High-street retailers should consider looking to win back market share from online-only and other competitors by making the customer shopping experience more theatrical, with a new emphasis on the sensuous elements of an in-store shopping trip, according to a new report by analyst firm Datamonitor.

Datamonitor said the next step in the battle to retain customers was to streamline the buying experience in-store to bring it more in line with internet shopping in terms of ease and speed of transaction.

The report – ‘Shop X: where’s the store heading?’ – sets out the technologies helping some retailers to achieve this change, including the use of digital signage systems in-store for pricing and for dynamic advertising.

Datamonitor said such technologies were now allowing advertisements to be tailored to the most appropriate audience, through the use of add-ons which enabled digital signage screens to determine the sex and approximate age range of viewers, as well as differentiating between individuals and groups.

In the next stage of development, it said systems would be able to log when people pointed at a particular product on a shelf and then stream adverts relating to it to nearby screens.

As well as incorporating increasingly sophisticated display functions, proximity sensors were also enabling such systems to determine when someone is nearby, said Datamonitor. Systems can even be set up so that when a customer comes within a certain distance of a display the sound increases and when he or she leaves the sound level is decreased.

Datamonitor said tests carried out on in-store digital signage systems showed it to be an effective method of advertising, leading to increased spend and elevated brand awareness. Although the cost of installing and maintaining a digital signage system is significant, Datamonitor said the benefits which could accrue from deployment made it worth considering investing in for larger retailers.

The study also looks at other emerging technologies, including near field communication (NFC) for ‘contactless’ payments and self-service checkouts to cut costs, queue times and to deal with employee shortages.

“For retailers self service tills translate to savings on labour, reduction of shrinkage – the presence of CCTV and sensitive weighting technologies reduces theft – and fewer cashier errors,” said the report.

Alex Kwiatkowski, lead analyst within Datamonitor’s vertical market technology team and author of the study, said: “Meeting the demands of today's retail environment requires clever application of key technologies. In a saturated market new technologies play an important role by offering retailers innovative means of engaging with consumers and helping them to retain market share.

“These technologies bring with them a variety of challenges, both for the vendors and retailers alike - in terms of integration and standardisation and also in terms of achieving the maximum return on investment.”

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