HOW CAN RETAILERS CAPITALISE ON THE EXPLOSION OF SMART DEVICES AND THE GROWTH OF SAVVY SHOPPERS?
EXECUTIVE SUMMARY DID YOU GET A SMART PHONE OR IPAD FOR CHRISTMAS? IF SO, YOU ARE ONE OF A RAPIDLY GROWING BAND OF SAVVY CONSUMERS THAT ARE SET TO DOMINATE THE RETAIL LANDSCAPE IN THE COMING YEARS. WE ARE CHANGING THE WAY WE SHOP BY USING NEW MOBILE “SMART DEVICES” TO ACCESS AND COMPARE COMPETITORS’ OFFERS WHILE IN STORE AND IF WE FIND A BETTER OFFER, WE WILL LEAVE AND BUY ELSEWHERE. IN A RECENT UK SURVEY IT WAS DISCOVERED THAT “…IN EXCESS OF HALF A BILLION DOLLARS WALKED OUT THE DOOR TO A COMPETITOR.” As a private label retailer or brand owner you can improve your chances of success by engaging with savvy shoppers in a new way using Augmented Reality (AR). AR gives shoppers a new type of App for their smart devices that really adds value to their shopping experience. To make the most of this technology, retailers need to rethink their packaging so that it can co-exist in a physical and virtual world. This requires a rethink of the packaging design and the adoption of best practices in a wider context. This paper looks at how retailers can use AR in a practical way and what best practices need to be addressed to manage the adoption most effectively. In September 2012, International Data Corporation (IDC) reported that shipments of smart devices had reached 267.3 million units in the second quarter of 2012, a 27.4%
increase year-on-year. On a revenue basis, the total sales reached US$131.5 billion worldwide, up 16% from the previous year. IDC projects growth to continue at a rate of 14% for the devices through to at least 2016. Tablets will rise from around a 10% share this year to 13% by 2016, reducing PC share from 31% to 24%. “The recent shipment data clearly demonstrates that we have fully entered into the multi-device era, where individuals are buying and using multiple devices per person” said IDC’s Bob O’Donnell. Looking ahead, leading global research company, Gartner, predicts significant growth with the sales of smartphones and tablets jumping to 1.2 billion in 2013 and to top 2 billion in 2015. These predictions are backed up by amazing sales results at Christmas 2012 including:
• Apple sold 3 million iPads in 3 days with iPad minis
taking centre stage and Apple iPhones reaching the highest ever US smart phone sales with 53% of market share
• Christmas shoppers in the UK snapped up one tablet
every second with sales up 1000% on last year
• Microsoft entered the market in 2012 with its Surface
RT using Windows 8 making it ideal for both work and home use
• Google ramped up its market share with a game
changing price point for its Nexus 7 at $250 (£159). The tablet sold out in the Google Play Store
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SUN BRANDING SOLUTIONS CAPTILALISING ON THE EXPLOSION OF SMART DEVICES
RETAILERS ARE LOSING OUT TO SAVVY SHOPPERS Wherever you look smart devices are taking hold. At the moment smart devices are used primarily for games or entertainment and occasionally as phones! David Johnson, General Manager of Devices at O2, puts it succinctly saying that “Smartphones are now being used like a digital ‘Swiss Army Knife’, replacing possessions like watches, cameras, books and even laptops. While we’re seeing no let-up in the number of calls customers make, or the amount of time they spend speaking on their phones, their phone now plays a far greater role in all aspects of their lives.” In Europe, a survey was conducted by design specialists, Foolproof, on shoppers at Christmas 2012. It was aimed at assessing an emerging phenomenon called “showrooming” where consumers visit a physical store when shopping for a product, before checking to see if they can get a better price online or elsewhere. The research findings showed that around a quarter (24%) of shoppers used their phones in a store to compare prices and once the comparison was complete a whopping
SMARTPHONES ARE NOW BEING USED LIKE A DIGITAL ‘SWISS ARMY KNIFE’
40% said they bought elsewhere as a direct result of showrooming. Or put another way, in excess of half a billion dollars of business walked out of the door to a competitor. The age profile data is especially interesting, with younger, more smart-phone savvy shoppers being far more active showroomers than the older generation. This suggests that showrooming is here to stay, and set to grow. Retailers need to find ways of accommodating and embracing showrooming as part of the modern-day shopping process.
RETAILERS NEED TO CREATE SMART APPS THAT HARNESS THE SHOPPING EXPERIENCE In the future smart devices are increasingly at the heart of shoppers’ experience, whether it is seeking alternative products or prices in store, checking out product credentials or assessing how the product may be used. New technology is emerging that is set to revolutionise the shopping experience and capitalise on the use of smart devices. It is called Augmented Reality (AR). AR uses smart devices to provide new “virtual” views of a product triggered by the physical packaging. It is not using barcodes or QR codes (although these technologies can be used to supplement AR). If packaging is the “real world” canvas of a product, then AR presents a “virtual world” canvas. AR offers shoppers practical and valuable use for their smart devices and helps retailers to enhance the shopping experience and more importantly to engage with shoppers in a new way. Sun Branding Solutions (SBS) working with their Innovation Partners have pioneered the use of AR in the shopping experience to enable retailers to offer savvy shoppers an intriguing opportunity to interact. The aim is to retain the attention of a shopper and to offer a personalised promotion on a “right here, right now” basis!
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SUN BRANDING SOLUTIONS CAPTILALISING ON THE EXPLOSION OF SMART DEVICES
PRACTICAL EXAMPLES OF HOW AUGMENTED REALITY CAN TRANSFORM THE SHOPPING EXPERIENCE 1. PRODUCT DISPLAY
2. SOCIAL RESPONSIBILITY
REAL WORLD – In the real world a box of chocolates is a passive package typically in a cellophane seal reliant on clever, standout branding.
REAL WORLD – In the real world social and ethical sourcing information is limited to specialist logos e.g. Fair Trade or to miniature information displays on the packaging label typically on the reverse side of the box.
VIRTUAL WORLD – Using AR a virtual lid will open and a tray of different chocolates will rise up. The shopper can select a chocolate and the flavour and description will appear next to it. This can be repeated as many times as the shopper wishes.
3. SALES PROMOTION REAL WORLD – In the real world sales promotions apply to a product for all shoppers for a fixed period. VIRTUAL WORLD – Using AR the shopper is presented with a question with multiple choice answers. One answer could “win” a redeemable sale promotion coupon on a purchase of the product in the store that day. The promotion is exclusive to the shopper.
WIN
VIRTUAL WORLD – Using AR a smart device sees the box (e.g. the reverse side or the fair trade logo), and the shopper is presented with a choice of 2 videos; the ethical sourcing of the product and packaging; and the benefits of recycling and where to place it.
4. ENGAGEMENT AND ENTERTAINMENT REAL WORLD – In the real world the product is one among many that is seeking the shopper’s attention through a single medium of the packaging. VIRTUAL WORLD – Using AR a smart device sees the box and initiates a game. For example, a round chocolate starts at the top of the box and as the user tips the box, it rolls with gravity and by negotiating some simple hoops the shopper finishes when it gets to the other end. A timer will retain the quickest time.
© Sun Branding Solutions
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SUN BRANDING SOLUTIONS CAPTILALISING ON THE EXPLOSION OF SMART DEVICES
WHAT SHOULD RETAILERS AND BRAND OWNERS BE DOING TO BEST EQUIP THEMSELVES FOR THE INCREASING VOLUME AND COMPLEXITY OF PACKAGING LAUNCHES IN THE FUTURE?
SMART DEVICES ARE SET TO TRANSFORM THE WAY WE SHOP Using AR, retailers can respond in a positive way. However, it cannot be treated in isolation nor as a one off change. It is part of the continued technological revolution that is set to transform both the need and purpose of packaging. Those involved in packaging launches need to be highly adaptable to cope with these new demands, avoid escalating costs and become tomorrow’s winners. With so much change on the horizon impacting many product lines, we’ve looked at the best practices being adopted by the most successful retailers and brand owners that are best placed to adopt AR technology.
1.
3.
EFFECTIVE COMMUNICATION Everyone involved in the packaging launch has visibility of its current status and what’s coming down the line. Everyone is provided with timely reminders and triggers when they are up against tight deadlines.
4. ONE TRUTH
Whilst AR can work with existing packaging, new 3D layered images can make the experience even more compelling, engaging and interactive.
The images used and the packaging assets are more important than ever and need to be managed as attentively as the pack copy / labelling definition. It is best practice to have one source of images and packaging data shared by everyone enabling a retailer or brand owner to manage packaging changes most effectively and efficiently.
2.
5.
The rate of packaging changes to support AR is set to rise and those with a robust, repeatable packaging launch process that all internal and external contributors follow, will fare the best.
Right first time is the mantra in most successful packaging launch cultures and is the fastest way to work. Rework loops are a disaster for everyone as the lost time cannot be reclaimed. It is lost forever.
3D DESIGN CAPABILITY
CONSISTENT UNIVERSAL PROCESS
WORK SMART AND WORK AT PACE
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