Personalized marketing has long been the domain of online retailers, while brick-and-mortar merchants were left to segment marketing based on basic shopper card information. With the explosion of Big Data, the rise of digital devices, and the increasing availability of real-time analytics and other cutting-edge technologies, that dynamic is shifting. It’s now entirely possible for brick-and-mortar retailers to provide real-time and real cost-savings solutions to customers, adding significant value to their in-store experience through various mobile and digital solutions. As more shoppers demand customized experiences, retailers that develop such marketing programs stand to reap big rewards.
Mobile devices offer a natural platform for personalized marketing. Today it’s commonplace for retailers to design proprietary apps to push coupons and special offers to customers, often based on previous purchasing information. By integrating predictive analytics and enhancing point-of-sale data, retailers can drive their mobile marketing efforts and fully engage shoppers with personalized offers. These tools enable retailers to go beyond backward-looking analyses and send customized marketing communications based on individual behavioral patterns. Patterns that indicate what a shopper’s future purchases likely will be, even if those items appear to be completely unrelated.
For example, data mining has revealed that customers who purchase cola are substantially more likely to purchase chocolate during that same shopping trip. Discovering these types of affinity purchasing behaviors allow retailers to cross-promote two seemingly unrelated items. By enriching existing sales data with external sources, retailers can determine the most targeted message to send to customers. Retailers can also decide the best time to send the message to customers via their mobile device, prompting shoppers to respond to the targeted promotion when they’re inside the store.
In-store tracking is another tool that progressive retailers can use to further their personalized marketing efforts. Mobile apps with in-store tracking capabilities can tap into Bluetooth or WiFi sensors on customers’ smartphones allowing retailers to identify shoppers’ movements. As consumers browse the aisles, retailers can collect real-time data, from the routes customers to travel to the departments they stop in the longest. Based on this data, retailers can further influence customer behavior by sending product recommendations or proximity alerts immediately to consumers’ smartphones as they shop. These alerts provide value to consumers by saving them time (and often money) during their visit. This real-time data can also help retailers improve product placement by determining the best location to showcase their products based on the frequency visited and length of time consumers spend in each area of brick-and-mortar locations.
Displays go interactive
While mobile is big, it’s not the only option for retailers looking to personalize their marketing tactics. Interactive displays and digital signs can also be used to collect information about customers and make individualized recommendations based on that knowledge. For example, some cosmetics retailers and brands have started using interactive displays that allow shoppers to “try on” makeup virtually, using facial recognition software to determine how a particular product and shade will look on a shopper based on her skin tone, eye and hair color, and other factors. These displays then deliver targeted advertisements and special offers based on a user’s customized results. Such platforms could be expanded in the future to link to other databases detailing Internet browsing history, social media presence and other elements of Big Data—even pinpoint individual identities—to tailor marketing messages even further.
As much as this last example highlights the power of data and the incredible potential of personalized marketing, it also exposes one of the biggest challenges to implementing such a plan: avoiding the “creep factor” that can result when personalization crosses too close to privacy invasion. However, these challenges are not insurmountable.
Allowing shoppers to choose to opt-in or opt-out of in-store tracking and making the process as simple and transparent as possible can help alleviate privacy concerns. Retailers that make it clear to shoppers exactly what information is being collected, why it is being collected, and how that information will be protected and ultimately be of value to them, can enhance their shoppers’ experience while gaining valuable data.
Fortunately, retailers don’t have to develop high-level analytics capabilities and personalization software to gather information to personalize customers’ in-store experiences. Retailers can partner with companies that specialize in consumer data and advanced analytics. In many cases, retailers can adapt existing software solutions provided by third-party experts making it easier and more efficient to obtain a virtual goldmine of information on consumers.
For brick-and-mortar retailers to deliver the type of cutting-edge personalization shoppers are coming to expect through all retail channels, they must keep their focus on the future and initiate marketing programs that can continuously evolve with increasing customer demands. Sending out made-to-order alerts on the best times of day to shop, and enhancing in-store navigation via mobile devices are just the beginning of boosting the in-store experience for customers, building brand loyalty and driving sales. In doing so, smart retailers can revolutionize the in-store experience for customers and set a new standard of excellence for consumer engagement.