AV technology rides to the rescue of retail

With traditional bricks and mortar retail suffering like never before, AV is in the frontline of the battle against online, austerity and political uncertainty like Brexit. AV Magazine UK's Rob Lane investigates.

The retail sector is under siege. The continued expansion of the online shopping experience – with online behemoths even having the temerity to open their own high street outlets – along with the continued uncertainty of Brexit, real-wage stagnation and the long shadow of years of austerity, are all combining to batter bricks and mortar retailers like never before; at least since the dark days of 2008.

With many stores fighting for their very existence, they are having to go beyond using AV to shape the instore customer experience, deploying AV technologies strategically to bolster their defences against the uncertainty/online/stagnation onslaught. But, as things get tougher for high street retailers, is it a make-hay-while-the-sun-shines moment for the AV industry, and how does it envisage a possible future where retail hay may no longer be harvested?

“The retail sector is faring well,” reckons Keith Dutch, managing director, EMEA, Peerless-AV. “Retailers are evolving to new challenges because they simply have to in the current business climate. Many want to install once and prolong the investment as long as possible, so they are opting for stand-out AV technologies that not only offer the wow factor but deliver the highest reliability and warranties.”

“At Crestron we haven’t seen a decline within this sector,” agrees Phillip Pini, business development manager, enterprise at Crestron. “Business is as normal, with a constant if not increasing demand.”

According to Pini, retailers are now, more than ever, looking to be creative with their high street stores, in order to create an experience and avoid losing sales to online –something that is confirmed by some of the AV consultants we spoke to.

“I would say there has been a slight drop off in business,” says Dan Watson, senior consultant, PTS Consulting. “However, interestingly there has also been a slight shift in demand with a lot of requests for exploratory works and ideas around innovation in the retail space. We are currently engaged with a number of retailers discussing art-of-the-possible, digital signage content strategies, retail intelligence and analytics.”

“Some of our retail clients are actively upping their investment in AV at this time,” adds Emma Bigg, director of consultancy, Octavius RE. “But some are being very careful where they direct their AV spend to ensure they get maximum impact from any investment.”

What is clear is that there is a move towards experiential marketing in retail, with AV acting as a very powerful tool for creating immersive and exciting shopping experiences – as well as improvements in back-end tech, to help with efficiencies.

“Using digital solutions means you can link in store content with online campaigns and where applicable press campaigns, easily updating and scheduling the marketing assets,” explains Bigg. “I also believe customers react well to technology and are drawn in by innovative, exciting experiences that give them access to information about a product, links with aspirational lifestyle content and social media.”

“Consultancy services for new store fit-outs have slowed down,” says Watson. “However, there has been an increased demand in consultancy services for back-of-house ops, such as HQ data centres, digital security, and data storage.”

Brexit’s impact

With Brexit still playing the part of Ghost of Christmas Past, Present and Future, it’s clearly starting to have an impact on consumer confidence, alongside investment. However, consumers’ Scrooge-like reluctance to spend (particularly due to Brexit, but mainly wage stagnation) and the continuing spectre of online seems to be having the most negative impact, with Christmas 2018 shaping up to be one of the worst for non-food retailers in decades.

“I don’t think Brexit is having much of an effect yet, however I think it’s only a matter of time,” opines Watson. “We are aware, however, that some vendors with European presence are shifting employees, warehouses and stock as a precaution.”

Whilst the effects of Brexit may be a slow burner, Watson notes retailers are being much more careful what they spend their money on: “Smaller retailers are taking less risks when it comes to system design in stores, and are opting for simplistic retail experiences. On the other hand, larger retailers have shifted their attention to the potential of using stores for data capture.”

“To be honest a lot of people I’ve spoken to are not reporting a lot of negative impact due to Brexit,” explains Bigg. “But some retailers are really struggling to maintain revenue when competing with digital online retailers. The knock-on effect of this is that shopping malls are set to lose “big anchor” tenants, putting into question the fate of some smaller, mid-size town shopping centres.

“So that has added a significant air of uncertainty for retailers that operate a lot of regional stores,” she says. “Also, in some cases, expansion programmes for new stores are on hold until after March 2019.”

Some retailers are being very careful with their budgets. Instead of rolling out a digital solution across their entire network of sites, they are focusing their spend by carefully considering where it can be deployed correctly with maximum impact on customers.

The hybrid retail model

“In some cases retailers are making a move to digital and increasing their budgets in order to remain competitive and strengthen their business in the lead up to Brexit,” adds Bigg.

It’s certainly the smaller retailers – those with shallower pockets – that are suffering the most, with the larger concerns flexing their financial muscle in an attempt to out-gun online, Brexit and the rest. Of course, this inevitably means smaller towns will continue to see closures, with the worry of potential domino effects decimating provincial high streets.

“The impact Brexit will have on industry trading is an unknown,” says Dutch. “Certainly, there are some major investments that are being deferred until retailers know what’s happening. However, we are not seeing any detrimental effect at present since the more high-end retailers are not stopping spend. They’re choosing to invest wisely on AV, to differentiate themselves and bring customers in store.”

What’s certain is that retailers are now fully on board with the idea of omnichannel or hybrid retail as a model: there’s really no other way going forward.

“When it comes to omnichannel, the retailers on the high street who will succeed are the ones thinking out of the box,” says David Da Costa, CEO & co-founder of infiLED. “It’s not just about a multi-purpose customer approach. It still remains the basics: if you have a product that consumers want to buy, then they will buy it. It’s about making the buy experience as exciting and accessible as possible.”

“I believe it has had a huge influence,” adds Bigg. “A whole AV sector that has now opened up that isn’t just about screens in store. AV technology is being used to interact with customers on a range of platforms and personalise the retail experience.”

This is driving innovation in how existing technologies – perhaps used more widely in other sectors – can be deployed, and in the development of new technology. It is also making AV a key component of the retail business model, which is great for integrators.

“Retailers are using technology within stores as a method of data capture,” says Watson. “We have been involved in projects where cameras track demographics and eye movement, allowing retailers to ascertain gender, age and how long a person looks at an advert/marketing/particular product. Similar technology, along with various sensors, are also used to track movement around stores. Retailers are also offering discounts via social media and online stores if buyers buy from in-store.”

Technology will be a key driver in how bricks and mortar retail continues to battle against its various foes, and also how the future of shopping – high street and online – shapes up.

“Retailers are beginning to see that they need to stay in front of technology – until virtual shopping becomes a reality, people will always need to use the high street,” says Pini. “Retailers need to put comfort back into the hands of customers and begin to focus more on customer service. Technology and AV is able to enhance both of these things. Retailers need to focus on enhancing the customers’ experience. A real experience is a real reason to return.”

Convenience is key

“Retailers will need to make shopping in store just as easy, or just as accessible as shopping from the comfort of your own home,” adds Watson. “My prediction is you will begin to see large warehouse-type ‘hub’ stores (similar to Argos, or even shopping malls) which allow users to look at, try on and buy items they see and interact with via their personal device/smartphone/wearable smart tech.

Technology that enables retailers to make high street shopping as convenient as online shopping will prevail.”
“There will always be products that consumers want to see, touch, test for themselves,” agrees Dutch.

“High end retailers and department stores, with the strength of brand and reputation for creating unforgettable customer journey experiences, will keep the high street alive.”

This article has been shared from Integrate’s UK media partner AV Magazine and is written by Rob Lane. You can read the original article and more articles from AV Magazine UK here.