Marianna Papadakis Reporter

Marianna writes for The Australian Financial Review and Business Review Weekly from the Sydney newsroom. She has an interest in legal affairs, technology and business.

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Shopping channels

Published 28 March 2013 07:12, Updated 02 April 2013 07:48

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Shopping channels

Nick Marfleet of software company Blocks Global says retailers should develop complementary digital retail marketing strategies rather than treat each channel in isolation. Photo: Josh Robenstone

Whether it’s changing store-wide promotions or shelf prices at the click of a button, or simply enabling customers to dress their own virtual avatar while they shop, technology in retail is developing at warp speed – both online and bricks and mortar.

The hunt for market share is leading retailers to rely on analytics from their IT departments to inform their marketing and business strategies. Data-driven enterprises analyse customer behaviour in-store, online and on their smartphones and tablets. It’s all part of trying to gauge the different ways the tools are used to shop.

Nick Marfleet, chief technical officer at Blocks Global, a software company specialising in omni-channel retailing and customer experience solutions, says that because retailers have mostly built their different digital channels in isolation, and reactively rather than proactively, they are not as seamless as they should be and require a lot of time and resources to manage. Most are also using a single message across all touch points rather than treating them as different channels that consumers use in different ways.

“Fragmentation between the channels is causing friction in customers’ experiences,” Marfleet says.

Bridging the gap, by incorporating an online experience into “real” shopping in store, has to be a major focus for retailers, given that constant access to the internet is now part of life for their consumers.

Many now expect iPads to guide them through products in stores.

Harnessing the power of HTML5, the latest version of the internet’s “language”, will help retailers enhance customers’ in-store experience. For example, retailers are replacing passive marketing posters with interactive content boards to dramatically reduce time and effort in rolling out promotions. That also reduces costs and the risk of printing errors.

Digital signage and appliance computing company AOPEN is developing an interactive digital marketing and signage platform that allows retailers to create and publish promotions to multiple screens on the shop floor.

“In the past, digital signage screens would require content in different formats, meaning marketers could not reuse their web assets for in-store promotions,” head of AOPEN’s global strategy Stephen Borg says.

Digital screens are being used at aisle ends and for shelf pricing, and can be updated at the click of a button, eliminating labour-intensive processes.

Voice and sensory-activated interactive content boards can display promotions until they register a nearby shopper and then prompt them to explore information about the products around them.

“Interactive touch screens will make it easier and quicker for consumers to browse products and make decisions about which one is best for them by narrowing their search,” Marfleet says.

“It will then point you to where the product is located in the store. You can also have a light come up at the customer service desk when [a customer] wants help.”

Consumers can also build wish lists by saving product details or having them sent to devices to review later.

Major retailers like Woolworths are using new shelf lighting systems that let shoppers filter their search. For example, they may look for the most appropriate migraine drug on a smartphone application, that then directs them to its location in the store.

Digital strategist Nicole Louise Venter, at retail consultancy Retail Oasis, says data generated from these sorts of applications can be used to build loyalty.

“If they are tracking what your previous purchases are, they can send promotions relevant to that behaviour in a similar way retailers do now online,” she says.

“It’s a constant communication with consumers through the app.”

A new reality for retail

Venter says augmented reality, like that used by adidas and Net-a-Porter, is becoming the trend. Shoppers can browse a virtual wall for shoes or clothes and use virtual mirrors to see what clothes look like on their body without trying them on.

QR Codes on posters let consumers transfer advertisements to their smart devices so they can click and buy the item while walking down a street if they’re in a rush.

Clothing retailer Lorna Jane is using OmniMirror kiosks so customers can photograph themselves in a mirror and send it to social networks for live feedback. Burberry also uses mirrors to show customers items that might match the one they’re holding.

Boosting the connection between advanced technology and regular retail therapy, shoppers can even tap their phone on a sensor or scan a sticker to bring up product information through the wonders of radio-frequency identification (RFID). Near field communication (NFC) takes this further, enabling consumers to save the information, compare it with other products or share on social media.

The hype surrounding NFC in the US centres around its ability to revolutionise point-of-sale systems. With NFC, shoppers can tap their phones on shop terminals to transfer funds through a mobile app.

Then there are digital wallets like Google Wallet, which uses NFC but also gives consumers the ability to store their bank, loyalty and other cards on their mobile phone. Australian consumers will have to wait for the iPhone to support NFC, though Samsung, Android and HTC devices do already.

Eftpos chief executive Bruce Mansfield says it is working on new payment platforms for the Australian market, including a mobile widget that will be designed as a funding source within a third party’s wallet.

“That is, we want to enable others’ wallets for eftpos transactions, not try to represent ourselves as the consumer or merchant point of interaction. We will simply be enabling the payment, as we have always done.”

Body of evidence

Further melding the virtual and physical worlds, retailers such as Myer, and Target and wholesalers such as Pacific Brands are investigating body-mapping technology already being used in US department stores like Bloomingdale’s. Shopping centres are fitted with 3D scanning machines that identify your proportions and spit out a list of items that will fit and the location of stores in which to get them.

The companies are taking part in a survey by US company Alvanon, which is collecting body measurement data from 3D scans of customers to help retailers and brands fine-tune their fits and sizing.

Alvanon president Ed Gribbin says the data will be used to design a system where people “virtually” try on clothes, using an avatar. The scans are sorted by gender, age, ethnicity and sometimes lifestyle to provide the most relevant information to a particular retailer or brand.

“They’ll be able to see how a particular size fits, how the next size smaller fits, even how it fits if they add a kilo or two over the holidays.”

The 3D avatars developed from the data mean retailers can design and fit their styles “virtually”, thereby getting new fashion to the floor to compete with global brands. It’s a cheaper form of product development.

The information will also be used in smartphone or tablet apps to be released this year so people can instantly determine their size in almost any brand.

Says Gribbin: “These apps use our vast database of body scans, over 300,000 worldwide, and map them against the product specifications of apparel retailers and brands, using a powerful algorithm that also considers personal taste and preference when making recommendations.”

To advance its online portal, Australian online fashion and footwear retailer, The Iconic is developing a “virtual wardrobe” where people scan their body using a home webcam, upload the images and drag and drop clothes onto their scan.

The head of The Iconic’s information technology section Eben Miller says it will take into consideration the 3D images uploaded (front, back and sides) and estimate your size and how the clothing hangs on your body.

“It’s not a perfect world but you get a sense of how something fits and looks,” he says.

Then there’s the barcode technology where the customer scans items they like in store to compare prices and products elsewhere, and also look at user reviews and ratings.

It’s a technology being assessed by The Iconic , along with a product aggregator that pulls items together so consumers can buy an entire look.

Personal touches online

Online shopping is based on a “golden triangle” of supply-chain efficiency, lower margins and consumer convenience. But its main disadvantage is that the personal touch of customer service is lost, Miller says.

Some retailers have found that a way to get around this is to provide online stylists and customer care teams who recommend products and help shoppers. That can be done through intelligent chat functions that recognise when consumers hit a problem with an online transaction, and offer them pop-up help.

When it comes to big data, Miller says researching the habits of customers, and how they shop, involves more than just analysing the time of day people use desktop computers, tablets or smartphones and more how they use them and the limitations of the different devices.

The Iconic designs its strategy for developing specific features on devices based on its analysis of these “usage scenarios”.

Miller says, people typically use smartphones to browse and kill time when commuting, so were less likely to make a purchase than when at a work desktop or tablet at home. For example, emphasising search and browse, “buy later” and “share with friends” functions on smartphones was more important than on tablets, where people liked a richer, graphics and gesture-driven experience.

“Smartphone users are not reading articles, but browsing product. When you log on later on your iPad you remind them of the items they saved,” he says. “An iPad user might get a richer shopping experience with editorial content, promotions and imagery because of the bigger screen.”

Tracking and leveraging the data drives not only how the company personalises customer experience but also how it delivers solutions.

“Looking at the reasons people leave [the website] can dramatically improve business performance.”

According to IBIS World Research Report, online furniture retailer Milan Direct is growing its web-based market share at a faster pace than Harvey Norman, IKEA and Freedom despite having no show rooms. It estimates online revenue from furniture will increase by 15.7 per cent in 2012-13. Co-founder and chief executive officer Dean Ramler said part of Milan Direct’s strategy is tailoring marketing and advertising according to the specific devices – in real time. Most of its online sales were done during business hours when people are “paid to shop”.

“Many people browse sites on a tablet in TV breaks, so concentration is not the highest. Mobile users are completely different altogether. People often use mobiles in retail stores to price check. Smart retailers, Ramler says, will use different PC advertising, focusing more on product specifics for tablets and mobiles.

“If a customer comes to the website and views one of our black leather office chairs and then goes to Facebook or other sites, our ads pop up, with an image of the product they were looking at, and prompts them to come back to the store to purchase,” he says.

Ramler says its next step is to enhance its search algorithms so the page results are constantly updated, reflecting the items being searched and viewed most.

National Online Retailers Association chief executive Paul Greenberg says retailers who see themselves as dedicated purely to online customers are just as guilty as bricks-and-mortar retailers who are slow to adopt digital channels.

But he says in the end, whatever environment the retailer prefers, the mission should be the same.

It is less about meeting “multi-device” customers, and more about meeting customers the way they want to meet you.

Says Greenberg: “The new mantra of retail in my view is ‘love the customer, master the channel’ and not the other way around.”

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