Interview • 30.11.2010

How can business in 2020 turn shoppers into buyers?

Interview with Professor Frank Ohle, STI Group

Consumers order more and more through the Internet, where there are more choices than in any store. What can retail do in terms of product placement and presentation? We asked Professor Frank Ohle, CEO of the STI Group. With an annual turnover of 300 million Euros and around 2000 employees all over the world, STI is the leading European display manufacturer and belongs to Europe’s top tier in the packaging industry. Ohle counts almost half of Europe’s major commodity manufacturers (FMCG) as well as leading industrial goods manufacturing companies and trading groups among its customers.

You say: By the year 2020 the POS is dead – we are entering the age of the POC, the Point of Communication. What do you envision a modern store will look like in the year 2020?

The Point of Communication – unlike the POS – makes the shopper be center stage, because it is him/her who should be courted. Shoppers are the purchasers, meaning the ones that buy your product. This does not mean that they necessarily also have to be the product users. Shoppers primarily look for solutions – for instance a healthy dinner, a present for a children’s birthday party or the ingredients for a successful barbecue. They don’t necessarily look for individual products. That’s why the product communication at the POS also needs to focus on those needs of the shopper and present alternative solutions. In order to be successful, today it is not enough to just sell the merchandise, but instead you need to stage it and tell a story. The POC is a place of dialog where multidimensional communication occurs. Customers can get information on products, try them out and exchange experiences with other users.

What you describe sounds like flagship stores and megacities. Will the Point of Communication also be in rural areas?

Especially in rural areas, consumer dialog is a big deal and customers appreciate the personal consultation. Megacities are not needed for this, because who actually says that all products in retail have to be arranged in rows on the shelves – with up to five facings side by side? Perhaps in the year 2020 in retail there will only be “demonstration- and test samples“, which can be purchased via scanner or Smartphone and then be provided at the check-out counter or at a packaging center.

Will the big urban cites and shopping centers take away even more buying power from small town centers?

High storage costs are one of the factors that give retailers in small towns a hard time. The previously described concept could provide relief – and through a combination of shopping and recreational activity, smaller stores can also exist. We are convinced that there will also be a renaissance of small stores.

What do you advise for smaller retailers to do? How can they become prepared for 2020?

Distinguish yourself. Those for instance in the fashion sector who only carry brands of large label chains become comparable and interchangeable – especially since by now they all offer an online shop with free shipping. Personality is in!

Does only a retailer who also has an online shop and twitters a lot stand a chance?

Generally, 360 degree communication is necessary to reach different target groups. This does not mean that all merchandise needs to be available “on- and offline“. But for specialty retailers, an online shop is a good way to sell leftover products without destroying their domestic market or the local price structure.

Customers today already often complain about sensory overload at the POS. Will there be even more display stands, mobile devices, screens and billboards in 2020?

Yes and no. In an era where costs are under scrutiny everywhere, marketing staff needs to ensure that all objects at the POS are also actually in position. This requires a close collaboration between manufacturing and trade, through which a sensory overload of consumers can also be avoided. On the other hand, shoppers and purchasing customers don’t just always want the same old stuff. They like to be inspired and stimulated particularly by new products, because boredom and monotony are out. A POS campaign can only be successful, if the display solutions are tailored toward the wishes of shoppers and the needs of retailers. Here experts are sought after, because they transform these needs into market-driven and marketable products.

Will Digital Signage make a nationwide break-through?

Just like gas station attendants today no longer need to climb up a ladder to manually plug the gasoline prices into a board, the future belongs to electronic displays and electronic posters – at least in supermarkets. However, the consumer doesn’t just want video information, but also tangible, three-dimensional product communication in retail. Too much digital information causes a much larger sensory overload than today’s broad range of products.

RFID is currently establishing itself in logistics. Will item tagging by 2020 remain a pipe dream?

No, certainly not. By 2020 there will be a solution for this, which not only permits item tagging, but also delivers a lot of important special information to the customer and shows for instance, whether allergic persons are actually allowed to eat a specific food.

Consumers are getting ever older, but they don’t want to be considered old. Wide aisles, bright lights and larger fonts – is that enough though?

RFID can also help in this case because through scanning of the code, product information can be displayed. Required data on packaging can thus be reduced, which is especially beneficial for the older population.

Green is currently “in“ in retail. Is this a short-lived hype?

In 2020 this trend will be daily routine, because in order to generate continued growth, the gentle handling of resources is absolutely essential.

If you were to take a look back in the year 2020, what would be considered the biggest mistake in POS marketing in 2010?

The major reluctance in advertising at the beginning of the year, when everybody was still paralyzed due to the recession. Those that showed counter-cyclical courage, today profit twofold from the rebound.

Interview: René Schellbach, EuroShop.de

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