5 lessons for retailers on using new technology

Mirador’s retail marketing director reveals his tips on harnessing the latest tech developments in the retail space to improve customer engagement

There’s a lot of hype and buzz around retailers adopting new technologies, but many lack the marketing direction to employ these in a way that’s relevant to customers.

That’s the view of Joe Blundell, the marketing director at marketing retail technology vendor, Mirador, who questioned whether retailers are being pushed into the tech space without enough strategic direction.

“We see a lot of technology pushed into spaces that retailers at one level are quite excited about because it is all buzzy and new, but where usage is driven by technology and not by strict customer applications,” he told CMO.

To help, Blundell shares his five lessons for retailers on using technology.

1. Combine technology with physical store presence

Blundell suggested retailers need to make the most of the physical presence in-store and combine that with the latest in technology.

“Rather than trying to pour everything onto people’s smartphones, use technology to understand what people are doing in the store, then reacting to it,” he advised. “Using the store and physical real estate as a medium for communication is really underutilised.”

2. Don’t overload your customer’s smartphone

According to Blundell, retailers are being pushed into moving everything onto mobile technology. While there are applications worth pursuing, he raised concerns that people’s smartphones are going to become too congested.

“It’s essentially what you saw with Google Adwords,” he explained. “When I started using it 15 years ago it was brilliant, you got great results. But now, it’s difficult to get paid for search results on Google that make economic sense.”

When it comes to app use in the retail space, Blundell argued there’s a dissonance between what has been the push from technology, bucking up against practical applications that are relevant to a busy Australian supermarket, for example.

“You hear people saying we should put all our communications onto apps, we should do location maps on the store on the apps and offers on the apps,” he said. “But the reality is that people don’t like walking around supermarkets just staring at their smartphone the whole time. It’s not the way busy mums shop.”

For Blundell, wearables like the Apple watch can be useful for specific things, but when it comes to applications in the retail space, it is still a very small piece of physical real estate.

“The idea that people would be walking around a Coles supermarket or even Myer store, with their Apple watch flashing every few seconds with an offer is not the way I would see it be effective,” he said. “I don’t see a 50-year old dad or a busy 30-year old mum with two kids hanging off her arms wanting that sort of personalised level of engagement with a retailer.”

3. Make friends with beacons

Blundell said beacons are a classic example of a new trend everyone is jumping into that has actual applications within retail and real and can offer specific benefits both in terms of customer engagement, as well as insight.

“I see huge value in beacons being used to gain insights and learnings about customer behaviour and analytic information to drive a better shopping experience,” he said.

But Blundell stressed the shopping experience still needs to be modelled on the traditional parameters of the store. “Don’t go using beacons to activate offers physically in-store every five seconds,” he said.

“Use the insights and information to merchandise better, site your products better, find store black spots, find opportunities for cross-merchandising and understand the flow of customers during the day and during the week to staff better. All those sorts of things offer fantastic applications.”

Related: Woolworths plans national beacons rollout to improve click-and-collect customer service
How beacons and nearables are giving marketers new customer know-how

4. Use technology to reduce operating costs

Blundell said one of the biggest challenges facing every retailer in Australia is reducing operating costs, thanks to the highest wage loads and real estate costs anywhere in the developed world in retail. Added to this is increasing pressure to keep up with the competitive global pricing of e-commerce retailers.

“Retailers in Australia need to think very carefully about how they can improve the operative efficiency of their business,” Blundell said. “There are some very interesting pieces of technology being utilised to drive down those operating costs. It’s a lot about driving down marketing costs and trying to use those costs savings to better deploy your staff and improve customer service – so that’s a very interesting space.”

5. Get creative with your data analytics

Retailers can also drive customer engagement through effective use of data analytics. Blundell grouped this into customer analytics for retailers to drive a better customer experience, and brands using customer analytics to unlock category opportunities within retail.

“In Australia, this whole category management piece is still emerging, but brands are going to need to be much more imaginative in terms of their category management to see real growth,” he said.

Blundell suggested using technologies such as beacons or video analytics to understand customer behaviour beyond simply transactions is another key ingredient in the data story. This could help retailers understand how people shop in each category, find out whether the category is merchandised in an effective way, it is in the right spot within the store, or using it to find potential growth opportunities in new categories, he said.

“You can use the same sort of insights to drive a better customer experience,” he added. “For instance, with a lot of apparel, retailers in Australia are suffering at the moment trying to understand how they can actually deploy staff in a way that is relevant and engaging with customers given that staffing is so expensive. Things like video analytics and beacons can be used to understand when people are coming into your store. “

Blundell claimed video analytics is becoming more accurate these days for identifying age groups and gender, and can tell retailers a lot more about the sort of types of people coming into a shop and which days they shop during the week.

“Using that information, you can spot demographic changes throughout the week, so you might be able to see that in certain parts of the day you get a lot more pensioners coming in, or early mornings you might get another sort of demographic coming in,” he said. “You can use that to your advantage in terms of effectively staffing or merchandising and in-store communications.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

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