Barriers to Retail Growth - And How to Overcome Them

Barriers to Retail Growth And how to overcome them

Dick Baynham & Sarah Mitchell - April 2013

IntroductionForeword Problem Solution Ticketing Rationale Service Personalisation Contact

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Copyright © SignIQ Pty Ltd - April 2013

The retail industry has never been as dynamic or competitive.

Operational complexities cause many retailers to unwittingly weaken their own marketing departments and degrade their customers’ experience – resulting in a failure to maximise the potential return from each shopper visit.

Yet there is ample evidence that marketers can use retail ticketing to gain tighter control of in-store promotions and:

•Increasesalesoneachshoppervisit •Differentiatethecustomerexperience •Deliverapowerfulcompetitiveadvantage

This paper explores the barriers preventing this from happening and explains how the simple outsourced service provided by our company is turning this situation around by assisting retailers to set new standards of excellence.

Foreword

Edward Breese CEO SignIQ

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Retailers have never been more under threat or better positioned to achieve sustainable sales growth.

Advances in technology enable companies to process vast amounts of data and transform it into operational insights on a previously unattainable scale, yet most businesses have been unable to capitalise on this opportunity. Why?

Part of the reason is because technology keeps changing. The volume of facts and figures is so large many businesses struggle to process the data passing through their systems. The vision of enabling marketers to mine this information has remained largely unfulfilled for the majority of retailers.

While a few exceptional companies are obtaining key insights after developing world-class intergrated systems, most retailers are sceptical of ever seeing ‘big data’ provide down-to-earth benefits that add real value to their business.

In this report we show how this situation has been turned on its head, enabling retailers of all sizes to begin tapping into the data that matters most.

This is done by placing an additional window into the IT wall, allowing marketers to communicate directly with stores and shoppers in real time at the shelf’s edge.

Is this ‘big data’ revisited? No, this is an easy to use service coming at the issue from an entirely different perspective. The information flow is simplified and made accountable in real time for the sole purpose of ensuring marketing departments have direct control of the product information on retail tickets.

However, it is what can be done once marketing has control of ticketing that makes this service so unique. It enables retailers to test offers in real time and build a bank of knowledge to assist in differentiating their brand and competing at a higher level.

Introduction Page 3

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The Promotional Collaboration Survey, a research project sponsored by IBM Smarter Commerce & Booz Allen Hamilton, repeatedly cites problems with data as a major barrier to collaboration between retailers and manufacturers, including:

• 42%-Systemscan’ttalkwithoneanother,sothedata can’t be shared

• 50%-Systemshaveinadequatetoolstoworkwithdata

• 50%-Systemsareunder-resourcedtoutilisethegrowing sources of data

• 67%-Dataisnotmadeavailableonatimelybasis

•75%-Datalacksconsistencyinhierarchies,formats, attributes, etc.

Only someone who has been heavily involved in retailing for a lengthy period can appreciate the multi-layered tasks involved in designing a mass marketing delivery system capable of competing in today’s offline and online environment.

Whatever category of retail you operate in, the realities of purchasing, distributing and keeping track of inventory and transactions are a complicated and never-ending challenge.

It is all too easy to depersonalise the shopper experience by inadvertently treating customers as numbers and manufacturers as suppliers of commodities. New advances in ticketing technology provide an opportunity to avoid this problem.

So as IT departments juggle ever changing systems, how can marketers access the information within their control to better influence their shoppers’ buying decisions?

A Complex Problem Page4

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In order for marketers to access the information they need they must remove the complexity, but there are difficulties to overcome in order to achieve this.

As retailers compete on the cutting edge of technology on a continual basis, most have been forced to keep adapting their existing systems to accommodate new advances.

Consequently few businesses use the same combination of hardware and software. This situation is made worse because the formats used to store data in different parts of the system are often inconsistent or incompatible.

Over time this practise can build an invisible barrier of gigantic proportions that places customers on one side and marketing people on the other.

A few companies have met this challenge, but they are the exception rather than the rule and the costs have been high.

However it is becoming critical for all retailers to find a solution that empowers their marketers to communicate directly with shoppers through their ticketing in real time.

‘Today the in-store decision rate has reached anall-time high of 76%. Shoppers are specifically planningless and deciding more at the shelf - suggesting today’s

shopper is more flexible than ever.’

POPAI – 2012 Shopper Engagement Study, Topline Report

The fact that a few larger retailers have invested so much is indicative of the universal truth that all retailers are governed by - the customer must always come first.

If retailers don’t place the information in front of the right people, in the right place, at the right time - everything else is irrelevant.

A Simple Solution Page5

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To appreciate how marketers can reassert their influence it is vital to understand the role ticketing plays at the heart of retailing.

The complexities of distribution are designed to process goods in the minimum time frame to produce a ‘just in time’ result and maximise the return on investment.

The longer it takes to get products through the distribution chain, the more capital is required and the less profit is made.

While other areas of retailing have been streamlined in recent years, ticketing has largely been forgotten because it is literally the last thing that happens.

As a result, ticketing is seen as a low priority - an operational necessity rather than a strategic opportunity. It has fallen to sales staff to bridge the gap by spending hours ensuring promotional signage and ticketing is current, which takes them away from their primary function of serving customers.

The slow nature of traditional ticketing in a fast-paced industry contributes to increased costs caused by inefficient marketing processes, operational store issues and compliance violations. It is also responsible for lowering staff morale.

As marketing departments gain control and fine-tune these levers, they can persuade more people to buy more often – and they can also increase the value of each shopper visit.

Ticketing is the starting point Page6

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The Nielsen Global Survey of New Product Purchase Sentiment lists the three major reasons shoppers are likely to purchase as being:

• 81%-Friends/Familytoldmeaboutit • 73%-Sawitinstore • 71%-ActiveInternetsearch

Any retailer seeking to become or remain a market leader needs a strategy that responds to each of those challenges so they can:

• Generatereferrals • Maximiseeveryadvantagethroughmerchandisingandticketing • Mobiliseonlineofferstomatchandalignwiththequalityof in-store marketing

Note: These statistics combine people defined as ‘Much More Likely’ or ‘Somewhat More Likely’ to purchase products.

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The issues surrounding IT systems is an area of risk that often carries a huge price tag to resolve.

SignIQ has moved to reduce both the risk and the cost by providing a specialised service that focuses on combining both the ‘operational’ and ‘strategic’ benefits of having a fully coordinated and simplified retail ticketing service.

WithinamonthofpartneringwithSignIQstoremanagersand/orfranchisees feel the benefit of greater flexibility and having more time to spend getting ‘closer to customers’.

These savings are further magnified at head office where ticketing templates can be changed in minutes and sent to all stores at the press of a button.

The immediate advantages of outsourcing your ticketing services to SignIQ are many.

The rationale for an outsourced service Page7

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• Noimplementationcosts

• NoconsultingfeeforITservices

• Nosoftwaretodevelop,maintainorlicense

• Nohardware/peripheralstobuy,exceptaprinterateachstore

• Noadditionalservicesorstafftrainingcoststopayfor

• Nochargesfordesigningtemplates

• Expertmanagementofyourticketingprocesses

• Futureproofticketing,drivenbyindustrybestpractice

• FreeingupvaluabletimeinITandmarketingdepartments

• Empowermentofmarketingtofullycontrol,monitorand

manage ticketing across the entire network in real time

• Optionalcapacitytoenableindividualstorestocreatefully

compliant, high quality, ad-hoc ticketing

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The long-term advantages of partnering with us however are even more important than the immediate benefits.

SignIQ tailors its services for each client. The more marketing departments adapt our reporting systems, the more they are able to differentiate their customer experience and maximise every shopper visit.

Every service we provide is included in one low monthly cost. While there are minor variables depending on the level of involvement you may want us to have in refining your reporting systems, we know we can deliver our service for…

…the cost of one cup of coffee, per store, per day.

ThisisthewhySignIQisnowoperationalinover6,000storesacross Australia and New Zealand.

The rationale for an outsourced service Page8

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As the illustration on the next page shows, SignIQ has the capacity to plug into your system without interrupting the data flow or compromising enterprise data security.

There is no special hardware or software required at either head office or store level.

All you will ever need at the store level is a suitable printer, a workstation and a good internet connection.

Once everything is in place, your marketing department has direct and ongoing access to our expertise and systems. They can immediately cut the time frame for putting tickets into your stores from weeks or days to hours and minutes.

If you currently use a centralised ticketing system, SignIQ can save you a small fortune in wasted print costs, as well as time. We stress once again this is not the main benefit.

The real competitive advantages lies in the simplicity of the information we add to the reporting tools sitting on the back-end of your Head Office systems.

By adding an extra layer of data connected to your store’s ticketing, we place your marketing department’s finger directly on the pulse of your business.

Management knows immediately which stores have printed the current promotional ticketing and which stores haven’t. There is an instant flag raised, highlighting compliance levels at every store in real time across your entire group.

This service alone can save hundreds of thousands of dollars a year. Again this only scratches the surface in terms of the competitive advantage that occurs once your marketing department is placed in control of your ticketing.

As retailers realise the critical role ticketing plays within their marketing mix, they are able to improve the quality of their decision-making and generate a favourable impact on their company’s bottom line.

How our service works Page 9

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How our service works Page 10

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SignIQ provides in-store ticketing and delivers personalised marketing reports to assist retailers to grow.


The point of retailing is to develop an experience differentiating your business from any other to the extent you establish greater trust and build a reputation.

However, in order to build that trust and protect your reputation, you need access to processes that enable you to constantly test and measure your marketing efforts against shopper’s actions.

This is how each business develops a unique personality and becomes a brand.

Without developing a formal process to test and measure your marketing effort against the action of your shoppers, the words ‘continuous improvement’ amount to little more than lip service.

How can you do this? You do it by seeing what happens when you place a specific product in a specific place, on a specific day, with a specific offer attached to it.

The offer might be a variation on ‘buy one get one free’, but it might also be as basic as moving an item from one place on your plan-o-gram to another or changing the size of a ticket.

The range of potential offers your marketing department can test is limitless and it is easy to begin that process as soon as the SignIQ service is implemented.

Your marketing department can review your inventory and choose to up-sell, cross-sell or develop different product combinations – but they can only do this if they have all the necessary information and can produce tickets in real time.

If marketing is not testing and measuring results in real time, they are not learning from experience or adding to your bank of knowledge. They are simply rolling the dice and going on gut feel. Which is what we mean when we say…

Improving the process - improves the proposition

Improving the proposition - improves the process

Gutfeelisfineforasinglestoreretailerthatsurvivesbyduckingand diving, but it’s not a viable strategy for a multi-store chain that plans to grow its brand on a sustainable basis.

The process of personalisation Page 11

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The SignIQ service is intended to assist our clients to gain a better balance between a potentially ‘vicious cycle’ - based purely on driving down prices and commoditising the shopper experience - and a potentially ‘virtuous cycle’ - based on adding value and enhancing the shopper experience.

The subtle distinctions between those two extremes are what will eventually determine where your brand is positioned - and how successful and profitable it will be.

At SignIQ we offer a simple and intelligent system for assisting retailers to use their ticketing to refine and improve their position in the marketplace.

The more you use this feedback loop, the more it helps to develop a differentiated and sustainable business.

The process of personalisation Page 12

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Contact

FormoreinformationonSignIQandhowwecanassistinpersonalising your ticketing process please contact...

Peter Kennedy GMBusinessDevelopment| SignIQ

T:+61390280385 | M:+61417030031 E: [email protected] | W : signiq.com

Dick Baynham is an award winning Copywriter and Creative Director who used to run his own advertising agency. He is now focused on turning business into brands and he sees ticketing as a critically important part of that process for retailers.

M:+61433308000| E: [email protected] | W: signiq.com

Sarah Mitchell is a highly experienced Content Manager. ShehailsfromMichigan,livesinFremantle,hasmanyyearsexperience in the software industry and is the Australian editor of CCO, the magazine of the Content Marketing Institute.

M:+61410024404| E: [email protected] | W: signiq.com

About the authors

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