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Planet Retail: Manual price changes costing retailers $104 billion a year

A theme to emerge from RBTE was that perhaps now’s the time for us all to talk less about the Future of Retail, and more about what technology can do now. It’s a point echoed in our new research produced with Planet Retail RNG. Based on insight from 1,000 retailers and 5,000 shoppers it speaks to shoppers’ desires for more technology in-store and, leaving aside things like AR, and big data for a moment, it spotlights an old, maybe unfashionable truth: the correct price, accurately displayed is still the prime purchasing factor.

The $104 billion operations cost

For 80% of shoppers price most influences what they buy and over half (53%), are losing faith over pricing errors and inconsistencies. What’s more, if mistakenly charged a higher price at the till than the one shown on the shelf, only 18% would shop again in confidence at the store. The importance of price highlights a legacy issue – the fact that prices are changed manually by associates in a laborious, expensive process. The research uncovers that 67% of retailers spend up to 4.99% of average monthly store turnover making price and promo amendments. That’s equivalent to approximately $104 billion in sales across the 10 markets surveyed.

Despite the eye watering cost, retailers say they’re not able to free enough associates to focus on pricing tasks. In fact, 78% say they’d like to increase the frequency at which they make price updates and launch promos.

Of course, suggesting that selling the right product, at the right price, will increase shopper trust isn’t rocket science. But it exposes a challenge: that in today’s internet of things, always on age, where virtual stores change millions of prices daily, physical stores cannot move with anything like the same dexterity. Permeating through the research is the feeling that with shoppers price aware and connected, they’re after a more consistent, automated experience, but their trust and faith in the store seems to be lessening due to basic technological inefficiencies.

And, contrary to popular opinion, physical stores should not be concerned that shoppers will worry if they’re able to price more dynamically: 65% of shoppers would welcome price changes throughout the day if it saves them money or reduces waste.

The need for agility  

Major retailers like Kaufland, are addressing the need to price in more agile ways by moving to Electronic Shelf Labels (ESLs). ESLs allow millions of shelf-edges to be remotely changed in seconds to price with speed, accuracy and consistency. They can display more info too, including the information shoppers value online, from stock levels, to social reviews, competitors’ prices and more.

And using ESLs enabled with bluetooth, they turn stores into digital, connected spaces. This provides the platform to offer new services in line with retailers’ goals. After improving price and promo’ strategies the second and third retailer priorities over the next 12 months are enhancing the in-store experience (45%), and digital customer engagement (42%). Using ESLs that are connected to central enterprise resource planning (ERP) and other data sources, everything can be managed centrally. This allows retailers to apply Big Data insights and send personal offers based on a shopper’s in-app activity, search history, past purchases, social media and so on. Likewise, AR apps can be used to guide shoppers to their items.

There’s no doubt that the future of in-store retail is going to be more interactive, personalised, and rewarding. But this isn’t a vision that needs to wait: the technology to deliver such experiences, is here, now.

For more about what shoppers want in-store, and how retailers are planning to respond, download your copy of the Displaydata / Planet Retail research here.

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