Embracing The Internet Of Things Meets Consumer Demand For Relevancy In Retail

Written By Nathan Pettyjohn
May 14, 2015

Data connections deliver insights that improve products, super-charge services and transform the customer experience and relationships.


Why (and how) digital connections foster deeper human connections is the focus of Customer Experience in the Internet of Things: Five Ways Brands Can Use Sensors to Build Better Customer Relationships, a must-read report from Jessica Groopman, an industry analyst with Altimeter Group, a research firm helping companies understand and act on technology disruption.


True to this mission Groopman’s report sheds important light on how the Internet of Things (IoT) fits into the customer-brand paradigm to potentially close the gap between the digital and physical worlds. As Groopman points out: “Creating and monitoring sensor-based touch points in the offline world provides brands empirical, often customer-driven insights, that bridge the historically mysterious gap between how consumers behave online, and what they do in conjunction offline.


But that’s just part of the picture.


IoT — because it enables real-time insights around customer interaction with brands (as well as retailers) at that precise moment in time (and context) — can also reduce friction across the customer journey


Against this backdrop, Groopman has identified five use cases where companies can leverage IoT (sensors in smartphones, wearables, beacons and other connected devices or infrastructure) to deliver real value to both stakeholders: customers and the companies they choose to do business with.


  1. Rewards: driving consumer interaction through incentives (promotion, points, content etc) delivered to consumers in the appropriate context.
  2. Information & decision-making: equipping consumers to make decisions because sensors provide hyper-relevant information and assistance.
  3. Facilitation: making it easier for consumers to access, acquire or accomplish what they need, exactly at the moment they need it because sensors streamline interactions such as payment, authentication and registration.
  4. Service: providing consumers a more enhanced experience through personalization because sensors pave the way for both proactive and predictive approaches and allow companies to close the loop with messaging, suggestions and solutions tailored to truly individual needs.
  5. Innovation: opening a dialog with consumers for feedback and improvement suggestions because sensors open up new and immediate channels for consumers to talk to companies.


Read between the lines, and more accuracy (enabled by IoT) means more efficiencies and less guessing. In our view, the advance of IoT allows customer to set much of the agenda and — more importantly — it enables companies to listen to what their customers are telling them (through both their behavior and feedback) directly and at the moment of inspiration.



Exciting examples


Combine connected customers with a platform for connecting objects and environments (in the case of Aisle411 that environment is in-store and the platform spans indoor location, in-store mapping, mobile marketing triggers and smartphone apps ) and the result is improved visibility into the shopping journey.


For the customer, the advantage is increased convenience and customization in the form of relevant content, offers and help when they need it to make more informed decisions.


For the retailer, it’s the ability to engage with shoppers during the key ‘mobile moments’ in the journey (and at the aisle level) when we believe shoppers genuinely welcome advice, assistance or relevant promotions.


Our work with our client Walgreens, which was highlighted in the Altimeter report, is a prime example of how retailers can leverage IoT to draw from contextual elements and deliver a totally new kind of loyalty program.


As Groopman observes: “Sensors in real-world environments foster many new ways for brands to entertain, incentivize and intrigue customers to inspire deeper engagement.”


At Walgreens pilots of our platform are underway centered on what Groopman describes as “an augmented reality mobile app that is part gamified product finder, part discount program, and part loyalty program.” As shoppers walk down the aisle, she writes, they receive a notification informing them of a discount in the laundry section or loyalty points in grocery.


The aim here, as she states in the report, is to turn the utility into an immersive game-like experience inside the store. By making shopping fun and removing the friction retailers can encourage shoppers to discover more products (in the store at aisle level) and build a bigger basket.’


In fact, recent research from Google (and confirmed by others since) reveals that frequent mobile shoppers spend 25 percent more in-store than consumers who only occasionally use a mobile device to assist with shopping.


What’s more, an Aisle411-sponsored national survey found that when shoppers can’t find an item in-store, 16 percent either go to another store to buy, or don’t buy that item, period. These hard-to-find products translate into billions of dollars in lost sales opportunity which could be captured by simply providing indoor location technologies — a digital way for consumers to do in-store product search, location, and navigation.


However impressive it is, increased basket size (because IoT can make shopping simple and seamless) is just part of the benefit.


At a time when retailers are waking up to the realization that they are in the business of selling experience (as well as items on the shelf), leveraging the IoT to create and deliver a journey that is both entertaining and helpful may well be the best way to get mobile consumers into the store — and encourage them to come back again and again, fostering greater trust and loyalty over time.




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