Changing channels

Padraic O’Brien, VisionID’s retail technology solutions manager for Ireland

Padraic O’Brien, national retail account manager with Vision ID discusses the best ways to improve customer engagement through technology

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Brand Central

Read More: retail technology Vision ID

Anyone watching recent retail industry trends can’t fail to have noticed the word ‘omnichannel’ come up with increasing regularity, but I’d like to challenge the concept. Like a lot of buzzwords, it’s unnecessarily confusing. In reality, omnichannel simply means giving the customer a seamless experience, whether they are browsing online, on their mobile device, or physically in-store. To me, that sounds a lot like giving the customer what they want – and I would argue it’s what retail has fundamentally always been about.

So, if we are actually talking about customer engagement, the challenge for traditional bricks-and-mortar retail chains is to add value and avoid a race to the bottom on price versus online-only stores.

Best of both worlds

Here’s where the click-and-collect model offers the best of both worlds. For customers, it has the convenience and choice of online shopping, with the excitement of holding the product in their hands shortly after. Giving customers the ability to buy online, whilst advising them of the nearest store to collect their purchase within the hour, is a huge step forward in customer engagement.

For retailers, click-and-collect is an invaluable opportunity to upsell based on individual customer history and preferences. Once they arrive to collect their purchase, it’s a chance to provide them with information specific to their buying habits, or to reward that customer for their business through a promotion or special offer. This activity improves the customer experience, enhances their satisfaction and boosts their loyalty.

Brands like Argos, Smyths Toys and Lifestyle Sports already provide this service and we can expect to see more activity in this arena. Mintel forecasts that 17% of online orders will be collected in-store during 2015.

Building blocks

So, if customer engagement is the goal, what are the technological building blocks? It starts with giving customers the right information at the right time. For this, the ability to know stock availability across all stores in real time is critical. Retailers need to have full visibility of their warehousing and logistics.

This kind of project which generally falls into a track and locate description, can start small, with warehouse operators collecting data using mobile handheld scanners and label printing devices. An added benefit for retailers is that it reduces the risk of overstocking – avoiding problems like reduced cash flow or having money tied up in stock. The more you know how much product is on hand or how much is needed, the better your position from a cash perspective. Fashion brand American Apparel is one of the leaders in this space; through its work with RFID technology across its supply chain, it has dramatically improved visibility of stock levels.

The next stage of engagement is when the customer enters the store. At this point, there are several options open to retailers. Let’s take the example of a shopper coming to a clothing outlet with that store’s app on their phone connecting via in-store Wi-Fi. Presence and location technology alerts the store to the customer’s arrival, starting the upselling process. Bluetooth Low Energy technology can ‘talk’ directly to smartphones, flashing an alert when a customer passes a certain shelf, to let them know a particular product is on special offer.

A question for retailers is whether to opt for dedicated hardware or let consumers use the smartphones they already have with them. That choice will vary. For clothing retail, it might be possible to let customers scan barcodes with their phones, but I believe it’s impractical to do this for large amounts of goods such as the weekly grocery shopping.

Device decision

There’s a huge variance in the capability of smartphones and not all of them have scanning features of sufficient quality. Our experience has shown that a dedicated unit, provided in-store, is a better approach. A dedicated device is more rugged and therefore longer lasting, whereas if a consumer uses their phone for shopping all the time, it increases the chances of them breaking it or becoming irritated at its inconsistency. Plus, you don’t have to compromise on quality. For example, the latest Motorola Personal Shopping Solutions units have the look and feel of a smart device, complete with a touch screen.

Don’t assume everything has to be done in one go – but it is worth doing. Customer engagement has been proven to work. The SuperValu Group has found that personal shopping technology results in customers spending two and a half times the average transaction value when using a personal shopping solution. What’s more, the payback for retailers is relatively quick, with a typical return on investment of between 12 and 18 months. For many in retail, this technology can be implemented in a modular manner, allowing retailers to define a roadmap to where they want to get to and then execute this plan in stages.

In an increasingly competitive retail arena, greater customer engagement is a chance to claw back market share against rivals. Otherwise, if you don’t engage your customer, you’re going to lose them.

Read More: retail technology Vision ID