2019 has been a wild ride for retail. The year began following a rocky 2018 (so long, Toys “R” Us) and continued with sad news of store closings from recognized brands like Gap, Payless, Gymboree, and more. But before you write it off as more proof of that played-out retail apocalypse argument, the year also saw its share of big wins (welcome back, Toys “R” Us), thanks to strategic partnerships, reimagined customer experiences, and so much more.
In sum, 2019 leads the way for 2020 to continue the trend of healthy brands that stay nimble setting themselves apart from the retailers that are married to the strategies-of-old.
We asked some of Frank Mayer and Associates, Inc.’s point-of-purchase display experts to weigh in on what 2020 has in store for retail as well as merchandising displays and interactive kiosks. Here they address everything from fresh customer experience ideas and brand alliances to replacing outdated mall concepts with experiential models. Read on to discover their take on what’s to come.
The New Face of Customer Service
2019 saw a continued decline of the jobless rate, with unemployment falling to 3.5 percent as of November. While a low unemployment rate is often an indicator of a healthy economy, the tight job market can present its own set of challenges for the retail industry, especially as the market shows similar signs of strength for 2020.
“In theory, a small job pool could force retailers to pay more to attract talented workers, which can be a difficult requirement. People just have so many more options in the current climate,” Steve Etzelmueller, Senior Vice President of Finance says.
With less interest in retail service positions, retailers may find tools like interactive kiosks can easily fill the void for customer education and sales.
“As the current labor force shrinks in this sector, kiosks, and even point-of-purchase displays, can step in and take on some of the load by offering self-service capabilities and product information,” Etzelmueller states. “And when you factor in wages, insurance, workers compensation insurance, and more, kiosks end up being a cost-effective answer to the problem.”
Look for more self-service kiosks factored in to brands’ customer service strategies in industries like hospitality and quick service restaurant.
Dave King, Senior Vice President of Operations, agrees we’ll continue to see the trend of self-service kiosks infiltrating verticals where people feel comfortable being self-sufficient with their ordering and checking in.
“People have really become more adept at educating themselves before buying,” he states. “So, we’re noticing more people enter places like hospitals, dispensaries, and fast food restaurants knowing what they want and feeling comfortable placing an order or checking in for a reservation without the need for assistance.”
But what does this mean for the current jobholders in these industries? Will the argument that kiosks will replace human labor have weight in 2020?
“No,” King asserts. “The intention behind offering self-service kiosks is to complement a company’s customer experience strategy. And redeploying labor to go toward other customer-geared tasks – like keeping a clean environment or decreasing wait times – is essential to the overall plan.”
Digital Goes Physical and More Surprising Strategies
The trend of digitally-native retailers going offline with brick-and-mortar stores or partnerships with traditional retailers has been covered quite a bit this past year. According to Integrated Marketing Manager Cheryl Lesniak, this pattern will continue.
“There’s a reason we’re hearing more about online retail going into the physical space,” Lesniak says. “Channels are more blurred than ever because crossing the imaginary line from e-commerce to brick-and-mortar is proving to be a winning strategy.”
Recently, Resident, the company behind online mattress brand Nectar, spoke about its success partnering with traditional retailers to sell its products.
The company realized 80 percent of shoppers want to test a mattress in-store before buying, so they teamed up with legacy retailers, resulting in a mutually-beneficial relationship. Now, they send customers through the shops’ doors, while offering potential consumers a chance to try out their mattresses. The company reports their in-store sales are currently growing faster than online sales.
“E-commerce is obviously not going anywhere,” Lesniak states. “So instead of spending time fighting against the stream, innovative brands and retailers are finding ways to work with each other to benefit the end customer.”
Nothing shows this more clearly than the well-documented partnership between Kohl’s and Amazon. In 2017, Kohl’s announced a pilot program to accept Amazon returns in-store. A recent Retail Dive article wrote that research confirmed participating stores showed “increased sales, transactions and customer growth compared to other locations.” It’s no surprise, then, in early 2019 Kohl’s announced plans to roll out the Amazon returns program to all stores by mid-summer.
And the obvious benefit to Amazon? The king of frictionless online shopping now offers an easy avenue to return items without the hassle of boxing, printing, and shipping.
“It’s not shocking to see other brands follow Amazon’s lead and experiment with taking advantage of what physical can offer that digital can’t,” Lesniak says. “UPS and FedEx have announced partnerships with major retailers to manage pickups and drop-offs, benefitting consumers with convenience, retailers with foot traffic, and the environment with less carbon footprint. It’s like a trifecta of advantages.”
We’re seeing this same omnichannel mix-up with programs like Buy Online, Pick Up In-Store (BOPIS) as well. In fact, the latest data shows 2019 was a pivotal year for the program, with studies indicating almost 70 percent of shoppers made multiple BOPIS purchases. This phygital strategy will continue to grow, with 90 percent of retailers expected to implement a BOPIS program by 2021.
So where do point-of-purchase displays and kiosks fit into this retail horizon?
Kiosks naturally fit in this new environment, according to Lesniak. Locker and kiosk programs, like Amazon’s Hub Locker kiosks, enable customers to easily access their goods on their own. And merchandising displays are still relevant in the retail landscape.
“Traditional retail is going through a restructuring to bring the most convenience to customers by being prepared when the consumer’s path-to-purchase carries on offline,” says Lesniak. “With continued foot traffic to stores, brands need to ensure their merchandising still grabs attention and educates the consumer. Even within this new landscape of omnichannel strategies, good merchandising is still a fundamental necessity.”
Capturing the Elusive Crowd
The slow death of the traditional mall has been happening for some time now. There are many arguments pointing to the “why,” ranging from the rise of e-commerce to the loss of department stores in large anchor spaces. At the end of the day, though, asking why doesn’t matter so much as asking how shopping malls will need to evolve in order to function in a changing landscape.
“While the term ‘experiential’ has become clichéd, it really is the perfect word to describe the new shopping of the future,” says to Ryan Lepianka, Creative Director. “Moving forward, the malls that thrive will focus less on retail being the sole traffic driver and more on services, experiences, and living spaces.”
As e-commerce takes greater bites out of mall numbers, retailers must stop trying to get people to the stores, and instead work on bringing the stores to the people.
“These new retail centers have everything, including condos and apartments,” Lepianka states. “Now, people can walk from their homes to grab a bite to eat, see a movie, visit the dentist, and run in to a store to buy a new pair of jeans.”
As malls continue to progress into mini villages, specific retailers are adopting the same idea of bridging the gap between merchandising and experiences.
Brands like Lululemon have perfected the art of encouraging customers to interact with product through exciting experiences, resulting in greater brand loyalty and product interest.
“It’s not a new concept, as retailers have been experimenting with activating their shopping experience for a while,” Lepianka admits. “But, as we go forward into 2020, we’re going to see even more creative ways to seamlessly blend product with exciting, Instagram-worthy experiences. Look at what Nike Live is doing with its locally-personalized stores and Canada Goose with its Cold Room. We’re moving past the days of run-of-the-mill pop-up shops serving as ‘enough’ when it comes to brand encounters.”
2020 Looks Bright
As retail continues to develop within the new parameters of today, the point-of-purchase display and interactive kiosk industries will play crucial roles in helping retailers to provide the best customer experience on his or her path-to-purchase.
As a leader in the point-of-purchase industry, Frank Mayer and Associates, Inc. works with countless brands and retailers to deliver merchandising, kiosk, and self-service solutions to fit their needs. Learn a little more about our history here, and then let us humble-brag about some of our favorite work.