fighting friction in retail - digimarc

16
Includes The Anti-Fricti Playbꝏk Friction is a drag for shoppers and a major threat to retailers. New insights into friction— anything that causes delays, frustration or extra effort for shoppers—are providing more nuanced views of the challenges. Two new reports, one highlighting how damaged thermal labels slow checkout, and another, demonstrating how cashier fatigue and injuries can cause further delays at the front end. We look at the causes of friction in key departments, why it impacts both consumers and store associates, and how a “total store” approach to removing friction is the key to improving the customer experience and satisfying shoppers. Fighting Friction in Retail WHAT CAUSES FRICTION, WHY IT’S BAD FOR BUSINESS AND HOW TO MAKE SHOPPING SEAMLESS

Upload: others

Post on 22-Oct-2021

3 views

Category:

Documents


0 download

TRANSCRIPT

Includes The Anti-Friction Playbook

Friction is a drag for shoppers and a major threat to retailers. New insights into friction—

anything that causes delays, frustration or extra effort for shoppers—are providing more

nuanced views of the challenges. Two new reports, one highlighting how damaged thermal

labels slow checkout, and another, demonstrating how cashier fatigue and injuries can cause

further delays at the front end. We look at the causes of friction in key departments, why it

impacts both consumers and store associates, and how a “total store” approach to removing

friction is the key to improving the customer experience and satisfying shoppers.

Fighting Friction in RetailWHAT CAUSES FRICTION, WHY IT’S BAD FOR BUSINESS AND HOW TO MAKE SHOPPING SEAMLESS

2

FIGHTING FRICTION IN RETAIL

Table of ContentsFriction Is the Enemy .................................................................................. 3

Competition: A Quick Note ....................................................................... 4

It’s About the Customer ............................................................................. 6

The New Data on Friction ......................................................................... 8

The Barcode Thing .....................................................................................11

The Anti-Friction Playbook ......................................................................13

Appendix: Grocery Resources for Busy Pros ......................................15

ji

3

FIGHTING FRICTION IN RETAIL

Friction Is the EnemyThe Problem of Slow Checkout

Nobody likes to do dirty dishes. If there is a top-ten list of troublesome domestic chores, a pile of dishes

in the sink is at the top. The bad news for retailers, however, is that some shoppers equate shopping with

grubby dinner plates.

A 2017 study by the renowned IT consulting company, Capgemini Group, reports nearly one-third (32%) of

6,000 global shoppers agreed that shopping was as unpleasant as tackling dirty plates and cups. And the

main reason for their displeasure? According to 66% of these shoppers, it is long lines at checkout.

That’s how friction feels to shoppers. But what is friction exactly? It’s simple: anything that causes delays,

frustration or extra effort for shoppers.

And the risk of not addressing this problem? It’s significant, because shopper

loyalty today is a brittle thing. Seventy-one percent of global shoppers (64% in

the U.S.) told Capgemini they are willing to bypass traditional retailers to buy

directly from manufacturers or from large online marketplaces, such as Alibaba

or Amazon.

The grocery industry has multiple challenges, but the reality of unhappy

shoppers remains paramount, and how that gets solved will determine the

winners and losers in the next decade.

Snags in the Perimeter

While checkout is the most visible source of friction, snags currently exist at key

touch points around the store (some unseen by customers, but felt by retailers).

The fresh/perimeter departments (prepared foods, bakery, dairy, deli, etc.)

utilize thermal labels, which have inherent inefficiencies and limitations, such as

scanning difficulties at the front-end.

There are also shrink issues: Tossing out expired items is costly. But if you

make it easy for shoppers to buy discounted soon-to-be-expired bakery items, you can increase sales

and reduce shrink. But many retailers have yet to adopt technology that would allow them to dynamically

adjust pricing and make it simple for shoppers to scan a barcode and instantly see what the sale price is.

Dedicating associates’ time to manually identifying soon-to-expire fresh items and discounting them is

inefficient and yet another source of friction. Thermal labels also slow customers down at the front end

(see Harris Poll Data pg. 8-9). Labels with traditional barcodes get torn, ripped or stuck onto container

edges and creases, making scanning more difficult and slowing checkout.

4 Slow checkout is friction personified

4 30% of shoppers prefer doing dirty dishes to shopping

4 Damaged thermal labels in the fresh departments are a major source of friction

4

FIGHTING FRICTION IN RETAIL

Seeking Product Info in the Center

The center store is also an acute pain point with customers. They increasingly expect complete product

transparency. Label Insight, an organization that helps consumers find product data, queried them with the

question: “What causes you to trust a manufacturer or product more?” The overwhelming majority (78%)

ticked the box: “Complete product label information (ingredients, nutritional information or allergens).”

A package may have a gluten-free symbol, but a customer with celiac disease

may want more reassurance than an icon. Providing a shopper with the ability

to scan the package and visit a mobile website with more detailed product data

quickly satisfies customers and keeps them engaged and loyal.

Along with product transparency deficiencies, untrained associates are a

major drag on the customer experience. Survey data reveals shoppers make a

purchase decision when helped by well-trained associates.

A TimeTrade consumer survey concluded 90% of consumers are more likely

to buy when helped by a knowledgeable retail associate. But the more square

footage a retailer has, the more challenging it can become for customers to

find a free associate. Instead of forcing a customer with an inventory question

to search for an associate, shelf edges, for example, can be digitized to make

it easy for customers to scan them for inventory information, personalized

coupons and product transparency data. The same technology also makes

it easier for associates to improve their product knowledge and help answer

shopper questions.

Competition: A Quick NoteE-commerce Is Retraining Customers

Retail grocers are familiar with the pressures facing them: Amazon’s entry into grocery, the arrival of

discount international retailers and the declining shopper loyalty to a primary grocery store.

The degree of concern about Amazon’s threat vary from retailer to retailer, but many agree Amazon’s

shopper data is an invaluable tool for their Whole Foods business. Amazon can use its data to make

better product and category decisions in the store.

And then there is Alibaba. It’s Amazon’s largest global e-commerce rival. More than 500 million people utilize

the company’s apps each month. And this market share is not confined just to China. It has operations in 200

countries. They are also following Amazon’s lead when it comes to buying brick-and-mortar stores: in the fall

of 2017 they bought the Chinese retailer Sun Art Retail Group, the biggest operator of supermarkets in China.

4 The center store isn’t delivering on product transparency

4 Shoppers equate product transparency with trust

4 Associate knowledge (or lack of) is critical to how shoppers experience the center store

5

FIGHTING FRICTION IN RETAIL

But what does this have to do with friction? A lot. It’s not just Amazon and Alibaba who are bringing online

learnings into the store—customers are doing the same thing. One reason shoppers are disappointed

with the store experience is they’ve learned a certain kind of convenience from shopping online. And they

now experience the current realities of brick-and-mortar retail as inconvenient or slow.

The Capgemini study makes the link between unhappy brick-and-mortar shoppers and the ubiquity of

e-commerce:

“Consumers now expect a physical user experience that rivals what they find online, from expecting goods to be in stock to being able to choose from multiple delivery options. Consumers wish to use technology to help them engage with the store at every step of the shopping journey.”

Retailers who can best replicate some of the conveniences of e-commerce in their stores will win

shoppers. One fundamental way to do this is to ensure shoppers and associates can use mobile devices

reliably and efficiently scan product packaging, thermal labels or shelf-edge tags. It’s critical customers

can digitally interact with elements of the store and get the immediate pricing and product data they are

accustomed to online.

Stand Out in a Crowd

One important firewall against these new consumer expectations is having the

right differentiators, many of which—such as meal kits and e-commerce—help

to satiate the demand for convenience and ease.

According to retail expert Graeme McVie, VP & GM, Business Development

at the global retail strategist firm Precima, “Shoppers want you to deliver the

basics, and they also want you to deliver the differentiators.”

Depending on a store’s demographics or its region, differentiators can mean

any number of things, but it comes down to delivering a menu of products and

services that make you stand out. Remember, stores are competing with the

seemingly endless selection available online.

4 Online shopping has trained customers to expect certain conveniences

4 E-commerce investments and meal kits are examples of competitive tools

4 Retailers who can closely match online conveniences will win big

6

FIGHTING FRICTION IN RETAIL

McVie and retail IT analyst Greg Girard, IDC Retail Insights, recommend that grocery retailers consider

several ways to revitalize their stores:

• Rank and cut products for optimal inventory management (a paradox: reducing assortments by 5-10% has been shown to increase category sales growth by 7%. Shoppers who are presented with fewer products are less overwhelmed and may buy more; Trader Joe’s success serves as an example)

• Invest in e-commerce

• Introduce meal kits

• Begin utilizing data tools to get new shopper insights

All of the above initiatives are potential ways to “grease the skids.” Imagine a customer wants

watermelon-scented shampoo, but you only have kiwi in stock. Make it easy for them to use the phone

right in the aisle to buy watermelon shampoo from your e-commerce site. If you don’t, you risk losing the

sale. A 2017 study by the shopper marketing firm Snipp reports that 52% of millennial shoppers—while in

the store—compare prices on their phone from other retailers.

Another offering that keeps the experience seamless is meal kits. Shoppers like them because they

increasingly go to a grocery store for a “meal event,” not simply to stock up on future staples. They’re

often buying what they want to eat for that day. According to Girard, recent polling indicates 30% of all

consumers say they will buy meal kits from their primary grocery or foods stores (if available). Not having

the items shoppers want is perhaps the most formidable road bump; forcing them to visit another grocery

store is the end-stage friction.

It’s About the CustomerSelf-Checkout

Today, the new/old mantra of retail is a maniacal focus on “the customer experience.” When considering

a new technology, retailers must ask themselves: “Does this make the shopping experience smoother for

the customer?” If the answer is no, it’s time to consider another solution.

Retailers and technology companies have focused on the problem of friction at retail for many years.

Self-checkout debuted back in 1992, and its implementation in retail continues to rise. According to RBR,

a London strategic research firm, self-checkout terminals are expected to increase globally to 325,000 by

2019 (up from 191,000 terminals in 2013).

And while there is an obvious retailer-first benefit with self-checkout, such as reduced labor costs,

customers believe they benefit as well. NCR, a leader in retail barcode scanners, polled approximately

2,800 global consumers. They asked them what they like about self-checkout and the number one

response was “I like the convenience of it (42%).” And for those customers who don’t find self-checkout

frictionless, at the very least, retailers have given shoppers a choice.

7

FIGHTING FRICTION IN RETAIL

In Japan, for example, checkout terminals are critical for both shoppers and retailers for a very specific

reason: the country has a severe labor shortage. The Japan Times reported in early 2018 that 70% of

companies said they couldn’t find enough workers. Self-checkout will be a key in this market.

POS Mobile Pay

Only a small percentage of shoppers are using mobile wallets today, but the

technology promises yet another way to remove friction at the front end.

According to a recent JPMorgan and Forrester study, the percentage of

shoppers using mobile remained at 14%.

The option of paying for your basket by tapping a phone against a card reader

at checkout is a tangible way to reduce the friction of cash payments or the

mechanics of paying by credit card. Retailers as big as Walmart are committed,

having launched their own branded mobile payment feature—known as

Walmart Pay—two years ago in the Walmart app.

Along with Walmart Pay, consumers have options such as Apple Pay and Google

Wallet. Some retailers are waiting for a universal wallet, but according to Katie

Jansen writing in RetailDive: “The universal wallet has a tricky adoption problem:

Consumers only want to use it if it’s accepted everywhere, and merchants only

want to accept it if it’s a common form of payment for consumers.”

For the time being, however, retailers with branded apps can take the initiative and create their own

mobile wallets much like Walmart did. Bloomberg reported in November 2017 that Walmart Pay was

poised to pass Apple in terms of U.S. mobile payments.

The “Go” Models

Amazon Go—depending on who you talk to—is ether a controlled experiment with little likelihood of

scaling or it represents the future of retail. In early 2018, Amazon Go opened its first publicly open store

in Seattle, Wash. The grab-and-go model of shopping exemplified by Amazon Go might be the most

enticing example of frictionless retail. This model excludes barcode scanning or a checkout experience of

any kind. Shoppers simply grab the food off the shelf and walk out of the store. Amazon has revealed little

about the technology powering the store, but experts speculate that once they’ve identified the shopper

via a QR code scan at the front turnstile, they track shoppers using depth-sensing cameras and infrared

sensors that specialize in traffic analysis.

While grab-and-go is still in its infancies, “scan-and-go” is here now, and in some of the biggest retailers,

including Walmart and Kroger. Scan-and-go relies on the shopper to scan products with a retail app or

with a provided device (Walmart has kiosks with handheld devices). Shoppers can then exit the store

with their products, where they may or may not be asked to show a receipt. And though having to scan

product barcodes in the aisles does add a thin layer of friction, it offers shoppers a way to bypass the

front-end checkout.

4 Self-checkout, mobile pay and scan-and-go concepts have been attempts to reduce friction

4 Despite smart advancements, friction remains a problem

4 Solutions must be simple, easy and convenient

8

FIGHTING FRICTION IN RETAIL

The Dirty Dishes Thing

But here’s the rub: Retailers have been pairing with technology companies for years now to make

checkout less painful, yet the problem remains. We call this painful reality “the dirty dishes thing.”

There is little doubt shifting some of the scanning and/or checkout process to customers offers tangible

benefits to shoppers, but it has not been a cure-all for improving the customer experience. It asks

shoppers to do even more, and in an era when Amazon will drop packages inside your entryway and

Walmart will literally put groceries in your refrigerator. Busy consumers want solutions that are simple,

easy and convenient.

Any strategy that reduces friction must consider more than the snags at the front end. It has to consider

the entire customer journey from start to finish. Retailers can also benefit from thinking about the

customer experience from the “frequency perspective,” which is to say shoppers experience the brick-

and-mortar trip as a conflation of multiple visits. They may have three-to-four weeks of seamless shopping

and short lines, but then a busy Saturday becomes their fixed view of the store as troublesome. A

frictionless shopping solution has to be reliable, efficient and repeatable. It must remove snags on both

quiet Tuesday nights and super-busy Sunday afternoons.

The New Data on FrictionDamaged Labels More Difficult to Scan

What grocery retail pros have long suspected has been borne out by new data: Torn, wrinkled or damaged

thermal labels from the perimeter departments can present significant scanning difficulties for cashiers.

Thermal labels are applied to fresh food items like meat, seafood, bulk and cheese products.

A new study of 500 retail cashiers, conducted by The Harris Poll on behalf of Digimarc, reveals how

perimeter department labels that are torn, wrinkled or damaged can be difficult to scan, and this problem is

impacting both retail operations and the customer experience, creating real friction at a critical touch point.

Ninety percent of cashiers with experience scanning these types of products believed that reducing the

number of hard-to-scan perishable and store perimeter labels would help improve their productivity.

Dairy items are the source of the largest number of scanning issues, with nearly half of cashiers

encountering items that did not read when scanned (47 percent). Cashiers also noted that these dairy

items caused problems three or more times per shift. Meat and seafood items were also challenging, with

63 percent of cashiers saying these items at least occasionally cause them scanning issues.

9

FIGHTING FRICTION IN RETAIL

The cashiers’ responses regarding damaged labels shed light on a part of

friction and slow checkout that is not usually considered:

• 79% said scanning issues are more common with thermal labels than with barcodes on product packaging

• 52% said it takes at least 30 seconds on average to deal with a label scanning issue if the barcode cannot be read

• 76% had experienced a label not reading from meat/seafood department at least once per shift

Damaged labels are creating a significant friction point. And it is not related to

a lack of open checkout lanes or too many customers, but to the reality that

thermal labels can create friction even during the slowest hours of operation.

Click here to see an infographic with additional poll data.

Ergonomic Study: UPC Barcode Taxing Cashiers

Friction comes in many forms, and in the case of the traditional barcode, it can manifest itself as more

muscle straining for cashiers searching the barcode on packaging. And this is no small matter. If the end

goal is a seamless shopper experience, snags—no matter where or how small—are problematic.

A study from the University of Arkansas Exercise Science Research Center (with funding from Digimarc

Corporation) collected data from experienced cashiers and examined the muscular and postural demand

of scanning products with Digimarc Barcode compared to the traditional universal product code (UPC).

The cashiers in the study had greater than 1,000 hours of cashiering experience over a two-year period.

The study asked cashiers to scan products with three types of barcode scenarios: packaging with a

single traditional barcode, packaging with the traditional barcode on multiple sides and packaging with

an advanced barcode, Digimarc Barcode. The advanced barcode is machine readable and can contain

the same data as UPC/EAN symbols. Yet what interested the University about Digimarc Barcode is how

it exists as a seamless part of the packaging. The advanced barcode is largely imperceptible and is

repeated across much of the packaging, making it easy for cashiers to confidently pull the product across

the scanner for a successful scan, all without searching for a traditional barcode.

The study’s authors concluded from their research, “Increased scanning time and reduced muscular

demand was found when scanning products enhanced with Digimarc Barcode compared to packages

with a traditional UPC.”

The results of the study clearly show that it was more taxing (i.e., there was more muscle strain) for

cashiers to scan packages with a traditional barcode. The study’s authors added: “There were significant

main effects of UPC for Upper Trapezius, Middle Deltoid and Biceps Brachii. Peak muscle activation was

highest for all muscles when scanning the traditional UPC packages.”

4 90% of cashiers said reducing problem labels will increase productivity

4 Labels on dairy items presented the most problems

4 Labels give cashiers more trouble than barcodes on packaging

10

FIGHTING FRICTION IN RETAIL

According to recent 2014 data from the U.S. Bureau of Labor Statistics, cashiers average more than 10 sick

days each year due to musculoskeletal pain. The problem of cashier-related injuries is real, and it hurts

retailers’ bottom line. Technology that helps ease this strain promises to translate into healthy cashiers,

easier checkout and ultimately more satisfied customers.

Efficiency Gains Found

Although primarily focused on muscle activity, the study revealed how Digimarc

Barcode showed a 30% increase in IPM (Items Scanned per Minute) compared

to the visible UPC barcode*. The authors also noted how cashiers began

scanning more quickly with Digimarc Barcode-enhanced products even though

it was their first exposure to the technology.

Some of the highlights related to muscle activity demonstrated that:

• Cashier cumulative muscle activity was consistently lower with Digimarc Barcode versus a UPC barcode

• There is lower peak muscle activity at the shoulder and elbow when scanning Digimarc Barcode versus a UPC barcode

• Study participants reported that they would prefer scanning products enhanced with Digimarc Barcode at work on a regular basis

The study also emphasized that alternatives to the UPC barcode, such as

Digimarc Barcode, can increase cashier efficiency, which relates directly to the

problem of friction in shopping.

The data is revealing, because we rarely examine customer dissatisfaction at the front end with the

simple mechanics of the cashier scanning a product. Just as traffic on the freeways is rarely the result of

one thing, long checkout lines have a complicated nexus. Yet the study clearly pinpoints the role of the

traditional barcode.

New barcode technology helps cashiers feel more comfortable and increases the IPM. And when

checkout is easier and more efficient, cashiers are free to focus more on the customer interaction than

muscle pain. Happy cashiers make happy customers. This is not just theory. New Seasons Market in the

Pacific Northwest believes that more efficient scanning leads to more time for conversation between

cashiers and customers, which supports their mission to actively engage their customers.

*This figure represents a basket consisting of 100% Digimarc Barcode-enhanced products versus a basket of products where all the products have a traditional UPC barcode

4 University study compared UPC, multiple UPCs and advanced barcode

4 UPC involved more muscle strain for cashiers

4 Advanced barcode showed 30% increase in IPM compared to UPC

11

FIGHTING FRICTION IN RETAIL

The Barcode ThingThe Oxygen of Shopping

When retailers look at the snags in their stores, they rightly obsess over the customer experience, yet

what’s often overlooked is the role of the humble barcode. It’s easy to gloss over this data carrier because

it’s like the air we breathe—something we take for granted. In many ways, the barcode is the “the oxygen”

of the shopping experience. Unless Amazon Go becomes the world’s only retailer one day, barcodes will

remain the way shoppers buy what they need from a brick-and-mortar store, as well as the method that

merchants manage inventory and their supply chain.

Several years ago, engineers at Digimarc invented a way to take the same data found in the UPC, and

imperceptibly repeat it across product packaging. They did this by adjusting the brightness and intensity

of colors and introducing a readable signal into the packaging art file.

Wegmans grocery store has adopted the technology and is implementing Digimarc Barcode into its

private-label packaging in an effort to satisfy customers’ demand for product transparency and to

promote easier checkout.

Spotlight on Thermal Labels

The impact of barcodes is not confined just to product packaging, but is present

in the perimeter department on thermal labels. The same advanced barcode

technology for product packaging is also available right now for thermal labels.

Digimarc Barcode is introduced to the labels as a lightly printed, structured

pattern of dots which fades into the background of the label. The technology

makes the label reliably and efficiently scanned even when damaged or ripped.

The new enhanced labels offer tangible benefits for retailers in the fight against

friction at the front end:

• Easier checkout

• Increased scanning success (reliability and accuracy)

• Improved cashier productivity

• Improved inventory accuracy (reduce cashier manual overrides)

• Reduced product shrink (cashiers may give away an item that is a problem to scan)

• Reduced fraudulent behavior (label swapping)

There is also the opportunity to reduce product shrink in the perimeter departments. Many retailers

assign associates to find and pull soon-to-be expired products and affixing secondary labels, providing

shoppers with a chance to pay less.

4 Barcode is overlooked when examining friction

4 Advanced barcode makes scanning more reliable and efficient

4 The technology is applicable to packaging and thermal labels

4 Label solution offers innovative ways to ease checkout and reduce shrink

12

FIGHTING FRICTION IN RETAIL

For large-format retailers dedicate associate time to this task is costly and inefficient. Yet grocers know

that the alternative is to lose many products to shrink. When retailers pair Digimarc Barcode-enhanced

thermal labels with a barcode-scanning retail kiosk, they gain the ability to dynamically adjust pricing

on soon-to-be-expired items, while the shopper can check expiration dates and other useful product

and/or brand information. To add this functionality to labels with conventional barcodes requires adding

GS1DataBar, expanded and expanded stacked barcodes, all of which crowd the label and interfere with

the current template.

Here is how this solution looks in the store with a container of cupcakes enhanced with Digimarc Barcode

thermal labels. In this example, today’s date is 1/13/2018. The expiration date of the cupcake determines

what the retail kiosk tablet will display when the label is scanned:

1 Cupcakes expiring 1/13/18:

- For associates: “DISPOSE”

- For customers: “We apologize. You’ve found an expired item. Here’s a store coupon.”

2 Cupcakes expiring 1/17/18:

- For associates: “EXPIRING SOON, MOVE TO FRONT”

- For customers: “Manager’s special. 50% Off”

3 Cupcakes expiring 2/21/18:

- For associates: “FRESH ITEM. NO CHANGE.”

- For customers: “Everyday Value - $6.95”

13

FIGHTING FRICTION IN RETAIL

The Anti-Friction PlaybookThe Total-Store Approach

A technology solution addressing friction must reduce snags at strategic touch points around the store.

Established innovations like self-checkout and mobile payment are critical to this effort, but they have

solutions limited only to the front end. An example from the fitness world is instructive: People new to

exercise often want to lose weight in a specific area of the body. But they quickly learn you can’t lose

weight in the mid-section only by doing crunches; you have to take a holistic approach by eating healthy,

doing cardio and adding some strength training. It’s a total body approach, and the same is true when

thinking about the problem of fiction in the store.

Below is a two-phase playbook that starts with an action as simple as sending an email to a scanner

manufacturer, and concludes with more advanced “plays,” such as focusing on adding new codes on your

private-label packaging.

SMALL STEPS SMOOTH THE WAY….

Phase 1 – Prep

Action – Scanners: Check your POS hardware manual to find out if your scanner supports one of today’s

advanced barcodes; if it doesn’t, contact your manufacturer or manufacturer’s representative for a

firmware upgrade (if available).

4 Benefit: Easier checkout for products enhanced with advanced codes like Digimarc Barcode.

Action – Retail Scales: Contact your retail scale manufacturer (or representative) and inquire about the

potential to print thermal labels with the advanced barcode.

4 Benefit: Make it easier for cashiers to scan damaged thermal labels, easing checkout and improving

the customer experience.

Action – Interactive Kiosks: Take the first step to enabling automatic, dynamic-pricing for soon-to-be-

expired items in the fresh departments. Contact a technology firm, such as Aila, which sells interactive

retail kiosks, and introduce the technology into your aisles.

4 Benefit: In the short term, the kiosks can be used by shoppers for price-checking packaging with

traditional barcodes. In the long term, after your thermal labels are enhanced with the new barcode

technology, the kiosks can serve shoppers who are looking for discounted fresh items.

14

FIGHTING FRICTION IN RETAIL

Phase 2 - Execute

Action – Brand Suppliers: Some of the consumer packaged goods companies you work with may already

be utilizing or experimenting with “Connected Packaging,” i.e., adding advanced barcodes like Digimarc

Barcode and QR codes to their packaging. Contact your brand supplier and find out what efforts they are

making to engage customers “at the shelf.”

4 Benefit: There may be opportunities right now to partner with your brand partners using your shopper

app or theirs, to engage shoppers with coupons, special offers, etc. These companies may already be

moving toward more product transparency via codes on their packaging. Statistics show that shoppers

who get the product information they want, remain brand loyal. So if shoppers become more loyal to

ACME Detergent—and you’re their primary retailer—that loyalty is a win for you too.

Action – Premedia Partners: Call your premedia (prepress, packaging supplier, etc.) representative and

ask them what their capabilities are for producing packaging with advanced codes. And while there is

no bad time to add connectivity to your packaging, the most cost-effective time is during a package

redesign.

4 Benefit: Even if your premedia isn’t familiar with the new codes, your inquiry will help them to better

understand your interest and desire to become a digitally-driven retailer. And good suppliers always want

to stay ahead of the curve and serve their customers better.

Action – Private Labels Products: Identify the five fastest-moving private-label products with paperboard

packaging (the enhancement process is more straightforward with this substrate) and begin a pilot.

4 Benefit: When these five product packages are enhanced with Digimarc Barcode, for example, you

can begin moving toward easier checkout and less muscle strain for your cashiers. A smaller pilot launch

with connected packaging will also help you measure ROI more easily.

In Conclusion

There are certainly more action items to develop a total anti-friction solution in your store, but by the time

you’ve delved deeply into this playbook, your meetings and work with partners, suppliers and technology

vendors will have clarified for you the way forward. In the end, solving friction is not a one-time event, but

a series of deliberate actions that result in lower and lower friction over time and impact the one thing that

truly matters: the customer experience.

15

FIGHTING FRICTION IN RETAIL

The Solution for Damaged LabelsFind out how Digimarc Barcode for Thermal labels helps reduce friction at the front end. Watch a video and see how we scan all kinds of challenging labels. Click here.

Today’s Advanced BarcodeWatch this short video and see how we add Digimarc Barcode to product packaging. Click here.

Fresh Insights for GroceryGet up-to-date insights on trends and developments in grocery, by checking out Digimarc’s new grocery page with blog posts and infographics on what’s new and hot in grocery right now. Click here.

Appendix: Grocery Resources for Busy ProsCheck out videos, solutions, articles and more, on the state of grocery today.

Digimarc Corporation

9405 SW Gemini Drive

Beaverton, OR 97008

T: +1 800 DIGIMARC (344 4627)

F: +1 503 469 4777

[email protected] www.digimarc.com

ABOUT DIGIMARC CORPORATION

Digimarc Corporation (NASDAQ: DMRC) is a pioneer in the automatic identification of everyday objects such as product packaging and virtually any media, including print, images, and audio. Based on the Intuitive Computing Platform (ICP™), Digimarc provides innovative and comprehensive automatic recognition technologies to simplify search, and transform information discovery through unparalleled reliability, efficiency and security. Digimarc has a global patent portfolio, which includes over 1,100 granted and pending patents. These innovations include state-of-the-art identification technology, Digimarc Barcode, as well as Digimarc Discover® software for barcode scanning, and more. Digimarc is based in Beaverton, Oregon, with technologies deployed by major retailers and consumer brands, central banks, US states, film companies and professional sports franchises, among others. Visit digimarc.com and follow us @digimarc to learn more about The Barcode of Everything™.