How Retailers Can Reinvigorate Brick-and-Mortar
Many brick-and-mortar retailers have used data analytics from their online sites to create in-depth customer portraits based on geography, demographics, interests and shopping habits. But when the customer enters their physical store, suddenly the store is largely blind, unable to connect the wealth of online data to the customer walking in their store.
Perhaps this is why brick-and-mortar retailers are being hammered by online-only retailers who know so much about their customers. A recent Forrester report predicts online sales will reach $262 billion by the end of 2013, a 13 percent rise from $231 billion in 2012, while retail store sales have limped along at just under three percent growth.
A recent IBM study finds one of the real threats to brick-and-mortar is decreasing customer loyalty in a world rich with choices, literally at the consumers’ fingertips. Other studies show that a clear majority of retailers agree that customers want to use multiple channels (or omnichannel) to interact with stores and that customers who do so tend to buy more.
So how can retailers make the physical instore experience more enjoyable and desirable for the customer?
New instore Wi-Fi presence analytics capabilities tied into smartphones, other omnichannel functionality, and a customer data warehouse show promise of transforming this dynamic to create a more customized, personalized and basket-rich in-store experience. These new personalized analytics transcend basic anonymous Wi-Fi analytics -- the % of people who look at a window display and actually enter the store, or the number of people visiting the store at certain hours to help set staffing levels. Rather, they understand who the customer is and their interests and preferences as soon as they enter the store.
Here’s how this might work: a regular customer of a clothes retailer, who has also purchased from the store’s ecommerce site, walks into the retailer’s physical store. As she does, a screen pops up on her smartphone asking if she’d like to access the Internet using the store’s Wi-Fi. The screen, a social access portal, can be custom designed by the retailer using the store’s branded colors and images. She only needs to ‘opt-in’ once. After that, each time she visits the store it automatically recognizes her and provides access.
Beyond providing the customer with access to the Internet and to the retailer’s website, this opt-in also opens up a new world of capabilities for the retailer.
From online data gathered from its ecommerce site, the clothes retailer knows that this woman is 32 and that she loves “urban clothing.” It knows her size and color preferences. She has viewed and bought numerous items from leading brands such as Vigoss and Frenchi and has also left items in her basket (perhaps she had wanted to try on the items?), and put certain urban clothing type items on her wish list.
Currently, the store has a special on Vigoss Colored Skinny Jeans. So as she enters the store (and once she has opted in), a pop up appears on her Smartphone alerting her to the special. (Or it could display the Flap Pocket Skinny Crop Jeans she had abandoned in her online basket.) She’s interested in the Vigoss jeans and the app creates a map directing her to the item. It also suggests other accessories to the jeans, including shoes and tops.
Once the customer decides to purchase, she has the option to scan the items with her Smartphone, the items are debited to her account, she places them in a store-branded bag nearby, and leaves – walking by the typically understaffed checkout counters with lines at most clothes retailers.
Personalization Combined with Location and Weather
Combining customer preferences with location information and a daily updating data point such as weather can open up new opportunities for personalization through smartphones. For example, Starbucks could incorporate a weather feed to their mobile strategy, and dynamically shift a promotion from a hot drink to a cold drink as the temperature rises in a particular location.
Walmart discovered that, by analyzing its vast data warehouse of daily customer interactions, it uncovered gems of insights that drive its merchandising decisions. Doug Stephens, known as the “Retail Prophet,” noted recently in a recent radio interview on CBC’s Fresh Air, that the giant retailer had discovered that in some hurricane-prone states people would stock up on a particular item – Pop Tarts -- prior to a hurricane. So Wal-Mart would physically re-arrange its stores in response to changing weather conditions, ensuring that the Pop Tarts were in prominent, easy to get to locations within these stores, driving up sales.
Or on those days when a downpour strikes a city like NY or Chicago, a well-timed promotion on umbrellas or rain gear that catches commuters or visitors or residents within a block of a store could quickly translate into increased sales.
While showrooming has become a growing threat to many retailers, studies such as IBM’s From Transactions to Relationships show that shoppers are willing to purchase from and be loyal to a retailer’s storefront and online site if the retailer pays attention to the shopper’s desires. The report states:|
“Eighty-nine percent of shoppers in our study were willing to contribute 20 minutes on average to help a retailer better understand their desires and provide them with more meaningful offers. Fifty-five percent of shoppers expect the retailer to use past purchases in order to offer relevant promotions.”
The message is clear: by creating a highly personalized in-store experience, combined with a connected online capability, retailers can surround the customer with a more complete and satisfying shopping experience – and create much greater loyalty and increased sales.
- AirTight Launches Retail Wi-Fi Analytics Engine for In-Store Business Intelligence and Customer Engagement
- AirTight Launches Social Wi-Fi; Integration of Social Channels & Customized Captive Portals Merges Social & In-Store Engagement
- RSR Research and AirTight Discuss the Benefits of In-store Wi-Fi [on-demand webinar]
- Why Retail Matters by Laura Heller via Forbes
- 23rd Annual Retail Technology Study  via RIS News
- IDC’s “Retail Insights Predictions 2013” webinar | Leslie Hand
- Accenture Retail Research: Insights into Millennial Shopping Behavior Patterns includes 3 videos about millennial shopping myths
- Syncapse Research Report: Average Value of a Facebook Brand Fan Increases 28% via MarketingProfs
- Why retailers embrace cloud for Wi-Fi access, PCI and wireless security | blog post by Hemant Chaskar
- 8 Things to Consider When Choosing a Scanning Solution | by CTO Pravin Bhagwat via QSRmagazine
- Free Wi-Fi is a Win-Win for Retail Marketers and Customers | blog post by Lina Arseneault
- To Shop or Not To Shop? | In-store Wi-Fi Is The Answer To That Question | blog post by Lina Arseneault
- Book Review: The Retail Revival: Re-Imagining Business for the New Age of Consumerism | blog post by Lina Arseneault
- Attention Retail Marketers: In-Store Shoppers are Changing. Are You? | blog post by Lina Arseneault
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