By  on June 22, 1994

WASHINGTON -- The smart retailer will use emerging technologies to entertain, inform and serve customers over the next decade.

That was the message from Thom Blishok, vice president and head coach of Worldwide Industry Consulting for AT&T Global Information Solutions, at the International Mass Retail Association annual convention here in May.

Blishok said customer intimacy was a key factor for success. Although it might seem like a contradiction, sophisticated technologies -- like those that store data about a customer's buying preferences, choices in color, style, sizes and shopping patterns -- can be used to increase intimacy between customers and retailers.

"Consumers demand convenience, personalization and product information," Blishok said. These technologies could include in-store kiosks with customer information, interactive TV retailing or using virtual reality technology to let customers try products.

An example? A simulated golf course where a consumer can try a golf club while a camera-equipped computer analyzes where the shot would go, based on the power and accuracy of the swing.

"Since consumers face a growing conflict between spending their time and money on entertainment or shopping, the successful retailer is one who will entertain its shoppers," he said. "Entertainment retailing is one of the most exciting strategies a retailer can embrace today."

The use of kiosks will grow to 2 million units over the next decade, from about 60,000 today, added Christine Propst, director of worldwide retail consulting for AT&T, who also spoke at the session. A kiosk can offer details of special promotions or events going on that day or, by offering personalized customer information, can also help a gift giver, much in the manner of a bridal registry, she said.

Blishok said TV home shopping can be either the most exciting or most dangerous technology for retailers in the future. TV shopping, which will be able to reach the entire U.S. by 2000, will grow by 20 percent each year for the foreseeable future, he said.

But, Blishok emphasized, merchants don't have to fear home shopping. The technology can be a direct link between the traditional retailer and the home. It will be driven by consumer preferences, not by a store's preprogrammed selections, and with personalized interactive capability, can add value and convenience for customers.The sales data can also help stores with back office functions. For example, histories of selling patterns can help retailers forecast inventory needs based on consumer purchasing, and end problems of being out of stock on hot sellers and overstocked on slow movers.

Affinity analysis -- analyzing relationships between certain items that typically sell together -- can help determine placement in the store or show a retailer what products not to promote at the same time, to maximize margins.

Obvious affinities might include cameras and film, or wrapping paper and tape. But not-so-obvious examples, he cited, include diapers and beer, and Thighmaster exercise products and Baby Ruth candy bars.

"For example, when fathers run out to buy diapers, there is a high incidence of them picking up beer while they're out," Blishok said. "This type of analysis will tell retailers not to run a promotion on two items that often sell together. You know you have a good chance of getting both sales -- this information helps you make full margin on at least one of them."

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