SELL PHONES
Smartphone apps are giving retailers a new set of tools to work with in their efforts to get us to buy stuff,
The woman next to you on the streetcar has a killer handbag. Snap a picture on your phone, and an app reveals its designer and where it’s sold.
You pass a shoe store on a Saturday stroll, and your phone flashes a push notification that the leather boots you’ve put off buying are 40 per cent off.
You walk into a department store with one task: find a toaster oven. Open an app that guides you to the aisle and offers discounts on items en route.
This is not the future of shopping. It is the new reality.
These shopper marketing tools developed by Toronto companies are just a few of the strategies being deployed by retailers to segment monolithic customer bases into target demographics, even individuals.
Shopper marketing blends big data collection — tracking consumers’ locations and browsing and purchase histories — with psychology, to influence shoppers while they are in stores, at the point of purchase. Bricks-and-mortar retailers are harnessing consumer insights to offer convenient, customized experiences to lure shoppers from their couches and into the malls.
Data-rich smartphones have simplified the art of consumer intelligence for physical retailers, putting within reach a dream they have long chased: a world where they know what you want before you do.
To some extent, retailers can already predict our behaviour, says Neil Stern, a senior partner at retail consultancy McMillanDoolittle.
About 80 per cent of grocery lists are repetitive, he says. Mobile technology has made tracking habitual behaviour — those everyday decisions we make so repeatedly they’re automatic — more precise and efficient than ever.
Some tools, such as Slyce, the app that can turn a photo into a purchase, require consumers to actively download the program. Others, such as iSign, automatically relay location-based offers, which users can opt to accept or reject.
Hudson’s Bay uses Apple’s iBeacon sensors to deliver offers to customers based on their in-store location and shopping history, while Loblaw’s PC Plus loyalty program taps into consumers’ past purchases to send them tailored deals.
And this is just the beginning of advanced customer profiling, Stern says. “It could progress to the point where it is almost as individual as a person, where yours would be almost like a fingerprint.”
While the technology does raise privacy concerns, Stern says the biggest barrier to widespread adoption is consumers themselves; changing shopping patterns is difficult and slow.
For most shoppers, there’s still a line between customization and creepiness. But it’s getting blurrier.
Consumers, especially this generation of digital na-
“They know you walked into the store, and this is your third visit this year, and typically you browse in a particular part of the store.” NILESH BANSAL AISLELABS CO-FOUNDER
tives, have grown accustomed to being tracked, said Allison Johnson, faculty director at Western University’s Ivey Behavioural Research lab.
In the field of consumer psychology, this is called habituation; repeated exposure desensitizes us until we feel comfortable with being targeted.
Studies show personalized marketing generally increases consumer satisfaction, Johnson says. The fact that it can feel creepy? That, she says, just shows how good the data is at nailing us down. And yes, she adds, people really are that predictable.
When campaigns go terribly wrong, companies do risk losing customers.
But backlash is incredibly rare compared to the number of people for whom the technology is useful, she says.
Target famously crossed the line in its study of purchase behaviour, which aimed to determine when women were pregnant based on a combination of items they bought. Some women found the campaign intrusive, and one father reportedly found out his teen daughter was pregnant based on the targeted advertising.
Johnson believes an eagerness to capitalize on analytics overshadowed social intelligence, leading to consumers discovering how much the company knew.
Stern says retailers should use Disney World’s Magic Band as an example of how to play up the consumer experience and de-emphasize data collection’s “creep factor.” The company touts the wristband as a way to make payment at its parks easier, help users get through lines quicker and unlock “special surprises, personalized just for you.”
The device is so omniscient that it can identify the whereabouts of a Hispanic family whose daughter loves Elsa from Frozen, and then have Elsa find her and greet her in Spanish, Stern says.
Striking that balance between personalized and creepy is one of the biggest challenges for the retail clients of Aislelabs, a Toronto-based data analytics firm.
Co-founder Nilesh Bansal says the technology gives established retailers a better footing to compete with advancements made in e-commerce — the key is to explain as much as possible to consumers and give them an option to opt out.
“With this technology, they know that you walked into the store, and this is your third visit this year, and typically you browse in a particular part of the store, so they know a little more about you to offer you personalized content.”
The technology is still in its infancy, but is developing rapidly, he says.
A decade from now, the way consumers interact within the mall will be more efficient and convenient, he says; they’ll browse products on their phones, touch and try on the options, then make payments through their mobile wallets.