Retail innovation: lessons from US and a SA perspective

Three other presentations took place on July 4, 5 and 6 in Port-Elizabeth, Durban and Cape Town respectively. The Johannesburg presentation took place at the Park Hyatt Hotel, Rosebank.

"Diminishing audiences reach is impacting on advertising effectiveness in traditional mass-media," Platt said. "Persistent problems associated with gauging the impact of most forms of advertising have not been resolved.

"Retail stores are an underutilised marketing channel, with outstanding potential to impact shopper behaviour," he added.

Research shows that some businesses spend a lot of money in media advertising but fail to understand shoppers' behaviour.

Digital communications network

Platt hinted that businesses should take advantage of the digital communications networks (DCN), a technology-driven system that delivers visual content through a centrally managed and controlled network, and allows brands to communicate persuasively at the retail level.

This simply means that apart from constantly redesigning and redecorating one's store, one has to install LCD TV sets that display dynamic and speedy messages, prices and adverts on a more localised level, which will probably capture the eye of the shoppers, get them engaged and convert them into buyers.

He firmly believes that the retail store is in itself an advertising medium, a right place where businesses can build a sound relationship with customers, and where the product interaction can take place. "It is all about converting shoppers into buyers," he said.

US product giant Procter & Gamble Co says that the first one to three seconds that someone notices a product in a store is one of its most important marketing opportunities. The company calls it "moment of truth" and says that this trend, which creates a shopping experience from outside the store and throughout the store, has seen marketing expenditure at retail climb by US$2 billion (R14.2 billion) between 2005 and 2006 from US$18 billion (R127.8 million) to an expected US$20 billion (R142 billion).

Retail is the one of cornerstones of the US economy, accounting for 30% of the country's gross domestic product (GDP) in 2005, and more and more US stores have become acquainted to this method.

"Shoppability"

Platt also said that "shoppability" - the ease with which shoppers can buy - is now the new vocabulary used by retail specialists to quantify the shopping process and experience in an effort to determine performance and identify areas for improvement.

However, he regretted that this ease to buy is being undermined by the presence of too many products, confusing promotions, ineffective graphics, poor store navigation and traditional bugbears such as lousy service and long lines.

"These factors produce consumer stress, low levels of shopper frequency and visit duration and ultimately low purchase conversion rates, and will determine the retail success stories of the future," he said.

"DCN eliminates the time-lag between consumer exposure to a message and a place of purchase," Platt told participants.

He also said DCN assists customers to quickly locate a product, and can provide in-depth information and product demonstrations to influence purchase decision.

Mass-media advertising doomed?

After listening to Platt's shop floor's thought-provoking theory, many marketers probably wondered whether mass-media advertising is doomed in today's evolving and competitive business environment.

But, speaking to Bizcommunity.com shortly after the workshop, Platt denied that shop floor is set to replace conventional media advertising anytime soon. "Despite being on its infancy and foundation stage, the shop floor method will be definitely going places in the next five years, and can even become bigger than radio," he said.

Nevertheless, it is believed that because of its community-driven approach, media advertising presents some loopholes and sometimes tends to miss its targets. "Take TV for example, you will never know who is watching and who is not watching. Some households do not even have a TV set," Platt explained.

As a customer-centric approach, shop floor has moved away from mass-segmentation to focus solely on the individual, at the same time playing a complimentary role and filing gaps left by media advertising.

Asked to comment, media consultant Gordon Muller of GSN Quadrant said: "Platt's statement 'converting shoppers into buyers' has really struck me. Shop floor can do wonders, but that does not mean it is the end of the traditional advertising. Media advertising is nevertheless here to stay. Buying is also about loyalty and choices. Somehow, someone has to convince consumers to buy a certain product. The media must create and shape that feeling of getting shoppers engaged and transforming them into buyers. I believe that both methods can work hand in hand."

For more information, log on to www.plattretailinstitute.org or email .