Photo: RetailWire
Stores rarely ID customers before they check out
According to BRP’s “2018 Customer Experience/Unified Commerce Survey,” only 23 percent of retailers are able to identify customers inside stores before they check out.
Of the 23 percent, 13 percent have ways to identify customers when they walk in and another 10 percent sometime during the pre-checkout stage. Fifty-seven percent can identify customers at checkout. Twenty percent are unable to identify customers at all at the store level.
The findings were based on an online survey of more than 500 North America retailers conducted in March and April.
BRP’s study noted that not being able to identify individuals prevents associates from leveraging customer information to allow personalized interaction such as clienteling and guided selling that can drive a better experience.
Online customer identification is easier because it doesn’t rely on opt-in via mobile phones. According to the study, 60 percent were able to identify customers online before checkout, including 30 percent when browsers first visit the website.
When asked what types of incentives they offered customers to encourage in-store identification, the top answers were personalized service, 37 percent, and product incentives, 30 percent.
The number of retailers that don’t offer customers any incentives to identify, however, has increased from 18 percent last year to 37 percent this year.
BRP wrote, “Unfortunately, this means that fewer retailers see the value in gathering customer information. In practice, incentives create a strong correlation to the rate in which customers identify themselves, and identification creates opportunities to personalize the shopping experience and or offer special discounts and promotions, which typically translate into higher sales.”
Discussion Questions
DISCUSSION QUESTIONS: How can retailers improve their ability to identify customers before checkout? Should retailers offer better incentives or turn to technology to improve shopper identification?
Poll
BrainTrust
Paula Rosenblum
Co-founder, RSR Research
Cate Trotter
Head of Trends, Insider Trends
Using technology to identify consumers is fine, but it really needs to be consensual. And retailers need to recognize that not all consumers want to be identified or to have a “personalized shopping experience” in store. As such, offering incentives like discounts, special offers and rewards is the best way forward.
Meaningful loyalty programs can go a long way toward getting customers engaged and willing to be identified. Offering incentives will entice some shoppers to self-identify, but ultimately the best way to actually identify shoppers is through technology. Amazon Go is a perfect example. In this case, shoppers “scan-in” to get into the store, which provides 100 percent identification – in the case of Amazon Go, the benefit is that shoppers can enjoy cashier-less check out.
What’s the point of worrying about identifying customers in-store when in most cases retailers today are doing a horrible job of any customer engagement? Most stores today have associates so engaged in tasks with pressure to get them done as quickly as possible that many of them go out of their way to ignore customers. Why bother concerning ourselves with the ability to identify customers in-store until we solve the problem of how to provide better customer engagement and outstanding customer service? It starts with hiring more staff, less pressure on tasks, better training, and the right culture. Do those things, and then we can worry about identifying customers!
I tend to agree here Art – there is too much focus on identifying customers in store with some type of ethereal technology so employees can pivot and provide a custom experience when a properly charmed “what can I help you with today?” would do it better.
Good point, Evan. I think what matters is the point after that question is asked. Every smart retailer already asks that question first. Those that know more about their customer, their intent and their motivations will have an edge over those that don’t. Identification becomes important after this to build value.
Quick hypothetical scenario: A customer looking for a part for their car is entering three different stores, describing the same situation. Rep #1 asks about what car they have and has to search for the product (time-consuming). Rep #2 asks about the car plus how many miles and finds multiple products that are better depending on the mileage (your words from your BrainTrust Live session — choice overload). Rep #3 knows both and has already selected the best product for them by the time they’re done with describing the problem. Identification allows the retailer to service the customer better, faster, and cheaper (and doesn’t always need lots of tech).
Evan, I understand the point, however, today’s in-store experience could be compared to having to register and input all of my personal information each and every time I log on to Amazon. I am happy to have a store retailer maintain that information and know that I am in the store if it provides better convenience, service, and value. I would love it if when I go into my favorite hardware store they already know my latest projects rather than having to explain it all to every employee I encounter. Wouldn’t it be great if the employee of my favorite department already knew my clothing size and preference and didn’t waste time going through all of that when they could be finding and showing me what I like and need? The right combination of service focus, people, process, and technologies should be able to deliver and help keep stores relevant.
I think retailers need to understand what’s most valuable to their customer and use that to draw them into a circle of value and trust. Take, American Girl for example. As a dad to two girls, there’s nothing more I want than to get in and out of than the American Girl store.
Having said that, I value savings (especially with two girls shopping at American Girl) and so it’s important for the staff to ask me for my phone number (or my wife’s phone number) to track my sales for returns, and give me any coupons that I don’t know I’m eligible for.
It works every time. It only took two of many trips for me to get trained to give my phone number because it was valuable to me.
This is one of the biggest misses in retail today. The solutions all start with an attitude on the part of the retailer that the identification of customers is the foundation of engagement and providing superior service. Yes customer identification needs to be consensual. How do you get customers to agree? Create relevancy! Retailers need to give consumers good reasons to “connect” when they come to the store. Beyond promotional offers, there are a host of services that customers value beyond price. The most alarming statistic in the article is that 37 percent of retailers don’t offer any incentives for customers to connect.
The problem here is that most retailers are unable to provide a personalized experience, giving customers limited reasons to self-identify. Even CVS, which incents customers to plug in a phone number as they enter the store, still offers coupons for irrelevant products. We have a long way to go.
I’m not sure retailers have a problem with their ability to identify customers. They appear to have a problem giving customers a reason why they should be asking for that information. Fix that part.
There are at least two ways in which retailers can improve their ability to identify customers before they check out. One is an expanded loyalty program, which may or may not rely on discounts or other erosion of gross margins. The other is through incentives that would entice some customers to opt into the retailer’s offering. As Neil states, however, not everyone is interested and therefore, not everyone opts in. The question then becomes, does the fragmentation justify the expense of developing these applications to identify the customer easily during the shopping experience? Clearly, loyalty programs seem to be the most productive way to accomplish many different objectives, including shopper identification before checkout.
You really have to start by asking yourself, do customers WANT to be identified?
Just because you can do a thing, doesn’t mean you SHOULD do a thing. And technological identification, while I know it is already happening, should not be continued.
I mean, it’s all well and good if you give me an app and incent me to be known. But if you just start tracking me via video, my phone, Wi-Fi or any other of the myriad of ways I’ve been pitched, it’s going to really be an irritant.
Like I said, I know what is already being done, and just that makes my hair stand on end. Going much further would not be a good thing.
I completely agree, Paula. If a shopper wants to be identified to receive better service — great. If not, there SHOULD be a reasonable expectation of privacy. Retailers should want to create an enjoyable atmosphere, not have shoppers feel like Big Brother is watching.
“To what end?” is the question too seldom addressed by solution providers who offer methods for shopper tracking in the store. If the answer is “So you can serve the shopper better,” you may be on the right track, but I wholeheartedly agree that data gathering can veer easily into stalker territory if not kept in check. If the promise is all about “actionable analytics,” some wariness is in order.
With the advent of iBeacons and mobile apps, identifying customers should be used much more. Certainly the customer needs to provide consent. But the technology exists. Apps should be the loyalty card for retailers. This use of technology would be able to provide a more customized shopping experience for the customer, create contact with the customer outside of the store and provide customized offers to the customer.
Retailers need to stop thinking in terms of transactions and start thinking in terms of customers. In terms of long-term retention and long-term value. Learn from e-commerce and apply it to in-store.
The customer’s interest in being identified certainly varies by individual, by the value proposition for doing so and by what type of retailer they are at. The same is true for the retailer. There may be a great value in a retailer that sells clothing knowing about the customer who just walked in the door but far less for a supermarket. I emphatically agree with Neil that using technology to ID a customer has to be consensual, i.e., done via an opt in process.
Online shoppers are, of course, more likely to be identified prior to check out. However, we’ve been talking about the lack of shopper identification for literally decades. I remember when I was a store manager in the 1980s that I wanted to know when one of my top 10 percent-spending customers walked into my store. I wanted to ensure the staff really took care of them.
Today, there are plenty of truly affordable solutions for retailers to ID shoppers before entry and/or inside the store. This can definitely be combined with offers throughout the store and/or upon entry to let staff know they’re in the building. The time is now to leverage these available capabilities.
This may be another case of conflicting studies, where one study wants retailers to leave the consumer alone until checkout and one wants to interact with the consumer prior to checkout. Retailers can and should up the incentives for shoppers so that customers allow the retailer to identify them at entry. They can also use technology to identify more loyal customers — either facial recognition or cell phone detection both of which may have negative results but do work to identify unique customers. Incentives that are forever changing would also be a way to reach more customers, because the retailer would sooner or later capture shoppers who would never agree to an incentive program!
Retailers today must know more about their customer to harness service as a competitive edge. This starts with knowing who they are. The most loyal customers are the ones who will try out new technologies, sign up on lists, carry around a bar-coded card, or provide personal information — and retailers need to start here, servicing this community with top perks and incentives. Focus on loyalty and make it worth the customer’s time.
For the second question — incentives or tech — the answer is yes. Both should be used to bring loyal customers into the fold as well as providing added value. Tech by itself won’t be able to convert customers. Amazon, without their stores, are pushing people into Prime with multiple services, broad presence, status and exclusive deals. Added value is inherent to a loyalty program, and incentives are one form of this. IDs need to be integrated with the loyalty and individualization strategy of the retailer. You’re not having a 40 percent markdown across your stores, you’re giving a 40 percent discount on just that sweater the customer was dying to get last time she was in the store.
I agree with other comments suggesting that this must be an opt-in program and, even if shoppers have opted in, it is absolutely imperative that retailers provide real benefit or “reward” for opting in. To date, far too few retailers provide meaningful value in exchange for the privilege of identifying shoppers by name when they enter their stores.
Decades ago Smart & Final Iris had customers swipe their loyalty cards as they entered the store. If they were frequent shoppers with high spends the store manager was notified by beeper and required to go find them to say hello. The system also did some suggested shopping list generation based on frequency of purchase. And, obviously, it was an opt-in service. But, since that was decades ago, I think it’s safe to say the idea clearly isn’t catching on. Why? Well maybe because store scheduling is such a mess, putting too few people in position to meet customers in the first place. Or, maybe because employees aren’t trained to actually “sell” individuals because that’s not how they are rewarded. Or maybe because customers don’t want to be creeped out by systems that seem to be monitoring them. The technology has been around forever to facilitate customer interaction, now we need the human engineering to catch up.
Cool example. High employee turnover and no standards for consumer identification – before they get to cash wrap.
Identifying consumers needs to be part of a complicated process or it is not worth doing. What percent of customers use personalized shoppers? Not all consumers want personalized service. Maybe it is because they have never used it or maybe some used it and found it to be not helpful. For identification to work well, customers need to have given permission for it to be used or to opt in when entering a store. There needs to be a good, reliable identification process. Analysis behind the scenes needs to have been done so that consumer preferences and/or offers are clear to store personnel, store personnel have been trained on how to use the information, and store personnel use the information when interacting proactively with consumers. Without the whole process, just identifying consumers does not provide much value.
The future of loyalty is an equal exchange between customers willing to share info and retailers making it worth their while. Right now, it’s lopsided — the retailer is in control of the customer’s info and customers largely don’t get a lot out of that interaction. True service means no one feels taken advantage of. We have a long way to go, especially in loyalty tech, which has erred on the invasive side instead of the service side.
The idea is not just to identify the customer, the idea is to help the customer to solve their problem or just make the shopping experience more enjoyable.
Let’s fix the easy things first — like the number one thing that bugs most retail customers today: waiting in the checkout line.
Let’s just assume that some customers want to be identified. For those that opt-in, from a technology perspective, the most effective solution to identify customers lies with your customers themselves – the fact that nearly all of them will be walking into your stores with mobile devices. Many retailers are taking advantage of this by using in-store WiFi as a way to capture customer sign-on information, while others are using their mobile app log-ins, or identifying customers by their MAC addresses on those devices.
From a process perspective, forward-thinking retailers are providing their associates with mobile devices and placing them on the sales floor in order to increase their engagement with customers and to capture information early in the shopping visit to provide suggestive sell recommendations or other purchase incentives.
Incentives for customers are a must, as customers need to get something of value to expose their identity. It is much easier to justify the value for customers that are frequent/loyal purchasers of your brand, as they will appreciate the personal attention and the accumulation of loyalty points, assuming the identification process is tied to a loyalty program which is ideal.
I make face contact and know many of my customers, and what they like inside my store. Not all of them of course, but it is very important for me and my employees to engage with our customers, and they enjoy being taken care of. Finding out what kind of soup or wine they like is simple, but effective, because customers like to feel special. And why not? Unfortunately, the masses around here want price and only price, so I better keep doing what I do, as the folks who want good deals and an engaging experience will come here, and I’m grateful for being able to help them every chance I get.
Unless the retailer has a specific call to action and has the proper staffing to act on it, there is no value to the customer to be identified when they enter the store. For years, technology has been around to try to capture data when customers browse the store, but end up creating mountains of data that cannot be actioned. Unlike online, for which is much more natural, people are visiting stores hoping for a great experience, without the need for personalization. I am more appreciative when I get positive service the FIRST time I visit, rather than as a repeat customer.
Great point Kenneth, identifying is just the start. If you are going to identify customers you must have a means of communicating that to the right store personnel and providing those personnel the means of delivering value to the customer as a result. If you can’t provide the value, you better not be doing it.
So is this 77% too few, or 23% too many? Sure, if you’re a regular at a restaurant or local shop you patronize regularly you’ll expect to be recognized, but if you walk into a department store or gas station or … whatever? Well I don’t, and this would be true not just out-of-town, but where I live as well.
That you’ve walked through the front door tells a retailer you’re interested in what they’re selling; providing someone or something to tell them where to find it should be the extent of the initial contact. I don’t think shadowing potential customers is the right way to go.
There’s a few things to unpack here — first of all, do customers want to be identified? Second if a store can identify them, is it set up to actually do anything with that information?
I suspect this is one of the big issues as customers don’t see any real value in return for their information. The average store doesn’t have any capability to truly act on it to improve or personalise the experience.
For example there’s a big, high street retailer that asks customers if they want an email receipt when they’re at the checkout, but pretty much everyone (while I’ve been in the store) says no. Why? Well because there’s no benefit to it. All that happens is they get added to a generic email list and get sent the same spammy offer emails as everyone else. There’s no personalisation there, no styling tips for the products they just bought, special offers, incentives.
Then there’s the fact that to get that email receipt they have to stand in the store and spell out their email address to the assistant for them to tap it in. This not only slows down the checkout process (for all other customers in the queue as well) but means they have to publicly broadcast personal data. This is just one example but is it any wonder that retailers struggle with identifying customers when this is the sort of set-up? Now if the customer in that store could check in with an app, pay through that app and request an email receipt with one click of a button — well that’s a different story.
There’s lots that retailers could do here to improve identification, but there’s no point in pushing any of that until they are in a position to capitalise on it properly.
In a perfect world, the retailer would know where the shopper is at all times during the purchasing decision. Not just a physical the place, but the mental place. They could then influence the process from start to finish, providing hints, warnings and whatever else is needed keep the shopper loyal. By not identifying the customer until checkout, retailers miss a huge opportunity to influence not only the purchase but also the process of engagement that keeps the shopper happy. It’s a tricky task since there has to be an incentive or a reason to ID yourself. But most shoppers will appreciate the attention and will show it with a bigger share of their wallet.
Some great comments already. In my case, I am happy to be identified on Amazon and other e-commerce sites because of the convenience, service, and value. I would be just as pleased to be identified as I walk into a store if I received similar convenience, service, and value. Of course, in both cases this is based on my consent and control of when and where I am identified; always having the ability to be anonymous if and when desired. I would think than many, not all, would feel similar.
I’m shocked that 23% of stores CAN identify customers before they check out. I find that creepy (as a shopper).
And, this survey is misleading. It asks consumers what they want and offer “personalized incentives” as an item — without noting what it costs the consumer to get those. Costs? Yes. Shopper privacy is a freedom owned by the consumer. To ask them to give it up is exacting a cost.
Were the survey to ask “Are you willing to give up your privacy in the store in return for getting personalized incentives?” I would expect it would drop to the bottom of the heap.
Research is NOT neutral. It must be evaluated for reasonability – especially considering hidden costs.