Dec. 4, 2012
By Stuart Armstrong, President Americas, ComQi
For as long as I can remember, the Holy Grail in retail has been to increase purchase conversion rates by gaining a better understanding of the way shoppers actually shop a store. What is the path of their shopping journey? Where do they dwell in the store? What merchandising techniques are most successful in moving shoppers to traverse more of the store?
To approximate an answer, a variety of methods ranging from simple people counters to video cameras and physical shop-alongs still remain common fare for retail researchers. Yet the results from these methods don't adequately satisfy the marketer's desire to do what is ultimately intended: enhance the shopping experience while driving increased conversion.
For a moment, let's move from bricks to clicks and examine the Web for some answers. Analogous to a physical store, an e-commerce site captures the virtual shopping journey. It knows how you travel the site, how long you are there, and how promotions and product messaging can link you to travel more of the site. Analytics, both individual and aggregate, come out of this process and can trigger content changes based on patterns in the data. These data-triggered content changes create relevancy. The more relevant and timely the content, the more likely it is to generate desired behavior changes. In short, sales will increase.
In one case in point, Williams-Sonoma has launched a new e-commerce site featuring personalized gifts and accessories while also adopting a new targeted marketing model that incorporates shopper behavior. This is being seen as an important contributor to their online sales increasing 16.7 percent, while total store sales grew 8.9 percent.
Ironically, the virtual shopping experience has become more personal than a store visit. Good news, there are proven marketing technologies that have been evolving for over a decade, that can afford brick-and-mortar merchants the same advantages that smart e-retailers have.
It starts with in-store digital signage but not your everyday "run-through-a-pre-scheduled-playlist" signage, using instead smarter, data-triggered digital signage. There already are too many examples to count in which digital signage is designed to deliver maximum results by being contextually aware and picking up digital cues from its surroundings:
- Digital signage at a quick-service restaurant "listening" to the weather and promoting hot soup the minute temperatures slip below 60 degrees;
- Signs inside department stores listening to car traffic on the highway, promoting lunch at their café while there's a traffic jam outside that will not clear for an hour;
- A sporting goods retailer listening to the PGA leader board and promoting Callaway apparel as Phil Mickelson battles for a win, while also listening to the inventory data to promote only those products that are in stock at that store;
- And, a consumer electronics retailer listening to the ePOS system to promote the latest featured price for a product their shoppers are interacting with on their mobile smartphones (showing promotional videos and loyalty benefits).
This is today's merchandising: using signage with relevant, interactive, just-in-time content that alters shopping behavior and drives same-store sales increases. But, how do these examples bring us any closer to emulating Web-based e-commerce for a store environment? The last example that involves the personalization of content triggered by a shopper's smartphone brings us closer to Web shopping.
One U.K.-based shopper analytics company, Path Intelligence, is doing this brilliantly, and answers many of the questions we posed at the beginning. They do that by collecting shopper path data continuously, passively and anonymously through the unique pings of every shopper's mobile phone (regardless of model, smart or otherwise). For privacy purposes, those pings do not contain the user's name or phone numbers. However if the user wants to opt in, then individual permission-based data can be captured, typically in exchange for shopper incentives.
Now it is possible to bring together smart digital signage and real-time shopper path data, by department or section. This will allow retailers to gain sharper insights into the effectiveness of content, and subsequently use those insights to make instantaneous changes to their content. For example, let's say a major department store is running a holiday promotion on children's apparel. Located in the department is a digital sign promoting great deals on the clothing and cross-promoting their toy assortment. The digital sign is continuously listening to the ePOS and inventory system to make sure that the items promoted are in-stock and the promotional price is up to date. Additionally, it allows the shopper to opt in through their smartphone using a QR code or near-field communications to receive a wayfinding map to the toy section as well as a 20-percent coupon intended for same-day use. Real-time shopper path data can provide amazingly valuable data.
- How are shoppers moving through the kidswear department and how long are they there?
- How many shoppers remain within viewing proximity of the digital sign, and for how long?
- What percentage of shoppers has opted in?
- What combination of content and incentives drives the most traffic to the toy department?
Based on the insights gleaned from shopper path data, content can be optimized to display the most effective promotions on an individual store basis without any human intervention by the retailer. The system can get even more granular by anticipating what, where and when (down to the day of the week and hour of the day) the content should be shown. Without the high cost of additional staff, the combination of digital signage and smartphone technology takes on the role of a personal shopping assistant.
It is often said that "content is king," but content does not tell the whole story. Content that is relevant and timely is what makes this "king" powerful. So if you are buying digital signage, or advising on how it should be used, first consider a system that has an astute sense of its surroundings and can trigger content intelligently. When you do that, your system will deliver a sizable return on investment, starting with a measured increase in purchase conversion.
Armstrong is President Americas for ComQi, a provider of multichannel message management for the digital signage and out-of-home industries, with a stable of content and network management platforms and media distribution technologies.
Read more about digital signage in retail.