You’ve heard it all before – the rise of online retailing has seen retailers scramble to develop an online presence, build their eCommerce capability and engage with their customers online. With so much investment in the online space, it would seem that some retailers have almost forgotten that well over 90% of transactions still happen in store.
So why not take the benefits of online and apply them in store? What many retailers don’t realise is that they’re sitting on a goldmine of unleveraged data in store. By translating data into something meaningful, retailers can use it to their advantage to drive traffic, target customers and increase sales.
The transfer of this data into adaptive content and personalised messaging enables marketers to hone in on the right person, at the right time and at the right place (and even in the right mood). This is the key to a successful Phygital strategy – the integration of digital within the physical environment – and is the new wave of IT investment for retailers across the world.
The Evolution Of Digital In Retail
With digital innovation bringing new ways to engage with customers, retailers whom are slow to embrace this new era of technology are the first to struggle in making valuable connections.
The first major digital marketing shift 10-15 years ago saw the eCommerce boom; quickly followed by the rise and rise of social media. The ability to track customers online and personalise messages changed what good customer service looked like in retail. “The online shift saw marketers move from broad based communications to targeted, loyalty based communications”, says Kuba Tymula of Sydney based data company Harris Partners. This enormous change meant that data was more important than ever. The ability to capture information and then use it to create a custom experience for each user meant better sales conversions.
Now however, more and more retailers are starting to apply these same principles to the in-store environment. The next evolution of marketing is the ability to seamlessly merge the online and offline worlds. Phygital, as this movement has become known, has fast become the way forward for retailers.
Leading retailers are embracing omni-channel marketing and leveraging insights obtained from sensors, facial recognition cameras and Wi-Fi sniffers to offer real-time, personalised communications.
Relevant and insightful data is the key to effective communications and educated marketing decisions. A screen in a department store playing extreme sports content to an elderly customer is unlikely to shape their in-store purchasing decisions . Having access to the right data is the first step towards successful in-store advertising campaigns that target the right demographic.
The availability of comprehensive data is common knowledge. Retailers can measure dwell time, gender, demographics, number of views on screen, products browsed and much much more. So if retailers do know this, why are they not actively seeking it?, Shying away from such valuable insights due to a pre-conceived fear that the data is too complicated to obtain is an unfortunate reality for many.It was 7-Eleven’s adoption of this targeted data and intelligence which helped spur a 400% uplift in sales across various product lines.
Obtaining the Data
With such rapid advancements in technology, obtaining this data is much more simplistic than many are led to believe. Analysing facial cues for mood detection is just the beginning of it. In-store Wi-Fi to digitally track shoppers physical habits is now common place. According to a Telstra Report How mobility is changing the rhythm of Australian retail, 51% of people using mobile devices in-store found that it influenced their purchasing decision. Both the provision and utilisation of in-store Wi-Fi is a great starting point in influencing consumer behaviour.
This together with the combination of sensors, which detect when a particular shopper is either nearby or in-store – allows for targeted customer promotions. Retailers such as Kenneth Cole and Timberland are just a few examples of retailers who are using sensors to deliver exclusive content straight to their customers smartphones; as emphasised in Hilmi Ozguc’s piece, Sensing the future of retail.
Beacons are also hugely important to retailers and are a low cost way to communicate with smartphone apps through a bluetooth signal. These have been implemented by US retailers Macy’s and Target.
See a short Macy’s beacon video below
Analysing The Data
The creation of an analytics portal is the most critical element when it comes to unearthing data. It is through this portal that the data is translated and made available for retailers to access the analytics and create adaptive real time content. Without this 7-Eleven would not have had the ability to create targeted content in real time to display a meat pie promotion to a 30 year old male customer who is in the store at lunch, or tailor the advertisement further to a slurpee advertisements on hot summer days. According to Harris Partners Kuba Tymula, there must be “a comprehensive dynamic data infrastructure that links all communications channels and sales metrics.” “Reconcile point of sale data with live communications metrics, and you get yourself a real live heartbeat of your business.”
Once this infrastructure is in place and a 360 degree view of a customer is obtained, retailers can then create real time content.This content provides retailers with the marketing intelligence they need to tailor opportunities via new offers, promotions and products.
With 94% of retail sales still happening in-store according to emarketer report “Retail trade will top 22 trillion this year”, retailers need to understand the power of adaptive content which can deliver the right message, to the right person, at the right time, in the right mood. The goldmine of data is waiting – it’s just a matter of embracing the retail transformation that a phygital strategy can bring in-store.