Mobility Set to Transform Retail Industry
A look at how some companies are using mobile technology to track customers and keep them coming back.
April 22 , 2013
A bevy of tech startups are helping retailers use mobile devices to change the way offline stores interact with customers—and make them a lot smarter, too. "Mobility is set to trigger a business transformation across retail,” Leslie Hand, research director for IDC Retail Insights, wrote in a recent report.
Here’s a look at three such companies:
Behavioral Modification for Sales Associates
Your in-store retail technology won’t do much good if sales associates don’t use it.
That, ultimately, is the conundrum David Hegarty, founder of two-year-old San Francisco-based, Signature Labsis trying to address.
Some background: Most high-end retail stores make the lion’s share of revenues from repeat customers, according to Hegarty. Excellent, personalized customer service, of course, is essential to inspiring more-frequent visits, especially to fancier enterprises.
But these days, fewer retail sales associates are making a career out of the job and, as a result, aren’t developing the long-term relationships typical of days of yore. And fewer of them can make effective use of the “black book”, a list of clients and preferences with which they can let customers know when new items come into the store.
The perfect solution, at first, seemed to be to have an app for customers, and another for retailers. But Hegarty soon discovered that, while consumers were eager to adopt the technology, sales associates tended to be less enthusiastic. The issue, then, wasn’t as much about the technology as what Hegarty calls “a behavioral change”. With that in mind, he decided to just focus on the sales associate piece of the puzzle, introducing a simple retail customer relationship management system for high-end retailers aimed at quickly building trust between client and seller.
First step is educating sales associates about just why the technology is needed in the first place—that having frequently returning customers boosts revenues considerably. Signature’s head of sales associate on boarding does in-person training, in addition to providing computer tutorials, and associates who hit their targets receive one of various levels of certification.
Then, there’s the actual application, which focuses on a few, key actions. For example, Signature’s system analyzes sales receipts each day to identify high-potential customers. Then, sales associates receive a notification and send written thank-you notes to those people. Thirty to 60 days later, they’re reminded to let customers know about appropriate new merchandise. Store managers also have a dashboard to keep track of it all. “We make it really easy for the associate to be thoughtful,” says Hegarty.
Mobile Payment Systems as Data Goldmines
Mountain View, Cal.-based Proximiant is all about turning the ability for customers to make in-store mobile payments into a way for retailers to build stronger relationships with them—and get access to a potential goldmine of data.
Here’s how the service, which was recently introduced, works: Retail customers with New Field Communication (NFC)-enabled devices can receive a receipt at the check-out counter when they tap their phones on a small digital receiver right at the point of sale. IPhones aren’t NFC-enabled, so you use your phone to scan a QR code; that appears on the receiver and is captured as a digital receipt.
The big deal for retailers is they can tell whether a customer has already bought from their store previously and then start sending them promotions and the like. “The moment customers check out and get their digital receipt on their phone, we start building a relationship with them,” says Dinesh C., vice president of business development and marketing.
More important is what happens once the data is collected. (Founder Fang Cheng, who also started a touchscreen display company called Touchco, which was sold to Amazon in 2010, has a Ph.D. in bioinformatics from New York University). Retailers can customize data to allow them to see anything from whether a Twitter campaign turned into real sales to the type of products that are faring well. Bigger retailers can choose to capture some data and integrate it into their existing analytics systems.
Making Offline Stores as Smart as Their Online Counterparts
While the Amazons of the world have the ability to gather and analyze all manner of customer data and add a heavy dose of personalization, physical retail stores have been lagging way behind. Mostly, the only data they’ve been able to gather has been the number of people who enter the store and who then buy something, otherwise known as the conversion rate.
That’s the dilemma the founders of New York-based Nomi decided to address. “If customers go to a store and walk out empty handed, no one even knows they were there”, says Wesley Barrow, chief revenue officer. “How could we make shopping in physical stores as measurable and efficient as shopping on Amazon?”
The first thought was to use videos. But, according to Barrow, they tended not to be useful, because you couldn’t usually identify individuals and, as a result, “If I were to walk into a store, leave and come back, there would be no way to know whether it’s the same person,” says Barrow.
The answer: Use smart phones and tablets. By tracking the unique WiFi signal on each customer’s device, Nomi’s software system, usually installed on the store’s router, could track such things as how long individuals stayed in a shop or whether they returned, and then store the information in the cloud for further analysis.
The bigger potential, however, may be in a capability the company is testing now. Customers who opt in and allow their identities to be known, would be eligible for loyalty rewards based on the number of visits to the store. What’s more, if, say, you have a history of buying clothing in certain colors online or offline, that information automatically could come up on a salesclerk’s smartphone or tablet. “There are all kinds of things you can do once you know someone has been inside the store,” says Barrow.
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