The growth in online retail continues apace. Some commentators have even claimed that online retail will eventually render physical stores obsolete. Nevertheless, the fact remains that consumers still place high value in the unique experience that a visit to a physical store provides—the opportunity to get up close and personal with a potential purchase, interact with sales staff, and browse at will with the chance of stumbling across a compelling impulse buy.
Sensor technologies, also known as beacon technologies, offer retailers new ways in which to combine their proven expertise in physical retail with data gathered in store in order to gain valuable insights about consumers.
From data to insights
For many retailers, the data trail starts and end at the point of sale. They know what consumers are buying, but that’s about as far as their insight stretches. When it comes to what they browsed but didn’t buy, or where they lingered longest in the store, the retailer is in the dark. Even with a loyalty program in place, there’s no way to tell when or how often customers have visited the store unless they make a purchase.
Combining technologies like beacon devices and Wi-Fi access points that gather data on what consumers are browsing, which areas of a store they visited with, for example, a mobile application provides the opportunity to retarget customers who visit the store but don’t make a purchase with relevant and compelling promotions and content later. Gathering the data is only one side of the story. Getting real value from it requires a system for storing and analyzing that data and connecting it to customer profiles, and this is where data analytics capabilities come into play.
This type of approach is becoming more widespread, where retailers are combining data gathered from beacon devices with video analytics to better understand how consumers move around in store. They can see where they linger, identify dead spots, and find out which are the most popular areas of the store. This type of information is used in a multitude of ways, such as for analyzing peaks and troughs in visitor numbers to enable more efficient shift planning, or to gain insight into how consumers react to product placement and in-store merchandizing and advertising activities.
Enhancing the consumer experience
The ability to better understand and anticipate the needs of customers brings the opportunity to tackle some of the typical pain points associated with visiting a physical store and provide a smoother experience. Take fitting rooms, which are excellent at converting browsers into buyers, but only if people end up finding the right size. Something as simple as a button to alert a member of staff that you need a different size can have a big impact on sales figures because it makes the in-store experience that little bit less stressful, especially during busy periods.
Sensor technology also provides the opportunity for retailers to expand the selection visible to the customer during the decision-making process. People already spend a great deal of time comparing products and prices across a range of outlets in search of the best deal, often using their mobile device. The ability to communicate with that device and immediately showcase what’s available in store based on what the customer has been browsing online reduces the risk that they will look elsewhere.
Mobile phone = The ultimate cookie
When it comes to mobile devices, there are two key development areas. The first concerns the transformation of these devices into the loyalty card of the future, where customers enter a store and the retailer knows who they are, their preferences, and their purchase history. This data can then be used to provide a seamless, customized in-store experience. The second is about taking advantage of the convenient communication channel provided by mobile devices for delivering personalized, contextual content.
The ability to serve consumers with relevant content based on weather data, for example, gives retailers the opportunity to become much more proactive in terms of their media planning strategy. Imagine the impact of being able to instantly react to an unexpectedly early cold spell or snowfall and market your winter products in real time while your competitors have already spent considerable sums on bought media to advertise their autumn range.
A shift in strategy approach
The relative infancy of these types of approaches means that it is difficult to predict what kind of results they will yield and which of them will turn out to be the most successful. This demands a more modern take on strategy development in place of the more traditional one of creating a fully-fledged strategy, implementing it, and then building the back-end solutions and capabilities. Rather, retailers should be looking to incremental, iterative approaches—low-risk, low-investment rapid piloting and proof-of-concept methods that produce reliable data to inform future investment decisions and greater flexibility for strategy refinement.
In recent years the digitalization of retail has been centered on ecommerce, but this is just one element in a much wider picture. The trend is towards developing the most effective blend of the physical and digital environments—enabled by a wide range of technologies and analytical capabilities—that helps retailers deliver relevant and rewarding experiences for consumers.