Comment: One-to-one retailing - the way forward

If technology has given us anything, it’s a world in­creasingly focused on the power of one. From news to music to advertisements to credit card rewards, companies of all kinds are using an unprecedented amount of consumer data to craft personalised recommendations and experiences.

Until now, these have predominantly existed online. Although providing a seamless, individualised experience across channels is one of the industry’s biggest opportunities, that promise often stops at the store’s entrance.

This should not be the case as similar to the advent of cookies and JavaScript in the early 2000s, which fuelled an explosion of innovation in personalised digital marketing, new technology now allows retailers to bring economically viable one-to-one retailing experiences to the bricks-and-mortar world so that customers receive the same rich brand storytelling and social media integration found online.

Providing these types of personalised interactions will create a tremendous competitive advantage by, for example, offering exclusive merchandise and promo­tions, which will help stave off showrooming in general merchandise categories and improve customer loyalty for differentiated retailers.

However, many retailers are rushing to implement technology that only their sales staff can use, such as mobile POS, working under the assumption that freeing them up will allow them to cross-sell and better assist customers. But mobile POS tech­nology has limited ability to influence conversion rate and basket size. Greater benefit can be gained by implementing technology to enable one-to-one engagement with the customer.

Kurt Salmon research reveals that within the fashion sector, even the most basic level engagement made customers nine times more likely to try something on. And when they did, they bought the item 52% of the time. Imagine what a truly integrated, personalised, technology-enabled experience could do - and one that doesn’t rely on exploding staffing ratios.

Until now, one-to-one retailing has required one sales person for every customer to facilitate close interaction and an understanding of their individual needs to help them navigate the brands and offerings. This limited the practicality of approach to big-ticket items like cars and high-end jewellery and fashion. But several new technolo­gies are enabling retailers to rapidly transform the physical retail experience with invest­ment economics that can make sense across even the largest store estate.

Combine geofencing with a loyalty app or smart card and you’ve got the ingredients for a truly personalised interaction with customers. Not only can offers be pushed when the customer is near or entering the store, but this idea can extend to any given display or fitting room. By knowing who is in their store, retail­ers can use individual purchase history or customer profiles to dynamically change recommendations, visual merchandising presentations or promotions.

By additionally augmenting this with now more affordable RFID technology, which shows exactly which products a customer is handling or trying on at any given moment, as well as providing SKU information on what is in stock, retailers have the power to make tremendous shopping rec­ommendations and offers.

The final requirement to creating a physical retail en­vironment as richly personalised as its online counter­part is deploying displays capable of dynamic content and interaction.

As the cost of display technology is dropping rapidly, enabled by an explosion of innovation such as touch foils and tablets, and reliable low-power communication like Bluetooth 4.0 and RFID, retailers can now create interactive displays quickly and cheaply.

More importantly, personalised store experiences enable significant sales and margin improvements, creating attractive returns on the investments required to deliver them.

While digital retailers can guarantee 100% of shoppers see alternatives and companion products to “complete the look”, today’s physical retailing experi­ence does a woeful job.

From a study Kurt Salmon carried out we discovered only 8% to 15% of shoppers in the stores surveyed were upsold - dramatically lower than what the management expected. Yet when the retailers could find the staffing and time to do it, 75% of customers who were offered additional items con­verted, and their average basket size increased by 25%.

Imagine the benefit of upselling to more than that 8% to 15%. Then imagine tailoring those offers dynamically based on what that customer has previ­ously purchased combined with what they have been handling.

Providing seam­less, endless-aisle recommendations to customers on the floor, or in the fitting room, should be part of every retailer’s in-store strategy.

Sue Butler will be writing regularly for Essential Retail in the months ahead. Look out for her comment pieces on how retailers are utilising in-store technology and the impact innovative new systems are having on the entire industry.