Using IoT to Hone in on Micro-Moments Convert Window Shoppers into Buyers Issue: February 2018
IoT has been around for many years. First launched for industrial and commercial use most commonly known as IIoT (industrial internet of things). These devices included RFID (radio frequency identification), NFC (near field communication), Wi-Fi, infrared motion detection devices to track movement / foot steps with the intention to maximize operational efficiencies and reduce costs.
Historically, IoT has been disconnected where the data sits in the back office to optimize a supply chain, manage a fleet and warehousing operations. Now, with the consumerization of wearables and smartphone devices on mass, the back of the house is able to speak to the front of the house in real time. It’s something that technologist have been speaking about for years. Up to recently, IoT for retail has been primarily used for counting foot traffic, assisting at the point of sale (POS) and payments. Real time communication is changing the retail landscape for department stores (big box), pharmacy/drug stores and grocery. It’s not only maximizing operational efficiencies, it’s also personalizes the customer's shopping experience – regardless if it’s through mobile commerce or at a brick-and-mortar location.
THE INTERNET OF THINGS BRIDGES OFF & ONLINE EXPERIENCES Retailers can optimize each interaction and drive immediate results. You get a full view into your customer! How they physically navigate the aisles, which displays are working best, how they interact with their smartphone within your store and they’re browsing pattern and history.
Year over year, as human attention spans shorten, the window to capture a consumer’s attention becomes more difficult. IoT enables you to hone in on micro-moments and increases your chances to convert a window shopper into a buyer.
How Retail Becons Work?
All smartphones have unique IDs. On an iOS device it’s called the Advertising Identifier (IDFA) and on an Android device it’s called the Advertising ID provided by Google Play services. These unique IDs, tracks a person’s digital activities (websites, social media, etc) and their physical locations (where they live, work, where they shop, etc). In a public space, Wi-Fi bridges the physical and digital world together. In store or at a mall, free Wi-Fi services are provided. Once the customer opts into the network, the beacons start firing – the two technologies working together are able to track the customer's location (via Wi-Fi) and their proximity (via beacons).
Consumer Experience As soon as a customer enters the door, their smartphone (with GPS location tracking and blue tooth enabled) would notify your staff that a customer is on premise. Depending on the number of beacons in the store, your Associates would be able to approximate between two to five metres of where they are located. In a perfect scenario, your connected customer would have your store’s mobile app. In urban areas, of developed Asia-Pacific countries, this is the norm. Customers expect a loyalty program built right into their mobile app – ecommerce being the driver for this adoption. Europe and North America lag behind in the mobile loyalty space, however these consumers are no strangers to loyalty programs! The top drivers loyalty program enrolment include: • Getting access to product discounts • Rebates/cash back • Free products • Free shipping
If you can provide these benefits, switching your customers over to a mobile loyalty app is easy, especially with younger consumers. For items that need to be replenished on a regular basis like, prescriptions, food and gas, a mobile loyalty app is a no brainer. Once a loyal customer enters your store, you can utilize beacons for proximity marketing campaigns – trigger ads based on your customer’s micro-location.
Campaign Scenario BACK-TO-SCHOOL Your marketing and merchandising team are working on a back-to-school promotion. You want to incent your customers to increase their shopping basket size.
“When you spend X amount, with a specific brand, you’ll receive a gift card for your next purchase.” Based on research from Deloitte, in the U.S., back to school is the second biggest shopping season. Mass merchants and discount retailers lead the pack – grabbing the attention of households with school age children in Kindergarten to Grade 12. The average spend in 2017 was $501 per school age child with the bulk of the purchases being made in store versus online. All the planning is done! Your displays are ready and you’ve started running ads. Now watch the families roll on in, for the deals!
Based on where the customer is located in the store, a beacon can trigger a back-to-school ad – by the time they see the display, the call-to-action (CTA) is fresh in their mind, along with in store signage. To re-enforce a light touch, a push notification is sent to the closest Sales Associate. They can engage the customer and assist with the sales process. Once the transaction is completed, the customer can see their purchase history and track their earned loyalty points.
The convergence between hardware and software is vital in staying competitive. IoT enables you to kick off, real time proximity marketing campaigns – true insights into all the attributions (assists) to get your customer to the cash register. But let’s say your customer didn’t end up converting on the spot. You can use this data to retarget them through email, notifications on their app and through social media to win them back.
Campaign Scenario NEW DAD For anyone who’s been a parent, (especially for your first one) you only want the best for baby! You do all the research, buy all safest products and have your home sterilized from top to bottom. Then the baby comes and everything you thought you knew now goes into the dirty diaper basket. You’re sleep deprived, hungry, thirsty, covered in puke, living in a house full of baby stuff and you can’t seem to find anything. On top of that, you’ve also running out of diapers!
Who ends up running out in the middle of the night? Dad! He goes to the nearest store to buy all the things he thinks the baby needs. For a new parent, would’t it be great if the store could give you informative and actionable information? For instance, how many diapers a new born uses and how many units you need to last you through a week? With beacons and digital signage it can. Once the beacon picks up the location of where the dad is in the store (let’s say the diaper aisle) you could personalize the messaging on the digital display. Show him a coupon for newborn products or even display items that he regularly purchases but has forgotten about since his newborn entered his life (protein bars, vitamins, deodorant etc.).
Based on a report written by Aruba Networks, a Hewlett Packard Enterprise Company, The Internet of Things Today and Tomorrow, 8 out of 10 retailers say that IoT has improved overall customer experience and 88% of retailers say that it has boosted business efficiency.
Operational BeneďŹ ts On the flip side, the use of IoT in the supply chain, building and equipment maintenance improves process efficiencies and it reduces operational costs – preemptively automating checks that would otherwise need to be done manually.
For a grocery retailer, food safety is top of mind. Refrigeration units and compressors are huge consumers of energy. Based on research from Baltic Trail Facilities Management LLC, 56% of electricity costs go towards refrigeration and 23% towards lighting. If a machine goes down, you can see your margins shrinking rapidly! Temperature sensitive products that require refrigeration, freezing or a precise temperature controls benefit with smart equipment sensors that manage these inputs.
The smart sensors provide data that can be used for predictive maintenance. This minimizes equipment downtimes, prolongs the life of the equipment and decreases food shrinkage due to improper storage.
To reduce inventory shrink on perishable items, tagging RFID tags on individual items, with best before dates, can notify you on when it's time to start discounting an item. It will also alert you on when you should replenish items to ensure that the shelves are always fully stocked. With the use of beacons, you’ll have visibility into which aisles and products your customers are shopping in so you can optimize your displays. By using IoT at the shelf level, smart shelves will notify you when your stocks are running low. Instead of relying on man power, once the shelves hit a minimum stock level, it will automatically reorder the inventory. If the inventory is on premise, in the warehouse, a push notification will be sent to the merchandising staff to restock the shelves. Ultimately, improving profitability – maximizing the shelf space and ensuring that your high moving products are always available.
The Internet of Things, brings disparate data together and enables actions to be taken. On the consumer facing side, it truly provides a more personalized and authentic shopping experience. It can turn a regular transaction into high value touches – keeping your most valuable customers loyal to your brand. On the operation side, IoT has a vast array of uses for cost reductions – instead of using data for post mortem analysis, you can use data to proactively transform outcomes in real time. For instance, you have perishable items in a truck and it's heading for a particular store. However you staff was just notified that the refrigeration unit, to house the inventory is under repairs. In real time, you could re-route the inventory to another store that has the refrigeration capacity – tragedy adverted!
IoT is the Swiss Army Knife of tools. It’s a proven technology and intersects with almost every single area in retail from the back office to the store level. Beacons have become the Little Engine that Could – the key player that makes your team perform better and drives results.
TheAppLabb is a product innovation and development firm. Our goal to improve human experiences through the use of innovative technologies and drive business results for our clients. Over 11 years of experience with 360+ global clients and over 500+ apps built, we offer strategic consulting, UX and UI design, custom software development and out-of-the-box industry solutions for several vertical markets. Let us turn your ideas into reality. URL: http://www.theapplabb.com Email: info@theapplabb.com PH: (416) 745 - 3164 PH: (464) 688 - 2786
Version: February 2018 - TheAppLabb ©
References:
Valassis Digital- The Problem With... - Two to Five Metres
https://www.valassisdigital.com/us/blog/problem-using-beacons-track-store-shopper-movement/
Neilsen - Get with the umProgram - Asia Pacific
http://www.nielsen.com/content/dam/nielsenglobal/eu/docs/pdf/nielsen-global-retail-loyalty-sentiment-report-Italy.pdf
Deloitte - 2017 Back -to-School Survey
https://www2.deloitte.com/us/en/pages/consumer-business/articles/back-to-school-survey.html
Aruba Networks - The Internet of Things: Today and Tommorrow
http://www.arubanetworks.com/assets/eo/HPE_Aruba_IoT_Research_Report.pdf
Baltic Trail Facilities Management LLC - Managing Refridgeration Costs... - Energy Consumption http://www.baltictrail.com/news/energy-efficiency/managing-refrigeration-costs-key-supermarket-managers/
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