Broad Thinking. Narrowcasting.
By: Ken Goldberg
Last week, I experienced an odd coincidence. In my travels, I stopped late in the afternoon at a Starbucks for a pick-me-up and a few minutes of WiFi. Even on a vacation, my dual addictions to caffeine and email seldom take time off. Once inside Starbuck’s I decided to try one of their new Refresher drinks. On the advice of a brand new barista, I tried the Cool Lime. I sat down to grab my email and make a couple of calls and sipped on my drink (I liked it… kudos, Starbucks). As my email downloaded, the item at the top of the stack was, lo and behold, from Starbucks. Not all that unusual, considering their typical email cadence. What made me take notice was the fact that the email was actually a coupon for a free Refresher, good on that coming Friday. A happy coincidence, and I made a note to stop in on Friday. The coincidental timing begs a more important question: How far are we from the day when relevant, customized offers are delivered in real time to consumers? The answer is most definitely not far at all.
Catalogers have known for decades that offers optimized for differentiated groups of consumers deliver superior results. In fact, the catalog you receive may be different than the one your next-door neighbor gets. Catalogers have learned how to use inside and outside covers, bind-ins, different copy and personalization to boost their results. More recently, online marketers have learned to use navigation data, cookies and in some cases, purchase history to present offers that have a greater-than-average chance of getting clicked through. Offers delivered in real time to consumers at a retail location are the next step in the evolution of offer optimization. Mobile, digital signage and big data analytics will combine to change the way that promotions are executed at retail. Taking the best of catalog and online methods to the bricks and mortar showrooms may in fact spark a retail renaissance. Three key problems are going to be solved to make this happen.
Identifying the Consumer
Before a personalized and relevant offer can be made to a consumer at retail, the merchant has to have an idea of who they are and where they are. The notion that every retailer will have a mobile app that consumers will launch upon entering the store is convenient, but not practical. Instead, what we are likely to see are approaches that use variations of geo-fencing. In one case, you may have opted in to a program with a given retailer that wakes an app when you enter their store and virtually checks you in. This requires an always-on app, which is not currently supported on the popular iPhone, yet is on Android devices. In another case, technology inside the store may identify your phone (again if you have opted in) and reach out reach out to you via Bluetooth or other technology. In either case, or in other approaches s that may appear, once you have been identified and located, the magic can begin.
Generating the Offer
Once a customer is identified to the merchant, technology must step in and replace the personal knowledge of the customer that Mom and Pop once stored in their heads. Purchase data from all channels, loyalty program preferences, demographic overlays and advanced profiling techniques must come together to fuel what amounts to an offer engine. That engine must select the best fit for any given customer in near real time and deliver it to the mobile device of the customer. The art of the offer will certainly take many forms, but may include a time box for redemption, provide links for more information, enable the customer to page a salesperson in the store, or even offer up a virtual sales assistant. Once an offer is made, its redemption or non-redemption informs the offer engine and helps optimize the next offer, both for that customer and others who fit their profile or persona.
Integration and Smarter Signage
Digital signage will likely take on two roles in the conversation with customers. Since it is by its nature a one-to-many vehicle, the digital signs within a store are likely to feature general promotions, and will provide methods (QR codes, automated content recognition, Snap Tags, and NFC to name a few) to allow the customers to learn more, and receive discounts or coupons electronically. Based upon what is known about the customers identified in the store, these generalized offers can be tweaked to provide the greatest level of relevance to the current audience, harkening back to the idea of customized catalog covers. In this role, the digital sign is an ignition point, reaching out to many and allowing them to use their second screen to engage. In its second role, the digital sign may receive a signal that a customer has received a specific offer, and then display relevant content on the big screen. This second role as a visual reinforcement to a single offer can be “magic” to one customer, without being unnatural to others who did not receive the same offer. For digital signage to take on the dual roles described above, software will have to get smarter and more flexible and be integrated with the systems supporting offer optimization. The foundation for that capability exists in some places today. The ability to become a leverage point for generalized and personalized offers will only make digital signage more relevant and valuable.
Big data and analytics are moving rapidly to reshape how merchants interact with their customers. As techniques evolve and lessons are learned, retail is likely to undergo a transformation that brings the customer experience into a new dimension. As offers become more personalized and relevant, digital signage can increase its value to the retailer by getting smarter itself. That would be pretty refreshing, wouldn’t it?