The techniques that allowed e-commerce to kill off the high-street CD-DVD chains are now helping bricks-and-mortar stores stay relevant. The challenge is to avoid freaking out the customers.
Data-mining is honing shop layout and promotions. Companies such as RetailNext, Euclid and ShopperTrak chart your progress through shops via your smartphone. More creepily, companies such as FaceFirst can track you using facial recognition. Did you make a beeline for the kale chips? How long did you pause by the raw honey display? Providing “free” wifi allows retailers to snoop on your browsing: did you just price check the Bugaboo on PriceNinja? Applied Predictive Technologies can monitor transactions across a retail chain, identify equivalent stores for real-time A/B testing of promotions and separate meaningful results from noise (such as the effect of local weather).
While satnav only gets us to the door; new technology – such as Apple’s iBeacons – can guide customers inside. Google’s Project Tango uses smartphone technology to map interiors: one day soon, Google Maps will guide users straight to the quinoa in Waitrose. Products will be easier to find and so will customers. US supermarkets use InMarket’s Mobile to Mortar to remind shoppers of items on their shopping lists and to offer rewards for browsing specific displays. Google Now can alert you if you pass a store selling a product you researched online.
Physical shopping is becoming more like online browsing. Burberry and other fashion houses are trialling dynamic displays. RFID tags on clothing enable displays (in changing rooms or built into shop-floor mirrors) to sense the items a customer has chosen and show related content: the item as seen on a catwalk model, other colours or must-have accessories.
Online shoppers, jaded by next-day deliveries, now hanker for instant gratification. Shutl (which was snapped up by eBay) delivers from London stores within 90 minutes of purchase. Google Express and AmazonFresh offer same-day deliveries from local stores in selected US cities (at least until Amazon’s fleet of drones becomes reality).
These developments are not without risks. Following media-fed public concerns, Titan switched off 500 beacons deployed in payphones around Manhattan while Renew London tracked over 500,000 smartphone users passing its rubbish bins before the information commissioner intervened, arguably pushing the company into administration.
Retailers must ensure that convenience and delight outweigh customers’ “Big Brother” concerns. They will need to provide timely and clear legal advice to customers to secure informed consent. They will need to partner with communication, software, and data specialists and, when doing so, ensure far-sighted contractual protections against unprecedented exposure to cybersecurity, data protection and reputational risks.
Matt Hervey is with the tech team at Wragge Lawrence Graham & Co
