The technology making retail personal

By Daniel Domberger, Partner at Livingstone.

This article is brought to you by Retail Technology Review: The technology making retail personal.

The rise of e-commerce is putting unprecedented pressure on bricks-and-mortar retailers to up their game. Some traditional players on the UK high street, including BHS and M&S, have clearly felt this more than others. But despite the collapse of some high-profile brands, the news is not all bleak for the sector. When bricks-and-mortar is blended effectively with online, and when digital tools and channels are deployed effectively instore, the impact on the retail experience can be transformational.

True data insights – a personal approach

Today's retailers need to deliver a personalised and relevant shopping experience to each and every customer, from the marketing they receive on their smartphones to the interaction the sales staff in-store. This level of personalisation demands access to vast amounts of consumer data. It is no surprise, then, that technology is playing a key role in transforming the way in which retailers engage with their customers.

Well-established physical retailers are often tied to inflexible legacy systems, so it has historically been difficult for them to deploy the technology they need to capture and analyse key customer data. In response to this, we are increasingly seeing niche technology providers enter the market and bridge this gap with innovative solutions based on a 'light touch' technology layer that can integrate with existing systems rather than replacing them.

But this creates the need for the CTO to manage a wide range of specific technologies and ensure they all knit together. As the process of technology evolution continues, retailers are likely to gravitate towards more comprehensive and multi-functional platforms enabling them to deliver effective personalisation across all channels. Technology providers can now offer retailers a comprehensive suite of applications that use Big Data to provide a central view of the customer lifecycle across multiple channels, devices and other touch points. A good example is IBM Watson, which allows retailers to extract the data that helps them to build a comprehensive profile of who their customers are, how they shop, and what keeps them coming back for more.

However, in order to really make progress, retailers need to ensure that data silos across individual channels are broken down, as well as the usual organisational hurdles and lack of technology understanding and engagement that so often plague large organisations.

Tracking the journey from online to instore

Mastering the omni-channel shopping experience is considered the 'Holy Grail' for retailers, and a key driver of this trend worldwide is mobile. By 2017, mobile transactions are anticipated to exceed $100bn in the US, and to generate over 40% of digital retail sales in the UK by 2019. In a bid to attract the smartphone audience, many retailers are now building perks into their apps such as in-store discounts and promotional offers which simultaneously capture valuable customer data revealing shopper preferences and behaviours.

For example, location data collected when a customer connects with a brand via mobile when visiting a physical store can offer valuable insights. Brands can now track their customers' shopping journey as they enter, browse and engage with the stock, even down to the level of an individual sales rail. With access to such data, the retailer is able to ascertain the likes and dislikes of a customer in as much detail as a personal shopper spending hours with a customer in-person is able to glean.

However, omni-channel sales can actually make tracking a purchase from start to finish more difficult for retailers, particularly when consumers use a combination of channels to conduct a single transaction.

For example, a Topshop customer looking for a new dress might view a few options on the retailer's mobile app, head to the brand's Oxford Street store to try one on, and then consult a shop assistant for information on stock availability whilst there. This same shopper may then go home and crowdsource opinion from friends on that same garment over social media, turning a solitary shopping experience into a social one. Finally, it may actually be her parent who checks out and pays for it on the retailer's website. For a retailer trying to pinpoint the source of the buying decision and understand the value of the transaction, that's an incredibly tangled trail to follow.

Recognising the need to track a customer's interaction with a brand through online to in-store, Carpetright (Europe's biggest flooring retailer) recently deployed specific attribution technology to gain better oversight of how its explore and purchase flooring, online and in-store. As part of that process, Carpetright created a dedicated e-commerce channel to transform its business.

By collaborating with Livingstone client Summit, the online retailing specialist acquired by TCC Global this year, Carpetright was able to harness key data that allows the retailer to personalise its engagement with each customer. By creating a series of interaction points on its website, Carpetright was able to track its customers' progress from website to store, monitoring engagement including input into the local store locator function, requests for free samples, and requests for floor measuring.

Armed with this information, the retailer was able to match online customer data with sales data collected in-store, and thus build a comprehensive profile of its customers and how they shop. The insights the retailer was able to glean as a result included the fact that 25% of those who interact with Carpetright's website go on to buy in-store, compared to 18% who browse Carpetright products on their phone or tablet.

Harnessing technology to empower the shop floor

As well as offering consumers increased product choice and power over where and when they shop, technology has transformed the way in which retailers communicate with their customers – and vice versa. By using technology to tap into historical behavioural data, large 'faceless' retailers are now able to connect with customers in a way that feels far more personal.

However, there are risks and downsides as well. Smartphones have transformed the way that consumers shop, and made them much more informed and empowered. Consumers are able to check stock and compare prices on their smartphone whilst in-store, removing the need to interact with sales staff. Limited engagement with the retailer increases the risk of the consumer leaving the store empty handed and impacts brand loyalty.

In response, retailers need to equip their staff with the tools that they need to drive engagement and offer extra perks that go beyond what they can access for themselves online. Earlier this year, high street pharmacy giant Boots armed its teams with iPad apps that allow them to check the store's product information, browse ratings and reviews, and look up inventory in store and online in real-time.

Boots now intends to roll out technology that will alert staff when a customer signed up to its loyalty scheme walks through the door, and also provide comprehensive details of that shopper's likes, dislikes and shopping habits. The Boots app also displays the status and location of a parcel that a customer has ordered for click & collect, allowing staff to hand it over immediately. This way, the customer doesn't have to remember order numbers or bring any documentation, limiting the friction at the point of sale and making the whole process more convenient.

Linking mobile apps with loyalty schemes can also provide retailers with valuable data insights that can help increase footfall and boost customer loyalty. However, privacy issues will always be there in the background, and retailers need to strike the right balance between using this personal information for commercial insights and protecting customer data.

Retail platforms are no longer siloed. It is clear that more and more consumers are now adopting a multi-channel approach when browsing new product lines and in-store stock and when making purchasing decisions. The personalisation journey has only just begun, and the more that retailers (quite rightly) invest in meeting "anytime, anywhere, anyhow" customer needs, the more customers will demand and expect from their retailers.