Wireless for retailers: Surprises in store
Ensuring that shoppers have Wi-Fi connectivity brings numerous opportunities for retailers to engage with customers and improve their experience, as well as a chance to upsell and maximise their sales, discovers Vaughan O’Grady
Imagine a world in which you are tracked – in real time – from the moment you enter a shop.
You receive information on store layout and product placement through your Wi-Fi-enabled smartphone, along with personalised offers and other information from the retailer. You can search for details on specific products such as price, nutrition facts and stock levels. You can compare value with other stores and check customer reviews. You are greeted by a sales associate who is aided by digital tools. Then, after self-scanning and mobile payment, you receive email or SMS receipts and vouchers.
This is a world where wireless connectivity enables a quicker, better and more efficient shopping experience.
That world isn’t here yet. But it may not be far off, according to consulting and technology giant Capgemini in its report All-Channel Experience:Engaging with Technology-Enabled Shoppers In-Store.
The vast numbers of smartphone users across the UK are key players in this future. Mark Thomson, retail and hospitality director EMEA with Zebra Technologies, whose portfolio includes retail mobile technology solutions, notes: “If I’d spoken to retailers three or four years ago they would have said ‘there’s no way customers need to use Wi-Fi in our stores’.”
Today he suggests: “the use of Wi-Fi in shops is not simply because I want Wi-Fi. It’s because I want to have an enhanced shopping experience. I want to know more about the products or have an app, for that allows me to add products to my favourites or wish list, for example.”
If retailers want to get closer to the customer Steve Hewett, principal head of retail customer engagement & loyalty at Capgemini, points out, “the no-brainer for retail is internet connectivity.... They also need to start doing work with their IT architecture... so that IT is being exposed in a way wireless services can engage with.”
Wireless couponing and mobile payment will require further investment so that customers can engage with the point of sale. And if shoppers want to look around the store on their smartphone then retailers should also spend money on digitising floor plans.
They can then consider whether to buy – and how they might want to use – other technologies such as sensors, beacons (short- range, one-way, portable device-aware Bluetooth communication in devices placed in specific parts of the store), NFC and any of a large number of payment systems. All of these technologies can both help the customer and offer information that enables the retailer to understand consumers’ needs better.
The retailer needs to work with a partner that can capture all that information. Zebra’s Mark Thomson explains how its MPact Platform does this. “It’s an engagement platform. It allows the retailer to set up a captive portal and enable guest access to a Wi-Fi network. The guest can be recognised and communicated with on a two-way basis and could have promotions or offers sent to them depending on where they are in the store.”
MPact uses Wi-Fi but can also integrate Bluetooth beacons, “allowing us to look at very specific locations and individual spending times within one metre of a gondola end or one metre of a specific product display”.
Guest access Wi-Fi offers more valuable information than free access. If the customer signs in through Facebook for convenience that can add to the insights a store gains. After that it’s up to the shop to decode and use that information, which is by no means easy.
It’s not just about assessing information from smartphones. Bridget Johns, retail analytics company RetailNext’s head of marketing and customer experience, says: “Comprehensive retail analytics platforms incorporate data from a variety of sensors and data sources, and each data stream provides a key piece in understanding the puzzle of what’s happening in stores.” Mobile is only one of these sources, albeit an increasingly important one.
Johns explains: “The first data streams from in-store mobile usage revolved around web usage and the sites shoppers were visiting, the items they were looking at, and even items selected for carts. The biggest opportunities there were for retailers to better understand showrooming [comparing a price in store with a price online] and demand for accessories, product tutorials, and so on.” The result? “Often those insights led to better promotional pricing, better displays and better sales associate training.”
Now, however, she says, “cutting edge in- store retail analytics platforms integrate full suites of mobile engagement solutions, and draw in video analytics data and data streams from beacons and other sensors, producing real time, actionable insights into shoppers and their shopping behaviour,” she says. “By syncing with CRM and other systems these analytics platforms deliver targeted, relevant communications personalised to each shopper.”
This may seem like a lot of effort except that, as Johns points out: “when a store has 200,000 SKUs [stock-keeping unit: product or service to you or me], it’s important to highlight the 10 or 20 most relevant to the shopper – and each and every customer is different.”
The next step? That depends on the retailer. “You try to base your decision on customer wants and needs, not technology,” says Hewett. “They might use interactive mirrors in a fashion retailer. You’re not going to put that in a grocer but you might tag some non-food products for more information with RFID or iBeacons [the Apple beacon protocol and associated hardware] to push end of aisle sales.”
You can also use this information to tailor apps or special offers. Eagle Eye, a technology company that validates and redeems digital promotions in real time for the grocery, retail and hospitality industries, has an impressive client list that includes Asda, Ladbrokes, Marks & Spencer, Sainsbury’s, Tesco and Thomas Pink.
Steve Rothwell, CTO and founder of Eagle Eye, explains: “Our Eagle Eye AIR platform allows retailers to collect a wealth of basket data from consumers in real time. This helps businesses build detailed consumer profiles and engage with them through personalised messages and offers.” This could be via direct messaging, email, alerts and push notifications or NFC. He adds: “Retailers now have more channels for engagement than ever before.”
Another approach is that of Powa Technologies, a technology firm known for its commerce servcies. Dan Wagner, founder and CEO of Powa Technologies, says: “Our mobile app PowaTag uses data collected from past transactions to send a welcome or personalised offers based on purchase history and proximity.”
As Powatag allows potential customers to scan QR codes appearing in advertisements in print, and then takes them to a secure in-app webstore where their buying activity is recorded, retailers can accurately measure their return on investment on offline advertising.
The app also enables a range of engagement opportunities such as personalisation, cross- and upselling opportunities and location- based promotions.
The uses are there, and so is the technology. However, Hewett says adoption is still relatively low. “Retail apps have very low opt-in rates for push notification – 30 to 40 per cent, typically – and that’s before you account for the fact that 20 to 30 per cent of retailers’ apps are downloaded and only ever used once.
“There are still big barriers for them to overcome from a customer perspective in getting that value proposition right.”
Mark Keenan, CEO of independent wireless advisory firm Real Wireless, adds: “While the combination of location-based services and retailer apps can allow the retailer and customer to have a positive interaction this is in its infancy”. It’s one of a number of scenarios suggested in the recent Real Wireless paper Wireless and the omni-channel time bomb, which discusses wireless technology as an enabler for bricks and mortar retail.
As for mobile payment, Hewett notes: “Until it’s ubiquitous you’ve still got to carry around your wallet. Convenience as a driver for adoption of [mobile transactions] isn’t powerful enough. It works well for Starbucks because it’s integrated with their loyalty programme, for example.”
He explains how beacons are being used for hyper-localisation within stores. “House of Fraser and Macy’s are often cited as examples of how they help you to navigate round the store. But retailers are still searching for that killer return on investment that justifies all the plumbing you need to do.”
And Wi-Fi, Keenan points out, isn’t all- conquering yet. Customers may not have Wi-Fi switched on on their device, “or they simply do not want to go through the registration process that is generally required”.
It’s also important to realise that a successful wireless strategy is not just about in-store experience but about bricks and mortar retailers integrating their experience with online – bridging channels in a seamless way.
As a spokesperson for Westfield Labs, a global digital lab focused on innovation in the retail ecosystem, puts it, “How, when and where people shop has changed with the ubiquity of the internet and mobile, and retailers need to shift how they think about the overall shopping experience to meet consumer expectations and demands.
“No matter who your target audience or what your product focus, both physical and digital need to be a part of every retailer’s strategy in order to be successful.”
“Multi-channel retailers have been performing quite strongly versus pure plays in the last year,” confirms Hewett. “And I think that’s where you’re seeing the fruit of joining the channels successfully – particularly around delivery fulfilment.”
He offers some examples: “For a high-end fashion retailer it might be about knowing you’re in the store or maybe responsive shelf- edge labelling or displays showing stuff to you that’s relevant.” Or maybe you’ve organised a click and collect. If your device tells the branch you’ve just walked in your order can be moved from the warehouse to the front of the shop before you request it.
Westfield Labs has already embraced the blending of physical and digital with several products, including Dine on Time, “a food delivery and pick-up experience, available via iPhone app and a website, which expands the services of our Westfield San Francisco Centre to digital users outside our physical building. Express Parking offers shoppers a seamless entry and exit to our car park through an RFID tag placed in the windscreen of their car. The Express Parking program allows shoppers to set up an account via the Westfield mobile app or website where payment details are saved.”
Nevertheless, we in the UK are still nowhere near the super-improved shopper experience outlined by both Capgemini and Real Wireless. As Zebra’s Thomson says: “You need a level of information about your customers.
We’ve seen results from various retailers and they say ‘we didn’t understand the customer well enough and therefore didn’t have enough of the right type of product in stock’.” This could eventually extend to stocking different mixes of products in different stores, but “based upon facts rather than feelings”.
And not just the shop floor but the back office – logistics, warehousing and transport – could all be integrated into the process, allowing a store manager to guarantee to a shopper that their preferred item will reach the shop before they leave, for example. Thomson notes: “That visibility of the whole supply chain adds a much enhanced element or value to the shopper journey and allows the staff to act much more as part of the sales process as opposed to the operational processes.”
In every area of retail, from parking and finding a shop in the mall to useful recommendations and personalised offers, wireless has a part to play in the end user experience. The end user can facilitate that by allowing contact with and access to information from his or her smartphone. And yes, retailers are trying out ways to engage – John Lewis with its innovation incubator scheme, free Wi-Fi at Bluewater shopping centre and many others, Argos with its ‘digital concept stores’, and iBeacon trials in Tesco are just a few examples.
Businesses may have misgivings about investment, customer response and confusing technology choices. Customers may worry about privacy or irritating messaging. However, they are both driving this. As Keenan
says: “Retailers have seen, like most of society, that the advent of high-speed mobile data services combined with smartphones has led to significant changes in customer behaviour, and therefore the shopping experience they offer must change too.”
As Wagner of Powa Technologies notes: “The current status quo, where retailers are surviving on scraps of customer engagement data regarding the effectiveness or impact of their multi-million pound marketing campaigns, is untenable. For organisations looking to survive in such an intensely competitive market, getting to grips with these new data sources is essential.”