Many retailers have started trying to copy the online experience in-store. Online consumers can receive recommendations tailored to them based on their past browsing and shopping habits.
In-store, typically, customers don’t receive that level of service. However, that may be changing.
Thanks to loyalty programmes such as Boots Advantage Card and Tesco Clubcard, customers can receive hyper-personalised recommendations while in store.
We sit down with Mark Thomson of Zebra Technologies to find out more.
He says: “If I drop into Sainsbury’s, for example, on a Friday night on my way home from the office, it’s likely that I’m on a sort of very short shopping journey.
I’ve been told to pick up one or two things and then I’m literally dropping in, and I’m on my way home. So, actually, personalisation or promotions to me at that point in time become less relevant because I don’t have time to look at them.
“And they’re less likely to have an impact. However, if I then go shopping the following morning for a full shop, full basket shop, maybe still to the same store, that’s a different shopping journey. So what we might call shopping missions have a strong impact on the relevance of whatever promotion.
He adds: “So it’s more than just personalisation to me. It’s personalisation to my specific mission at that point in time. ”
He suggests that offering hypersonlisation in store can be difficult as firms don’t want to “track or trace people”. He also points out that there is very little opportunity to offer personalised promotions in-store as consumers aren’t traditionally asked for a loyalty card until they are checking out, and by that point, most shoppers don’t want to see promotions.
Unlike online shopping. Take Amazon, for example, it already knows the user and is therefore able to offer personalisation from the very moment someone clicks onto its website, and the homepage you are looking at might not be the one I am browsing.
He says: “I’m looking at something that is relevant to me. So it’s been a technological challenge for physical store retailers to get to that point. And I think it’s therefore been easier for them to focus on their e-commerce sites first.
“But I definitely sense the frustration over the last few years from retailers that they want to be able to include their physical store estates in that personalised approach. And I think the technology is coming in now that it’s starting to allow them to do so.
He explains that being offered additional services when purchasing can be considered a form of personalisation. When buying technology like TV’s, consumers can be offered things like insurance and product protection as the retailer already knows the customer is interested.
He says: “Typically, you’re not going to show your loyalty card as soon as you see a staff and they go, Oh yes, Hey, Mr. Thomson, let’s give you some special offers.”
But there are opportunities to do so using apps.
For example, he states, when you visit Starbucks, the company automatically knows you are there, as it offers you the Wifi and therefore can offer the consumer relevant offers through the app.
Thomson says: “And then if we look at the grocery side, and this is something very close to our hearts from a Zebra point of view, is if I’m going into a supermarket and I’m going to do my own scanning.
“So I’m going to pick up a scanner and walk around the store with us with a scan and go device from the retailer. I’m using my loyalty card to pick that up at the very first place. So I’ve walked into the store, and I’m now using my loyalty card.”
He explains that the retailer then knows that the consumer is in the store and can personalise the experience to them, commenting: “And therefore if you’re thinking about the benefits of that. Let’s say you’re Coca-Cola, for example, I’m now wheeling my trolley with my scanning device with a screen on it down the cold drinks aisle. I could actually get a promotion from Coca-Cola.
“On my little scanning device screen, a three-second show of a bottle of Coke or a can of Coke with condensation tripping down the side, the sort of design that makes you really want to go, oh yeah, I do fancy a Coke. Let’s buy a pack of six cans of Coke”
He adds: “I think it’s a massive opportunity with those sorts of devices.”
However, marketers must ensure they are not “spamming” consumers with promotions “every six metres,” as this will cause them to disengage.
He says: “Nectar is starting to look at it in terms of how do we use that little screen that’s now in front of a shopper, where we know that shopper, how do we use that in the best way to get cross sales, sell conversion and bigger basket sizes of those shoppers.”The secondary benefit to the retailer is that brands like Coca-Cola or Colgate will pay for that as well.”
According to Thomson, marketing teams will need to determine if consumers are likely to impulse buy after receiving a promotion like this or if they will stick to their preplanned lists.
He says: “I think they have the ability through those sorts of devices [shopping scanners] to do a lot of testing and then start to learn. And I think this is one of the areas where AI will certainly play a part: in terms of crunching that data. So if retailers could run a test for a whole year of some shopping journeys doing it, some firms promoting Coca-Cola, some not at different times of day and then build up that data to see what the patterns are.”
Thomson explains that there are also more interactive kiosks in stores, which consumers can log in to and receive personalised offers and promotions.
He says: We know that Gen Z, even more than millennials, is actually coming back to physical stores. They want experiences but they want those experiences to be relevant to them.
“So actually they’re demanding from retailers that the retailer gets to know them and builds a profile. So, we’re seeing more and more retailers doubling down on their loyalty programmes, which, at the end of the day, is not just to try and give you points. It’s actually to try and build a profile of you so that they can promote to you more relevant products.”
He adds: ” Which drives better sales, better conversion of those products, better lifetime value of that particular customer.”
Thomson explains that the next challenge for retailers is the shift to “conversational commerce” and how to replicate it in stores as more and more consumers are using ChatGPT (and other generative AI tools) to aid them when shopping online.
He says: “I think the next challenge for retailers is going to be how do I take that sort of logic and do that in a physical store? Is it kiosks or is it actually I’m going to talk to a member of staff who happens to be empowered with some sort of mobile device, which can also be listening.
“And then together, almost the three of us, the staff member, the shopper and the mobile device can then narrow down the relevant products for that customer.”
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