Published: July 5, 2016
Online shopping and e-commerce channels are driving retailers to develop solutions that keep the retail experience relevant to consumers. One such strategy is leveraging POS technology to produce essentially an “endless aisle.”
The endless aisle strategy offers customers unlimited inventory and assortment ‒ whether they’re shopping online or in the physical store.
Over the last two years, the endless aisle approach has become a more mainstream experience. Technology has advanced, costs have come down, and retailers recognize that this strategy will let retail brick-and-mortar businesses provide consumers the “endless” options they can find online. In concept, it is a very powerful value proposition. And as the concept takes off even further, it may also change the retailers’ inventory strategies.
Are Consumers Buying In?
Initially, some speculated that the endless aisle concept was a fad, or a niche strategy limited to unique products or departments. However, evidence indicates not only a current economic impact, but – and more importantly – one that is becoming mainstream. Initial research by Forrester found that retailers that use endless aisle strategies based on POS technology generated between 1% and 10% of a store’s revenue. Why? Previously, when stores ran out of stock or did not have an option consumers wanted, consumers went elsewhere. With an endless aisle, though, they don’t have to.
Consumer expectations and behavior will continue to push the importance of the endless aisle strategy. The numbers may be surprising:
The most important findings were the trends among younger consumers between the ages of 26 to 34:
Retailers and brands are starting to invest more into the endless aisle concept. Brands such as Croc have found that using the concept enables retail stores to offer consumers more – indeed, “endless” – options, resulting in online sales greater than single digits.
Other brands and retailers reporting success include:
- Barns and Noble
- Bed Bath & Beyond
- Nine West
- J.C. Penny
- Solstice Sunglasses
What This Means to You
The success of these initiatives relates directly to retailers’ expectations of and training for store associates. Endless aisle concepts can work in a variety of ways, with varying levels of associate engagement. For example, one option involves kiosks that enable consumers to check online or even order products at the kiosk. However, these have proven to be challenging, as volumes remain low.
On the other hand, store associates engaging consumers within the physical aisle or during their shopping experience have had significant success. Direct, immediate engagement helps capture the customer’s attention and addresses their needs, allowing for a more complete shopping experience. Increasingly, associates are using tablet technology to provide instant access to information on the consumer as well as how the store can solve a need. As stores leverage the potential power of these technologies, directing consumers to an associate to solve inventory or stock challenges will become common practice.
It may be difficult to maintain balance: Store associates must be available for support and be confident in their solution, but not come off as sales agents or disruptors to the retail experience that consumers often expect (i.e., free from sales pressure).
Use of the endless aisle concept will accelerate as other technology, such as augmented reality (AR), enters the retail environment. Already CPG companies are using AR options to educate associates on shelf-facing strategies and training. The endless aisle can eventually expand to include an entirely new sales experience related to providing consumers with options to see how they look, or how a room will look with options found both on the shelf and in the inventory system of a warehouse 300 miles away.
EVERYTHING Is Changing
Endless aisle development will change EVERYTHING related to retail associates: qualifications, hiring practices, training, compensation, role, and customer engagement strategy. Key changes expected include:
- Hiring sales associates who have more customer engagement experience
- Training on technology and POS selling
- Changing compensation to help promote endless aisle sales activity and create the ability to track sales conversions
- Developing best-in-class experiences and environments that engage customers without turning them off
- Leveraging the newest concepts of online sales navigation
How PWW Can Help
Proactive Worldwide specializes in market, customer, and competitive insights. We can help your organization navigate these changes by providing intelligence that will keep you informed and Out in Front® of market developments.
We can help you win with endless aisle strategies by:
- Providing insight on how competitors are leveraging endless aisle strategies, and what that means to your specific organization.
- Benchmarking best practices and best in class execution related to hiring, training, and compensation strategies that support endless aisle concepts.
- Identifying budgets and cost structures as well as ROI goals that retailers have related to endless aisle programs.
- Executing studies that identify learnings from early endless aisle adopters and what they would do differently when hiring, training, and executing endless aisle programs.
- Understanding how the market will be transformed, and identifying what will be needed not only today, but in the next five years.