End caps are a great way to advertise and promote products. However, this prime retail real estate becomes even more effective with digital displays, video content and interactive features.
There’s a reason why digital advertising spend is increasing: Features. Features draw more consumers year after year. They drive digital advertisers to buy more targeted, relevant ads. They drive optimized retail merchandising and improved understanding of customers. Features explain why digital channels have the retail equivalent of the “high ground.”
The lift that a single digital end cap can bring to the store makes it well worth the thought, design and investment. We have seen clients more than double sales for a particular SKU within a year (Read Designing a Connected Store Journey), and realize an overall sales lift of 3-5%. Here’s how we approach digital end caps for retailers.
Before we jump to the use of digital end caps, it is important to understand what a savvy retailer can achieve without digital tools. These are some of the most valuable areas of the store. Retailers leverage their end caps to achieve a variety of marketing and operational goals. And, with any introduction of technology in the store, you need to have clear goals in mind — what are you trying to achieve with digital end cap displays?
By displaying items that are on promotion, or specific products that you want to highlight, you can draw customers into your store or toward a specific aisle. This can be to draw attention to your own private label products or offering the high value marketing space to third party brands. Additionally, end cap display fixtures aim to sell more products, so by cross-merchandising complementary items from different categories, you can increase basket size and increase profits.
Picture times you’ve been in the grocery store and noticed an end cap with a theme— perhaps boxed stuffing mix, cans of cranberry sauce and pumpkin pie filling around Thanksgiving. Tomato sauce, boxes of pasta, olive oil and spices. Pet food, collars and bowls. Placing this combination on the end caps increases the convenience to the consumer, since they do not need to walk down the aisle to reach the lower-cost options. This can also influence purchases, and introduce upsell opportunities for higher margin products. The convenience of the end cap makes the sale more attractive than it would be elsewhere.
Adding digital tools augments the ROI that can be achieved in this high-value location.
Traditional end caps use print ads, signs and price tags to draw attention, but it’s largely the location itself that draws any attention. End caps offer more physical shelf space for products, complementary items, decor and props, allowing brands to get creative with visual merchandising, setting the stage to inspire the purchase. Technology vastly extends creative boundaries. Digital displays have proven to command and retain attention, and digital end caps can employ all the tools of a modern content management system. Display video, schedule content, and refresh content easily to deliver stunning, relevant ads. Digital content is proven to be more memorable as well, increasing brand exposure to each shopper walking by. The variety of tools available to store display fixtures multiplies the strategic value of the end cap.
Although sales are the end-all, be-all of retail, pathing and dwell sets the foundation for the sale. Use digital end caps to set new patterns in store behavior, drawing more customers down the aisle, or to dwell near other, high-value products. Strategically placed, low-cost, low-power sensors give valuable, actionable insight into these behaviors. With the move to a cookieless mobile world, retailers are deploying in-store digital and analytics capabilities. Check out our white paper that examines what technology is the best currently available to measure customer behavior, where we look at three possibilities. Find out the clear winner when planning for long-term deployments at scale.
As an advanced solution, strategically placed sensors can measure pathing and dwell, validating brand exposure and success of the digital end cap promotion. Sensors can be used in combination with digital displays to track the effectiveness of merchandising on a granular level. Content can be triggered to update in real time to maximize effectiveness of messaging with your shoppers. This allows merchandisers to explore new combinations and layouts, even tracking what products are taken from the shelf. This level of detail is impossible when tracking in-store behavior exclusively through sales.
Data is screaming information about what shoppers want from the in-store experience. POS data gives great insight into what’s being purchased. But there are many other points of data that can be gleaned throughout the store, including end caps, to optimize sales and satisfaction.
It’s no secret that more and more shoppers are choosing to do their shopping online. In fact, a recent study found that 37% of respondents chose to shop online specifically for ecommerce features like customer reviews, product information, and product comparisons. This should come as no surprise to retailers, who have been losing market share to ecommerce competition for years now. The way to win back customers is to offer the same features and functionality in your retail stores that they can find on ecommerce websites.
Deliver an interactive and engaging shopping experience that provides customers with the information they need to make informed purchases and the ability to purchase anything they want.
The best way to start is by offering digital services in locations where everyone can see them: end caps.
Retailers who deploy digital end caps use a combination of large- and small-format digital signage, digital shelf edge displays and touch screens to allow shoppers to:
Providing customers with digital tools does more than help drive sales; it provides a superior in-store experience. Using digital end caps in the ways mentioned above delivers more convenience and satisfaction in the store, and that builds demand — not for products but the store, itself. That demand makes all the difference, especially in times of change.
McKinsey & Co. researchers analyzed companies that provided industry-leading versus lagging customer experience during the last recession. They found that prior to the recession, customer experience leaders performed better, but the advantage was relatively small. When the recession hit, financial performance of lagging customer experience companies was magnified, and they never returned to a competitive level. Overall, customer experience leaders achieved 3x higher returns by 2011.
Retailers that prioritize customer experience over other strategies tend to perform better in the long run. Let’s look at the three reasons for this.
One, customers are more likely to return to a store that provides a good experience, even if they can purchase the same products elsewhere. Use in-store technology to win — and retain — shoppers’ loyalty. Data around consumer sentiment has proven that satisfied customers are more likely to recommend a store to their friends and family. Retailers who create a competitive advantage around customer experience make their store a destination instead of a place.
Two, advanced features, such as personalization and sensors, allow retailers to learn more about their customers over time. Traditional end caps give retailers little understanding of who is responding to their store displays, and how. This also leaves a gap in learning about return on your store investment, and the investment for third party brands as well. Deploying sensors with digital end caps provide detailed information on dwell time and behavior. This allows retailers to conduct A/B and multivariate testing, which drives increasing impact of ads. It also provides a data-driven view, which helps retailers empathize with their customers and make better decisions.
Third, closely related to personalization, retail network monetization also becomes a large source of ROI in digital end caps. With more data, features and control over ads, retailers can sell more ad space more effectively to their partners. This allows retailers to reduce the out-of-pocket expense while still achieving customer experience and profitability outcomes.
Focusing on customer experience can be challenging, but it is worth the effort in order to build a strong foundation for a successful retail business (McKinsey, Adapting to the next normal in retail: The customer experience imperative).
Retailers that want to invest in customer experience often struggle with deciding when and how to start. After having served some of the world’s largest retailers and quick service restaurants with their digital signage needs, we think digital end caps are a great first choice for retailers because:
Commercial-Grade All-In-One Intelligent Tablets
All-in-One Shelf Edge Digital Displays
Need help with digital end caps, store displays, retail merchandising or display fixtures?
STRATACACHE is a global, full-scope digital signage provider. Our technology powers 7 of the top 10 United States retailers. Ask us how we can set up your digital retail experience for success.
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