Although it may seem that the retail experience is being taken over by new technology, the reality is that few retailers, if any, are ready to apply it chain-wide.
Despite assumptions that retail environments would be transformed by multimedia, retailers are still experimenting to ascertain what customers would feel comfortable with and what the benefits are. And here’s where consultancies who have branched into multimedia reap the rewards.
According to Peter Matthews, managing director of design group Nucleus, the market at present is typified by “a lot of pilots, and research and development, but very few people are committed to it wholeheartedly”. So consultancies which offer both design skills and new technological expertise will find themselves in demand. “This is a great opportunity for designers to lead the way,” adds Matthews.
Judging by the bad publicity for at least one of the trials, it is hardly surprising retailers are reluctant to jump straight in at the deep end. The interactive kiosk pilot at London’s Heathrow Airport, which involved 24 sites within all four terminals, did not attract the number of buyers hoped for and were removed. The kiosks, which offered goods ranging from Interflora bouquets to undies from Janet Reger, attracted plenty of browsers, but the number prepared to purchase was disappointingly low.
The design of the kiosks has been partly blamed for looking too much like a cashpoint machine, but then sites did not have any point-of-sale advertising as part of the experiment. Galleria 21, the US company which is developing the system, is now piloting new-look kiosks at ten US airports, and BAA has said it will
consider reinstalling kiosks once the product has been refined. “We’re still interested in the concept. In principle, we could use it in all our airports,” says BAA head of media Steven Olivant.
Although retailers are still only dabbling with in-store electronic retailing, several designers are excited by the future potential. “There’s no doubt it will be the future and will change the way stores look,” claims Richard Mott, managing director of 20/20, which owns interactive multimedia specialist 1/2/1. Matthews, whose consultancy Nucleus has a multimedia division, agrees: “I firmly believe technology will change the face of retailing significantly over the next five years”. He adds: “Retailers will realise the potential for reducing floor space by utilising multimedia either to browse or to buy.”
But not everyone is this enthusiastic. “Our view is that electronic retailing should be treated with caution,” says David Grainger, head of environment design at Lloyd Northover Citigate. “It will have a niche. But shopping is more of an event, a leisure activity. You won’t replace it with new technology.”
Current trials, which include a jeans fit guide in Levi’s stores, wine guides in Threshers, electronic catalogues and credit card purchasing at Argos, and interactive sales desks at Daewoo showrooms (see page 16), are providing retailers with valuable information about their customers. And that, it seems, is the key to devising successful schemes.
The use of new in-store technology has to be there for a purpose rather than as a gimmick. Mott, who worked on the Daewoo concept, stresses that interactive multimedia concepts must pay attention to “whether the customer wants it, for what, and how it looks in-store”. And Matthews warns that retailers must be wary of all the hype about multimedia being spread by companies with a vested interest, such as those in IT and telecommunications. Teams must have the right mix of design, marketing and technology skills, he says. “They need a deep understanding of it, not just an “I can use Photoshop’.”
Neil Churcher, a designer with TUI Consultants, which specialises in interactive design, says multimedia has to be easy for customers to use and has to give them something. But he doesn’t agree that it may be more suitable for younger shoppers or that screens may put some customers off. “People aren’t scared to use them. They’re not scared of televisions.”
The application of interactive services is likely to spread faster in certain retail sectors, such as those which don’t have to put products on shelves, like banking and finance or travel. Retailers selling through catalogues may also be quick on the uptake.
Argos is one of the few high street retailers to incorporate interactive sales kiosks within several of its stores. The system was developed by multimedia consultant Julia Schofield Associates and is being tested in 18 stores. Some critics have suggested that terminals provide more use for keeping children occupied than for serious purchasing, but a spokeswoman claims the “amount of business going through them is increasing, and people are comfortable using them”. However, there are no current plans to roll out the system chain-wide.
Drinks merchant Threshers is taking interactive retailing very seriously. Wine Quest kiosks, providing information on wine, are currently being tested in five Threshers stores and ©
the company is exploring the concept of stand- alone kiosks at other shops and railway stations. Customers could then browse through a selection of wines and purchase items for home delivery. Threshers communications manager David Howse claims design is a key element, and that the trial kiosks have been given a whole bay within stores for prominence.
How applicable interactive services are for supermarkets still remains unclear, though all the major players are looking into the options. It’s unlikely that multimedia would be used for the purchase of baked beans, or that kiosks would replace check-outs, but concepts such as information on wine and certain foods, or recipe suggestions and ingredients are currently being tested.
Stephen Gravelle, design director at Sainsbury’s, is hesitant to give too much away about the chain’s plans, but says: “We are looking to see how we can best harness it,” and adds “we are seeing the emergence of some very competent design groups specialising in this area”.
Mott is unconvinced that electronic directories will ever replace traditional signs in stores, but sees potential for them in a shopping centre setting, enabling customers to “plan their journey, book a table for lunch and check the kids into a crÃ¨che,” all with the aid of a touch-screen. Sounds like heaven.
Daewoo’s multimedia screens
For car manufacturer Daewoo, the inclusion of interactive screens for customers formed an integral part of its new showroom design. The strategy behind the concept, worked on by retail design group 20/20, was to create out-of-town motor shows rather than heavy-sell car dealerships. By pressing a few buttons, customers can browse through the product range, select a model, choose a colour and any extras, work out a price, and even get information about finance packages and insurance before having to deal with a sales assistant.
“The whole approach to presenting cars was different anyway, and the new technology was part of that. The screens are an invitation, part of the journey round,” explains 20/20 managing director Richard Mott. “You can help yourself to a screen and find out what you need to know without being pounced on by sales people.”
Screens in casings developed by shopfitter Campbell and Armstrong are positioned in quiet areas around the edges and within the cafÃ©. A continuous video flashes messages inviting customers to touch the screen, and Mott claims the system, developed by 20/20 subsidiary 1/2/1 with Julia Schofield Associates, is easy to use, though there is a help button to alert sales assistants. There is even a children’s version so they can build their own cars at the same time.
Mott declares the concept has been “extremely successful” since it was first launched six months ago, and that people are delighted to use it. Daewoo has 17 sites in operation, and future outlets will be built using the same format.
Let’s face it, retailing is going to change dramatically over the next decade, and manufacturers and retailers who want to survive are going to have to grasp the implications of technology firmly and reconfirm the value of their products and services across all media. Those who don’t will find themselves obsolete. In other words, don’t worry what and how consumers are buying this Christmas, worry about what they will be doing in December 2005.
Many major brand manufacturers have suffered through their failure to anticipate the influence retailers have over consumers, first with own-label products at discount prices and more recently with premium quality own-label items. And the relationship of brands, whether own-label or manufacturer, will change with the customer in the brave new world of interactive media and home shopping.
Virtual Shopping – Reality in our lifetime?
The interactive media revolution is, to a certain extent, a misnomer. It’s hard to imagine computing power, signal bandwidth and sensory input replacing the “touch-feel-smell” experience of traditional shopping, with its interpersonal communication between customer and shopkeeper. How do you expect to be convinced by a terminal saying “Mr Jones, that orange polka dot tie goes very well with your green shirt”, only to discover you have the colour balance wrong on your screen?
But that said, there is a market that can be clearly separated into those consumers who have access to a computer and are familiar with the Internet and World Wide Web, and home consumers who watch television and may or may not be able to use the teletext function on their TV.
Since the majority of consumers will only be accessible via the TV, we will see a huge rise in the number of on-screen catalogues. We will interact by browsing through screen pages at our own speed, request additional information on products or services that interest us, search for items by category and then purchase via credit card.
Existing direct distribution channels such as the 5bn mail-order market and recent “direct” marketers such as Direct Line and Guardian Direct will find the transition relatively simple. Network marketers such as Quorum already reach their agents via satellite TV.
Smart retailers are hedging their bets. Interactive Media in Retail Group (IMRG) reports a growing level of interest in multimedia by retailers in a recent survey. In fact, over half are planning multimedia activity and almost a third already have a direct budget for this.
If managed well, the balance of power will shift away from traditional retailers, who risk losing valuable control elements such as physical environment, layout and merchandising. Packages will no longer enjoy multiple facings (if they are seen at all), while parking, crÃ¨ches, and other extra “service” differentials will
But as William Drew of Fashion Weekly magazine says: “The opportunities to sell and serve via interactive multimedia systems are substantial, but they will supplement store retailing, not supplant it.”
We believe that manufacturers will go directly to consumers, and if they can learn quickly enough they can establish their own direct relationships. Witness NestlÃ©’s “Buitoni” moves over the past few years to build a club-style database, and Heinz’s investment of over 10m, announced in June 1994, to develop individual relationships with consumers through database marketing. Manufacturers seem to have begun to accept the notion of providing information, as well as products, as part of tomorrow’s brand-building.
Closing a Sale – Opportunities for ‘single message definition’
The remote control changed the rules of TV advertising, allowing viewers to “channel surf” during commercial breaks. Single message definition (SMD) will give consumers a choice of what ads, products and services to look at, and will give vendors a single chance to define the message they wish to impart. SMD will make or break a new product or confirm or devalue an existing brand.
Since 80 per cent of purchases are impulse- buys, the SMD will have to compensate for the lack of visual appeal experienced in a traditional retail environment. In a situation of comparison shopping, it must communicate all the qualities of the brand and more. Similarly, current merchandising is a huge generator of secondary purchasing. But can screen-based selling create the same urge to impulse-buy when consumers are in their own homes? Comfort and familiarity with a product may overcome the urge – and this is where a strong brand will win most of the time.
Products and services designed to look good on the shelf or in a brochure will have to be redesigned to communicate just as well – if not better – on screen. The smart brand manager is already thinking about this.
Will the marketing concentrate totally on advertising to create awareness or will it depend more on doorstep selling? Will the corner shop return as a “sample shop”, displaying a wide range of products that can be delivered to your door?
Traditional retailers suffer from customers who come in to have a product or service explained before going to purchase from a discount warehouse. But some manufacturers, such as Nikon cameras, are a step ahead, using showrooms where an employee of Nikon explains the equipment to the customer, who then purchases the item anywhere.
An example of interactive TV shopping is Viewcall. To be trialed in 1000 homes this autumn in Glasgow and in a town in the south of England, it will feature independent retailers in association with Great Universal Stores. Connected to a modem, a set-top box will drive the merchandise offer, home entertainment, e-mail and access to the Internet.
How will a brand succeed in the interactive environment?
Highly creative brand management is needed, involving complete control of the brand’s personality. Before manufacturers invest in new advertising campaigns, manufacturing equipment and so on, it is critical that the product or service communicates well across all forms of media, that the SMD is effective and seductive.
Design will have a sizeable role to play. Brands will need to become “media stars” and the total brand personality will have to assume the corporate personality characteristics of the proprietors (or vice versa). New skills will be needed to create total co-ordination between design, advertising and consumer response feedback, and to design for the new media, where instant recall will be a prerequisite.
Brands that can stand on their own or are supported by a strong company endorsement are likely to succeed. A good reputation is a source of confidence, reassurance and advice.
A brand must be in direct dialogue with the consumer and be interactive, not “intrusive”.
Focus on values, attitudes towards the product or service and keeping it fluid rather than just repeating it, are also essential, combined with an understanding of markets and a monitoring of feedback.
What will have changed in the debate between manufacturers’ brands and own-labels?
At the moment, the retailers hold most of the cards. They have the best physical locations for interacting with the consumer and total control over the physical environment. They control which products are listed or not. They have the ability to collect a wealth of information on buying habits through check-out swipe cards at the till.
In the future, there will be unlimited space for new “electronic” supermarkets and department stores. There is nothing to prevent a coalition of manufacturers creating their own on-line stores. If shoppers switch from physical to on-screen shopping, it will be the capacity to deliver and the post-sale services that will count. This will create new brands in on-screen shopping malls, to compete with those existing at Sainsbury’s and Harrods.
Whatever the situation, all brands, if properly managed, will continue to increase their value and command a premium, because few consumers will have the time or ability to make decisions based on quality/price criteria.
Retailers who can transfer their corporate values on to their own-brands will benefit from interactive shopping, while potentially sustaining a reduced store presence.
Finally, just as retailers stole the march on major manufacturers and service providers by creating own-labels, there is nothing to prevent the new interface between the consumer and the product from creating their own-brands. Wait until the BBC and CNN start selling their own-branded sunglasses and jeans…