You all know that ad that goes “it does what it says on the tin”, but how many retailers can match up to this simple claim?
More than ever in today’s multichannel world, brand integrity has to be paramount – do everything possible to protect and reinforce it.
It is the only protection retailers have from third-party intermediaries and price competition leading to an endless race down a profitless black hole.
How many promotions confuse and annoy rather than satisfy customers? The ‘free’ bar of chocolate at the WHSmith checkout immediately comes to mind.
In this context a recent half-price promotion for a national newspaper at WHSmith annoyed me, as for the period of this promotion I found the paper was often out of stock and that it was invalid at WHSmith Travel Shops.
“Most annoying, and sadly most prevalent, is the ‘50% off’ sticker in the window which applies to only a handful of items hidden away in-store, or the multi-buy promotions advertised on the shelf but not honoured at the till”
The brand is WHSmith, the consumer does not differentiate or understand that High Street and Travel are different operating divisions.
Less surprising was my final BHS shopping experience, where given the price reductions I was ‘open’ to buy. I should have realised that the almost complete absence of basic retail skills meant that unless you were exceptionally small or large, there was nothing available.
Most annoying, and sadly most prevalent, is the ‘50% off’ sticker in the window which applies to only a handful of items hidden away in-store, or the multi-buy promotions advertised on the shelf but not honoured at the till.
This all leads me to the missed opportunity presented by electronic shelf-edge labelling, an investment which can bring a store into the digital age and open the door to dynamic pricing.
I have never understood why UK retailers never invested in this invaluable tool, and now that the national living wage has eliminated ‘cheap’ labour, it looks like a serious strategic blunder by any retailer – such as a grocer or a DIY store – selling a wide range of SKUs.
I first came across electronic shelf-edge labelling in the US in the early 1990s, when I dismissed it as an expensive toy.
A decade later though, I came to see it as an investment that can transport the shopping trip into a magic land where price adjustments are instantaneous and require no labour input at store level.
This eliminates mistakes – no more queues at the till when shelf edge and product prices don’t match and the harassed till operator has to summon a supervisor to sort it out – and provides promotional opportunities (‘time’ pricing for lunch specials, happy hours, etc).
As well as the obvious cost savings and gross margin benefits (no mistakes and instantaneous price adjustments across the board), service levels can be improved by getting staff out of the back office and into customer-facing roles, and by improved product information at shelf edge, including displaying the number of units sold, the number in stock and competitors’ pricing.
“Both in terms of hard and soft benefits, I see the payback from this investment [in electronic shelf-edge labelling] as more substantial and immediate than the current obsession – personalisation”
Couple this with the adoption of robots for warehouse deliveries, shelf-filling and picking customers’ online orders, and you have a recipe for the creation of the store of the future.
Not only does it transform the shopping experience but it creates a much higher level of job satisfaction for shop staff.
Both in terms of hard and soft benefits, I see the payback from this investment as more substantial and immediate than the current obsession – personalisation.
The latter provides far too much scope for mistakes through over-simplification and ‘analysis paralysis’. Ask yourself how many of the emails retailers send you each day are really welcome and adding value?
Worse still, how often do they actually annoy you?
There is a sad contradiction in the terminology ‘personalisation’ when simultaneously it is becoming more and more difficult to actually talk to anyone directly. This is the real opportunity for store-based retailers to exploit.
John Richards is a retail consultant and non-executive director