The secret of retail tech innovation? Never forget the customer

First published by Retail Week on 4th August 2016

While I spend most of my working life looking to the future, I’m not afraid to take inspiration from the past.

I still occasionally dance around to my 1980s alternative singles and remain fond of classic movies such as The Belly of an Architect.

The return of a 1990s phenomenon in the format of Pokémon Go illustrates the point nicely, showing the power of brand affinity, of past associations, to engage a vast audience.

More importantly for retailers, the craze demonstrates that it’s possible to drive engagement very quickly if you get it right with mobile innovation.

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French retailer BUT has already used the popularity of Pokémon Go to drive store Traffic and offer discounts to shoppers.

While the rise of the game is set to benefit retailers greatly, through sponsored locations, promotions and merchandising, what it says more broadly is that consumers crave fantastic and entertaining experiences alongside a sense of community and adventure.

AdTech AdThis was heavily in evidence at the recent Cannes Lions advertising and marketing festival. Many winning campaigns in categories such as mobile provided examples of innovation that deliver a human and interactive customer experience.
They included Burger King’s activity in Argentina, where it created an interactive Snapchat game, Snapking, using an entertainment experience to drive a voucher-based mechanic for participants.

Perhaps the best use of innovation applicable to retail was the Sydney Opera House’s #comeonin, using social platforms and location data to create and then invite people to a personalised experience.

Retailers that understand the need to build human connections into their technology innovation have a greater chance of success.

However, when Cheil spoke recently to more than 150 senior global retailers we revealed a disconnection between the focus of their technology innovation and the delivery of better customer experience.

It is very clear that consumers want innovation in technology to be rooted in delivering customer benefits. Yet the conversations with retailers highlight that innovation budgets are not primarily focused on meeting unfulfilled consumer need.

A majority are confident that they have a world-class innovation culture. And, in many cases, this is driven by new technology. That sounds encouraging.

The issue that emerges, though, is that technology displaces meeting unfulfilled consumer need as the driving factor in innovation.

Meeting consumer need was identified by just 18% of retailers as the main reason for innovation, indicating a danger that retailers are losing sight of the consumer.

Consumer research shows that this is an issue for customers. Amazon emerges as the most innovative retailer because it uses technology to make it quicker to find, pay for and receive products.

Where Amazon is identified as less strong is in providing a ‘human service’, but it has maintained customer perceptions in this area at acceptable levels while more traditional offline rivals struggle to deliver against even this hygiene factor.

Retailers could gain greater competitive advantage by using technology in ways that improve perceptions of human service, with a big opportunity in focusing on the greater personalisation of the shopping experience.

This is where they can learn from the success of experiences such as Pokémon Go and brands that use mobile not only to bombard people with messages and offers but to entertain and delight.

In doing this, retailers shouldn’t lose sight of the need to improve the customer experience by using technology to simplify and accelerate the retail experience.

This should be the main focus of retail innovation budgets, rather than investing in mobile and other tech merely for its own sake.

CES 2016: IOT, VR, AR & groceries  

Try to contain your excitement because the connected fridge is finally here. This future blend of refrigeration and grocery retail was launched at CES in Las Vegas.

MasterCard joined forces with Samsung to unveil their Groceries application for the Family Hub refrigerator, which boasts a 21.5 inch display allowing consumers to view their fridge contents without opening the door and order replacement items with taps and swipes.

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It’s smart too, having the capacity to learn what types of food and drink products consumers’ favour. In time, I suspect the capability will be added to automatically order the items consumed most regularly and bring new meaning to ‘out of stocks’.

The fridge will also tailor product recommendations as it learns. This will bring some solace for the Consumer Packaged Goods (CPG) brands that have fought for attention on supermarket shelves for so long and are now trying to understand how to bring this same fight to eCommerce.

Shopper marketers must now ask the question, how do you win in grocery if your consumer is buying from their fridge? Part of that answer must be in recommendation and the other part will come through shoppable media that connects brand communication seamlessly with ecommerce. Groceries by MasterCard is on to this already and the companion app will work on smartphone, tablet or PC and enable consumers to add items to the household shopping list. It’s surely only a matter of time before we see a Groceries by MasterCard ‘buy now’ button on CPG brand communication.

The cynics out there will be quick to suggest it will be more than five years before the connected fridge poses a real commercial threat to traditional grocery retail models and, given the $5,000 price point for this Samsung model, they have a point.

Transforming shopping and ecommerce with VR and AR

Virtual reality applications are much cheaper to access, making them very big news at CES this year because they promise an experience that has previously been the stuff of science fiction. Gamers will be the big winners in this, but shoppers should expect to see more VR too.

A Google Cardboard headset costs around £5 and a consumer can already enter a far more immersive experience than is provided by a holiday brochure by coupling Cardboard with Google Maps or, as Nestle offered in its partnership with Google, the experience of touring a Brazilian coffee plantation.

VR has the opportunity to transform ecommerce, enabling a near real experience of a product that had only been available in-store until now. But we will also see more retailers using VR in their shops to educate, inspire and sell product benefits. This will provide a reason for new customers to visit stores and, if the experience is good, it will keep them coming back.

Augmented reality is set to enhance shopper experience and the ModiFace Mirror shows just what can be achieved in-store. The mirror allows users to change not only their makeup but also whiten their teeth, alter their eyebrows, reverse the signs of aging, and change eye color while also delivering a 3D makeup tutorial. At an expected $2,000 per unit it’s not cheap, but compared to the salary of additional sales associates it represents value.

I’m not a big fan of removing staff from the shop floor as they make the biggest difference in customer experience, but the idea of being greeted by a Segway advanced robot in aisle seven sounds like fun.

Innovations in cash management

Where retailers do need to manage cost is in cash management and a new addition to CES this year was the Digital Money Forum. Apple, Google and Samsung all see the future as being in smartphone-based payments that deliver fast, seamless and secure transactions for consumers. More exciting is the innovation at the intersection of wearable technology and payments.

MasterCard and fintech firm Coin announced a partnership  that will enable manufacturers to integrate mobile payments into pretty much anything able to accommodate an NFC chip. Fitness tracker-makers Atlas and Moov and smart watch producer Omate have already signed-up to MasterCard’s Digital Enablement Service and I am sure we will see many more products do so very soon.

All this talk of the future makes me feel my age and I’m starting to think those oldies who don’t own connected fridges and still use cash will be the only people left in our stores. Help is at hand though. The Genworth R701 Exoskeleton could become the must have tool to help retailers shape stores for people like me in our old age because wearing the product simulates what it feels like to be an elderly person. That brings to mind an apocryphal story involving a CEO who wore a pregnancy suit to shop his store and then conceived the idea of parent and baby parking.

This anecdote provides a reminder that while CES brings us fantastic insight into technology that might shape retail in the future, we must never forget that the customers who shop our stores are real people and that true transformation in retail experience is always grounded in human truths.

How many retailers will it take to change a lightbulb?

This article was was first published in Marketing Magazine on 11th June 2015 

“To beacon or not to beacon?” is a question on the lips of many retailers and brand owners.

Talk of how beacons, small Bluetooth-enabled transmitters in stores, will revolutionise proximity-based targeting of promotions has been in the air for at least two years now.

We’ve even seen some action. Tesco began a beacon trial in April 2014 at its Chelmsford store, integrating the trial with its MyStore app. A month later, Waitrose started a similar test at its concept store in Swindon. When Asda and John Lewis launched tentative trials towards the end of 2014, it seemed we were on the cusp of something big. Unless, of course, as was the case with QR and Foursquare, technology superseded instore beacons before they hit critical mass.

Now that just might be happening. In France, supermarket giant Carrefour has invested in an alternative approach. While beacons use Bluetooth LE (low energy) to determine the distance of a shopper (but not their precise location), Philips has developed an LED lighting system that transmits promotional codes to smartphones via light waves.

The Carrefour trial in a Lille store uses this Philips system and functions in a similar way to GPS-based maps. Each LED transmits a distinct location code, which can be picked up by a shopper with a compatible app using their smartphone camera. From this, special offers and location data are sent to the shopper, enabling them to search and locate their preferred promotions or discover promotions and products around them.

It’s a technology that Cheil Worldwide has experience of using, building a similar LED system to support emart’s Sales Navigation work in Korea. The goal was to provide promotions and product location detail direct to smart phones and the technology enabled precision delivery of this promise.

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The advantages, however, are offset by the relative high cost of the LED approach. The Carrefour/Philips approach involves replacing a store’s entire lighting system with the LED alternative. Beacons are relatively low cost and, therefore, could provide a good option for trial for smaller stores or those just testing the water.

Nonetheless, the LED systems offer a viable alternative because they provide a one-off, long-term solution. Even should the current iteration of proximity-based targeting fail to take-off, at least stores that have fitted the LEDs will be left with an entirely serviceable lighting system rather than a bunch of obsolete beacons attached to shelving.

However, don’t get blinded by the sake of technology for technology’s sake. The big questions brands should be asking don’t revolve around whether “to beacon or not to beacon”. Or even “to beacon or to LED”. What’s essential is to consider what you are doing with new technologies to solve customer problems and to enrich their overall experience.

When deciding on whether to invest in new ways of delivering in-store promotions, I’ve learnt that it’s important for retailers and brands to ask whether this activity will enrich the shopper experience, deliver convenience and value.

Don’t forget that people are on a mission when they shop. The best marketers understand that mindset, alongside the retail context, and so remove barriers to purchase. Most retail environments are already jam-packed with price messaging, discounts, and promotion. The last thing that shoppers want is more clutter, they demand clarity and simplicity.

This technology has the ability to deliver all of that and more. The opportunity to deliver personalized experience and dynamic value is there and with that shoppers will adopt this new technology because it will be contextually integrated into their buying habits enriching their retail experience, delivering convenience and value.

To make that happen I find myself asking a new question… how many retailers does it take to change a light bulb?

How the Super Bowl turns views into purchases

First published in Retail Week 11th February 2015

As well as being the first major US sporting event of the year, the Super Bowl is a red letter day in the US retail calendar and is estimated to be worth $14.3bn (£9.4bn).

It’s a big day for advertising too – arguably the biggest in the world.

Last year’s ad spend topped $330m (£216m). That’s just over a dollar for every US citizen.

But what relevance does it have for UK retailers? American football may be a minority interest here but the issues the Super Bowl exposes are pertinent this side of the pond.

As retailers know, turning viewers into buyers is a challenge.

Last year H&M tried to close the gap by airing the first ‘shoppable’ TV commercial using Delivery Agent’s ShopTV platform to sell David Beckham’s underwear range.

This year Katy Perry’s half-time show was shoppable. Viewers were able to purchase exclusive products promoted by Universal Music and half-time show sponsor Pepsi. Meanwhile, Twitter’s ‘buy now’ button enabled tweets to be shopped using Visa Checkout.

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It is further proof that the traditional boundaries of brand communications and retail are becoming blurred.

Retailers, especially fashion retailers such as Asos, are already pointing the way to a future when everything that can be shoppable will be shoppable.

That will create a new dimension to what it means to be truly omnichannel.

But the battle for the Super Bowl dollar does not take place on TV – it is won or lost on the shopfloor.

The elaborate Super Bowl-themed displays and promotions in US big-box grocers dwarf anything you would see in a UK store.

While viewers see Super Bowl advertising as part of the entertainment, for retailers ad spend and money spent on property rights are all wrapped up in supplier negotiation for off-shelf display.

AB Inbev, which owns Budweiser, set up 150,000 displays in advance of the event, supported by ad spend and sponsorship of the NFL.

That will be very familiar to retailers and brand owners in the UK,where we are also seeing money from traditional advertising budgets move to digital media and shopper marketing.

Increasingly that shopper marketing spend is digital, reflecting changing shopping habits. Consumers are as likely to find inspiration through Pinterest as through traditional media.

Many retailers understand this and are changing how they approach creative work. For example, Walmart claims to vet every creative idea on how well it will play out in social media.

The relationship between retailers and brand owners is constantly evolving and has always been a negotiation, but the news last week that Tesco is to face investigation for breach of the Groceries Supply Code of Practice highlights how tense that has become.

As we see changes in shopping behaviour brought about by the rise of shoppable media and consumer empowerment through mobile technology, a genuine shift to partnership between brands and retailers will be required.

To beacon or not to beacon?

It’s now a year since Apple announced it would be rolling out iBeacon technology across all its US stores. Since then there has been a plethora of retail destinations, retailers and brands following suit.

Regent Street, one of the most famous shopping destinations in the world and home to an Apple flagship store, is using beacons and an app to deliver offers to its tenants. Tesco began a trial in April at its Chelmsford store, integrating it with its MyStore app, and in May, Waitrose started a Beacon test at its concept store in Swindon. More recently UK publisher IPC Media has partnered with Tesco-owned One Stop, installing beacons in 740 convenience stores to drive magazine sales.

2014 has been the year of the beacon, a disruptive technology that seems destined to transform how we communicate in-store. Certainly, many see beacons as providing brands with the opportunity to direct more offers to shoppers in store, which will drive more sales. Right?

Well not necessarily. According to a 2014 survey of UK smartphone owners by eDigitalResearch, only 33% of consumers stated that personalised, direct messages sent to their smartphone would influence purchase decisions. So that means the majority, 67% of consumers, would be unmoved.

In a marketing landscape used to mass-market communication, where spends are still dictated by reaching the majority, the minority that would respond to ibeacons fade into relative insignificance.

Yet the marketing community is transfixed by digital technology – and most recently with ibeacons – even if it appears incapable of doing anything beyond simply digitising the traditional. TV spots are now viral films for the ‘YouTube generation’, old school promotion happens on facebook, instagram or twitter instead of in-store and beacons mean we can say goodbye to cardboard and paper to deliver a virtual coupon when consumers are within proximity.

There’s no question that this digital obsession is right, and for all the reasons we already know: people no longer follow a linear path to purchase, we expect our shopping experience to be everywhere, instant and personal. It’s just that to properly lever the connection between behaviour and technology, we need deeper, sustained insights into how the two play off each other.

Cheil is working on a number of beacon innovation projects for clients, and to truly understand this new technology it has built a solution that has turned our office into a living lab. When our London team of 200 people moved to a single location in Bankside we created an app called Cheil Break. It uses beacons to help people interact with the space and drive loyalty to the in-house café, Cash-only Tony.

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In doing this we’ve learnt there are in fact three questions to ask when it comes to beacons:

  1. Are you enriching the experience?
  2. Are you delivering convenience?
  3. Do you have an opportunity to offer dynamic value?

People are on a mission when they shop and the best shopper-marketers understand that mindset, and the retail context, and so remove barriers to purchase. Most retail environments are already jam-packed with price messaging, discounts and promotion. The shopper does not want more clutter, they want clarity and simplicity. Yes they want offers, but they need to be relevant and most of all they need help in making the decision that is right for them. To achieve this, technology needs to enrich their retail experience, making it easier, more personal and more convenient.

Studying beacon location gives us much greater insight into context and enables us to target experience that is relevant. The loyal shopper may not want to know that there is a 2 for 1 on brand X in aisle 5, but, as she passes a beacon in aisle 15, she may be delighted to hear that they are opening a new check-out just for her.

Contextual integration

The Cheil Break app is activated by a beacon as employees walk through the front door so there is no need to open it or check-in. It is connected to searchable Pinterest profiles for our people so that we can use the app to search for specific experience or just locate people who are not at their desks. By encouraging and allowing more interaction between our people, the hope is that it will help them become even more creative for our clients.

It all starts in our café where we’ve replaced the traditional coffee shop loyalty card with a digital stamp in the café section of the app. Starbucks in South Korea, and Harris+Hoole in the UK, both do this well and have contextually integrated technology to make buying coffee more convenient and personal. They reward customers who sign-in to this service with recognition in-store, and allow pre-ordering and payment to circumvent the need to queue.

While Starbucks and Harris+Hoole achieve this with a sophisticated and expensive EPOS system, Cheil’s simply uses two beacons. The first activates the loyalty section of the app when a customer approaches and the second is tapped to deliver the digital stamp. In doing so, we made a breakthrough in understanding how to use proximity settings to enable a beacon behaviour not unlike RFiD/NFC, but which is recognisable by both iOS and Android.

Convenience trumps privacy

We’ve also found that people are prepared to trade some personal data for improved relevance and convenience. As a regular traveller I am looking forward to seeing how British Airways will broaden its use of beacons to enrich my experience of T5. With all the data it has on me through its Executive Club and the app I use to check-in and collect my boarding card the opportunities are almost endless. BA has started on the journey by using this new technology to ease an existing customer grumble and sending the wi-fi password to those with the BA app as they pass the beacon on the way into the lounge. It is a good use of beacon technology that is contextually integrated and will enhance my experience. In fact I probably will not even notice, because it is almost invisible.

The best technology is invisible technology

The concept of dynamic pricing is not new to retail. On-line specialists have become masters of this invisible technology to drive sales and beacon driven data may enable this in more traditional retail environments. There is also a broader opportunity to look at value and we are exploring how to use loyalty functionality in our own app to bring dynamic value to our staff. We’ve handed over this functionality over to the ‘Appreciation Society’ which runs our agency events and creates partnerships with local businesses that become Friends of Cheil. Our ambition is that we will learn more about the behavioural impact driven by dynamic pricing, but more importantly we will find new insight into ‘price plus’ that will be of real value for retail.

So, to beacon or not to beacon is not the question brands and retailers should be asking themselves. The real question is what are they doing with new technologies to solve their customers’ problems and enrich their overall experience?

Out of the app and into the store with KakaoTalk

First posted with Econsultancy

People have been talking about social commerce for some time now. The idea that shopping behaviour can be directed and informed by social networks is intriguing to retailers, but its application has been clunky.

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However developments by South Korean instant messenger app KakaoTalk point towards social becoming much more ‘shoppable’.

KakaoTalk is the dominant messaging app in Korea, used by more than 90% of smartphone owners. It is a near ubiquitous part of daily life for people who use it to make free calls and texts, share content and take part in group chats.

It is a hybrid app, half instant messenger, half social profile, whose development in some ways mirrors how Facebook has evolved to cover more bases.

Of particular interest to retailers is KakaoTalk’s capabilities for driving shoppers in-store. Its Plus Friend feature enables users to follow brands and receive communications and shopping vouchers via IM. Recipients can then redeem the voucher in a given store.

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Shoppers can also use the feature to buy and virtually send gifts to their friends and families. They could for instance buy a t-shirt from Uniqlo via KakaoTalk and then ‘gift it’ to a friend who could then go in-store and pick up the t-shirt. With today’s shoppers expecting a new level of convenience, this feature provides it in spades as recipients would be able to try on the item and swap the size or colour there and then.

As well as tying physical retailers back into mix of channels, it would also provide additional benefits in savings on postage. Imagine also the boon for last minute buying at times such as Christmas when even the most laggardly of us would have no excuse for making a purchase and sending it to the right person.

The emergence of instant messaging as a shoppable channel is another example of how retailers need to consider a wider array of channels for their marketing efforts.

In fact shoppers no longer care about channels, they just want to be able to move seamlessly between platforms, media, devices and environments to achieve their shopping mission.

Crucially this is affecting how marketing is perceived by shoppers. It is no longer enough for ads to create desire, they must also be able to satisfy it there and then.

Hence online retailer ASOS has introduced the hashtag #asseenonme as a way of encouraging users to share pictures of their outfits. Anybody searching the hashtag can buy what they see, because ASOS ensures every image is then linked to the relevant product pages.

US beauty website Joyus.com has developed shoppable content through its how-to videos. Any make-up products featured can be clicked on at any time and purchased. Meanwhile H&M customers with Samsung smart TVs were able to buy David Beckham’s underwear straight from its Superbowl ad spot.

It’s all part of the drive towards the everywhere, instant and personal shopping experience that smartphone wielding consumers expect. And with its IM capabilities, KakaoTalk demonstrates how retail can move shoppers out of the app and into the store.