A blog for all things retail and licensing.

Staying Afloat

Guest Blog By Chris Horacek

It’s no surprise that brick-and-mortar stores have been suffering a slow decline for years. Recently, Radio Shack announced that it will be closing more than 1,000 stores. Staples: more than 200. Increased competition from online retailers means less foot traffic and revenue, making it more difficult to justify expansion and growth.

Now more than ever, retailers need to identify where they can squeeze extra value and where hidden cost savings lie. The most comprehensive way to do so is by examining their supply chains, end-to-end, to understand all current costs, by category, department, supplier and brand.

To start this process, here are four methods that you can use to optimize a retail supply chain and as a result, improve profitability.

Purchase as a Company
Like with anything, the fundamentals are the most important, but often overlooked, ways to achieve savings goals when sourcing retail merchandise. Three procurement or supply management techniques that separate the retail leaders from the laggards are:

* Leveraging: When two different divisions or departments combine volume of purchases with the same supplier to get better pricing or terms.
* Normalizing: Ensuring that if different division or departments are sourcing the same product, that they’re all paying the same price.
* Rationalizing: Using one supplier for similar items across several categories.

It all depends on how aggressively you manage your supply base, but most retailers using these techniques see double the savings, at minimum, with the most aggressive seeing a tenfold cost reduction.

Revaluate Transportation
Once you begin to purchase smarter, it’s time to dig into the specific categories that are costing you the most. These days, many retailers find that transportation, logistics and shipping costs can easily total upwards of 20 to 30 percent of the entire cost of goods sold. In the most extreme cases, it skyrockets to 50 percent.

Transportation is one of the hardest aspects of the retail supply chain to manage because it’s so dynamic – rates change daily across hundreds (or thousands) of carriers.

To tap into this savings opportunity, retail teams must understand not only the cost difference, but other, critical decision-making criteria, including on-time delivery rate, fuel surcharges, handling costs, etc.

The solution: use technology to do the heavy lifting for you. E-sourcing tools give you full visibility beyond just pricing and allow you to analyze all the factors that can impact a transportation strategy, by seeing an apples-to-apples comparison of what each transportation provider offers.

Lower Maintenance Costs
In addition to transportation, retailers have a huge opportunity to drive savings when it comes to store maintenance and operations. On average, this category accounts for seven to 10 percent of the cost of goods sold.

In order to avoid passing rising product costs onto your customers, there are a few techniques you can use to save on facility services. First, make sure that you compare national and local suppliers on the same criteria during the proposal process. Ask each of them to list specific costs for each region rather than just an average price. Drilling into these details will help you make the most cost-effective decision.

Another technique is to consolidate services so that you’re using fewer suppliers. For example, you may find that the vendor who does the nightly cleaning for your store may also have capabilities to manage security. Why not use one supplier for multiple services and benefit from volume-based discounts?

Lastly, bring in as many suppliers into the proposal process as you can. The more suppliers you end up evaluating, the better idea you will have of the average pricing for that specific service.

Improve Capital Spending
And finally, the stretch goal. Most retail procurement operations don’t get involved in capital spending – but the truth is, they should, in order to stretch this approved money and then reinvest it back into the business.

Every brick-and-mortar retailer knows the challenges of today’s economy; however, it’s often difficult to pinpoint the solutions. Procurement and supply management teams have a major opportunity to help their businesses not only survive, but thrive.

Chris Horacek is vice president at BravoSolution

This story originally appeared in the summer 2014 issue of Supply Chain World

The Challenge of Mobile-to-Physical Retail and How to Change the Dynamic

Guest Blog by Scott Pulsipher

Mobile retail is facing some major challenges today.

More and more shoppers now turn to their mobile devices for product information and advice. But their trust of retailers has diminished. A Retail System Research survey found 54 percent of shoppers want knowledgeable store associates more than any other service. Yet 59 percent of them believed they knew more about the products than the people paid to help them.

These stats illuminate two important facts. First, shoppers want knowledgeable help they can trust to help them make their buying decisions. Second, they feel they are more likely to get that kind of help online—or on their mobile devices—than at a store. This shows shoppers want their product information from unbiased, knowledgeable, and available sources before they buy. This behavior also demonstrates that retailers are largely viewed as biased and untrustworthy.

This isn’t for a lack of trying. Retailers are staying on top of quick-developing trends and shopping habits. They are combatting general consumer distrust toward traditional marketing. As retailers accept these challenges as opportunities, they are ways and tools to help them adapt quickly in order to make up ground and change the web/mobile/in-store dynamic.

The Challenge of the Mobile to In-Store Dynamic

It starts with mobile devices. Consider what happens as a shopper enters a store with a mobile phone on their ear or staring down at one in their hand. Inherently, the shopper blocks themselves off from in-store associates. And 49 percent of shoppers do this. What hope do in-store associates have of interacting or building trust with shoppers?

This problem is only compounded by the broad availability of information on the Internet. Couple that with the general feeling online of distrust toward marketing messages. Now more than one-third of consumers trust a stranger’s opinion on websites more than branded marketing, according to recent article in Forbes.

It doesn’t stop there. The more shoppers use their mobile devices to shop, the more they turn to online retail sites from their mobile devices. Unfortunately, too many retailers fail to make their sites responsive to mobile devices. Although this may seem like a trivial concern, studies show that mobile responsiveness has significant effects on shoppers. Sixty-one percent of mobile shoppers will move on if a site is not responsive. Fifty-five percent said a frustrating experience on a mobile website would hurt their perception of the retailer’s brand.

This has created a startling deficit of trust between retailers and shoppers that threaten to keep 84 percent of shoppers away from the brands that have lost their trust.

At this point, retailers have two choices: wage a war on mobile devices and the Internet or use mobile and the Internet to regain the trust they’ve lost. The first has a low probability of success. The second is really the only viable way forward for retailers. Their adoption of technology to interact in personal, meaningful ways with their shoppers could make all the difference.

The Pathway to Restoring Trust

First, embracing mobile has to be at the top of the list for any marketer looking to overcome these challenges. This inevitably has to include updating any web properties connected to retail to deliver a fluid, responsive experience for mobile users. Considering that 67 percent of users are more likely buy or convert after a visit to a mobile-friendly site, the development will be well worth the investment.

Second, retailers need to ensure they have the right people talking for them online. According to BazaarVoice, time spent on social media is not always about personal relationships. Users also use these tools to gather feedback from experts with common interests to inform purchasing decisions. These advocates are two to three times more effective in persuading others to buy recommended brands, according to Comscore.

If your shoppers distrust marketing messages, who better to help them regain trust in a brand than unbiased, knowledgeable advocates? They might just be the most powerful—and often underused—tool retailers have at their disposal.

The Benefits of Embracing Mobile

Mobile has threatened most retailers because they are unprepared for the shift and evolution it created in shopper behavior. But mobile could also be the thing that keeps them relevant. Using advocates to regain the trust of mobile shoppers have been shown to significantly increase conversion and customer loyalty alike. When credible, trustworthy advocates directly engage online shoppers at the moment of decision, they are more likely to make a purchase. This avoids the sale-killing delay that results when shoppers postpone buying until they get back to their computer. Better still, retailers who do this successfully will have built up priceless trust with shoppers.

Scott Pulsipher is President & COO of Needle and previously served as the general manager of Amazon Webstore

Are You Willing to Pay the Price?

Instant Gratification May Spell Trouble for your Personalized Marketing Efforts

Guest Blog By Genia Chechersky

They say that “good things come to those who wait”, and when it comes to managing a personalized marketing program, these simple words of wisdom ring loud and true.

Retailers that achieve the most impactful results from their marketing programs don’t base their success on the performance of an individual campaign, as a significant amount of the value created through such vehicles can only be realized longer-term, after a minimum of nine to twelve months of operation. Instead, they’re using consistent and meaningful communications to bolster their relationship with customers, increasing the likelihood that they will shop with them not just during campaigns, but are also maintaining loyalty every day.

Although effective one-off campaigns can yield strong participation rates and immediate gains, the long-term value generated through an established and well-executed program presents a greater return. That’s because the most accurate marketing programs are executed to align with consumer insights and data from loyalty programs, including consumer shopping habits and key product preferences.

Retailers today have failed to see the big picture and are still seeking instant gratification as they drive their marketing teams to deliver immediate results, without assessing the trends inherent in consumer data, which can hurt their finances in the long run. The following are a few signs your marketing efforts are headed in the wrong direction:

•          You’re Delivering an Inconsistent Customer Experience:  One of the cornerstones of a successful marketing program is consistency. Customers need to know what to expect from a retailers’ communications, as well as when to expect them.  This conditioning is imperative to the long-term success of a marketing program.

When the pressure for immediate results is high and focus is lacking, teams begin to inundate customers with inconsistent, one-off messages. Consequently, developing any sort of relationship with shoppers becomes much more difficult, and opportunities for long-term value creation are greatly reduced.

•          You’re Not Measuring Long-Term Program Performance: While campaign-level metrics are important, the true value created by a marketing program cannot be correctly evaluated sans a long-term measure. A long-term control group must be established to help you compare the behaviors of shoppers who receive communications with the behaviors of those who do not, over periods as long as twelve months.

Marketers are rarely willing to forgo the short-term gains associated with higher circulation numbers for the sake of this analysis. By only measuring campaign results in the short-term, teams are more likely to understate the value that their programs create for their organization in the long-term.

•          You’re Focusing Too Much on Winning Back Lost Customers: Another major marketing misstep is to focus too much on your lost customers at the expense of your most loyal ones. While sending a rich offer to a lapsed customer may drive an incremental trip in the short-term, doing so won’t create a lot value for your organization in the long-term.

Instead, a minimum of 60 to 70% of your budget should be allocated to your best customers – the ones who account for the majority of your sales. By rewarding this group with meaningful offers and communications, you will not only maintain their current engagement with you today but minimize the need to reactivate them down the road.

At the end of the day, organizations that are serious about generating the most value out of their marketing programs – and measuring that value correctly – must abandon their myopic mindsets. Teams would be well-advised to commit to developing long-term customer contact strategies; designing compelling and sustainable marketing programs; and investing in the necessary program measurements, even if it comes at the expense of immediate gains. After all, “patience is bitter, but the fruit is sweet.”

Genia Chechersky is a Manager for emnos U.S. at the firm’s Chicago office, helping retail clients leverage their consumer behavior insights into actionable sales and revenue. Contact her at info@emnos.com.

The Art of Retailing in a Changing Economy

Decoding the Science Behind Consumer Motivations – Guest Blog By Brandon Hunt

After battling to stay afloat during the economic downturn, retailers are finally feeling optimistic again. According to The Commerce Department, Retail sales (which account for a third of consumer spending) are on the rise with March seeing the sharpest increase in nearly 2 years.

However, while spending is up consumers haven’t forgotten the recession and they are still being cautious with their purchase decisions. As the summer shopping season approaches, retailers who are aggressive with their promotional offers will be the ones to drive traffic both online and in stores.

The booming popularity of online deal sites is proof that shoppers are looking for a better way to save. In recent years we’ve seen a real shift in the retail industry. Merchants are recognizing that in order to spend, consumers need motivation and companies have become more committed to helping shoppers save money.

Consumers are taking the time to really do their research to find the best deals and make the best purchase decisions. Retailers would be wise to do the same, and many are. We’ve found that many retailers are using our site to research their competitors’ deals and promotions. Consumers have many choices when they shop, and for the most part they are not brand loyal. They are going to shop around, so it is a good idea to know what your competitors are offering and how your pricing and promotions compare. Taking it a step further, retailers have realized the benefit of technology that allows them to predict shopper behavior for individualized recommendations and promotional offers, and they are capitalizing on it.

Aggressive offers have multiple purposes. They drive new business, help retailers unload discontinued products, and convince consumers to act on purchases they’ve been contemplating.

Thanks to modern technologies, shoppers have more control than ever before over where they purchase goods, forcing retailers compete for their attention. Realizing that their survival depends on their ability to adapt to this customer-centric world, retailers are becoming masterful at keeping the attention of shoppers through aggressive offers.

Brandon Hunt is the co-founder of DealScience.com.

Retailers Must Be More Proactive Against Cyber Threats

Guest Blog by Charles Tendell

The retail sector has been targeted and damaged by high-profile cyber security incursions, resulting in a loss of customer confidence and a move by retailers to upgrade security measures in the constant battle against criminal hackers. Security threats exist at multiple points in the retail chain, from point-of-sale systems and online purchasing to employee access to sensitive information. It’s part of a dizzying trend including research by the Ponemon Institute showing that hackers have exposed personal information of nearly half of all Americans in the past year.

One important tool retailers must implement is penetration testing, conducting ongoing self-evaluation of systems, processes and policies in an effort to stay ahead of the curve. However, penetration testing is not enough to identify new threats ahead of time, as proactive threat intelligence is needed to fill the gaps in penetration testing and implement a truly dynamic and aggressive cyber security protocol. It’s often the case that companies do not notice retail hacks until weeks or months after the intrusion, creating far more damage.

Proactive Threat Intelligence

Retailers should monitor the ‘deep web’ to identify problems before they become implemented by criminal hackers, such as point-of-sale malware, the latest in credit card skimming capabilities and a wide range of Trojan Horses. Only by staying ahead of the curve on a constant basis can retailers have a chance to combat these and other nefarious activities. It’s similar to having a tornado warning; even a bit of notice can go a long way. Having time to understand each threat and prepare defenses is key.

This type of aggressive cyber security is not typically implemented by a traditional IT department, but by ethical hackers who work and lurk in the same places as criminal hackers, but use their knowledge to protect businesses and consumers instead of damaging them. Ethical hackers monitor and participate in message boards, chat rooms and other online sites, as well as hacking conferences, where the most current information on what’s coming next appears before techniques are implemented against businesses and consumers. This is how ethical hackers create the warning time needed to implement defenses.

It’s important for retailers to have an active program searching threats on a proactive basis, because hackers are always adjusting and updating tactics in the deep web.

Charles Tendell is a cyber security expert and founder of Azorian Cyber Security

Retail chains cracking Indian jewelry market

Deepika Padukone in Tanishq

Bollywood superstar Deepika Padukone in Tanishq jewelry.

May 19, 2014 — When one thinks of India, jewelry often jumps to mind. Mental images of the place shimmer and sparkle — and seeing it for real doesn’t disappoint. Even women of modest means can be found bedecked by Western standards — with bindis and bangles, décolletage dripping and hair cascading with bling. And forget about the American three-months-salary rule of thumb for a measly diamond solitaire — Indian parents might spend a large percentage of their life savings on bridal gems.

India is the world’s largest market for gold — much of it worn rather than stashed away. The Indian jewelry market — by some estimates as large as $25 billion a year — is dominated by small, mom-and-pop retailers. But large chains and brand names have begun to change that.

Tanishq, India’s largest national jewelry chain, is a joint venture between Tata Group, the country’s largest conglomerate, and the Tamil Nadu Industrial Development Corporation, a government agency. Tata’s sprawling operations range from steel to tea to hotels. Tanishq was launched in 1994, but took off in earnest around 2007 — revenue has been growing 40 percent a year on average since then.

As India becomes more affluent and its middle class continues to explode in size, there’s a growing change in the perception of jewelry — it’s being viewed less as a savings vehicle and more as a fashion statement. And the old family jeweler might not be as trendy as the latest chain store that carries popular new brands. Women want to look more like chic, modern Indian movie star Deepika Padukone, who donned a Tanishq collection in the recent slick Bollywood hit, Race 2. Indian women also want stylish understatement to wear to the office, where Western attire is often the norm.

Additionally, there’s a comfort factor in buying from an established jeweler with a national reputation, as opposed to a local market vendor, who may be selling goods of dubious quality. Tanishq, which now has about 150 stores and has cracked into double-digit market share, is a division of Tata’s Titan Company Ltd., the largest designer and manufacturer of watches in India and the fifth-largest in the world.

Titan watches are known for their extreme slimness. Titan brands include Fastrack and Raga. Its slimmest brand — the slimmest in the world — is the Titan Edge, with a total thickness of 3.5 mm and a movement of 1.15 mm.

Titan makes other jewelry as well and exports to more than 35 countries, including, as of last year, the United States, the largest watch market in the world. But for now, the company’s wheelhouse is India, where it has a 60 percent share of the country’s watch market.

The Future of Retail

RM Editor’s Note: Everyone in our industry is always looking for insight into the future of retail. We all know that the industry has seen many disruptive changes in the past decade, and the change trend is expected to continue. As luck would have it, Sean Mulroy from Ingram Micro Mobility and Christopher Landry from Colourfast Printing both had some thoughts to share with us on the future of retail. This blog post and infographic came to us separately, but we think each has an interesting take on retail’s future. Read on to take a look at both.

Buying Mobile Devices: Predictions for the Future Experience and What All Retailers Can Learn
Guest Blog by Sean Mulroy, Ingram Micro Mobility. Infographic supplied by Christopher Landry from Colourfast Printing.

The successful mobile store of the future will embrace the concept that phones are rapidly being replaced by handheld computers. Therefore, they will focus far less on “traditional” phone accessories and far more on the connectivity enabled by the computers in our hands.

Here are four ways I envision the mobile retail store of the future – and there are lessons learned here for retailers of all types:

How about a little mood music?
Prior to the introduction of the iPhone, the idea of an Apple phone was driven almost exclusively by the idea that phones would act as music players. While the overall mobility landscape has changed dramatically since 2007, music is still a key component for consumers. Embracing that role is vital to the mobile retailer – pull the high-end Bluetooth music speakers off the shelf and put them on the show floor to flaunt the level of audio quality that is now available for connected devices. Headsets designed for audio, such as those devised for use while exercising, should also be featured. Ask yourself this: do you get the same audio experience using a pack of earbuds that you do by cranking up the volume on the Bluetooth music controlled from the palm of your hand?

Consumers want to walk into a store and have the entire mobile experience at their fingertips. And this is true for any retailer. Regardless of the product you’re selling, retail stores of the future will make sure the consumer has hands-on interactions with the product from the moment they walk in the store.

Maxing out mobile device capabilities
You name it, and it’s guaranteed that consumers are buying it with their mobile devices: apps, content, the latest top 20 song, a pair of shoes, or concert tickets. As mobile retailers become the curators of all things mobile, we need to extend the device-purchasing conversation further into how consumers are using devices.

Options like offering app-store gift cards and direct-to-account billing help position the retailer as the guide in unlocking more of the device’s potential. Another example is to offer a subscription to a TV or video service to allow consumers to flex the ability of devices by serving as a content host for videos.  Retailers other than those focused on mobile devices also need to be creative by tapping all of the device’s capabilities

Using connectivity as a selling point
Connectivity is a mobile buzzword we hear daily. Aligning with that is only natural and a near-requirement for retailers of the future. How this connectivity will develop is already apparent: network-connected home security systems, smart thermostats and home appliances, Wi-Fi-enabled scales, and quantified-self health trackers all rely on the current generation of handsets as their brains expand the device’s capabilities exponentially. My imagined mobile retailer showcases these capabilities in an interactive way that allows shoppers to better visualize how the functionality is applicable to their own experiences (i.e. in the home, for work, or just for entertainment), as well as gives a taste of how easy it is to manage multiple tasks from a device. You don’t necessarily need to be in the technology industry to provide a connected experience.

Smart people, smart products
Lastly, the overall mobile retail experience needs to be tied together by a knowledgeable, engaged sales team who take care of customers’ needs, while demonstrating how connected products work. Some of us may talk about connected products ad nauseam, but there is still much consumer education to be had. From a technology standpoint, these teams will utilize mobile point of sale systems designed to make the purchasing process as painless as possible. All of the connected technology from the future – or now – will fall on deaf ears if the assisted sales portion of the experience is neglected.

In the competitive retail landscape, brands are fighting to unlock the formula for greater customer loyalty and success. If retailers consider some of the ways that the consumer imagines my future retail experience, they might stand a greater chance of pulling ahead of the herd.

Mother’s Day: Make it Meaningful

May 9, 2014 - By now, you’ve been reminded 10 million times that Mother’s Day is this coming Sunday. If you haven’t made plans by now, your shopping days are numbered. But before you go out and settle for the old standard fare of a card and some flowers, let me share with you a tale of an early Mother’s Day surprise.

Sundays tend to be extremely busy days for me, especially in the spring when I spend God knows how many hours driving all over New England coaching soccer. On Sunday, May 11th, instead of spending time with my mother, mother-in-law, grandmother, or any other mother, I’ll be coaching kids who are honoring their mothers by playing soccer in front of them.

Giving all the credit in the world to my wife for discovering this opportunity, we chose to take my mother and grandmother to a little place called the Wenham Tea House two weeks before Mother’s Day for a Downton Abbey themed event. I’ve never watched an episode of the show, and I thought it was called Downtown Abbey for the longest time. But the combination of cute hats, trivia, tea, sandwiches, pastries, scones and excellent company made for a memorable event.

So what does this have to do with retail? Well, the Wenham Tea House – in addition to being one of the oldest tea houses in the country – has a pretty interesting gift shop. But the main point is this: don’t waste your money on overpriced, last-minute gifts because the marketing machine tells you not to forget mommy. Take the time to come up with a meaningful and emotionally compelling way to honor your mother this Mother’s Day. And then go out and get your dad a tie and cologne for Father’s Day.

The Counterintuitive Truth: How Retailers Can Invest in Labor to Lower Costs and Improve Profits

Guest Blog by Matt Howard

Every once in a while you come across a simple idea that really forces you to stop and think…and then it makes you stop again and think some more.

For me that happened just the other day when I purchased and read a copy of Zeynep Ton’s new book entitled The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits.

Ms. Ton is an Associate Professor of Operations Management at MIT Sloan School of Management.  Over the past 10 years she’s conducted a vast amount of research focused on the critical role of store operations in retail supply chains and exploring how retailers can design and manage their operations in a way that satisfies employees, customers, and investors simultaneously.

Professor Ton’s simple, but powerful, idea is that retailers can invest heavily in store employees and simultaneously deliver lower prices, higher profits, and better customer service than their competitors.

Does that sound impossible to you?  Well, you’re not alone?

Conventional wisdom is that low cost retailers have no choice but to cut labor expense so they can attract customers with low prices and drive sales.

For most people, it’s simply counterintuitive to think that top performing low cost retailers are doing the exact opposite – choosing instead to invest heavily in labor.

But that is exactly what Professor Ton’s 10 years worth of retail research shows.  The presumed trade-off between investment in employees and low prices is a fallacy in certain situations.

The trade-off is specifically false for 4 low cost retailers – Costco, Trader Joes, Quicktrip, and Mercadona – each of which delivers superior financial performance by combining investment in labor with operational best practices including:

  • Offering less:  fewer products for sale reduces costs, improves labor productivity, increases category expertise and improves customer satisfaction.
  • Standardizing and empowering store staff:  non-selling tasks are completed efficiently and consistently plus employees make decisions that work best for local customers.
  • Cross train:  store employees are well-rounded athletes and remain productive doing different things.
  • Operate with slack:  stores are deliberately over-scheduled to ensure enough staff with positive attitudes are available to care for customers and complete critical non-selling tasks.

So, if increasing investment in store labor is such a good idea for low cost retailers, then why aren’t more doing it?  Professor Ton says the main reason is that labor is often a retailer’s largest controllable expense often accounting for 10% of revenues.  She also observes that many retailers see labor as a pure cost rather than a sales driver.  Finally, she notes that the financial benefits of cutting employees are immediate, direct, and easy to measure — whereas the downside of cutting labor is indirect, long term, and difficult to measure.

Now that I’ve read the book, and now that I’ve stopped and thought about it, it’s easy to see why certain retailers like Costco, Trader Joes, Quicktrip, and Mercadona do what they do.  It’s not because they are altruistic.  Rather it’s because they’re dedicated to operational excellence in retail, which leads to great experiences for consumers and superior returns for investors.

For me personally, the moral of the story is that retailers should avoid the familiar temptation to respond to short-term pressures by automatically cutting labor.  Instead, they should make the hard choices necessary to rededicate themselves to operational excellence and schedule sufficient staff to simultaneously care for customers and consistently tend to critical non-selling tasks.

Matt Howard leads global sales and corporate marketing for Natural Insight, a SaaS platform that provides workforce management and structured task management solutions to retailers.

Real-Time Shopper Data Takes the Guesswork out of Retail Planning

Guest Blog by Rich Scamehorn

Market research is a crucial part of a successful business venture. When you know what your customer is thinking and what drives consumer behavior, you can successfully target them and make your product a success. 6.7 billion dollars are spent on market research each year, and it’s an ever-growing business especially as technology and social media sites continue to spawn anew each day.

However, in the past, market research on shopping behavior has been very limited. For example, if a retailer or manufacturer wanted to monitor customer behavior, they would simply strive to track in-store behavior and purchases. Alternatively, companies could survey shoppers about their in-store behavior to try to understand why they bought (or didn’t buy) the products on the shelves.

For example, they might notice that shoppers appeared to prefer whole milk to skim milk, or that cereal on the middle shelf was more popular than cereal on the lower shelf – but it was difficult to understand why. Essentially, companies would try to make educated guesses about shopper behavior based on shopping trends, attitudinal surveys and tracking how people behaved while inside a supermarket.

Although such information was helpful, it was also very limited. The scope was narrow and results could be flawed.

However, thanks to advancements in virtual technology, manufacturers now have access to real, verifiable data that shows exactly how people shop and what leads them to make purchases. Shopper research can now be taken to the next level thanks to virtual simulations and 3D displays that allow manufacturers and retailers to try out store displays and packaging ideas before they invest time and money in them in the real world.

With these new technologies, the days of trial and error are over. And that’s great news, because in today’s world, stores are looking to do more than just offer the goods and services customers want. In order to compete in an over-saturated market (including online options), stores have to make sure that they offer a streamlined experience. That means that they have to make the shopping experience as seamless and smooth as possible. With the advent of simulations, stores can really put the needs and wants of their customers first and foremost.

With virtual store simulations, for the first time, we are able to see into the mind of consumers and actually predict their next moves. This means that we can help clients create in-store marketing plans accordingly and ensure that our clients don’t waste thousands of dollars on ineffective displays. From packaging to shelf arrangement, we provide data to ensure that every decision is made with real, first-hand knowledge and unquestionable statistics.

Virtual simulations are also invariably useful when it comes to working with manufacturers in different locations and perhaps even from different cultures. Unlike traditional in-person meetings that feature a Power Point presentation and plenty of talk, a virtual simulation allows clients to interact with the data no matter where they are on the globe. That means that even if your team is spread out across the country, they can still take part in the important process of shopper market research.

In particular, this is true for franchisees who come from different countries and might not be well-versed in English. With the simulations, it’s much easier to get the point across and bridge the language gap, which helps to ensure that everyone is included in the conversation and everyone’s voice gets heard.

We all know that the Internet has forever changed our society, and it has also forever changed the way that people shop and the way that people interact. In order to keep up with these trends, it’s time for market research itself to change. We have to continue to be innovative and progressive, and to change with the demands of the day as well as stay one step ahead of the curve. And, with virtual simulations and high-tech shopper research abilities, we can do exactly that.

Rich Scamehorn is CRO of InContext Solutions