So, how can come the digital revolution has yet to reach us in our pockets? Don’t worry, it is coming and coming fast. With the new generation of mobile devices is now possible to link the device directly to bank and credit card accounts and many merchants have started to accept payments leveraging either a scan code displayed in the phone screen, or through “contactless” readers using the NFC (Near Field Communication) standards.
If you accept the fact that these technologies are already here, the next logical question is what will it mean for you, will it change what, where and how we shop? Most likely it will, let us explore what possibilities this new technology will bring and how it will impact shopper behavior:
First, let us think about how each of us gets to know about new products and what is happening in the market with our favorite retailers, chances are that you are part of either a mailing list and/or email campaign that periodically targets you with advertising. However, most of us find these kind of unrequested advertising irrelevant, annoying most times and occasionally a nuance. While some of the advanced shoppers would have no doubt signed-up for customized promotions the reality is that the information that we provide (or how these preferences are interpreted by the retailer) can only produce relevant hits once in a while. In my experience there is no better recommendation engine that the one which looks at every customer event: either purchase, on-line visit, or other interaction (e.g. call center), then uses advanced analytics (primarily event cluster – if you were wondering) to create a personalized profile that can distinguish every member of the household (so the dad does not his pregnant daughter specials) and their purchase occasions (e.g. when are you buying for yourself vs. a gift) to build a true historical profile.
Being able to pinpoint your location is just the beginning, thanks to Big Data, the retailers can play NSA with your purchases history and literally understand what your inventory is on hand, how old it is and how much you paid for it. These opens-up other possibilities, for example, if you are holding an Xbox® game which has strong demand and they know that there is one coming-up that you would definitively like to play, they could offer a higher trade-in amount for that game, which would lure into the store and then market to you to buy the new game at full retail price. You would be delighted and the retailer would have made good profit on your need to trade-up. In a more fashion driven example, imagine that you bought a jacket a month back which went out of fashion, the retailer could send you a reminder of the news trends and urge you to donate your old clothes (e.g. your month old jacket) to your local charity in exchange for a discount on new merchandise. Better yet, in these scenarios, the credit for the trade-in game and the discount for new merchandise would be literally stored in your mobile device so you do not have to worry about carrying coupons or printed emails. Giving you an added level of convenience and giving the retailer a much closer relationship with you.
There are still some open questions that will have to be answered, many will fear for their privacy while others will cherish the potential benefits of this deeper retailer-shopper relationship. Which one are you?