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Convenience technologies yield data that retail can use to personalise the shopping experience
THE PACE of technology innovation in the retail sector – with shopping centres at its heart – is little short of giddy. The speed with which developments evolve from the lab to pilot to estate-wide roll out is also accelerating.
This year alone we’ve seen a raft of new technologies spanning the whole spectrum from the blue-sky thinking of augmented-reality advertising to the more prosaic queue-busting scan-and-go payment systems Sainsbury’s is rolling out; but the overriding theme that connects them all is convenience and personalisation.
Some, like eBay’s EEG-based ‘mind tracking’ headband which aims to clarify buying decisions by de-coding our unconscious desires, are cutting-edge and experimental. Others, such as FingoPay, a biometric POS payment system that uses the unique blood vessel pattern in your finger for verification, are material advances to tech that has been around for a while that improve it such that it becomes viable for retailers to adopt it in their day-to-day operations.
The impact of these innovations can be, it is no exaggeration to say, transformational. How? We all know that consumers shop at malls not, as in the past, because they have to, but because they choose to. So, the equation today is how to pivot away from a business model built around maximum spend toward making visiting a mall a pleasurable experience that shoppers actively seek out. In other words: re-invent the mall into spaces where people want to spend their time because it’s fun/relaxing/stimulating/refreshing – preferably all four. Get that right and the revenue will follow.
Right from the off, the very process of providing these services yields a trove of invaluable data, both anonymous and personal, that retailers and malls can use to tailor their offering to meet the needs and expectations of shoppers. In doing so, malls develop a two-way relationship that enables them to go beyond merely providing a space in which to view and purchase products to create an ‘experience’.
Of particular relevance is Free WiFi, the use of beefed-up wireless networks in malls to deliver a personalised service. Once a shopper has registered with their details, the system tracks visit frequency, which stores they visit and for how long to build up a picture of their behaviour and preferences in order to provide a customised experience pushing relevant offers and information to their smartphone.
And for once this trend is not geek-driven, so to speak, and even terming experiential retail a ‘trend’ is an injustice because all the evidence points to the opposite. The driving force is a growing recognition not only that consumers want – indeed actively seek out – shopping that goes far above and beyond the traditional transactional relationship, but that it makes sound business sense.
Personalisation is now credited with driving sales and profits growth. The latest research from Boston Consulting Group finds that brands offering customised experiences are growing their sales by 6% to 10% – double or triple the rate of brands that do not use personalisation.
Big winners include Shop Direct retail which earlier this month reported record sales and profit for the fifth straight year. Owner of Littlewoods and Very, the group said its strong performance was mostly on the back of working hard at providing a personalised experience through building closer relationships with its customers.
Other retailers reaping significant dividends include John Lewis, Waitrose, Next, Fat Face, and Jack Wills, according to a recent RetailWeek article. Next, which has only been offering a personalised service for the past few months, has already seen a 1% jump in sales.
While shopping malls are adopting the latest advertising and wayfinding technologies they are lagging behind their tenants when it comes to engagement. Very few use personalisation to engage with their customers and barely more than a half-dozen – all in the United States – employ Free WiFI or similar real-time data collection systems. With the evidence underscoring the commercial case for personalisation reaching a tipping point, it’s time for mall owners and operators on both sides of the Atlantic to get off the fence and begin a genuine conversation with their shoppers.