PICSELL at Retail&Development Business Summit 2019

December 5, CEO PICSELL Sergey Germashev was one of the speakers of the VII Retail & Development Business Summit. In his report, Sergey spoke about the transformation of merchandising in the era of AI / Computer Vision, reviewed Computer Vision systems for retail and merchandising, as well as presented SAAS platform PICSELL.

In addition, PICSELL representatives Sergey Germashev and Yulia Sokolova highlighted a number of interesting insights that are now visible not only in the West, but the first signs can also be seen on the Ukrainian market.

Offline is back again. Just a year or two ago, all retailers were puzzled by the rapid growth of the online segment due to the growing number of millennials who prefer shopping on the Internet, paying with phones and gaining new experience in ease of shopping and plenty opportunities for online shopping. In addition, traditional offline could not provide engagement tools and a new experience for young people. As usual, the USA and Japan remain the trendsetters and the engine of progress, where large online retailers, for example, Amazon, Casper and even the Alibaba Group, began to open offline stores. That means return from online to offline. But at the same time gives buyers a certain new experience: stores without cash desks, sellers, ease of payment, automated navigation tips inside the store.

Thus, there was a return to offline, but different. In the new retail format, one of the key functions that really needs to work is the real-time monitoring mode of product display and product presence on the shelf. The main problems of the retailer and distributor are now in the level: the product is not on the shelf – it is not for sale. Chaos on the shelf – a person will no longer come to this distribution network, because he can’t find or get his desired product. At the same time, the speed of generating applications for both retailers and the brands themselves is also important. This directly affects sales growth and turnover, especially of goods with a short shelf life. If physically the retailer’s location looks attractive, considerable budgets are invested in high-quality rebranding – all this is useless if there is no systematic analysis of what is happening on the shelf. As soon as the promotional period starts and the goods are washed out from the shelf, retailers are faced with the fact that there is no system that would allow this to be controlled. But today, PICSELL can provide retailers with online monitoring, which will overcome the above barriers.

Salary increase. Another trend in retail is the migration of personnel abroad, in particular – merchandisers and sales representatives. Due to the fact that there is a rather active staff turnover, business representatives today are already forced to think about making strategic decisions in order to continue constant necessary monitoring. One solution, of course, is to increase salaries for merchandisers in order to keep the employee in the workplace. According to the assumptions of retailers, in 2020, rates will increase by at least 15-25% for employees who perform the main operational tasks in retail. In addition, of course, various automated solutions come to the rescue, which in fact will make it possible to simultaneously increase salaries and reduce the number of necessary staff for monitoring, and thus competently reallocate budgets without losing quality of work.

Also in Ukraine, competition is still rather low (by world standards) among the shopping and entertainment centers, which usually host retailers. For example, in Ukraine there are about 300 shopping centers of different formats, for comparison in Europe this figure is almost 10,000 shopping centers, and for the USA – 35,000. It is clear that the territory of countries is different, but if you bring all the indicators to the same denominator, then the number of square meters of retail space for 1 person living in the territory, it will turn out:

Ukraine – 0.11 square meters m / 1 person

Europe – 0.28 sq. m / 1 person

USA - 2.14 sq. m / 1 person

Therefore we are almost 2.5 times lagging behind the competition for offline consumers from Europe and almost 20 times from the US. And since the malls mainly create traffic for the retailer and invest in the development of their platform, for which they take rentals, the higher the traffic, the higher the retailer’s expenses for maintaining their property, and the greater the need to find tools to optimize the cost of maintaining such an internal space.

Integration of innovative solutions is the future of all retail in a new format and products such as PICSELL will be part of the new eco-system of interior space management.