Getty Images
Step into a Jenni Kayne store, a California-based apparel and housewares brand with 20-odd locations across the United States, and a tablet-wielding employee might ask if you’re a rewards member.
Inputting your phone number brings up your customer profile, showing your purchase history and notes that have been manually entered by associates indicating your home-decor colour palette and even your favourite candle scents. You might be offered a special in-store promotion because it’s your birthday month, or receive a discount on a set of throw pillows to match the sofa you purchased a few weeks ago.
This type of personalization usually happens ad hoc, with pen-on-paper notes, typically in luxury stores with higher-spend customers. Most retailers are still catching up on adopting the latest technology to boost their customer-service experiences.
Ian Rawlins is the chief executive officer of Tulip, a Kitchener, Ont.-based retail tech company that operates the “clienteling” platform used by Jenni Kayne and other retailers such as Coach and denim company 7 For All Mankind. He says the COVID-era push toward e-commerce delayed retailers from implementing bricks-and-mortar updates, including customer engagement tech.
“The vast majority of transactions and sales still happen in physical store environments,” Mr. Rawlins explains. “Traditional retailers have understood now, with the reinvigoration of the physical store channel, that they’ve underinvested in the technology stack that was running in those stores.”
By incorporating technology into the retail shopping environment, companies can offer a more personalized experience to customers, even after they leave the store. For example, e-mailing product recommendations – or, better yet, discounts on those products, after a purchase to increase the chances of another sale or a return to the store.
“Corporate outreach with a generic message to every customer has a very, very low success rate,” Mr. Rawlins says. “These days, people are inundated with these kinds of things. Getting meaningful, targeted interactions is much more possible today.”
Adopting customer engagement technologies can have significant effects on a retailer’s bottom line. At Jenni Kayne, orders closed through Tulip had a 50 per cent higher average value compared with walk-in traffic.
Making customer engagement platforms a success requires a shopper’s buy-in to join rewards programs and consent to give personal information. Mr. Rawlins says retailers should understand the motivations of customers for sharing personal details.
“We’re all familiar with these scenarios where [retailers] ask for information but you have never understood how they’re using that information, and there’s no perceived benefit,” he explains. “I think more and more customers are leery of these kinds of scenarios. Why share information if I don’t see any tangible benefit to me?”
Vivek Astvansh, an associate professor of quantitative marketing and analytics at the Desautels Faculty of Management of McGill University, agrees that retailers should be explicit about what benefits they’ll offer to shoppers in order to collect their data.
“It comes down to a trade. Customers are willing to share the data, provided you give them value, like lower prices, better assortment, better return policies or deals targeted to that particular shopper.”
The adoption of Internet of Things (IoT) devices in retail environments, such as Bluetooth beacons and radio frequency identification (RFID) price tags, amps up tracking and personalization. “The Internet of Things, as the name suggests, is the interconnectivity of objects,” Dr. Astvansh says. “In the retail context, objects could mean products that are on the shelves, it could mean the shelves per se, it could also mean the shoppers and the devices they have.”
How this plays out in, say, a grocery store might mean tracking products that are frequently placed in a cart together, and in what order. This might inform a retail manager’s decisions to adjust the shop’s layout to place commonly purchased items together. It could mean customers, once they log into the store’s app and they have Bluetooth enabled, get limited-time-only coupons for a particular product when they’re lingering around its shelf for more than 90 seconds.
Free WiFi for customers is also a way for retailers and shopping centres to track data and offer promotions. “We can see the [customer] stopping at a wristwatch store – that information goes out to all the relevant retailers,” Dr. Astvansh explains. “One of them who has a high inventory of a wristwatch can send a coupon to this customer, so there is value for the shopper.”
Dr. Astvansh says there’s a slower uptick in the use of IoT tracking technologies in North America, compared with countries in Asia and Europe.
“The United States and Canada have big bureaucracies that go through a lot of thinking and doing,” he says. “You compare it with France or Italy – they’re smaller countries, and perhaps those retailers are more swift in implementing these changes.”
It can also feel overwhelming as a customer to have so much data logged and tracked. But Dr. Astvansh reminds us that video surveillance, which may have once felt intrusive, is now commonplace.
“The assumption is that if I enter a retail store, there are cameras all over and they are recording me,” Dr. Astvansh says. “No one asks consent for that. That is an established norm. However, if the retailer is storing my data, then they need to seek my consent.”
Moving forward, retailers could gain the trust of shoppers, and perhaps warm them to the idea of sharing data and tracking, by advocating for stronger privacy rules. It’s another way Europe, with its stricter privacy laws, sets itself apart from North America.
“Perhaps the shoppers and consumers [in Europe] are more accepting because they know that the regulations and the laws are going to protect them,” Dr. Astvansh concludes.