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Embracing the internet of things to achieve frictionless commerce

Connected products, enabled by intelligent labelling technologies that give items their own digital identities, are allowing retailers to deliver frictionless commerce experiences, providing customers with the convenience and transparency they desire
Francisco Melo Vice president and general manager for global RFID at Avery Dennison
Francisco Melo, Vice president and general manager for global RFID at Avery Dennison

The increasingly omnichannel nature of retail is shifting consumer behaviour and driving expectations for a convenient and transparent shopping experience, whether it be in-store, online or on a mobile device. If that experience isn’t delivered, consumers will go elsewhere.

In a recent Forrester report, four in ten customers showed a high willingness to shift spend. Once they’re gone, replacing them with a newly acquired customer can cost anywhere from five to twenty five times more, according to a study by Bain & Company, which also found that increasing customer retention by just 5 per cent can increase profits by up to 95 per cent.

In this ruthlessly competitive retail landscape, consumer engagement is more important than ever. Avery Dennison, a global materials science and manufacturing company specialising in the design and manufacture of a wide variety of labelling and functional materials, is enabling a link between the physical and the digital world by attributing unique digital identities to every product through its portfolio of intelligent labelling solutions, which include radio-frequency identification (RFID).

“By embracing the internet of things, retailers and brands can connect with communities on a one-to-one level, provide customers with complete transparency and deliver enhanced shopping experiences whenever and wherever they decide to engage with them,” says Francisco Melo, vice president and general manager, global RFID, at Avery Dennison.

What do shoppers expect from a retail experience?

Consumers expect a seamless and functional retail experience, with the ability to interact with brands and buy products and services easily through a variety of channels. It’s all about ensuring the shopping experience is of a similar standard irrespective of where it’s being delivered.

The fundamental reason that hinders consumer experiences is retailers don’t know what they have and where they have it. That started in-store – you go in and can’t find the item you’re looking for – but it’s the same when you go online.

Simply put, consumers want to buy something when they want, where they want, how they want and they want to experience it in a unique way.

What technologies are allowing brands and retailers to meet those expectations?

RFID has largely been used for inventory accuracy, enabling retailers and brands to track individual items throughout the supply chain. However, it also enables a more seamless shopping experience across multiple channels, as retailers have visibility of their inventory at all times. This means a brand or retailer has security in selling items exactly where they are, all the way to the very last unit.

Avery Dennison is the world’s largest ultra-high-frequency RFID supplier. We have years of experience across many segments, including apparel and footwear, and are now using that experience within new segments, such as beauty and food and drink, where the expectation for personalised and augmented consumer experience is as beneficial to the brand as the supply chain management.

The internet of things is also enhancing the value of traditional technology such as QR codes, which are being increasingly used to drive engagement and personalisation. Through its Janela Smart Products Platform, Avery Dennison recently partnered with designer brand Rebecca Minkoff to create the #AlwaysOn handbags, which customers can interact and engage with through a QR code that allows them to access personalised content, special offers, recommendations and other loyalty rewards.

How is technology being deployed to acquire new customers?

Technology is creating new opportunities for reaching consumers and inspiring them to engage with a retailer. For example, Avery Dennison is launching a dynamic window-display advertising system called Vela, which is a turnkey platform for digital advertising based on technology developed by Gauzy, one of a number of innovative startups Avery Dennison has invested in over the last couple of years.

This system helps attract more customers by transforming store windows into eye-catching, switch-on-switch-off advertising media that projects campaigns, promotional offers and personal content, changing the message throughout the day with time and location-based videos and images.

Vela is completely transparent when not in use, retaining in-store visibility and sales opportunities. It offers retailers the flexibility to combine traditional merchandising with innovative digital advertising, creating truly engaging content for the consumer.

Avery Dennison has also recently made a venture investment in Wrapify, which is disrupting out-of-home advertising by paying drivers to wrap their vehicles with micro-targeted ad campaigns and offering brands offline-to-online and retail foot-traffic attribution solutions.

How does frictionless commerce help build a more transparent relationship between retail brands and their customers?

Connected products and frictionless commerce allow customers and retailers to engage in ways that are meaningful to the shopping experience, such as speed or discovery. With transformational technologies, consumers don’t have to find a store associate to receive basic information or wait in line to check out.

Experiences can be fast and efficient or personalised and accompanied, depending on what the consumer wants. Ultimately, time is spent in valuable engagement versus process friction. The business value is exponential: customers can choose where, how and when to shop and engage, and brands and retailers can maximise their workforce and capture new, informative datasets that continue to improve the personalisation offered to each customer.

How will the retail landscape continue to evolve in the coming years?

Avery Dennison believes in this world where every item will have a unique digital identity. It also believes in a world where identity will stay with the product beyond the point of purchase, and Avery Dennison is enabling retailers to optimise that consumer journey.

The next step is the window of data between the brand and the consumer in a way that benefits the consumer. The retail industry is being disrupted daily and omnichannel is not enough for increasing consumer demands. In the very near future, everything around us will be even more connected and able to provide information and logic that cater to our needs and wants.

Avery Dennison is focused on the internet of things by providing seamless and functional connections to products through innovative packaging solutions. “We will continue to pioneer innovative change in this space and invest in technologies that create seamless and personalised retail experiences,” Mr Melo concludes.

For more information please visit rfid.averydennison.com/future-of-retail

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