Traditional Stores Get Smarter and Better Connected
In their e-commerce operations, retailers have long had access to limitless data about customers and transactions. They’ve become adept at using this information to deliver personalized communications and targeted campaigns to customers as they shop online.
Unfortunately, the same could not be said for in-store shopping. Retailers have had no way of knowing what customers were doing in their stores from the time they entered the front door until they checked out at the POS system.
Now, new technologies are becoming available that can bring the personalized customer experience of online shopping into traditional brick-and-mortar stores. These “connected stores” will help retailers better understand the purpose of a shopper’s visit to predict how they will shop and shape their experience. Such technologies promise to help keep brick-and-mortar stores relevant, engaging and competitive.
A host of IoT technologies
The primary driver of this change is the increasingly widespread adoption and deployment of sensors and smart devices as part of the Internet of Things (IoT). The IoT is a network of physical objects or “things” that contain embedded electronics, software, sensors, and network connectivity that enable these objects to collect and exchange data.
In particular, retailers are increasingly taking advantage of:
• Sensors. Embedded into “things,” such as infrared traffic monitors, sensors help retailers understand where customers are, what they’re doing, and what’s going on around them. Then they can communicate and share data in real-time over a network or cloud-based platform. Retailers can use this data to measure traffic patterns, trip times and checkout queues.
• Mobile devices. Retailers can provide customers with downloadable mobile apps. Customers share their identities through these apps so retailers know exactly who is in their store, and can collect detailed behavior on customer’s preferences and shopping behavior.
• Beacons. RFID and other inventory tracking devices will allow the retailer to understand whether an item is in the store—and if so, if it’s in a pile in the dressing room or how many times customers picked it up but did not purchase it, opening up a whole new realm of real-time signal data.
Intelligent in-store communications
Retailers are combining real-time data from these IoT technologies with the detailed historical information on customers’ preferences and shopping behavior they’ve always collected from loyalty programs and POS systems. By running real-time analytics on all of this data in the background, retailers can predict what products, services and promotions an individual customer might be interested in and determine what promotions to present at what frequency as the customer moves through the store.
For example, knowing that the parent of school age children is in the school supplies section in the weeks before classes begin, a retailer might adjust in-store signage for Back-to-School. With in-store tracking, as the customer passes end-of-aisle displays or other areas of potential interest, the store might generate an instant promotion based on his profile or purchase history and deliver a message or coupon to his mobile phone. If a high-value customer dwells for a long period in a single location on an aisle, store associates can detect that, go over in person to the customer and offer to help.
With knowledge of where the customer is in their shopping journey, retailers can also better predict what’s the next best offer or action. If someone is buying a TV set, a retailer could look at their previous history to determine whether to offer them a warranty or an accessory. On the other hand, if a frequent customer has consistently opted out of warranties online and in-store, the opportunity will lie in offering accessories.
When done right, connected retail technologies promise to dramatically improve the in-store customer experience, allowing retailers to give the customer exactly what they want (product, experience, service, info) with more precision in less time.
Dan Mitchell is the director of retail at SAS, a Cary, N.C.-based analytics software and solutions provider.
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