This is the second installment in our Technology Revolutionizing Retail series.
As retailers compete on delivering an exceptional customer experience using real-time customer data, it is no longer acceptable to merely gather customers demographic information via your loyalty program and send e-mails weeks after their purchasing patterns have been determined through data mining. Real time in-store tracking is becoming increasingly more commonplace, with leading retailers like Home Depot and American Eagle having trialled tracking services to optimize their offerings in real-time.
But how can retailers successfully implement in-store customer tracking? We examined the leading service providers to find out.
1. Promote in-store deals to combat showrooming
ShopBeacon, which uses Apple’s iBeacon platform, sends deals to opt-in customers’ mobile devices depending on where they are in the store. The app also makes recommendations based on past purchase history and sends customers discounts and loyalty rewards they can redeem in-store. Currently on trial in Macy’s, shopBeacon is poised to help retailers combat showrooming by directing customers to deals right around the corner.
- Emphasize in-store deals and sales to appeal to showroom customers that may deflect to an online competitor
- Think immediate gratification—deals should be disbursed according to the department the customer is browsing right now
- Be consistent: make sure that your website and social media accounts reflect the same in-store deals
2. Customized shopping experience in exchange for data
According to Infosys, 93% of customers would share personal data for more customized offers. Start-ups like Index are using the data collected from in-store tracking to personalize the shopping experience from the floor to check-out counter. When used in combination with customer data mined from loyalty programs, social media, and online purchase history, retailers will be able to target messages to the customers that are most likely to buy.
- Offer customers a reason to opt-in to the in-store tracking program, such as a better shopping experience
- Ensure that your backend system or your service provider’s infrastructure is strong enough to support segmented customer data prior to launch
- Compliment your data with observational shopper research to capture a complete picture of shopping behaviour
3. Address privacy issues early on
Inevitably, in-store tracking platforms will bring up concerns about customer privacy. When Nordstrom customers found out that the retailer was using Wi-Fi and customers’ smartphones to track general activity throughout the store, it sparked complaints about privacy since Nordstrom hadn’t notified customers prior to the launch of the in-store tracking trial. Retailers that exercise transparency will avoid common complaints about customer privacy.
- Signs should be placed at the store location telling customers about the tracking platform before the program has been implemented
- Always opt-in instead of opt-out, and clearly define what opting in means (downloading an app, registering for an account, etc)
Effective in-store tracking platforms do more than just track customers movement and data. They have features that make sense to customers and retailers alike and, most importantly, create win-win situations.