ZBD Solutions

Sainsbury's trials in-store price comparison scheme

Sainsbury’s announcement that it will trial its Brand Match scheme is typically well-considered and in stark contrast to the language and style at the start of the current price war.  The Asda CEO’s original ‘copper bottomed-guarantee’ at the beginning of this year, followed by Tesco’s ‘10% cheaper or double refund’ - and the subsequent rather embarrassing retraction – has done little to improve business or reputations.  Sainsbury’s measured response however – if rolled out – will give them hugely valuable ‘KVI’ price positioning as well as extremely cheap market intelligence.

To me it looks like the beginning of the next phase of this campaign: open and sustained price competitively rather than attention-grabbing.  It might be called ‘the consumer-benefit phase’.

Sainsbury’s recognise that they can only achieve their aim reputably with the aid of technology.  ‘Price match’ data on paper tickets is too quickly out of date and expensive to maintain.  A single point service, like Sainsbury’s Brand Match, is progress.  Ultimately however, retailers will want to put their best and most persuasive information at the shelf-edge itself – where over 60% of buying decisions are made – with self-scanners, PDA apps or the new generation of graphic electronic shelf-edge labels.

And by the way, watch out for ‘guerrilla pricing’ Where there are long established price wars, soon someone will start to flex prices in select stores for short periods with the specific aim of wrong-footing the competition. 

Jann Naef
Product Marketing Director
Jann.naef@zbdsolutions.com

epaper for retail: A powerful tool for convenience and forecourt stores

We already know the main reasons why retailers make the decision to invest in electronic shelf labels: labour savings, improved efficiencies. But a growing number of convenience stores and forecourt retailers are looking to adopt our epaper solution as they recognise its potential beyond far and beyond the usual benefits.

It’s all in the name. Convenience stores are quite simply, convenient. Whether they’re located in the middle of town, or within a petrol station off a busy main road, their customers are all looking for the same things:  a small store, conveniently located, offering a broad range of products with the benefit of extended opening hours. They’re not likely to do their weekly shopping there, but they all expect short queues, quick service and they will pay a premium for that convenience.

Most convenience stores or forecourt shops serve different types of customers during the trading week – predominantly business travellers during the week; and families at weekends. How can retailers target their promotions and optimise pricing for these customers more effectively to improve margins?  Increasing prices of core products at particular times sounds like the answer, but putting this into practice is another matter. The reality of frequently updating paper labels is highly labour-intensive, and most retailers cannot justify the resources. Customers are expecting a fast throughput, they don’t want to see staff on the shopfloor updating paper labels.

Implementing electronic shelf labels enables stores to maintain pricing from a central point and without staff intervention, allowing retailers to implement more profitable pricing strategies quickly and easily. Time of day pricing promotions can be introduced without staff downtime, and can be particularly effective for stores operating 24 hours a day. Because the process is automated, prices can be updated almost instantly.

Whether it’s targeting wine promotions at the after-work crowd or introducing lunch meal deals aimed at the business traveller, electronic shelf labels empower retailers to change promotions and optimise pricing instantly, helping them to utilise their convenience to increase their margins and profitability. And all whilst displaying standard product and pricing information that you would expect from a standard paper label. It’s not surprising that the ROI for electronic shelf labels within these stores can be just a few months.

We’ll be attending the Insight NACS Future of International Convenience & Petroleum Retailing event in London in September if you’d like to meet with us and find out more.  http://www.insightreport.co.uk/conferences/ficr2010/ 

Sarah Hool
Marketing Manager
Sarah.hool@zbdsolutions.com

VAT rate set to change again?

Whether the UK will retain the 20% VAT seems likely, but it is not certain.  In any event, it is the third VAT change since November 2008.  Rightly or wrongly, the government clearly sees VAT as a legitimate lever to steer the economy, and Retailers may therefore expect further changes over the next parliament or two.

At ZBD, we talk to retailers about the real operational costs of maintaining correct, synchronised pricing and the costs of implementing changes, including promotions, on time.  To do this – as well as modelling all of the other manual in-store processes that graphic ESL (electronic shelf labels) can eliminate or improve – we use a comprehensive ROI modelling tool: now in Version 8 and soon to be launched as an in-house toolset to ZBD’s clients and partners in USA and Europe.

Using this model, we can calculate a realistic cost for making a single VAT change.  For a typical non-food store with 30,000 products this could be around £25,000 – a figure which comprises the cost of additional labour & materials, as well as a quantification of sales losses arising from the ‘price discrepancy period’ (the period during price changes when manual shelf-edge ticket are at variance with the price at the checkout).  If the retailer wants to avoid these losses, he can always plan and execute a department-by-department price-change exercise outside trading hours: Management effort and staff overtime would probably leave him similarly out of pocket.

With these three VAT changes, and perhaps a similar number over the future lifetime of the system (5-8 years), retailers will have already justified around half the cost of their investment in a graphic display system.  This is in additional to all the other day to day savings.

Jann Naef
Product Marketing Director
jann.naef@zbdsolutions.com

ZBD at EuroCIS 2010

ZBD exhibited at EuroCIS, Europe's leading trade show for the retail sector in Dusseldorf, Germany, last week and the interest in our solution was overwhelming, with enquiries from retailers and potential partners from around the globe. There is often talk about electronic shelf labelling (ESL) not taking off, but if last week's show was anything to go by, then the interest is most definitely there. And with the retail sector still experiencing strong price competition, with frequent promotions, VAT rate changes, plus increasing legislative product and price labelling requirements, then it is only a matter of time before the solution becomes even more widely adopted, as retailers recognise the multitude of benefits that it brings. 

When we discuss our ESL (electronic shelf label) solution with a potential customer or partner, they all agree that our epaper displays are well designed, and visually appealing. But what resonates most with each and every one of them, is the lack of infrastructure required to support our solution in store. We show them the Bounce Communicator, which is roughly the same size as a laptop battery pack, and that's it. No wires, no cables. It really sets our solution apart from others in the market.

Sarah Hool
Marketing Manager
sarah.hool@zbdsolutions.com

ZBD @ NRF's 99th Expo: attendance figures up and signs of global retail recovery

It’s hard to believe that NRF just concluded its 99th Annual US-based Exposition in New York City. The fact that any professional organization has been in existence for 99+ years is truly amazing and a testament to NRF’s value and integrity. When NRF began, it was focused on the Specialty Apparel and Department Store retail markets. Over the years, other retail associations have come and gone. There was NMRA (National Mass Retailers’ Association) focused on the likes of K-Mart, WalMart and smaller retailers in the mass merchandise category, and there was Retail Systems focused on most retail store verticals save Food and Grocery but these expositions and organizations no longer exist. Food and Grocery has historically been served by FMI (Food Marketing Institute) in the US. FMI, however, seems to have fallen from grace with the trade show of choice now appearing to be NRF.

This year, the 99th Annual NRF Exposition attracted retailers from all retail sectors to include department, specialty, mass-merchandise and food & drug. They came from across the globe. Top Tier retailers from the UK, Europe, South America and Asia were present in force. The exhibition floor was filled with retail industry representatives looking for solutions and new ideas to increase profitability as well as ways to attract and keep customers through better communications and increased customer service. If a retailer had a problem to solve or was in search of a “better alternative” or a creative idea they did not have to look far to find a viable solution.

This year, ZBD Solutions was an active participant at the exposition. Our stand was located in a featured section on the exposition show hall referred to as “Innovation Station”. Here, a select number of solution providers demonstrated new and creative product offerings destined to change and/or impact the “ways of retail”. Through one-on-one product presentations and pre-recorded interview videos featuring executive officers of the participating “Innovation Station”  companies and their customers, attendees were provided with a thorough understanding of the offerings, origins, functions and proven benefits. Through observing a featured video track, ZBD’s Chief Executive, Shaun Gray and our most recent US customer’s Chief Information Officer, PCC Natural Market’s Gary DeBoer, guests were able to better understand the “how’s and why’s” of “ZBD’s E-paper for Retail” .

Staffed by both US and UK personnel, the ZBD stand demonstrated the applicability of our epop displays to all retail sectors. Attendees were impressed with the superior contrast provided by our “white state” LCD electronic shelf labels as well as the ability of the Bounce software to support and assure the functionality of the total POP solution we offer. Most impressive and appreciated was the Bounce in-store infrastructure. Visitor after visitor was amazed when told of the ability of a single transmitter to support an entire store. A large flat screen monitor, integrated into the stand, ran store videos and customer testimonials from our installed customer base.

 
Early attendance reports indicate that this year's exhibition set new attendance records. A number of additional NRF venues are scheduled for 2010 and expectations are high that retailers are about to experience a significant increase in growth world wide as the economy recovers. That being the case most retailers recognize that maximum profitability will only be realized by those retailers who streamline their operations and capitalize on new technology. ZBD is ideally positioned to help meet that objective.

Alan Kahn
Account Director - US
alan.kahn@zbdsolutions.com

Stay one step ahead this holiday season

How might an innovative retailer with thousands of merchandise skus in a large chain of stores change almost 100% of the displayed prices for each sku four times in a 24 hour period?  A typical response to this “hypothetical” question could be: “Why would any retailer want to do this?”  “Surely you jest.”  “Can’t be done”.

Here are the surprising facts:

This is not necessarily a “hypothetical” question. A retailer might want to create just such a promotion during this competitive holiday season.

The “Why” is obvious and there is no “jest” involved. In today’s competitive retail environment, with every retailer doing their best to maximize seasonal sales dollars, the need to build shopper traffic is more important than ever. Watch the evening news or read the local papers and you will find that shopper after shopper is focused on Store Sales in order to save money. The current seasonal forecasts expect sales to be down incrementally from last season. Every purchase dollar that can be captured looms more significant than ever to achieving gross sales objectives let alone profitability.

It “can’t  be done”. Yes it can. The question however, is “at what cost?”  Here is an example of the way a 24 hour - like a US “Black Friday” - promotion might be structured. The stores would sell merchandise at the “regular prices” until close of business on a given day.

Opening at say 5:00 AM the next morning, an “Early Riser” sale would offer a 15% discount on most merchandise purchases until noon.

From noon until 8:00 PM, the discount would be reduced to 10%.

From 8:00 PM until midnight the 15% discount could be restored along with in-store “extra specials” as part of a “Midnight Madness” promotion.

When the store closes at midnight the prices would revert back to the regular or perhaps a select number of “special” prices for store opening the next morning. That would come to four (4) prices promoted for the same merchandise in less than a twenty four (24) hour period.

Why even consider a promotion of this nature? Obviously to increase store traffic, attract shoppers away from the competition, make shopping available to customers who may work off hours and on and on.

If a promotion of this nature is to be truly effective and encourage the necessary customer activity to achieve the obvious volume objectives, customers, once in the store, have to readily recognize the values being offered. Here, promotional sale signage at the merchandise level becomes a critical factor. In today’s retail world, paper signage appears as the media of choice even though it is often an error-prone and costly solution.

How will a retailer ensure that the necessary signage is located in the proper areas of the store – on racks, counters and shelves, appropriately and in a timely manner so as to assure cut-off times and synchronization with the POS price files? Perhaps not an overwhelming task from close of business the day before the promotion begins at 5:00 AM the next morning. All that will require is good planning and available sales resources to place the proper signs in the proper locations. But how will the prices be managed from noon of that day until 8:00 PM that evening when the sale prices are reduced to a 10% discount level and then restored to the 15% discount level at 8:00 PM that evening? Remember, we are talking about paper signage. And then again we have to change back to the regular pre-sale prices and some advertised specials before store opening the next morning.

Oh yes: Let us not forget about any merchandise that might be transacted at a higher price or lower price than called for in advance of, or following, the promotion periods. No need to worry about any fines that might be assessed if a sign or two is out of sync with the POS price files either. After all, this is the holiday season.

If only there existed a solution that would support the immediate change of signage at the merchandise location. A solution that supported a fully graphic display technology that could utilize radio frequency communications without requiring a costly network infrastructure. A system not dependant on the availability of sales or stock resources.  A system that has a proven ROI. A system that could offer retailers “electronic paper” merchandising support solutions”.

Do the preceding characteristics sound familiar to you? They do to me. They are all readily available with ZBD's electronic shelf labeling solution.

Alan Kahn
Account Director, US
alan.kahn@zbdsolutions.com
 

POPAI's Innovation Conference

I was fortunate to attend and speak at the POPAI (Point of Purchase Advertising International) Innovations Conference which had in excess of 50 attendees ranging from POP suppliers, brands and retailers.

The audience received nine presentations in 3 hours based on solutions for in store communication and merchandising to the food and non-food retail sectors.

It was interesting to see suppliers continually working to reduce the environmental impact of operations, as well as developing product ranges with sound environmental credentials.  Everyone working to create a whole new retail experience.

From sustainable backlighting systems, decorative print finishes and digital signage to suppliers of interactive screen content, complemented by a presentation from our partner, Pierhouse, based on the accuracy and relevance of in store messaging using net.tickIT and outputting to ZBD's electronic shelf labels.

ZBD’s epaper for retail solution was extremely well received and created many conversations afterwards regarding opportunities in this sector.  The key messages received were that they believed the solution would save time, money and greatly improve the customer experience.

Overall the Conference provided an opportunity to present, exchange ideas and experiences and was very positive for ZBD, reinforcing the high levels of interest we're receiving in our electronic shelf labels currently.

Lynne Kahr
Sales Manager
lynne.kahr@zbdsolutions.com

28 days, eh?

So the UK government has presented retailers with a concession that for 28 days after the 1st January 2010, provided the retailer displays a sign they can get away with showing lower prices at the shelf edge versus higher prices at the tills (as long as the difference is only the incremental 2.5% VAT).

Now, I don’t know about you, but my ability to remember the price of everything I buy when completing a weekly shop in my local supermarket whilst adding 2.5% to the displayed price where applicable is going to cause me some confusion!!

Nevertheless, this still means that retailers across the country will have to print and place hundreds and thousands of paper shelf edge labels costing the retail business as a whole somewhere in the region of £90million (according to the British Retail Consortium) to complete.

Furthermore, I think it is also safe to say that this won’t be the last time the UK's VAT rate will be on the increase - the current Government has not ruled out future increases in VAT and Shadow chancellor George Osborne has also declined to rule out increasing VAT to rebalance public finance.

Of course, if your retail store operated ZBD’s epaper solution, in 28 days you could have changed millions of individual shelf labels at zero cost ensuring your customers only paid the price they see at the shelf edge - With zero infrastructure and 3 different sized labels, ZBD has packages to suit all sizes of stores and budgets - from individual promotional displays to Fresh Food counters & departments through to a complete storewide solution.

Contact me today to learn more.

Rob Morgan
Business Development Manager
Rob.morgan@zbdsolutions.com

Are your customers confused?

According to an article in the Daily Telegraph recently, Tesco is planning to end confusing labels on meat products by enabling customers to see where all of its lamb, pork and chicken originates from – specifically, it is now going to report where the meat in any ready meal, pizza or sausage is reared, instead of (legally) labelling products as ‘produced in the UK’ when the meat actually came from another country.

Whilst all the above is good stuff and very commendable (and is sure to please the farming groups and the Conservatives’ Honest Food campaign who have been working hard to make this a requirement for some time), how can you really educate and inform customers of what they are buying?

ZBD offers retailers a low-cost option to dynamically show ‘sell-by’ dates and other key nutritional content, giving the customer more comfort that there is more information available, more often, more relevant and up to date - this has to be a good thing.

If you are reading this and are a food manufacturer – then you might even consider adopting and part-funding our electronic shelf label solutions in your retailer’s environment to give great customer content and 'fresh stamp' your credentials to their customers – as I’ve said in my last blog – it’s all about communication first, sales second.

Our epop (electronic point of purchase) electronic shelf labels offer complete flexibility when it comes to presenting information, not just with country of origin or where ‘Florence’ became a steak dinner (!), but also all of the other nutritional content that is important to the consumer when deciding what is going to be on the dinner table tonight.

Here at ZBD we know a thing or two about high resolution epaper labelling – it’s what we do for the 21st century retailer. If you are an innovative retailer and still looking at segmented LCD displays (or are ready to refresh your current shelf labelling solution), then see how we can help you communicate more effectively to your customers - Zero confusion guaranteed!

Rob Morgan
Business Development Manager
Rob.morgan@zbdsolutions.com

Is BIGGER always better?

With the recent launch of our epop 50 label, retailers are increasingly keen to understand how our mass market label is better than the competition’s, and aside from the obvious stuff, like superior display resolution, class-leading definition, and all the other things you would expect from a company borne out of the original inventors of LCD display technology, I think I have uncovered what the real difference is...

Unlike other ESL (electronic shelf label) manufacturers, we control all of the elements of our manufacturing process. From display technology to software through to communications – link this to a mindset that is ‘business-led’ rather than ‘production or technology limited’ we make solutions built for what today’s retail markets demand.

A prime example of this is when you look at our communications infrastructure...or more accurately ‘lack of infrastructure?’

We have developed what is arguably the lightest touch Bi-directional RF infrastructure on the ESL (electronic shelf label) market today – a simple USB connected box that enables swift instore deployment with zero installation cost. Think of it another way – you can buy either...

A) a pallet full of boxes containing IR or RF senders, mounting poles, cabling, connectors etc along with another van containing electricians, ladders and cherry pickers to get up into the ceiling to fit it all (oops - nearly forgot the Security guards to look after the store as this needs to be done out of hours when the store is closed).

OR

B) a box no bigger than a normal household Wi-Fi router – simply plug it in, and away you go!

So what does this mean? Well, the next time you ask another ESL (electronic shelf label) vendor the price of his segment display(s) ask the question slightly differently – ‘What is the price of the total solution - fully installed?’

I can assure you of one thing – when you take this figure and divide it back into the number of labels required, it makes the cost of a ZBD’s fully addressable epaper display look like a bargain because as we all know – Segmented labels that require manual maintenance of the printed element, is never quite a complete solution....it’s a bit like getting on a bus and having it stop 500m short of the destination!

Email me to learn more – conversations are free.

Rob Morgan
Business Development Manager
Rob.morgan@zbdsolutions.com