Study: Two-thirds of retailers to ID shoppers entering stores

Discussion
Jun 12, 2015

If you have a smartphone in five years, there’s a really good chance stores are going to know a lot about you as soon as you make your entrance. In fact, according to a new report by Boston Retail Partners (BRP), nearly two-thirds of retailers (883 percent higher than at present) will identify customers in that way.

According to the report:

  • Seventy-six percent of retailers plan to provide suggested selling based a customer purchases within three years;
  • Ninety-one percent will have real-time inventory information available at the point of sale within three years;
  • Eighty-three percent plan to offer promotions based on a customer’s geographic location within five years;
  • Ninety-five percent of retailers plan to implement real-time analytics within five years.

RetailWire asked if retailers risked crossing over the line to creepy by identifying customers by their phone as soon as they entered stores. The key, according to a response from BRP, is leaving the decision up to consumers.

Customer targeting

Photo: RetailWire

"Retailers’ access to customer identities and profile information will be controlled by individual consumers’ desire to opt-in to a retail brand — or not," Ken Morris, principal, BRP, said recently. "Consumers can and should choose which retail brands they want to develop a relationship with and when they want to remain anonymous. According to the 80/20 rule, 20 percent of customers account for 80 percent of sales and the customers that opt-in are probably from the 20 percent who are most loyal and likely to buy."

In a recent interview with RetailWire, Mike Hogan, executive vice president of business strategy and brand development at GameStop, emphasized the importance of knowing the customer regardless of whether they were shopping in stores, online via PC or using a mobile device.

The goal in stores, he said, is for GameStop to have someone "who will have a tablet right there who can see who you are, what your interests are, what game you last bought, how many points you have on your PowerUp Rewards and so on."

"Customers are forcing a fundamental reshaping of retail by demanding a seamless convergence of the in-store and digital experiences," said BRP’s Mr. Morris in a statement. "Successful retailers realize they can no longer divide that experience among separate channels and must work towards a holistic shopping experience that transcends channels and offers contextual guided selling and promotions — in real-time."

Will a large percentage of consumers by 2020 be open to retailers identifying them when they walk into stores? What will retailers need to offer customers to get their permission to do so?

Braintrust
"Retailers seem to be generally bullish on personal identification and in-store tracking, but there are a few flies in the ointment: There’s no evidence that many are actually DOING anything about it. After all, more than 40 percent don’t even have Wi-Fi available on the selling floor."
"I don’t think so and the reason is how it will be used. As I wrote in my post, How Using Technology To Greet A Customer Is Just Plain Creepy, just because you can do, doesn’t mean you should."
"It depends on how you define "large percentage." I don’t like to predict anything beyond 10 minutes, but by 2020, my scientific wild-ass guess is 17 percent."

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28 Comments on "Study: Two-thirds of retailers to ID shoppers entering stores"


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Dr. Stephen Needel
Guest
2 years 11 months ago

Two conflicting trends here. More people using phones in more ways will be open to this idea. More hacking and an increased desire for data privacy will work against this. As Ken Morris says, it will be the shopper’s decision whether to let a store in or not.

Ralph Jacobson
Guest
2 years 11 months ago

I think the methods of identification are the keys to successful adoption by consumers. Some newer technologies border on creepy. As long as there is brand enthusiasm (for the retailer and/or the CPG brand), the shoppers tend to opt-in on programs if they see a value for it.

Paula Rosenblum
Guest
2 years 11 months ago
Retailers seem to be generally bullish on personal identification and in-store tracking, but there are a few flies in the ointment: There’s no evidence that many are actually DOING anything about it. After all, more than 40 percent don’t even have Wi-Fi available on the selling floor. A majority of consumers of ALL ages have indicated they do not want stores tracking them. Yes, even the Millennials. One study was done by our client, Balance Innovations, and another one was done by OpinionLab with similar responses. Consumers fully expect compensation of some sort if they will give retailers anything. The same OpinionLab survey indicated they expect FREE stuff, not just nice offers. Most importantly, consumers have little to no confidence that retailers can keep their data safe. 81 percent of the OpinionLab respondents reported this. In other words, while we generally just survey retailers on these subjects, in-store tracking is one topic where you have to look out at the consumer side of things, and also beyond the theory of what retailers say they will… Read more »
Bob Phibbs
Guest
2 years 11 months ago

I don’t think so and the reason is how it will be used. As I wrote in my post, How Using Technology To Greet A Customer Is Just Plain Creepy, just because you can do, doesn’t mean you should. Many will offer a discount, I don’t think that’s enough to compensate for opening the floodgates of intrusions on our smartphones while shopping.

Steve Montgomery
Guest
2 years 11 months ago

Admittedly I am one of the people who thought it was creepy. I do realize the perception of personal privacy is just that.

However, I wonder how many retailers will not wait for someone to opt-in an instead get the data about the person as a base from someone else such as AT&T or other carriers. Then there is the question of what they will do with the data beyond their internal use. I agree with Stephen that one of the known issues is that hackers will expand from PCs, servers, etc., to smartphones.

Max Goldberg
Guest
2 years 11 months ago

To many consumers, giving up their personal information to be bombarded by offers when they enter a store is not a compelling proposition. Consumers will opt in when retailers respect consumers’ privacy, treat them with respect and make it financially worth it to consumers. Otherwise retailers may find consumers opting out faster than they opted in.

Chris Petersen, PhD.
Guest
2 years 11 months ago
Consumer presence and identification in store is analogous to cookies and tracking on the web. Consumers seem to be far more willing to give up privacy in order to receive personalized service and offers on the web. Part of that is probably due to experience over time, and part of it is still due to consumer naivete on exactly how much web sites can learn about your identity. There seems to be a different “creep out” factor when consumers find out stores can track their every movement and send them offers when they arrive. A key will be letting the consumer decide to opt in, and letting them choose at what level they want to engage. I just attend the PLACE conference in NYC this week and had an opportunity to hear Jeff Donaldson SVP at GameStop’s speech about how they identify and engage consumers. They are currently a model for best practices of how to engage consumers in ways that add great value to their experience — and let them have levels of control. Bottom… Read more »
Warren Thayer
Guest
2 years 11 months ago

It depends on how you define “large percentage.” I don’t like to predict anything beyond 10 minutes, but by 2020, my scientific wild-ass guess is 17 percent. Retailers will be wanting to contact you, obviously, to make this worthwhile for them. I already get “contacted” way too often via robocalls, spam and what-have-you. I sure don’t need any more of it. And I don’t trust the info about me not to get hacked. Hey, I’m pretty far from a privacy freak. I don’t care who knows where I’ve been, what I had for breakfast or how often I call my wife. But I’m busy trying to have a life, and constant interruptions are making that difficult. So I am very unamused about these interruptions becoming even more frequent.

Mark Heckman
Guest
2 years 11 months ago

Relevant content is the key to any successful one-to-one engagement with a shopper whether it be direct mail, proximity marketing, SMS or other. Accordingly, shoppers have demonstrated their willingness to be interrupted during their shopping trip if the message helps them find what they are looking for, adds value through information to their trip, and/or offers them a deal on items that make sense for them on that particular trip.

For the most part, technology is way out in front of the targeting strategies and the content bank needed to make in-store communications worth the shopper’s while. Retailers cannot delegate content creation and targeting strategies to brand partners or third parties. They must make a commitment to transition a good portion of both existing and new merchandising content to targeted media. As always, some retailers are making progress in this area, while others are waiting to be “fast followers.” However, In this particular case, given the dramatic changes of shoppers’ expectations, “fast-following” may get you to the party after it’s over.

Ken Lonyai
Guest
2 years 11 months ago

Most people will accept being identified, but they will continue to poll stating that they are offended and don’t like it.

Separately, how pathetic is it that in 2015 having 90 percent-plus retailers with real-time POS inventory information and analytics is still off in the future?

Adrian Weidmann
Guest
2 years 11 months ago

It’s not so much of a question of whether consumers will be open to retailers identifying them when they walk into stores but rather it will become just as accepted and ubiquitous as connecting to any website, or search engine tracking. Just as Google tracking and analytics became accepted, so too will tracking in the physical world. This should not come as a surprise to anyone. If you use a credit card you’ve been “tracked” for the past 30-plus years.

The key for retailers is to get out in front of the privacy issues and bring real value to the shoppers and your customers. Don’t just use the available technology to ambush a shopper with some lame offer on their mobile device just because you know they’re there. That is creepy! Use the information intelligently and with respect in order to bring real surprise and delight along with value to your shopper. You’ll be surprised how this approach will be rewarded before, during and after the shopping experience.

Tom Smith
Guest
2 years 11 months ago

An outstanding customer experience like Ritz Carlton has been providing its guests. The more you know about me, the more I expect you to use the knowledge to provide a better experience.

Camille P. Schuster, PhD.
Guest
2 years 11 months ago

How consumers are identified, whether the process is opt in or opt out and what is offered in exchange will determine success. Can retailers do this? Yes. Will some consumers be willing to share their information? Yes. Now how will the process work and what will the consumers be willing to exchange for their data? If a discount is offered, then price-conscious consumers or cherry-pickers will be willing to sign up. Is that the 20 percent generating 80 percent of sales? Probably not. What kind of relationship do that 20 percent want? How will the retailers deliver? How is the relationship and shopping experience enhanced? Is it worth sharing information? The consumer will decide.

Ed Rosenbaum
Guest
2 years 11 months ago

This is going to happen. But it is strange that retailers already have information about the customers from their data base and POS. Why have they not capitalized on it yet? My guess is they really do not know how. Maybe I will leave my phone in the car. But then how do I get past the separation anxiety?

Ben Ball
Guest
2 years 11 months ago
Eventually, we will all understand the fact that the mere act of HAVING a smartphone opens us to an incredibly detailed level of tracking. Just as we are finally becoming aware that the GPS system “OnStar,” and even the toll transponders in our cars, allow them to be tracked at all times. And that the courts have said that data CAN be accessed in investigations and litigation — even civil, not just criminal. When we get that, we are going to then have to accept the consequences of our phones. We ARE being tracked by someone, somewhere, all the time. Even pop culture has adopted the “so she bought a cheap disposable cell phone at Walmart so she couldn’t be tracked, leaving her real cell phone at the restaurant to throw her stalker off her trail … ” story line. So, as always, the responsibility will revert to the retailer to decide what they will do with that access to us. Will they treat us with respect and strive to make us want to invite them… Read more »
jack crawford
Guest
jack crawford
2 years 11 months ago

As a retailer I can see the potential benefits, maybe. As a consumer I think this will add a new dimension to the word “creepy” in regards to retailing. If it is used, it will in all probability be used by so many desperate retailers that consumers will learn very quickly to ignore it.

Shep Hyken
Guest
2 years 11 months ago

In 2020, if things continue the way they are going, I don’t know if consumers will have a choice in the matter. They may be able to stay somewhat anonymous, but the way Google and similar companies are working, tracking will be part of the right to use apps and even the actual phone.

So what can retailers do to get a customers’ permission? Make it worth their while. Offer good, targeted, even personalized promotions. Don’t overdo it. Too much and the customer will delete you. Maybe other incentives, similar to joining a frequent shoppers club, might get a customer to opt-in.

Lee Kent
Guest
2 years 11 months ago
Let’s think about this for a minute. If I opt in to a service that allows my selected retailer to know I am in their store, what do they really know about me? They know my smartphone’s IP address, they can then tie that to me and my purchase history, home address, etc., if provided, but not my credit card (that should be encrypted somewhere and NEVER accessible). So what is all the fuss? No we don’t want some stranger walking up and calling us by name, however, if they walk up with a tablet very visibly in their hand and greet me with a hello, look down at tablet and say, “Ms. Kent, can I assist you in any way while you are in the store? Are you aware that … ?” I just don’t see the creepiness in that. I opted in! The big thing to me is that retail doesn’t get carried away in thinking that they owe the customer a promotion or something with a dollar attached. Customers, in many cases,… Read more »
Lee Peterson
Guest
2 years 11 months ago

Creepy. Good reason to turn your phone off or leave it at home, IMO. It’s one thing to study how and why I buy things, but to basically follow me? No.

You know though, as we have found in any study we’ve done, Millennials are different and their acceptance and ambivalence towards that type of technology is stunning. So…in five years, retailers may not know where I am, but they very well might know where 100 million others with expendable income are. #getoffthegridkids

Vahe Katros
Guest
2 years 11 months ago

100% of customers will be open to this if on one occasion, the advice given leads to a valuable or delightful outcome and retailers learn from their mistakes.

Five years is a long time. In five years, it will be transparent when a customer in a Forever21 store receives a message that says: “An item on your wish list is in the store, in your size and 25% off and is a perfect color match with the shirt you’re wearing.”

However, to be sure, in five years, a large percentage of consumers will think that drones that intercept them in a store singing “happy birthday” and delivering birthday wishes are creepy, except in Japan, where they will be a requirement.

Grace Kim
Guest
Grace Kim
2 years 11 months ago

Yes, a large portion of consumers would be open to retailers identifying them when they walk into stores within five years’ time. Some retailers like Burberry are doing that today with tablet accessorized sales reps on the floor and as long as retailers are being HELPFUL and providing additional value to the customer (not nuisance!), then consumers would welcome that.

Tony Orlando
Guest
2 years 11 months ago

I’m to old to be bothered when I walk into a store. Most customer service sucks now inside the stores, and now they want to send me more stuff?

How about being really good at the nuts and bolts of running the stores, and maybe I might let you send me something when I go in. Until then, keep me off the grid for this, except Macy’s, who already knows how to treat me right.

Herb Sorensen
Guest
2 years 11 months ago
Several points occur, the first of which is Scott McNealy’s (Sun Microsystems) observation more than a dozen years ago that “You have no privacy, get over it!” The development described in these articles is certainly going to happen. I’ve pointed out before that all the information in the universe will exist in the cloud, and your smart device (phone/watch/whatever) will be linked to that. THAT is a 2 way street—you can have access to everything and everyone; but also, everything and everyone can have access to YOU. The intelligent retailer will use their side of the link (see “Googling’ the Store“) to intelligently both receive and send information to shoppers. There’s not a lot of evidence to date, particularly when led by techie companies, that this will be managed sanely. Note: “One study by InMarket, a platform for beacon apps, found that sending more than one notification per shopping trip led to a big drop in app usage, as those that offend are deleted.” Despite this, and the failure of apps to penetrate more than… Read more »
Kenneth Leung
Guest
2 years 11 months ago

I think transparency, context and expectation setting is the key. When I take my car to the dealership for service, I fully expect the service advisor to pull up my service history for diagnostics and services, they tell me, and most of the time I see the screen over their shoulder. When I go to a retail store, I may not expect them to know my purchase history. A simple, “may I pull up your records to help you better?” may be a good start…. Some people will object, some will say, “sure.”

Li McClelland
Guest
Li McClelland
2 years 11 months ago
Everything in context. Compare these: A car dealer pulling up detailed information about your vehicle when you bring it in, including all previous services and recalls, who hands you an unexpected coupon for money off today’s service—and a store where you sometimes go to buy general merchandise, but which has no possible clue from looking at its “records” on you what you are in the market for today. Or compare these: A favorite restaurant greeting you by name when you come in and, because they already knew from being able to look you up in their records that you’re a steady profitable customer, realized that you are worthy of premium seating by the window overlooking the park and of being served by a pro waiter, not someone “in training”—and the pet food superstore which unfathomably surmises that after you’ve just bought and lugged home 4 cases of cat food on sale two weeks ago, that more cases of that same food is the reason you’re back this week so they offer you a coupon for… Read more »
Martin Mehalchin
Guest
2 years 11 months ago

The article/report lays out a cool vision for the future. I do think that consumers, especially younger cohorts, are going to gradually become more and more accepting of their phone essentially becoming a virtual name badge that IDs them to businesses they interact with. So, privacy will be less of a concern by the time these digitally and data enabled experiences are ready for prime time.

What the article glosses over is the difference between saying you have a plan and the ability to execute on it. Real time inventory and analytics along with the ability to render a comprehensive purchase history are resource and investment intensive projects that can take years to implement successfully. I’m still seeing a minority of retailers making the investments required to realize these plans.

Karen S. Herman
Guest
2 years 11 months ago

I see the retail landscape looking much different in 2020 than today, due in great measure to the shoppers’ adaption to the smartphone and growing affection for real-time interactions with their favorite brands and retailers.

What I most like about BRP’s concept of “real-time retail” is the understanding that technology is a mutual ally of both the shopper and the retailer. It is not a tool to use against the shopper; it is a unifier that streamlines and enhances the experience of both parties, once the shopper has “opted-in.”

And smartphones are just the beginning. Let’s see where HoloLens and Oculus Rift take the shopping experience. Best bet for retailers these days is to go all-in on digital.

Arie Shpanya
Guest
2 years 11 months ago

Tracking customers could provide retailers with great data, but there are two related issues with this:

1. Getting shoppers to agree to being tracked will be tough. There’s a fine line between creepy and helpful, so retailers will have to figure out a way to attract customers to opt-in.

2. Retailers will have to provide good incentives to make this worthwhile for shoppers and this could be costly.

wpDiscuz
Braintrust
"Retailers seem to be generally bullish on personal identification and in-store tracking, but there are a few flies in the ointment: There’s no evidence that many are actually DOING anything about it. After all, more than 40 percent don’t even have Wi-Fi available on the selling floor."
"I don’t think so and the reason is how it will be used. As I wrote in my post, How Using Technology To Greet A Customer Is Just Plain Creepy, just because you can do, doesn’t mean you should."
"It depends on how you define "large percentage." I don’t like to predict anything beyond 10 minutes, but by 2020, my scientific wild-ass guess is 17 percent."

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