Technology is enabling highly personalised levels of customer tracking and marketing, which retailers can exploit in stores.
In-store customer data collection has presented a significant problem for retailers. Although consumers are used to brands using their online browsing data, they are taking longer to come around to the same idea in a physical environment – as recently as 2014, a survey by OpinionLab found that nearly 80% found it unacceptable to be tracked via their smartphone while in store.
But attitudes are changing. Younger customers in particular realise personal data collection can, if used well, be beneficial.
Expectations around customer service are also growing. A CBRE Ipsos Mori survey found that 84% of consumers want stores of the future to offer the same services that they get online, such as personalised recommendations.
At the same time, sources of data in store are proliferating. It has long been possible to measure the movement of shoppers via GPS technology on smartphones, and newer innovations such as facial-recognition software mean that CCTV cameras can be used to decipher a shopper’s gender, approximate age and even their emotional state.
Mihkel Jaatma is founder and chief executive of Real Eyes, which makes emotion tracking software. He says the future of in-store shopping will be data driven, highly personalised and respond to people’s reactions in real time.
“We still get the Minority Report reference in some conversations we have,” he says. “And that’s what we have in mind: real-time, individual-level understanding of people.” The company has already completed a trial with childcare retailer Mothercare in which it found that people who smile in store are likely to spend 30% more, suggesting that tracking and attempting to improve emotional states in store could be beneficial.
Alongside this, artificial intelligence (AI) assistants could go some way towards solving the in-store data conundrum. AI can analyse data quickly, opening up the possibility of an in-store smartphone assistant that can do everything from telling a customer who made a garment and how much they were paid for their work, to what shoes go best with it.
While many bot services are online only at the moment, US department store Macy’s has designed one for use in store, using IBM Watson technology. Named On Call, it provides navigational help and answers to basic questions, with the option to call a store assistant if it can’t answer something.
Data can also be used to improve the relationship between store staff and consumers. Tools such as the Hero app, for instance, allow online customers to click a website icon to ask to be connected by smartphone to a store assistant who is available, and Harvey Nichols is among the retailers to have adopted the service. The assistant can see the shopper’s profile and history, show them a product via video streaming and answer their questions about it.
Hero chief executive Adam Levene says the tool can also be used to prompt a cross-channel relationship between store and shopper: “It gives customers the sense of having their own personal shopper on-demand.”
This sort of focused, relationship-based approach to gathering data is likely to be the best way forward for many retailers, especially when compared with facial recognition and anonymous tracking.
Sean McKee, director of customer experience at footwear retailer Schuh, points out that data protection legislation requires a careful approach: “Beyond the information required to complete a transaction – and home delivery, where appropriate – and the anonymous customer-counting data we collect to calculate conversion rates and plan staffing, we have only focused on collecting the customer’s email address as part of our general roll-out of e-receipts.” He adds that any further developments would have to be done with compliance in mind.
More than half (51%) of consumers still prefer to shop for clothing and footwear in store, a PwC report found this year. They like to try on and feel clothes, and they often prefer the experience over online. Carefully handled, data-driven services give retailers the opportunity to take this experience a step further – and find out more about customers in the process.