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And Then the Computer Said ...

Retailers, brand manufacturers and store designers searching for ways to apply interactive technology on the retail floor will find an entire show devoted to the subject at this year's GlobalShop, scheduled for March 27-29 at McCormick Place in Chicago.

Sponsored by the National Association of Store Fixture Manufacturers (NASFM) and the Point-Of-Purchase Advertising Institute (POPAI), the In-store Interactive Ideas, or i3, show will exhibit the latest touch-screen and multimedia technology, speakers, kiosks, interactive software and in-store electronic commerce concepts.

But i3 will show more than just an accumulation of blinking monitors. It will demonstrate how technology attempts to change the way retail has always worked.

Critics often label interactive retail technology concepts as gimmicky, unreliable and expensive.

But proponents point out that technology must pass through two stages before it fulfills its promise. In the first stage, a business adopts technology to automate work and to carry out work more accurately. The work itself remains the same, but a computer does the grunting.

For instance, when a customer in a shoe store asks a salesperson if the store carries a particular brand and style, often the salesperson disappears into the back of the store to study the inventory and returns a few minutes later with the answer. In a computer store today, however, when customers ask if a certain product is available, the salesperson queries the inventory at a computer terminal on the sales floor. It's the same process used in the shoe store, only faster and more accurate.

The second stage, consultants say, involves re-engineering the nature of the work itself. The displays at i3 represent the beginning of this second stage of technology for the retail industry. The assembled displays show how retailers may eventually use technology to transform the traditional retailing process.

Transforming the sales pitch Now and then, a retailer hires the perfect salesperson: a friendly, gregarious and knowledgeable person whom customers love. Retail technology vendors are looking for ways to build some of these qualities into interactive selling technology for the retail floor.

Don't scoff too quickly. Granted, a computer will never achieve such a human ideal. Then again, many retail salespeople don't reflect the ideal either.

At i3, Scottsdale, Ariz.-based First Wave Inc. will unveil an interactive system for the retail floor designed to operate as a salesperson. The system includes two computer screens: a touch screen for the customer to use and another screen set above the interactive display. Customers tap queries onto the first screen, which responds with visual imagery and written words. The second screen reinforces that message with visual imagery, audio responses and even aromas in cases where appeals to the sense of smell may benefit sales.

The touch screen leads customers through a question and answer session designed to determine needs and to recommend the best products to satisfy those needs. The second screen drives the sales message home.

"This is a box that can operate like an expert salesperson," says John Glitsos, CEO and founder of First Wave. "The fact is, you can't train store personnel fast enough these days to keep up with turnover, let alone customers. And your best salesperson doesn't have time to be with everyone at once."

The system conveys information not only through words and pictures on the screen but also with lighting changes in the store, motion on the screen, aroma, and three-dimensional projections in mid-air. "This appeal to many different senses helps bring the experience out of the computer and deliver it in a personal way to the consumer," Glitsos says.

How much does something like this cost? Either a lot or a little, depending on how a retailer looks at it. Call it an interactive floor display with lots of bells and whistles, and $5,000 to $10,000 per display may appear too expensive for a chain with several hundred stores. Add to that the cost of developing the software presentation and updating it regularly, and most retailers might not be interested.

On the other hand, when a retailer looks at such devices as a way to replace one or more salespeople per store, the cost analysis changes.

Innovative financing by vendors can also reduce the impact of advanced technology costs. "We lease systems for about $300 per month per station," Glitsos says. "Compare that cost with the cost of a minimum-wage salesperson, and it's less expensive."

Point-of-purchase brand imaging Over the next 18 to 24 months, brand manufacturers may begin to focus on point-of-purchase displays that employ interactive technologies, according to Barry Gordon, vice president of sales and merchandising for Santa Monica, Calif.-based STV Communications.

STV, another i3 exhibitor, provides stand-alone and online interactive marketing solutions for retailers, and interactive point-of-purchase systems for bra nd manufacturers. Stand-alone systems use optical disks in the form of digital versatile disks (DVDs) and video compact disks (VCDs) housed within kiosks on the sales floor to deliver on-screen presentations. Online systems connect to networks through direct cables or phone lines and can draw on larger databases housed elsewhere.

The distinction between stand-alone and online systems carries implications for manufacturers wanting to create interactive point-of-purchase displays in stores.

While a retail chain controls each of its store locations and can set up regional and national data networks to deliver information to its stores, a product manufacturer may or may not be able to arrange for or bear the cost of a network connection from the stores where its merchandise is sold. For these manufacturers, stand-alone systems, with information stored on a replaceable optical disk in the unit itself, are an affordable and practical alternative.

"As these systems improve, manufacturers are going to begin looking at in-store media as part of their overall media spending," Gordon says.

He points out that broadcast media audiences continue to fragment as cable television channels proliferate. As a result, manufacturers will find it more difficult to target audiences using broadcast media for advertising. Interactive point-of-purchase displays represent one potential solution to this problem.

As much as 70% of all purchasing decisions are made in the store, within a few feet of a product display, according to studies conducted by POPAI. If a manufacturer has a product that is sold virtually everywhere and always faces stiff competition on the sales floor, Gordon says, interactive point-of-purchase displays offer a way to control the message about that brand right on the sales floor.

"I'm convinced that brands will eventually look to interactive point-of-purchase systems to build excitement," he says. "Up until now, our primary account base has been retailers creating category-specific interactive programs. Eventually, our revenue mix will be 50-50: half retail and half brand manufacturer."

Adapting technology design to store design The arrival of interactive technology on the retail floor will create store design challenges as well. During this year's Super Bowl, a series of Victoria's Secret commercials announced a fashion show to be held at the retailer's website. On the day of the show, according to televised news reports, the Victoria's Secret website drew more than 1 million hits. Such a result suggests that Victoria's Secret may benefit from interactive in-store technology as well. But how would a gleaming kiosk fit into a Victoria's Secret store?

Rochester, N.Y.-based Factura Kiosks, a division of MicroTouch Systems Inc., another i3 exhibitor, specializes in tailoring kiosk enclosures to the image of individual retailers.

"We have a design group that does needs analysis with customers to determine how a kiosk design can fit into the image of a retailer's store design," says Lisa Scibetta, marketing manager for Factura. "We ask questions about the environment, corporate image, appropriate colors, components, and the nature of the interactive application. Is this a gift registry, a product locator, a product demonstration unit, a catalog ordering terminal or something else? From there, we develop four-color renderings for clients to approve."

Factura designs kiosks in a variety of materials, again depending on how the unit will be used. "We work with metal, plastic and wood," Scibetta says. "Our retail customers often want something in wood with a melamine cover. Wood makes it easier to work in a variety of colors, which is important to retailers."

Tailoring interactive systems Columbus, Ohio-based Retail Planning Associates (RPA) will show a new software product along with a group of related interactive services at the i3 show.

The RPA software, called Trellis, represents an advance in authoring software that enables RPA to design and deliver content-specific multimedia applications to its interactive in-store displays - and to evaluate and revise those applications depending on customer responses.

Like most interactive software applications, Trellis authoring begins at the strategic level and establishes goals, competitive conditions and basic sales messages for interactive delivery.

In developing a program that a consumer will eventually follow in making a buying decision, RPA has outlined a communications hierarchy. "This includes announcement graphics on the first screen and explanatory graphics that follow up the interaction with the main screen," says Kent Rambo, RPA vice president of marketing.

What makes Trellis unique is that the system tracks consumer interactions with the merchandising path, delivering data about how many customers looked at what screens and how many customers did or did not make purchases.

"By analyzing the data, we can evaluate different sales processes," Rambo says. "We can make informed decisions about changing the screens, the product configurations in the system, the merchandising on the sales floor and the pricing."

The system also makes it possible to control and adapt the sales messages from a central location, Rambo says, instead of relying so much on a minimum-wage sales force. "Depending on what the data tells you, you can customize the messages delivered at different locations to better match what the audience tells us when they access the display."

The i3 show at this year's GlobalShop makes bold promises about interactive technology to retailers and manufacturers alike. Can these new interactive technologies deliver on their promises? Good question; i3 may have some answers.

For the first time at GlobalShop, an In-store Interactive Ideas show, called i3, will exhibit the latest in multimedia and interactive technology. The i3 show will demonstrate how the use of kiosks, touch-screen computers and electronic commerce is changing the world of retail. These new technologies aim to provide a more successful selling environment for retailers as well as an outlet for manufacturers to educate consumers about their products.

GlobalShop 1999, scheduled for March 27-29 at McCormick Place in Chicago, hopes to surpass last year's attendance of 14,000 retail design decision-makers surveying exhibits offered by more than 800 companies.

"GlobalShop represents the best and latest of what the $40 billion retail design industry has to offer," says Doug Hope, a co-director of the event. "In retail, a customer's perception is literally the bottom-line reality for a store. Store design, image and branding are crucial for retailers to differentiate themselves in an increasingly competitive industry."

Along with GlobalShop's store design exhibitors, scheduled speakers will address themes critical to contemporary store design. Among the speakers is Floyd Hall, president and CEO of Troy, Mich.-based Kmart Corp., who will deliver the keynote address and share the retail design strategies behind Kmart's highly praised turnaround efforts.

David Glover, executive director of retail design for Universal Studios, will offer an insider's perspective on implementing experiential retail design through architecture, information and merchandise.

Paco Underhill, founder and managing director of Envirosell, a behavioral market research and consulting company, will share his ideas about consumer shopping behavior and how it relates to store design.

Last but not least, Debbie Allen, author of "Trade Secrets of Retail Stars," will discuss what is new in store design, how to change a store image, and the do's and don'ts of visual marketing.

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