It’s no surprise that sensors in devices such as smartphones, beacons, interactive dressing rooms, etc. are proliferating and becoming a normal part of the retail shopping experience. The next logical step for retailers is to understand touch points across the shopping journey, from browsing to consideration to purchase, and then use collected data to improve customer experience and omni-channel logistics.
So how can retailers use data they collect more effectively to delight shoppers and drive sales without impacting profitability? Here’s a simple example that includes sensors already in use today by many retailers. It shows how a sample shopper, Callie, interacts with sensors throughout her shopping experience in a satisfying manner that builds her relationship with a retailer and leads to increased sales.
Callie’s day with retail sensors
Callie receives a text from a friend that includes a photo of shoes from a social media site. Her friend tells her that the shoes pictured will go great with the outfit she’ll be wearing to an upcoming wedding, and suggests she check them out.
Searching in Store: Callie likes the look of the shoes and wonders if her favorite retailer has a pair in her size. She quickly finds a pair that should fit while browsing the retailer’s website. Then she reserves the shoes to try on in the store after 4 p.m. that day. The retailer is confident that the shoes are available in that size and that specific store since its inventory management system uses RFID sensors to accurately track merchandise.
Reserving: A store associate receives a request via an alert on her smartphone to put aside the specific shoe requested. She does so, and since the shoes are a new style, she receives a second alert to put another pair on display. An RFID-enabled pick-pack reserve app as well as an RFID display compliance app have assisted in this stage.
Visiting the Store: Callie arrives at the retailer, smartphone in hand. iBeacons integrated with loyalty apps sense her arrival. Since she is a loyalty customer, a customized offer is pushed to her phone based upon past preferences. She learns that her favorite jeans are being offered at 40 percent off, and her size is in stock. Again, RFID-enabled inventory management gives the retailer confidence to make this offer, knowing her size is available.
Callie makes a bee-line to the jeans shelf and tries on a pair in the fitting room. While there, she gets recommendations from a magic mirror for complementary clothing in her size that is in stock. She then selects some of that merchandise and tries on a new top as well as the shoes she came in for. Had the store not installed a magic mirror, while Callie was changing the associate could have received recommendations for her on a mobile device and made specific suggestions on complementary items, and brought them directly to Callie to try on.
Her shopping complete, Callie heads to the RFID-enabled point of sale counter to make her purchases. She stacks her three items on the pad, where the total is rung up immediately and RFID tags deactivated. Using RFID at POS makes processing the sale much faster (and the sales associate can chat with Callie while ringing up the sale without being distracted by barcode scans) — and automatically decrements inventory and connects Callie’s purchase to her browsing and buyer behavior.
Based upon Callie’s responses to store pickup, ibeacon, magic mirror and associate recommendations, as well as those items she tried on and then returned to inventory or purchased, the store has now captured data that will enable it to optimize offers to her in the future. By aggregating this information, it has also added to its knowledge base of what items shoppers purchase together and strengthened its recommendation engine and loyalty program. This enables retailers to predict which products, services and merchandise locations shoppers are most likely to respond to in the future. Over time, this additional information improves algorithms for all of its shoppers through sensor-based analytics and machine learning.
Many retailers mistakenly believe that this scenario would only be feasible at a major national or global chain. But leveraging sensor data is an equalizer for retailers of all sizes. Today it’s not about how many data analysts you may have, it’s about what you do with data, much of which you may already be collecting. In fact, it’s fair to say that with incremental efforts, most retailers could improve their operations simply by more beneficially using the data that already exists. First movers have already discovered this.
About the Author:
Su Doyle, RFID Industry Programs, Checkpoint Systems
Su has been advising end customers on RFID deployment for over seven years, working on in-store, supply chain, manufacturing and aftermarket projects in Retail, Industrial, Aerospace and Consumer Goods markets. She has authored RFID planning guides, business case metrics and deployment guides for Checkpoint Systems’ OATSystems division since 2008. She frequently comments on supply chain best practices on Twitter at @sudoyle