In continuation to part I, this blog will resume discussing proximity marketing.
One way brick-and-mortar stores are looking to compete with the ultra-convenience offered by online retailers is by developing smart shopping carts. As well as saving customers from the physical effort of pushing a laden cart around, the technology also helps customers find items on their shopping list.
Optimizing space, pricing and promotions. Space is at a premium in today’s retail environment and businesses need to utilize every inch to make their profit. Shelf space optimization is a fine art that can be optimized by an algorithm. For instance, stores can allocate space for commodities in proportion to their sales figures or specify a more effective aesthetic layout, which can both increase sales and cut labor costs.
Businesses now also use algorithms to adapt their pricing structures to reflect a wide range of specific factors, such as desired profitability, stock levels, historical customer interest, seasonality, competitor prices and sellers’ inventory levels. Pricing analytics are key for any retail business looking to compete against online pure players. Retailers who don’t develop such a capability are likely to become trapped in a cycle of discount and promotion. Uber’s pricing model is now a notorious example of algorithmic data in action. By setting their prices based on the laws of supply and demand, Uber has succeeded in dominating the market and effectively re-written the rules of pricing.
For anyone who has ever been lost in a store searching for that one item that eludes them, help is at hand. A new app, Ubamarket, can now arrange shopping lists into the order items appear in a particular shop. Shoppers make their list within the app then just select a participating store. The app then re-orders the items according to where they appear in the aisles.
Then, once shoppers reach the checkouts, they simply scan the app at a payment point and pay without having to load all their purchases onto the conveyor belt. Loyalty points can also be earned within the app and future editions will enable automatic payment via a pre-stored credit card.
The North Face customers can now find exactly what they want faster than ever with the launch of their new state-of-the-art mobile shopping app, Watson. It’s the first mobile app experience to put Watson, the powerful artificial intelligence computer owned by IBM, to use in a retail environment. The app allows you to speak to it openly on the phone — where the Watson-powered shopping assistant will engage you in a question-and-answer conversation to help figure out exactly what you need. Watson’s artificial intelligence works by being taught things. As it learns over time, the AI should get better and better at recognizing what people want. According to its creators, it will also soon have the ability to understand synonyms!
This more agile way of working can improve both the customer’s experience and the marketing department’s conversion rates. Big data is now big business. There are now countless examples of proximity marketing within the retail space.
We’ve seen how this future touches every part of the value chain, and how companies are responding. Ultimately, it will be for each business to work out what’s right for its people, culture and customers. Business leaders now have a vast technological arsenal at their disposal. How they choose to deploy it, will determine whether they become a viable business of the future. Whatever the technological advancements however, one basic rule of commerce endures — the customer is king. Especially when that customer is armed with tech of their own and expects to get what they want faster, cheaper and in more ways than ever before.
We do this by not only deploying our own deep expertise, but also through a number of partnerships we have with leading technology providers. If you need help navigating your way through the technological changes to come, talk to PROXERA.