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We humans have a flair for the dramatic and love hyperbole, particularly in the form of a mass extinction event. At any moment of change we wonder, and perhaps fear, that the world as we know it is ceasing to exist, as happened to the dinosaurs. Though extreme, the same could be said about the general assessment of the state of retail. Words like apocalypse and Armageddon are often used in the popular media to describe the forecast end of store-based retail. And, as we know, hyperbole sells papers and gets click throughs, even when the facts don’t quite bear it out. Or in this case, even as virtually all of us head into stores to buy something, even if just groceries, week after week.
To be fair, stores are closing as some legacy businesses shutter operations under the strain of an evolving marketplace. Witness Toys ‘R Us as the latest to hit home, a sad event for many of us who remember looking forward to a trip to the halls of Geoffrey to get that must-have action figure. But at the same time, other retailers are emerging or remaking themselves in a massive evolution event, which some will survive, and others will not.
These changes are scary for many. After all, change means uncertainty and so retail can appear too risky a place to do business for some. Pro-AV professionals are no different as they consider which client types they would like to go after, weighing the opportunities against the risks or challenges of serving each market. Wishing to help lighten the perception of risk through the provision of actual data and insight, AVIXA created the Market Opportunity Analysis Report (MOAR) series to help shed light on the actual opportunities and challenges of vertical markets, with retail as the first target of study. The results of MOAR: Retail give visibility into the evolving nature of retail and the potential AV projects it creates by investigating the shopping habits of consumers, the translation of these habits into design requirements for retailers, and the process with which AV providers turn these into solutions. In short, the entire value chain is explored, much as one might do when employing a design thinking approach.
Looking first at consumer shopping habits highlighted the difficulty of isolating the specific impacts of a single component of retail experience on the final purchase decision. Shopping is an organic and complex behavior with a number of considerations, thus knowing whether a specific interactive display moved the needle of intent toward a given brand or item is difficult at best and perhaps even impossible (though many do try). Plus, when done well, the individual parts of an exceptional retail experience are transparent and may not stand out or be remembered. This proved to be true in surveys of consumers, most of whom didn’t recall which technology they interacted with, if any. Instead it was the pain points and the lack thereof that reveals the successes or need for improvement. This is where the ease of navigating stores, finding product, and getting the required information jumped to the top. While intuitive, they are still the places consumers are looking for help, sometimes of the human kind, but aided and facilitated by the available technology.
Retailer research confirmed stores are prepared and intending to make investments to improve the consumer experience. According to surveys among retailers, a full 60 percent of respondents said they plan to make capital improvements to their stores over the next couple of years, most of which will represent an increase in spending from years past. While this alone is good news, more important for the AV industry is how AV technologies fit in. Distilling the percentage allocations reveals a nearly $6 billion planned spend on AV solutions within U.S. retail locations, in line with AVIXA’s market sizing report, the IOTA.
Blending in provider research with the retailer findings highlights retailers’ need to get help with determining how to allocate that spending. Retailer preferences skew toward more established technologies like displays and audio, with some interest in more cutting-edge options like AI and virtual or augmented reality. In either case, an admitted lack of technical knowledge on the part of the retailer makes navigating the waters of technology options difficult. This is where the savvy AV provider, through conversations with the owners and other key decision-makers, can help at an early stage to better ensure the resulting solution meets the required bar of providing an exceptional consumer experience worthy of the “retail-tainment” moniker.
All of this may sound easier than it is in practicality, as those same providers with retail experience will attest. There are challenges and risks associated with meeting retailer needs, including knowing how to speak the retail language. But most of that is more about a fear of the unknown, which according to surveys is keeping many AV providers out of the opportunities the retail market represents. Less than 40 percent of providers surveyed are serving retail today. But with a $6 billion market out there, the waters certainly look right for those wishing to jump in. Getting a feel for the environment through available research is a great way to dip a toe in first.