Sounding Board: Using technology to ring the till

Innovative applications can engage consumers, but will they buy?

Are you as bored as I am with all the chatter about the technological revolution presented by social networking and e-commerce? If so, let us take it up a couple of notches.

Basically, retailing is a pretty simple business: stock the product, sell the product and get people to come back to buy more of it. It reminds me of what someone once told me about cigarettes being the perfect product—make it for a dime, sell it for a dollar and it is habit forming. The numbers have changed but the concept has not.

But retailing really gets down to one thing—what goes through the register. That said, how do you use technology to ring the till? A lot of buzz these days is centered on behavioral research and predictive analytics that tries to change or anticipate shopping behavior. It is a little like looking at consumers as rats in a maze, or looking at rats in a maze like consumers, whichever you prefer. If you want to read a great article about this and what companies like Target have reportedly done, get a copy of the fascinating cover story in the Feb. 19 New York Times magazine entitled “Psst, You in Aisle 5.” You will be amused.

What really fascinates me are some of the cutting-edge retail applications that use technology to engage consumers one-to-one. Some of it may be pretty far outside the box. But there is nothing here that is not applicable to grocery in some way.

If you want to talk about the potential of m-commerce, one of the milder but most interesting projects is taking place in the Paris Metro where, in the next few years, you will be able to just swipe your phone for access.

In Japan, mobile phones have created an entirely new culture with applications that let customers aim their phones’ cameras at restaurants to bring up menus and customer reviews.

Also, in fashion- and shopping-obsessed Japan, the Vanquish department store in Tokyo has introduced interactive hangers containing an RFID chip. When a customer picks up an item, information and pictures are sent to a video screen above the rack, along with recommendations for other items. This makes purchasing decisions easier and gives the store valuable information on which items are more popular and those that drive additional sales.

The Westfield shopping center in London has introduced what is being called a “Tweet Mirror” that contains a web-enabled digital camera so shoppers can send pictures of new outfits to friends on Facebook or Twitter. Should they decide not to buy the item, the brand’s web address is automatically sent to their email so they can buy it online if they change their minds.

In the Netherlands, electronics retailer Scheer en Foppen is introducing a small store concept with half the selling area of traditional units. It carries far less physical product but features an iDesk where customers can see the retailer’s entire assortment online.
At the recent Consumer Electronics and National Retail Federation shows, a company called Facecake used Microsoft’s Kinect technology to produce a 3-D virtual fitting room with screens that enable shoppers to see how any outfits looks on them without actually trying it on.

The Swedish supermarket, ICA Vanadis, is experimenting with digital signage that can change the price of a product based on consumer interest. Shoppers are asked to check in to the store’s Facebook page. The more people doing it, the lower the price of the product will become. This is an interesting wrinkle, although the jury is still out on what is called

Tesco has had great success with virtual stores in subways in Seoul, South Korea. Consumers can buy food items displayed on posters by scanning the QR codes and having products delivered to their homes. Aside from the publicity, the virtual store brought the chain a 135% sales increase in just two months.

For something really fascinating, albeit a bit scary, one Japanese software company is experimenting with something called “gladvertising” that uses emotion recognition software to read facial expressions and eye scanners to identify a person’s state of mind. It can also calculate age and gender to deliver more targeted ad messages. I am not sure shoppers would like being hunted or stalked like this since it is done without their knowledge.

Will all these innovations help push more product through the checkout? It is anybody’s guess at this point. But it’s best not to ignore innovations that could tell you more about how and where people discover new products.

This entry was posted in 2012 04 Article Archives, Columns. Bookmark the permalink.