Three Retail Game Changers are Beacons, Big Data and Gamification

02 March 2016

In-store navigation, customer data analysis and turning loyalty programmes into fun games are expected to dramatically change the retail landscape in the forthcoming years. Check which of the up-and-coming retail solutions works best for your business.

All three are hardly a novelty in the retail world. Beacons have been part of retailers' arsenal of weapons for some time now, allowing them to ensure a level of personalization that competes with e-commerce. Big Data has been a buzz term in the industry for a while, too. The focus has now shifted to how to make sure that we have the right data and leverage it. Finally, inducing game thinking in customers has long been discussed in marketing, only to be later slowly adopted by the retail industry.

Navigating customer's experience

Beacons are small, relatively inexpensive hardware devices that retailers install on walls or countertops to communicate with a shopper’s smartphone or tablet in a bid to enhance the in-store shopping experience. Using BLE technology, a beacon communicates with a mobile device via a low frequency chip. The chip communicates with multiple beacon devices to form a network. With the customer’s consent, beacons detect nearby smartphones and send them ads, coupons, alerts, or product reviews. In exchange for a personalized offer, the phone registers valuable information on our in-store behaviour. What caught our attention in the store? What aisles were we walking? What did we buy? In front of which shelves did we linger or hesitate? All of this type of data is invaluable for retailers, including industry giants such as Macy's. The American store chain installed beacons in all of its 840 department stores. Kohl’s and other national chains are testing beacons in several stores. American Eagle, which has almost 1,000 retail stores, also has a substantial rollout, as does Urban Outfitters.

Precious data nuggets

Beacons help collect Big Data which happens to be another key concept in modern retail. But without a proper filtering methodology in place, Big Data cannot be effectively used. The system gathers huge quantities of data which must then be sorted into the relevant categories. Aggregate consumer data will translate into better sales of retail chains as soon as we can identify key factors that trigger specific consumer behaviours. We can then come up with relevant marketing messages, based on a consumer's shopping history, most frequently visited retail outlets, vulnerability to particular forms of promotion, gender, age, hobbies and a number of other useful data bites. Macy’s is one of the best-known retailers that has gone to great lengths to use its underlying data to change its operational model and inform strategy. The American department-store chain has a strategic roadmap: MOM, which stands for ‘My Macy’s localisation, omni-channel integration and MAGIC Selling’. This lays out how its localisation, omni-channel and customer engagement activities should be closely integrated to better serve the customer and improve business performance.

Taming a promiscuous consumer

‘Customer promiscuity’ is a term that upsets all retailers, regardless of size or status. Nowadays options are plentiful, especially in e-commerce. Little wonder that your consumers eyes wander. However, the success of effective loyalty schemes such as Tesco Clubcard and Sainsbury’s Nectar shows that with the right incentives across channels, consumers continue to value long-standing relationship with their favourite retailers. The question is what loyalty tricks work best. One of proven methods of attracting and retaining shoppers is to get them emotionally engaged. A reliable tool to build competitive advantage, gamification combines emotional relationship and loyalty to the brand. What it boils down to is setting up communities around a brand and involving consumers in activities which are modeled after games and contests. Community members or users can share their scores, achievements and experience. Simple and fun, gamification may look like an alluring alternative to complex and complicated loyalty schemes of some retail chains.

Source: http://www.dlahandlu.pl; http://www.practicalecommerce.com; http://eandt.theiet.org; http://www.mycustomer.com